Bradley v Ashton
[1999] NSWSC 782
•22 July 1999
CITATION: Bradley v Ashton [1999] NSWSC 782 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): 3287/99 HEARING DATE(S): 22/07/99 JUDGMENT DATE:
22 July 1999PARTIES :
Robert Harold Bradley and Norah Catherine Bradley (P)
Wallace Mackenzie Ashton (D)JUDGMENT OF: Young J
COUNSEL : I Harrison SC (P)
C Freeman (D)SOLICITORS: Jack C Herrald (P)
Lamond Howard & Associates (D)CATCHWORDS: Equity [325]- Injunction- Plaintiff in breach of undertaking to court- Injunction denied. Estoppel [35]- Estoppel in face of a statute- Farm Debt Mediation Act- Act means to estoppel or res judicata can have effect. Landlord & Tenant [77]- Termination- Farm debt- No estoppel or res judicata may outflank right to mediation. Procedure [748]- Declaration- Whether equitable remedy- Discretion. Words & Phrases- "Seeks". ACTS CITED: Farm Debt Mediation Act 1994, ss 6, 8(1), 20 CASES CITED: Barilla v James (1964) 81 WN (Pt 1) (NSW) 457
Chapman v Michaelson [1909] 1 Ch 238
J & F Stone Lighting and Radio Ltd v Levitt [1947] AC 209
Lodge v National Union Investment Co Ltd [1907] 1 Ch 300
Plier v Trumble (1873) 4 AJR 26DECISION: Injunction denied
THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISIONYOUNG, J
THURSDAY 22 JULY 1999
3287/99 - BRADLEY V ASHTON
JUDGMENT
1 HIS HONOUR: This is the final hearing of a suit that was commenced earlier this afternoon whereby mortgagors seek declarations that their mortgagee is intending to take enforcement action to auction their properties tomorrow, contrary to s 6 of the Farm Debt Mediation Act 1994.
2 The properties involved are in the Braidwood area upon which the plaintiffs run cattle. They have been doing so for some time. They borrowed money from the defendant, the amount of the debt is not clear, but it would seem to be over one million dollars.
3 The plaintiffs previously made an application in proceedings 2276/99 for much the same relief as is presently sought in respect of previous enforcement action involving an earlier auction. Those proceedings came on before Austin J on 12 May 1999. The proceedings were settled. His Honour ordered in accordance with the short minutes that the summons be dismissed and that the plaintiffs pay the defendant's costs agreed at $6,000. The court then noted an agreement between the parties, essentially being that the plaintiffs would pay, and the defendant would accept, one million dollars on or before 4pm, 9 July 1999 in full satisfaction of all that was owing to him. If that money was not paid then the plaintiffs would give the defendant vacant possession of the properties before 9am on the next day and they undertook to the court that they would do so. They also undertook to the court that they would not make any further application in a court for a stay or injunction preventing the defendant exercising any enforcement action.
4 The orders that were sought in the previous proceedings were in accordance with paras 1 and 2 of the summons that the relevant debt was a farm debt within the meaning of the Farm Debt Mediation Act 1994 and that the defendant had failed to comply with s 8(1) of that Act. The rest of the orders were consequential injunctions.
5 Today the plaintiffs ask for the same orders, plus an order that they be released from their former undertaking, together with a declaration that the agreement in the short minutes of order of 12 May constitutes an agreement which contracts out of the Farm Debt Mediation Act contrary to s 20 of that Act.
6 The plaintiffs seek injunctions preventing the auction tomorrow, plus declarations that the debt is a farm debt and the defendant has failed to comply with the provisions of s 8.
7 Mr Harrison SC who appears for the plaintiffs candidly put that there is no argument that if the Act and in particular ss 6 and 20 did not apply that there would be an estoppel. However, he said that there could be no estoppel in the face of the statute, particularly ss 6 and 20, which evinced a firm intention by the legislature that the mediation provisions of the Act could not be outflanked.
8 This submission is certainly correct. There are judgments of high authority in cases where people sought to use estoppels to make life easier for landlords under the local and overseas equivalent of the Landlord and Tenant (Amendment) Act 1948, which were completely unsuccessful. In J & F Stone Lighting and Radio Ltd v Levitt [1947] AC 209, 216 Lord Thankerton said that:
"It is idle to suggest that either estoppel or res judicata can give the court a jurisdiction under the Rent Restriction Acts, which the statute says it is not to have."9 That thought and similar thoughts were applied in this State in the Full Court decision in Barilla v James (1964) 81 WN (Pt 1) (NSW) 457, particularly at 462-3. Walsh J quoted a further passage from Lord Thankerton's judgment that in this sort of matter the court cannot be prevented from looking at the true facts, and no legal technicality can prevent the tenant from calling the attention of the court to those facts so that the policy of the Act will be complied with.
10 It is to be noted that Lord Thankerton speaks not only of estoppel but also res judicata. As to res judicata, it would seem to me that bearing in mind the principles referred to in Spencer Bower Turner and Handley on Res Judicata 3rd ed (Butterworths, London, 1996) particularly paras 38, 39 and 56, one must look at the summons and the evidence in the former proceedings to see what the dismissal determined.
11 The dismissal must have determined the issues that the debt was not a farm debt within the meaning of the Act and/or that the defendant had failed to comply with the provisions of s 8. Query whether both. It seems to me that really one cannot conclusively say it must have been both.
12 Accordingly, even if there had been a res judicata it would not have conclusively dealt with the matter in the defendant's favour.
13 However, as on high authority neither estoppel nor res judicata can prevent the court from looking at the true facts, the matter is not an answer to the plaintiffs' claim in any event.
14 Accordingly, I have to look at the true facts. I have looked at the material in suit 2276/99 only for background and to work out what was the issue before the court. The only evidence in the actual suit is the evidence of Mr Bradley, who says that he is engaged in a farming operation with cattle and that there has been no mediation. I appreciate that the suit was only commenced earlier this afternoon and there has been little opportunity to put on evidence, but that is the only evidence before the court at the moment.
15 Should the court then grant an injunction? I think the answer to this question is “No”. This is a Court of Equity and a person who comes before the Court of Equity must come with clean hands.
16 Even putting out of consideration entirely that the plaintiffs may be in contempt of court because of their undertaking to give vacant possession on 10 July, which they just have not done, the quite clear promise on 12 May was that they would not make any further application to the court.
17 Normally people who are in breach of an undertaking to the court and also breach a promise get no relief in this Court at all. That is so, even if what they are seeking to do is to rely on statutory rights that a transaction in breach of public policy ought to be restrained; see Lodge v National Union Investment Co Ltd [1907] 1 Ch 300.
18 Mr Harrison SC says that the agreement embodied in the short minutes is one which offends against s 20 as an agreement by which a person seeks to avoid the operation of the Act.
19 There is no evidence at all to suggest that either of the parties to the agreement intended to avoid the operation of the Act. Mr Harrison SC, however, submits that the word "seeks" covers not only a person who has the intention when he or she makes an agreement, but also a person who entered into an agreement the natural result of which is to avoid the operation of the Act.
20 In the limited time that I have had available I have endeavoured to see whether past courts have construed the word "seeks" in this way, and have found no assistance. The nearest one can get is in Plier v Trumble (1873) 4 AJR 26, the Full Court held in Victoria that there was a very real difference between pursuing game and seeking game. However, it seems to me that bearing in mind the whole purpose of the Act Mr Harrison SC's contention is likely to be correct.
21 The terms of short minutes of order operate both as an order of the court and also as a contract. Insofar as they operate as a contract, it would seem to me that the undertaking not to bring a further application, if the Act gives the right, would be something which would be affected. However, whether that be right or not, the fact that the plaintiffs are in breach of the undertaking to give vacant possession, and the clear intent of them submitting to the order on 12 May, is reason why this Court should not in its discretion give any relief by way of injunction.
22 It should be made one hundred percent clear that the way in which this Court has been able to function over many years is because any orders and undertakings given to it are very strictly policed and that people know if they breach an order or breach an undertaking the serious consequences that that would have. The court will not be involved in granting injunctions to people who are in that position, except in the most extraordinary case. Mr Harrison SC is right when he says there has not as yet been any application to enforce the undertaking, but that makes little difference for present purposes.
23 There was, as I indicated earlier, an application for release from the undertaking and there was some suggestion that the plaintiffs were people of little education who made the promise to the court in the expectation that they would have new finance, but there is nothing in those statements which would warrant the release from the undertakings.
24 The application for a declaration is a different matter. An application for a declaration is not an application for equitable relief and although the court has a discretion as to whether or not it makes a declaration, the court ought not to impose upon a plaintiff any equitable terms in making a declaration; Chapman v Michaelson [1909] 1 Ch 238. Furthermore, coming to Equity with clean hands is not a maxim that affects the common law.
25 If the true facts are that this is a farm debt and there has been no mediation, and if, as I have held, estoppel and res judicata are irrelevant, then the result of tomorrow's auction will be void and the auctioneer and the defendant will be committing conversion of the plaintiffs' properties and the purchaser will get no title.
26 Accordingly, despite the conduct of the plaintiffs, it would seem to me that some declaration should be made in the interests of all.
27 However, the making of a declaration is a matter of discretion and I am extremely loathe to make a declaration in terms of paras 1 and 2 of the summons because that might be very unfair to the defendant. This is because he really has not had a lot of opportunity to put on evidence dealing with the true facts and it may be that, if he had have had that opportunity the court would see clearly that this was a case where for instance there had in fact been mediation.
28 Accordingly, I believe the appropriate thing to do is merely stand the suit over.
29 I have no power to make an interim declaration, but I will note on the papers that the court notes that on the material before it at present the proposed action by the defendant to sell the property at auction tomorrow is void. I will stand the suit over into the Registrar's list.30 I stand the matter over to Friday 30 July before the Registrar at 9.30 am and note that I regard my intervention today as, although technically a final hearing, it is more of an interlocutory nature and there is no problem about the next round of these proceedings being heard by a different judge. I reserve the costs.
[Mr Harrison sought order 3 in the summons]
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