David Securities Pty Ltd & Ors v Commonwealth of Australia

[1993] HCATrans 263

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl17 of 1990

B e t w e e n -

DAVID SECURITIES PTY LTD

First Appellant

A & T RAHME & SONS PTY LTD

Second Appellant

ANTOINE RAHME

Third Appellant

THERESE RAHME

Fourth Appellant

and

COMMONWEALTH BANK OF AUSTRALIA

Respondent

MASON CJ

David(3) 1 7/9/93

BRENNAN J
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 SEPTEMBER 1993, AT 10.17 AM

Copyright in the High Court of Australia

MR A.R. EMMETT, QC:  May it please Your Honours, I appear

with my learned friends, MR G. O'L. REYNOLDS and

MR J.E. MARSHALL for the respondent in the appeal,

which is the moving party in the motion before

Your Honours this morning. (instructed by

L.E. Taylor, Chief Solicitor of the Commonwealth

Bank)

MR J.M. SPENDER, QC:  May it please Your Honours, I appear

for the appellants in the appeal, the respondent to

the notice of motion, and my learned friend,

MR D.J. HAMMERSCHALG, appears with me. (instructed

by Isenberg Spedding and Player)

MASON CJ:	Mr Emmett.
MR EMMETT:	Your Honours, the motion is one inviting

Your Honours to vary the orders which were

madefollowing the disposal of the appeal in the

proceedings in October last year. It appears to us

that it may be that Your Honours were not fully

apprised of the real issues between the parties,

and that that has led to the orders in the form in
which they were made. Alternatively, if

Your Honours were intending deliberately to give the effect which is the result of the orders, then

it appears that we have not really been heard in

relation to the form of the orders.

The matter arises in this way:  Your Honours

will recall that in the court below, at first

instance in the Federal Court, the appellants to

this court were the plaintiffs seeking damages from

the Bank in respect of the foreign currency

transaction.

There was an issue raised in the applicant's

claim against the respondent, below, for refund of
the withholding tax, which Your Honours have

ultimately held would be recoverable if it can be

shown it was paid under a mistake, even though that

mistake be a mistake of law.

The Bank filed a cross claim in the

proceedings and the course of the proceedings was

that the trial judge disposed of the claim on the

statement of claim and entered a verdict for the

respondent Bank in those proceedings. He then

embarked on a hearing of the cross claim and on the

cross claim entered judgment for the Bank in a sum
of United States dollars, in total in the aggregate
in excess of some $2 million.

The appellants in this court appealed to the Full Court of the Federal Court and that appeal was

dismissed. Application was then made for special

David(3) 7/9/93

leave to appeal to this Court. When the matter

came before this Court, the Bank indicated that it

did not oppose special leave on all issues intended

to be ventilated by the appellant. However, the

Court declined to grant leave on all matters, and limited the leave to the question of whether or not

moneys paid under a mistake of law could be

recovered. That was the issue that Your Honours

determined as a matter of law in October last year.

Because of the state of the evidence,

Your Honours directed that the matter be returned

to the trial judge for the purposes of an inquiry

as to whether or not there was in fact a mistake

relevantly made and, if so, whether or not the Bank

would be entitled to defences along the lines that

Your Honours indicated would be available by way of change of position or what have you.

The orders that Your Honours made included the

setting aside of the judgment which had been

entered on the cross claim for something in excess

of $US2 million. However, the amount involved in

the appeal was something in the vicinity of

$30,000. The net result is that the Bank has now

been deprived of a judgment in excess of $2 million

until such time as the matter can be tried. While

the appellate process was under way there was other

litigation between these parties and related

parties concerning the enforcement of the judgment

which the Bank had obtained, including proceedings

for possession of property which was the subject of

a mortgage given to secure the indebtedness of the

Bank.

At the time when those proceedings came on for

hearing - this is by way of example of the
difficulty that the Bank faces - when those

proceedings came on for hearing before

Mr Justice Studdert in the Supreme Court of

New South Wales, the fact of the outstanding appeal

was raised.

there is a judgment for a money amount and Mr Justice Studdert said, in effect,

therefore judgment for possession will be given

pursuant to the mortgage securing that amount.

There was then a notice of appeal filed in respect

of those proceedings. This was, again, before

judgment was given. Following the giving of

judgment by Your Honours in October, a

supplementary notice of appeal was filed in the

proceedings on appeal from Mr Justice Studdert

alleging that because the judgment of

Mr Justice Hill had been set aside there was no

longer any valid judgment to support the judgment

for possession. So that the Bank is faced with a

situation where it can now no longer enforce its

judgment for $2 million - in excess of $2 million -

David(3) 3 7/9/93

when the only amount in issue is something in the

vicinity of $30,000, or perhaps even if it is

$100,000, it is something which is only of a very

small proportion of the total amount of the Bank's

claim.

The Bank, of course, would contend that that

does not matter, that the judgment, for example, of

Mr Justice Studdert would stand. The fact that the

Bank is put in the position where it no longer has a judgment in place leads the Bank to make this

application, and the application was made very

shortly after Your Honours delivered judgment, to

invite Your Honours to vary the terms of the

judgment such that the Bank will still have in

place a judgment of an amount which represents a

figure that is simply not in dispute as between the

parties.

In the notice of motion we have formulated two

possible alternatives. One is, in a sense, the way

in which the proceedings were conducted at trial,

that is, that the judgment which the Bank had on

the cross claim should remain unaltered, and that
the present appellants, if they succeed before

Mr Justice Hill or some other judge in the Federal

Court, in establishing that they are entitled to

recover moneys, would then have a judgment for that

amount; and no doubt it would be appropriate for

there to be a set off of the amounts and the Bank,

of course, would submit to a stay to an extent

sufficient to protect the appellants against the

maximum amount that could be recovered by way of

judgment on the hearing of that application.

So shortly, Your Honours, the application is

to invite Your Honours to vary the orders that were

made.	I should say the orders have not yet been
taken out, if that is a relevant factor.	The

application is to vary the orders so as, in effect,

to preserve in place a judgment of some amount

either the full amount which Mr Justice Hill
ordered, or some reduced amount.	The amount which

the Bank offers to consent to in terms of the

reduction is far in excess of what the Bank

understands to be the maximum claim which could be

the subject of the proceedings in the Federal

Court.

MASON CJ:  Mr Emmett, at the moment I do not quite

understand what is the difference between the order

sought in 2(ii) and the order sought in 3(ii). It

does not emerge very clearly from the difference in

the expression of the order sought.

MR EMMETT:  The difference between 2 and 3 is that 2

involves no interference at all with the judgment

David(3) 4 7/9/93

of Mr Justice Hill on the cross claim, but simply a

judgment for a money amount on the principal claim.

In other words, the verdict for the respondent

would be set aside on the principal claim and a

money amount entered as judgment for the applicant.

MASON CJ:  I see. What was the order of the trial judge

made on 11 May which is referred to - - -?

MR EMMETT:  He simply entered a judgment for the respondent,

the Bank.

MASON CJ:	I see.
MR EMMETT:	The cleanest way of dealing with it would be to

say that the judgment on the cross claim remains

unaltered and what would happen if the present

appellant is successful in the Federal Court is it

would get a judgment for whatever amount it is

found entitled to recover. That would be a

judgment in its principal claim which is really the

way in which the matter was litigated below, as I

hope to demonstrate to Your Honours in the course

of address. That is what is intended to be the

difference in the two forms of order.

Now, Your Honours, we move on the affidavit of

Alfred Henry Watkins. Your Honours have, in an

application book, an affidavit sworn in March of

this year. As a result of discussions between

counsel, we do not wish to read or in any way rely

on paragraphs 21 and 22 of that affidavit. We have

prepared a substitute form of application book,

which we are happy to hand up if Your Honours have

not already made use of the application book that

is there. It is really a matter of logistics and

convenience for Your Honours as to whether it is convenient to look at the book that Your Honours

have on the basis that we do not wish to refer at

all to paragraphs - - -

MASON CJ:

I think that is sufficient for our purposes,

Mr Emmett, without handing up an additional book.

MR EMMETT:  May it please Your Honours. Is it convenient if

I read that affidavit to Your Honours?

MASON CJ: Yes.

MR EMMETT:  Mr Watkins says:

I am employed by the respondent ("the

Bank") as a senior manager of the Bank's -

MASON CJ: We have read the affidavit, Mr Emmett. There is

no occasion to read it.

David(3)	5	7/9/93
MR EMMETT:	May it please Your Honours.	I also wish to

tender the judgment and supplementary notice of

appeal in the matter which I briefly opened a

moment again, that is, the proceedings before

Mr Justice Studdert, just to indicate the nature in

explicit terms of the problem that the Bank faces.

I do not think it will be necessary for

Your Honours to read the whole of

Mr Justice Studdert's judgment. The relevant part

is the reference to the orders at the bottom of

page 9, indicating that he directs "the entry of

judgment for possession" in respect of the

premises. The proceedings are between the Bank and

Mr and Mrs Rahme, who I think are actually

appellants before the Court as guarantors of the

principal indebtedness of David Securities and

A & T Rahme and Sons Pty Ltd. There is reference

in the body of the judgment to arguments that were

addressed and rejected concerning issue estoppel

and the like as between these parties, and

reference is made to the fact that the matter was

on appeal to this Court.

If one then goes to the second document, which

was the "Supplementary Notice of Appeal" filed in

November 1992, the first ground of appeal before

Mr Justice Studdert is that:

The Judgment of Justice Hill of the Federal Court of Australia relied upon to establish

debt has been set aside and is of no effect.

Now, whereas the Bank certainly does not concede

that that is a valid ground, the fact that the

appellants are disposed to rely on such a matter

indicates that there is at least a risk that the

Bank could suffer real prejudice if the orders stand in their present form.

Your Honours, that is the evidence of the

applicant, the moving party, on the motion. We

have been given notice of some further evidentiary material that my learned friend wishes to rely on.

BRENNAN J:  Mr Emmett, can I just follow this clearly. The

appeal to the Full Federal Court was against the

judgment of His Honour Justice Hill of 11 May?

MR EMMETT:  And also his judgment of 14 June.

Mr Justice Hill, in effect, dealt with the matter

in two stages, and gave two separate judgments and

entered two separate verdicts, in effect. First of

all, he disposed of the plaintiff's claim and gave

judgment for the defendant in effect. I am using

supreme court terms rather than Federal Court

terms. Then he dealt with the cross claim and

David(3) 6 7/9/93

entered judgment for the cross claimant on the

cross claim. The effect of Your Honours' orders is

to set aside the judgment on the cross claim and,

principally, what we invite Your Honours to do is

not to interfere with the cross claim but to
interfere with the first judgment, namely the

judgment for the respondent, or the defendant, in

the principal claim. I was proposing to develop

that during the course of address after the

evidence is finished.

BRENNAN J: In terms of the Court record, what is the

present state of the two judgments by Justice Hill?

MR EMMETT:  So far as the Federal Court is concerned, it is

our understanding that they are still in place, as

this Court made an order but that order has not

been taken out and we think, therefore, has not yet

been given effect to.

BRENNAN J:  And the effect of this Court's order is to do

what in respect of those two judgments?

MR EMMETT:  It would leave untouched the judgment of May,

but is to set aside the judgment on the cross claim

of June, so that the Bank ends up with no judgment

at all, and of course the appellant has no judgment

either, because until such time as Mr Justice Hill

or some other judge, if that is appropriate, makes
a determination of whether or not the present
appellant is entitled to recover money paid under

the mistake, if a mistake is found, then there is

simply no money judgment either way.

MASON CJ:	You say Mr Spender wants to -
MR EMMETT:	We have been given notice of two short

affidavits that my learned friend intimated he

proposed to seek leave to read.

MASON CJ: Yes, Mr Spender.

MR SPENDER:  If Your Honour pleases, we do have two short

affidavits. One, I believe, has been filed, an

affidavit of Mr Peter Jackson, and the other one is

an affidavit of Mr Grant Edward Spedding.

Mr Jackson's affidavit simply goes to the proposition of the suggested agreement between the

parties and negates that, and Mr Spedding's

affidavit goes to the interests that others have in

the determination of the issue which was to be

remitted, and which was remitted to

Mr Justice Hill, but which of course has not been

heard. May I inquire whether Your Honours have Mr

Jackson's affidavit of 3 September.

David(3)	7/9/93
MASON CJ:	You can take it that we have read these

affidavits.

MR SPENDER: If Your Honour pleases.

McHUGH J:  Mr Spender, I do not have a copy of Mr Jackson's

affidavit. Thank you, Mr Spender.

MASON CJ:  Mr Spender, before we hear from Mr Emmett, what

is your attitude to this application?

MR SPENDER:  Your Honour, we oppose the application. We

take the position, very simply, that within the
authorities there is no case made for the reopening

of the judgment which has been given, that there

was an opportunity to put anything that was sought

- that wanted to be put on the subject, and that

there has been no error of law, no error of fact,

that is, no misapprehension of fact by the court,

no denial of procedural fairness, and the remedy is

there. Unlike almost every other case which comes

before the Court for reconsideration, the matter

has been remitted to Mr Justice Hill and had -

MASON CJ:  I was not inviting you to address us at the

moment, I was merely inquiring as to your attitude,

that is all.

MR SPENDER: That is our attitude.

MASON CJ:  Thank you. Yes, Mr Emmett.

MR EMMETT:  May it please Your Honours. Might I say in

relation to the affidavit of Mr Jackson, in the

light of what is said there, we do not contend that

there is any agreement and we are not asking

Your Honours to enforce an agreement. There does

not appear to be any dispute as to what occurred in

terms of the communications that took place between

the parties. We do not, at the moment, see the

relevance of the material referred to in

Mr Speeding's affidavit but, no doubt, my learned

friend can indicate the relevance of that. Can I take Your Honours, briefly, to the way

in which the appeal ran, really by way of

anticipating in advance the proposition that my

course of the hearing - I might inquire whether learned friend just advanced. Very early in the hearing of the appeal?

MASON CJ:  No.

MR EMMETT: There are only two very short passages, if I

might take the liberty of reading out the relevant

David(3) 7/9/93

passages. At page 4, Your Honour Mr Justice Deane

said:

What is the total amount involved, Mr Spender?

MR SPENDER:	Your Honours, on that subject
there are discussions between the parties.	I
would apprehend that we would come to an agreement in the course of the day on that
subject.

At page 89, Your Honour Mr Justice McHugh asked me:

How much is involved in this appeal?

I said:

In this appeal, Your Honour, only some

$30,000 -

and I went on to indicate that the matter was

nevertheless of some significance because there were many other claims of a similar nature that

might be resolved by the outcome of these

proceedings.

Your Honours will now be familiar with the

exchange of communications between the parties that is deposed to by Mr Watkins, indicating the quantum

of the amount in issue in the appeal, in effect.

That amount is effectively best summarized at

page 10 of the application book in paragraph 22.

TOOHEY J: That has gone unfortunately. Did you say

page 10?

MR EMMETT:  Page 8 of the affidavit which is page 10 of the - I am sorry - - -

TOOHEY J: That is the paragraph I thought had been

eliminated.

MR EMMETT:  I am sorry, we had prepared a substitute

application book, and I am looking at the new one,

page 11 paragraph 24, page 9 of the affidavit.

There is a formula set out there and there are four

figures in the middle which indicate the Bank's
understanding of the amount which the applicants
would recover if successful. The figures are in
parenthesis. The formula is set out above, and

then the amounts of withholding tax that are in

issue are the figures of $24,795.60 and $21,363.

If interest is recoverable in respect of that

amount, and that might be in issue below, then the

amounts of interest would be $14,000 and $12,000

respectively as shown in parenthesis on that page.

So I rather underestimated the figure when I

David(3) 9 7/9/93

responded to Justice McHugh that the amount was

about $30,000. It is closer to $70,000 odd. But

what is clear is that the amount on this material

which the applicant could recover is something less

than $100,000.

DEANE J: Mr Emmett, I am a little behind, I think. Should

you not set the context, as it were, by telling me,

and no doubt reminding others, how things were

pleaded. I mean, what was involved in the first

case? What was involved in the second

judgment - - -

MR EMMETT:  Your Honour, I was intending to take that

course.

DEANE J: Well, it is very hard to follow what is being said

if one has a blank mind about what was involved in the claim and what was involved in the cross claim.

MR EMMETT:  Yes, I was intending to do that. I thought it

was convenient to have the figures first, but Your Honour may be - obviously, is correct in

saying that it is better to start at the beginning,

which I will endeavour to do.

McHUGH J: Context first, details later, Mr Emmett.

MR EMMETT:  Yes, may it please Your Honours. Do

Your Honours have the appeal book which contains

the pleadings?

MASON CJ:  No.

MR EMMETT:  No. That may make things slightly more

difficult. I can, perhaps, read the relevant

passages to indicate, and if it becomes apparent

that we are getting into difficulties we might have to take a different course. I can at least outline

the way in which the matter went.

DEANE J:  What I was hoping you would tell us is what was in

involved in the claim which led, presumably, to

the first judgment and what was involved in the

cross claim which led, presumably, to the second

judgment.

MR EMMETT:	The proceedings were commenced in the Federal Court by two foreign currency loan borrowers and
the guarantors in respect of those loans against the Bank. Broadly, the allegation was that the Bank acted in breach of a duty said to be owed by
the Bank to the borrowers in recommending that they enter into a foreign currency loan and in not
administering the foreign currency loan in a manner
that was consistent with that duty.

David(3) 10 7/9/93

TOOHEY J:  Was it not a claim for misleading and deceptive

conduct?

MR EMMETT: It was as well. It was a breach of duty plus

an allegation that the Bank engaged in conduct

which was misleading and deceptive in contravention

of section 52 of the Trade Practices Act. There
were a multiplicity of causes of action pleaded but
the general thrust of them was that the Bank had in
some way acted in breach of a duty owed to the
borrowers in advising them to enter into the
transaction and in the way in which they

administered the loan after the transaction had

been entered into.

McHUGH J: There was a whole series of claims, was there

not?

MR EMMETT:	Yes.
McHUGH J:	..... advice, breach of contract, breach of

fiduciary duty, breach of the Trade Practices

Act - - -

MR EMMETT:  Indeed, as I say, multiplicity of cause of

action, but the general thrust was the Bank acted
wrongly in relation to the entering into this

foreign currency loan. In the course - - -

MASON CJ:  The claim was disposed of by the judgment

delivered on 11 May?

MR EMMETT:  Yes, it was, but in the course of the pleading,

allegation was made that the Bank had required

payment of withholding tax, and that it was not

entitled to require payment of withholding tax. I

will just read the two paragraphs which - they are

paragraphs 30A and 66 for the record.

BRENNAN J:  What document is this?

MR EMMETT: This is the statement of claim before

Mr Justice Hill, and in a moment I will get the -

in the appeal book, paragraph 30A appears at

page 18 and paragraph 66 appears at page 63, and

the language of the two paragraphs is somewhat

similar. Paragraph 30A says:

In purported reliance on the terms of Clause 8

of each of the loan agreements -

and Your Honours will recall that that was the

clause that was the subject of Your Honours'

judgment concerning withholding tax -

the Bank has required -

David(3) 11 7/9/93

the borrowers -

to reimburse the Bank for interest withholding
tax deducted by the Bank from interest paid by

it on moneys borrowed overseas.

So the allegation is that the Bank had required

reimbursement from the borrowers of the interest

which the Bank - withholding tax which the Bank had

to deduct on the interest which it paid to its

overseas branch.

Then in paragraph 66 that matter is taken up

again:

As pleaded in paragraph 30A herein, the Bank

has claimed reimbursement of interest

withholding tax deducted from the interest

paid by the Bank on moneys borrowed overseas

in contravention of section 261 -

so the allegation, broadly, in the statement of

claim was the Bank has required us to pay

withholding tax, which it is not entitled to

require us to pay because of section 261, and
Your Honours held that that was, in fact, the case,
that the Bank was not entitled to require payment

of withholding tax.

The application simply sought an order for

damages, with no specific reference to a claim for

withholding tax. The cross claim brought by the

Bank was for recovery of debt, being the amount

payable under the loan. There was no claim by the

Bank for recovery of unpaid withholding tax; the
Bank simply sought unpaid principal debt and

interest.

The defence to that cross claim - this appears

at pages 79 and following of the appeal book - did

not refer specifically to any claim for recovery of

withholding tax. It simply said, in answer to the

whole of the cross claim, the borrowers say:	that the amounts claimed by the cross claimant
are not presently due and payable by -

the cross respondents -

by reason of the matters, facts and

circumstances pleaded in the statement of

claim.

BRENNAN J:  Now, was the amount claimed by the Bank the

balance of a running account which had as some of

its elements the charges which the Bank had made in

respect of the tax?

David(3) 12 7/9/93

MR EMMETT:  No. The Bank was simply seeking to recover the

amount of principle and interest on loans that had been made. The payment of the withholding tax had been made through a current account, which the Bank

was not seeking to recover. The Bank was simply

seeking to recover outstanding principal and

interest.

In the course of opening, and this is in the

appeal book, counsel for the applicants in the

Federal Court referred to the claim for withholding

tax and said that it was recoverable because it was

a claim made under a void provision, in effect. A

payment made pursuant to a void provision.	No
mention was made in the course of opening of

mistake. These are matters that are referred to in

the transcript of the argument before Your Honours

on the appeal.

BRENNAN J:	Mr Emmett, could I interrupt you for a moment? The sums of money payable under clause 8, were they
added to the principal?
MR EMMETT:	No, no they were paid each roll-over as the term

goes. Each roll-over the amount was charged -

BRENNAN J: Yes, I recollect that.

MR EMMETT:  Yes. Now, Mr Justice Hill determined the

principal claim and found that there was no breach

of duty by the Bank, and although the question of

withholding tax was opened by counsel for the

applicant, it does not appear to have been

mentioned thereafter up to the time of the entry of

judgment for the Bank on the principal claim. The

Bank then brought on its cross claim and in the course of argument in relation to the cross claim the matter of withholding tax was ventilated, and

Mr Justice Hill dealt with the matter in dealing with the cross claim - again, I am afraid I am

going to have to refer to some paragraphs in the

appeal book. At page 266, of the appeal book,

Mr Justice Hill concludes what he has to say about

the claim for withholding tax.

There had been some misapprehension, it seems,

as to what was being claimed in respect of

withholding tax, and it had been understood, it

seems, by the applicant in the Federal Court that

the Bank was seeking to recover withholding tax.

When that was pointed out, Mr Justice Hill's

observations, after dealing with the fact that if

there was a claim it would be a mistake of law and

therefore it could not be supported in any event,

then went on to say - and this is at page 266:

David(3) 13 7/9/93

While the Bank claims interest to the date of judgment it does not claim any amount

under clause 8(b) of the agreement ..... When

the borrowers come to pay the amount of

interest as merged in the judgment, at that

point they will be obliged to withhold

tax ..... and once the withholding tax is paid

to the Commissioner that payment will operate

as a discharge to the borrowers. It will be

at that stage, if at all, that an issue under

s. 261 could arise and then only if the Bank

relying upon clause 8(b) calls upon the

borrowers to pay in effect the amount of

withholding tax. That is not a matter before

me and in the circumstances I do not believe
it appropriate that I comment further upon the
matter.

So, in dealing with the withholding tax question in answer to the cross claim,

Mr Justice Hill said, "The Bank is not seeking to

recover withholding tax, therefore I do not need to

deal with the matter. If there had been a claim

for recovery of withholding tax already paid, that

would have been paid under a mistake of law and I

would have dismissed it anyway." The further part

was the subject of debate before Your Honours as to

whether or not there was evidence of mistake and

the like.

McHUGH J: But did not the defence to the cross claim raise

a question of set off?

MR EMMETT:  In general terms it did. The language which I

read a moment ago - in answer to the whole of the

cross claim, the first cross respondents says that "the amounts claimed by the cross claimant are not

presently due and payable by reason of the matters,

facts and circumstances pleaded in the statement of

claim." So, that may well be a pleading of an

entitlement to set off.

DEANE J:  If you go back to square one and assume it had all

been in one hearing, and there had been a finding

that the Bank was liable to refund $30,000 for

withholding tax, how would it go under present

procedure? Under the old procedure, as I recall,

it would have been judgment for the plaintiff for

$30,000 on its claim; judgment for the Bank for

$1,000,000 on its cross claim; verdict for the Bank

for $970,000. Is that the way it would go now, or

is it all different now?

MR EMMETT:  It would probably go the same way, Your Honour.

One difficulty, since Your Honour was, no doubt,

involved in pleadings, is the repeal of the statues

of set off which would have permitted a legal

David(3) 14 7/9/93

defence by way of set off, whereas a defence by way

of set off is now only allowable to the extent that

it can be shown as an equitable defence. So that,

in so far as there is a claim for set off here, it

must be treated as an equitable set off which, of

course, means that the conduct of the present appellants may be relevant to the question of

whether a set off is appropriate, in so far as they

seek equitable relief.

The net result, then, before Mr Justice Hill

was that he determined there was no claim against

the Bank, which included the claim in respect of
withholding tax, and then found that there was
judgment for the Bank in the sum of $2 million-odd.
As I have said, there was then an appeal to the

Full Federal Court on all issues and that was

dismissed on all issues. In the course of that

appeal the question of recovery of the amount of

the withholding tax on the basis that it was paid

under a mistake was ventilated and the Full Federal

Court, considering itself bound by precedent, said that the amount of withholding tax could not be

recovered because if there was a mistake it was a

mistake of law and it was simply not recoverable in

those circumstances.

It was dealt with, if anything, as a set off,

although it is certainly not clear what the

Full Court would have done had they upheld the

appeal in respect of withholding tax. They took

the view that it was just not open because it was a

mistake of law and they therefore did not have to

deal with the matter. Before this Court the notice

of appeal on which leave was granted, and this does
appear in the application book, I am pleased to

say, at page 47, this is the draft notice of appeal

upon which leave was granted.

The relief that was sought in the application for special leave was that the order of the Full

Court be set aside, and in lieu thereof the appeal

be allowed, without any reference to setting aside

any judgment of Mr Justice Hill. Alternatively,

that the action be remitted to the Federal Court
for assessment of any amount payable by the

appellants to the respondents, rather suggesting

that the appropriate course would be to determine

how much is payable by the Bank to the borrowers,

and that a judgment be entered for that amount.

There was a supplementary - - -

MASON CJ:  The notice of appeal, of course, at page 49, has

two defects.	One, it does not specify the part of
the judgment	against which the appeal is being
brought, and	it does no more, under orders sought
in paragraph	3, than say "appeal be allowed".

David(3) 15 7/9/93

MR EMMETT:  Indeed. But then in the course of argument - r

have already taken Your Honours to the brief

references in the transcript to the amounts

involved - the written submissions by the

appellant, a paragraph from which is reproduced on

page 4 of the application book, indicates the basis

upon which, in our submission, the Court was

invited to approach the matter.

In paragraph 3, paragraph 7 of the written outline is set out:

The payments were made under a mistake

(AB348.S). The First and Second appellants

therefore enriched the Respondent without any

intention so to do. The payments should

therefore be restored to the appellants
together with interest. This should be

achieved by an appropriate reduction in the

judgment ordered by Hill J.

So that all that Your Honours were being invited to do was not to set aside the judgement altogether,

but simply to reduce the amount. And that is what

we have endeavoured to pick up in the alternative

form of order, because that appears to be the

approach that Your Honours took, that is to say,

"What we should do is interfere with what

Mr Justice Hill did on the cross claim, rather than

deal with the matter in terms of the plaintiff's

principal claim".

But what is clear, in our submission, is that in the course of the submissions made by my learned

friend, it was not ever contended that Mr Justice

Hill's judgment should be set aside altogether so

that the appellants would be in a position to say
to another court, "There is no judgment, and

therefore anything that depends upon that judgment

should be set aside".

MASON CJ: But, of course, the Court did not know at that	stage that there was any outstanding problem in	terms of the judgment and another court relying
upon it, so that setting aside the judgment and
sending it back to Mr Justice Hill was but a step
in arriving at a reduction of the judgment.
MR EMMETT:	Indeed yes.	Had, however, we been told that

that is what the Court was intending to do, we

would have been able to apprise the Court of the

difficulties that we faced. The affidavit sets out

the communications between the parties indicating

that it had been thought at one stage that some

agreement might be reached as to the amount

involved. Had agreement been reached then, of

course, the Court could have been told and the

David(3) 16 7/9/93

Court no doubt would simply have said the judgment

is reduced at least to that extent, and the

question of whether or not that amount can be

recovered by the Bank would be the matter that

would be referred to the Federal Court. But in

short, Your Honours, what we say is this - - -

McHUGH J:  What does that mean - that the Court would have

made an interim judgment, modified the orders so

that it would be an interim or interlocutory

judgment? Has the Court got power to do that?

MR EMMETT:  In our submission, it would not be an

interlocutory judgment. It would direct that the

judgment be set aside to the extent that the

applicant can establish before Mr Justice Hill.

McHUGH J:  I appreciate that, but I thought that you were

wanting a judgment for a finite sum so that you can

enforce it.

MR EMMETT:  We have a judgment for a finite sum at the

moment. The simplest way of dealing with it would

be to leave Mr Justice Hill's judgment on the cross

claim untouched and simply enter a judgment on the

principal claim.	In other words, vary the order of
May rather than vary the order of June.	The Bank,

of course, would submit to an appropriate stay

order to ensure that the Bank did not recover the

full amount of its claim, including the amount that

is still in issue, and I am instructed to make that
clear to the Court, that the Bank offers to submit

to an appropriate stay order.

BRENNAN J: Mr Emmett, as a matter of law, and I am not

talking about what the practicalities of this are,
but is the situation this: that your successful

cross action yielded a judgment in solidum for

$1 million or whatever it was, and that once it is

established that some element of that was not

recoverable, then the judgment as an entirety had

to be set aside?	On the other hand, if one says
that is a judgment which can be reduced by a set

off, then the question arises whether this is

capable of being set off.

MR EMMETT:  Indeed.

BRENNAN J: Well, do we have to decide whether it is capable

of being set off, because if not, does your

judgment not necessarily have to be set aside as an

entirety?

MR EMMETT: That question simply has not been argued, and

that is really, in a sense, our complaint, that

whether or not it is capable of being set off was

not an issue before Your Honours, and has not been

David(3) 17 7/9/93

argued. We would want the opportunity of going

back to the way in which the case was conducted, to

determine whether or not it is, in fact, capable of

being set off. As I have said, there are questions

of - that statutes are set off, which in New South

Wales at least have been repealed, and that is why

we put forward the first alternative as a means of

achieving the end without having to debate that

question.

As I say, justice would be ensured by the Bank

submitting to an appropriate stay, and we have put

on evidence to indicate what our understanding is

the maximum amount of the claim which the appellants

could succeed on, and we do not understand that to

be disputed. So that, in order to avoid having to

come back to reargue the question of whether a

set-off was appropriate in this Court, the course

would be that the Bank keeps its judgment but

undertakes not to enforce it beyond a certain limit
or, alternatively, to submit to a stay beyond that

limit.

BRENNAN J:	What is the undertaking?
MR EMMETT:	The undertaking would be not to enforce the

judgment beyond the amount which is referred to in

paragraph 27 of Mr Watkins' affidavit - I am sorry,

that is not quite right. The Bank would undertake

not to enforce the judgment beyond the amount which

is reached by deducting from the verdict the amount

referred to paragraph 27 - I am sorry, it might

be 29 of the - I have confused myself by referring

to the -

BRENNAN J:	It might not be either; it might be 24 of the old one, is that right. It is the $73,320, as I
make it.
MR EMMETT:	Page 11, paragraph 25, indicates the amount

which the Bank understands is the amount to which

made in paragraph 29 is to, in effect, grant a	by the whole of the claim, but the offer that is it would be entitled if the judgment were reduced
margin for error of 100 per cent. The Bank's offer
was to undertake not to enforce the judgment beyond
the amount obtain by reducing the judgment by twice the amount that is in issue.

DEANE J: Is that amount going up all the time, as the

dollar goes down?

MR EMMETT:  No. Well, in effect, the amount which the

plaintiff would be entitled to recover goes down as

against US dollars as time passes, so the offer

becomes more and more generous as time passes.	I
think that is what we want to say, Your Honours.

David(3) 18 7/9/93

Just to conclude though, our primary submission is
that the appropriate order would be not to
interfere with the order made by Mr Justice Hill in

June, but to set aside the order made in May and make the same directions as to an inquiry on the

basis that if Mr Justice Hill determines that the

present appellants are entitled to recover the

withholding tax, he would then enter a judgment for

that amount and, if need be, that can then be set

off, as the rules contemplate, against the judgment

which has already been entered and, in the meantime

the Bank would undertake not to enforce its

judgment beyond the amount calculated, as I have

indicated.

MASON CJ:  Now, Mr Emmett, could you prepare for us short

minutes of the order, on an alternative basis, that

you now say the Court should make?

MR EMMETT:	We can certainly do that Your Honours.
TOOHEY J: Can I just ask you this, Mr Emmett:	the order of

11 May 1989 was presumably simply that the

applicant's claim be dismissed with costs?

MR EMMETT:	Yes.
TOOHEY J:	And what are you suggesting should be done with

that?	I am looking at paragraph (ii) at the top of
pages 2.	You ask that that order be set aside in

so far as it relates to the claim for reimbursement

of payments made.

MR EMMETT:  Yes, in other words, in so far as the applicant

succeeds in showing that it is entitled to recover

money, by showing that there was a mistake and that

the Bank does not have an defence - - -

TOOHEY J:  It probably would need to be spelt out in a bit

more detail than (ii).

MR EMMETT: That may be appropriate.

McHUGH J: Paragraph (ii) is directed to the present

respondent's original application in contrast to

your cross claim?

MR EMMETT:  Yes. Whereas 3(ii) operates on the same

judgment that Your Honours' orders operated on.	I
do not wish to say anything further, Your Honour.

MASON CJ:  Thank you. Yes, Mr Spender.

MR SPENDER:  If Your Honours please. Your Honours, may I

commence by putting matters in a slightly different

context to the one which has been advanced by my

learned friend. It is perfectly true that in the

David(3) 19 7/9/93

written submissions the contention was advanced

that there should be a deduction. That was

advanced in the context of the primary case which

was put on behalf of the appellates, which was that

we wished this Court to determine the issue of

mistake favourably to us.

In the course of debate, Your Honour

Justice Gaudron raised with me - and it appears at

pages 64 and 65 of the transcript - that I was

really asking for a bit too much and that they

should have the opportunity of being able to put a
defence if such a defence was available. If I

could just read very briefly what Your Honour said

to me on that subject as appears at page 65, and it

was this:

It does seem to me a little odd to say you can - I mean, there may be all sorts of

reasons why a settled principle should be

overturned, but it does seem to me to be a

little odd that if one is about to overturn it

that one is not at least obliged to give the

people who fought the case on the basis of

settled principle to fight it on the basis of

new principle.

That was the proposition which we resisted,

but unsuccessfully, because Your Honours found that

the matter had to be remitted to Mr Justice Hill

and indeed this was a matter which was put before

the Court by my learned friend's notice of

contention since the notice of contention, which

was filed in the Court, raised very specifically

this issue. It is ground 3 of the notice of

contention, and it says this:

There was not sufficient evidence from which it could be inferred that the Appellants made

payments referable to Clause 8(b) by mistake.

And so, when my learned friend refers to what

was said in the written argument, and when

Mr Watkins refers to what was said in the written

argument, that it not the context of seeking to

persuade this Court to deal with the matter once

and for all if the Court chose not to do so.

Consequently, the matter had to be remitted to

Mr Justice Hill and consequently, in our

submission, the only order that could be made was

the order which was in fact made.

McHUGH J: Is that so? Is not your notice of appeal

directed not to the cross claim but to the

application?

David(3) 20 7/9/93

MR SPENDER:  Your Honour, the notice of appeal is not

limited in terms to the cross claim -

McHUGH J: It talks about "precluded from recovering

payments". I would have thought that was more

directed to the original application rather

than - - -

MR SPENDER: Both matters, in fact, came up, Your Honour.

The notice of appeal, which came up to Your Honour, was pursuant to leave granted in respect of the two

matters which had been before the Court - G203 of

1989 and G314 of 1989. That is how the matter came

up here and it is our submission that it does not

matter whether you look at the one set of

proceedings or the other set of proceedings. What

the Bank seeks to do now is to say that it should

be given the opportunity to proffer this
proposition to the appellants and that the judgment

should be varied accordingly.

McHUGH J: But it may make a lot of difference, depending on

what the appeal was against, because if the appeal
was against the application, then the present

applicants would be entitled to have the judgment and the cross claim stand. You would then have a

right to a further hearing on your original

application, and you would also have the right to

seek to restrain the present applicant from

enforcing its judgment on the cross claim, over and

above the amount of principal and interest.

MR SPENDER:  Yes, but Your Honour, we cannot even get to

that until we get a determination of what the
proper figure is, because that is the amount which

is the subject of a set off, or cross claim,

however one calls it, and so it is very simple for

the bank to now say, "We proffer this charity

somewhat tardily, and we agree to a figure which

which we specify".

McHUGH J: But on that basis, you are the mendicant, you are

the one that asks for the privilege, because all

the Bank is seeking to say is, "We want to enforce

our claims with principal and interest". You say, "Ah ha, that is not fair or proper, because on our

application we may be able to recover money from

you, and therefore we ought to be be entitled to

set it off, therefore you should not be entitled,

as a matter of fairness, although not of legality,

to enforce your judgment against us".

MR SPENDER:  No, Your Honour. What we say is that the

orders which were made were properly made, and that

there was no opportunity denied to the respondents

to say that, in the event that you reach a

determination on this matter which has the

David(3) 21 7/9/93

consequence of accepting the appellants' argument,

that the judgment can be varied in a certain way. pointless to refer to negotiations which did not reach fruition, which were not before the Court,

and which were not thereafter pursued as the
respondents had just on a year during which they
could have agitated that matter and, if they had

wished to do so, come back here in the event that

no agreement was reached.

TOOHEY J: Mr Spender, I am sorry, I do not really

understand what your client's position is.	Is it
that the order presently made by this Court	should
stand, and that - - -

MR SPENDER:  Yes, Your Honour.

TOOHEY J: Yes, but with the consequence that all matters

that were the subject of the Bank's cross
application are at large, or that it is purely a
formal matter that arises, namely the Bank is held
out of the judgment until such time as the amount

referable to withholding tax is determined, at

which point a judgment is then entered for the Bank

on a reduced amount, depending on the calculation?

MR SPENDER:  Your Honour, it must be the latter, it cannot

be the former, because only the latter matter came

up to this Court. But what we put, Your Honour, and we have prepared some written submissions to

make our case somewhat shorter, which I would

provide, Your Honour. There are only two pages of

them. I have annexed a copy of the earlier

submissions, the written submissions which were in
the appeal, just so Your Honours can see how

paragraph 7 came into being.

TOOHEY J: Could I just ask you the question again so that I

understand it? Are you saying that if the matter

goes back to Justice Hill and the necessary

assessment is made, the judgment will then be

entered for the Bank on whatever amount is found to

be appropriate.

MR SPENDER: That is so. Yes, Your Honour.

TOOHEY J:  So that the only difference between you and

Mr Emmett, essentially, is that the Bank is held

out of the judgment for the time being.

MR SPENDER:  The Bank is held out of their judgment,

Your Honour, until it goes back to Mr Justice Hill, and is determined before Mr Justice Hill, and that

of course was something which the Bank could have

done at any time up until now.

David(3) 22 7/9/93

TOOHEY J: Well, that may or may not be, but just so I can

understand the point of difference; it is really a

question of when judgment should be entered for the

Bank.

MR SPENDER:  It is a question of when and how and under what

rules, because what we put, Your Honours, is this,

that in order for the jurisdiction to be exercised,

which my friend now seeks to persuade Your Honours

to exercise, it must be shown that there has been

error of law or a misapprehension of fact, or a

denial of procedural fairness.

TOOHEY J:  My question was not really directed at the

substance of the argument - - -

MR SPENDER:	I understand that.
TOOHEY J:	- - - but to point out what the differences

between the two approaches was, and I understand

what you are saying.

MR SPENDER:  Let me put it very simply. One gets to

whatever the figure is by one means or another, but
what we say is that we have a right to have

determined the issue which Your Honours have

remitted to Mr Justice Hill. The Bank does not

concede the issue itself; that is, the issue of

mistake. What it does is to seek to achieve, by an

indulgence of this Court, the enforcements of its

judgments and, as a practical effect of what it

seeks, to foreclose the ventilation of the issue

before His Honour Mr Justice Hill.

McHUGH J:  I do not see that at all, Mr Spender. It seems

to me that the Bank has got a cross claim to which

you have no legal answer whatsoever, and it is you

who seek the indulgence. The Bank says, "You owe

me for the principal; you owe me for the interest",

and to that claim you have no legal answer.

MR SPENDER:  We have a cross claim or set off, Your Honour.

McHUGH J: Well, that is a different matter altogether. You

have an application in which you say, "I am

entitled to some money by way of restitution for

these payments. It is not fair or equitable that

you should be entitled to enforce your judgment

against me while that issue is outstanding", but

that is a different thing from saying that the

Bank's judgment should be set aside.	Why should it
be set aside?

MR SPENDER: Well, first of all, Your Honours did so, and I

put it Your Honours did so for a very good reason,

because that is what necessarily flows from

upholding the appeal, since, if one looks to the

David(3) 23 7/9/93

situation one cannot compartmentalize and simply

say, "The Bank has a claim, you have no answer,

therefore the Bank gets $1 million" or whatever it

is.

McHUGH J:  You can on that cross claim.

MR SPENDER:  - - - one must look to. The Bank has a claim

to which you have no answer, save in so far as you

are able to establish your cross claim or set up,

in which event you have a right to have that claim

by the Bank reduced to that extent. That is the

situation in which matters have been left by this

Court, and I submit to Your Honours that whilst it

has a beguiling simplicity to say, "Well yes, why
shouldn't we accept the Bank's generous proposition
that you get twice the amount off", the fact of the

matter is the Bank had a perfect opportunity to go

back to Mr Justice Hill - it has, after all, had

almost a year for that purpose - and to have the

matter litigated there, which would bring about

precisely the result which the Bank seeks to

achieve here by getting Your Honours to reopen the

orders which were made.

BRENNAN J:	What would the Bank do if it went back to Justice Hill?
MR SPENDER:	The Bank would, I suppose, Your Honour - I do

not presume to advise the Bank - but I suppose what

the Bank would say is, "Well, we set up the

following defences to the cross claim or set up

that you have against us and those are that there

was no mistake, in fact, made by you - - -

BRENNAN J: It would simply assert a negative, would it?

MR SPENDER:  It may assert a positive which was left open by

Your Honours, I believe, and that is that there had been a change of position which would render it

inequitable, or not - - -

BRENNAN J: That problem would not even arise until a

mistake was shown, would it?

MR SPENDER: That is so, Your Honour.

BRENNAN J: Well then, do you not have the onus of proof of

getting back before Justice Hill and proving some

ground for relief?

MR SPENDER: 

I would say that the onus was on us to

establish prima facie that there was a mistake,
certainly.

BRENNAN J: 

What if you choose not to go?

David(3) 24 7/9/93

MR SPENDER:  If we choose not to go, the matter has been

remitted to His Honour Mr Justice Hill. We simply

cannot stand back and say, "Well, look, we are not

going to do anything." What would happen is that

the Bank would go back to Mr Justice Hill, ask that
the matter be relisted and in the event that the

appellants took no action, then have the remitter

dealt with on the basis that there was no attempt

by the appellants to establish that there was any

prima facie case of a mistake as a consequence of

Your Honours' holding in the case here. That is

how it would go.

BRENNAN J:  Now, Mr Spender, as a matter of - if an order

were made by this Court, contrary to your
submissions, which set aside the order first made,

and dismissed any appeal against the judgment in

favour of the Bank, and then allowed an appeal, in

part, in relation to your claim against the Bank,

and remitted that issue to the trial judge, and

stayed the Bank's enforcement of its judgment only

to the extent of the undertaking, where would any

injustice flow to your client?

MR SPENDER:  Your Honour, I suppose that our answer to that

is that the orders were properly made, and it is

not a question of asking the question, with

respect, as to whether there is injustice in some

subjective term to be found. What one has to ask

is the question whether there has been shown the

error. As what this Court has said in a number of

judgments, and I think that Your Honour has,

indeed, said as much, is that this is an

exceptional jurisdiction which can only be invoked

on the basis - on a rather strict basis - and every

member, I believe, save for

His Honour Justice McHugh, has had something to say

about it, and it has been, in our submission, put

on the basis of error.

If error has not been demonstrated, such as a

failure to give an opportunity to be heard, then
the orders must stand.	And if one looks to any

question of subjective injustice, Your Honour, the

position being that the Bank chose, rather than to

have the remitter dealt with, to come back here,

then if one says, "In what way has the Bank been

prejudiced?", we would put to Your Honours that the

Bank has not been prejudiced by the course which

Your Honours have taken. The Bank's prejudice

arises out of the course that the Bank has taken.

And I put to Your Honours - and I thought I got a

negative from Your Honour Justice McHugh - that

really that was a matter which the Bank could have

dealt with, and the Bank could deal with it.

David(3) 25 7/9/93

The effective result of what the Bank now

seeks - let us understand this, if I may put it to

Your Honours, is a matter of obvious consent, in

fact, is that the issue itself, which is an issue

which others are interested in - it raises a very,

very important principle which has never been

determined by any court, at first instance - will

not be determined.

McHUGH J:	You mean from a practical point of view?
MR SPENDER:	As a practical point of view, Your Honour,

there is no doubt about that, and I put to

Your Honour that as a practical point of view -

DEANE J: But is that not a good thing? I mean, if it is

just an academic question in the practical context

of the amounts here, is it not a good thing if it

is never determined?

MR SPENDER: With respect, Your Honour, we submit, no, it is

not, and the reason is this; if it was simply a case where there was only one issue known, that

this was an isolated matter of no public interest,

it might be one thing, but we say that this is a

matter of great public interest, and -

DEANE J:  I might have misunderstood you. As I followed,

what you were saying was this, that if you are

forced to pay the amount about which there is no

dispute, the issue about the amount which is in

dispute may never have to be determined.

MR SPENDER: Yes, Your Honour.

DEANE J: Well then, why is it not better from the point of

view of the administration of justice that you be forced to pay forthwith the amount that is not in

dispute?

MR SPENDER:  Your Honour said that the amount is not in

dispute, and the Bank - - -

DEANE J: Well, the amount that has been determined by the

courts to be owed by your client.

MR SPENDER:  I would answer that in two ways, Your Honour.

First of all it is a perfectly fresh matter that

could have been put to the Court within received

principles and we put to Your Honour that that

opportunity was there and it was not availed of.

TOOHEY J: Well, an answer to that may be that the Bank may

have to pay the penalty by way of costs for not

taking that step, but it does not really affect the

substance of the application.

David(3) 26 7/9/93

MR SPENDER: With respect, Your Honour, it does go to the

question as to how Your Honours view matters.	It
is easy enough to be sympathetic to any litigant

indeed, including a bank when matters of money are

concerned, and one says, "Why should the Bank be

shut out of its rights?" But when the alternative

exists and always did exist, why should not the

Bank have availed itself of that, and so have

avoided this argument? It is difficult to conceive

that the matter, having been remitted by

Your Honours over 11 months ago, that His Honour

Mr Justice Hill would not have dealt with the

matter pretty speedily, and it would be an end to

it.

Furthermore, Your Honours, we say that if a

litigant wishes to litigate an issue which is open

and which has been found to be open, and that issue

as well is a matter of public importance, and is an

issue which is of public importance referable to
the interests of many other people who find

themselves in precisely the same circumstances,

that it is in the public interest that that matter

should be determined, as the resolution of the case

at first instance must, one would think, as a
practical matter, throw a great deal of light on

other matters.

McHUGH J: But, Mr Spender, from what you say it appears

that you do not have any real interest in

litigating this issue, and the Bank certainly does

not.

MR SPENDER: 

Your Honour, our interest in litigating the

issue is a desire to do so, there are others who
also wish to litigate the issue, of course, and the

Bank certainly does not want to litigate the issue

and one may, perhaps, fairly infer that the

litigation of the issue is one which the Bank would

prefer to avoid, as a commercial matter, for as
long as it possibly can, and we say that as a

commercial and practical and legal matter it is

better that the opportunity be given pursuant to

Your Honours orders to litigate the issue.

I do remind Your Honours that even on the day

that the orders were handed down, I would

understand that nobody got up to say, "Well look,

this is unfair, we have not been given an

opportunity to be heard. It is a matter of minor

importance, no doubt, but it is still a matter."

We have put, Your Honour, in our written

submissions, the references to the authorities.	I
do not believe I need take Your Honour to those authorities in any kind of detail, but I would
remind Your Honours that starting from State Rail
Authority v Codelfa Construction, and going up

David(3) 27 7/9/93

until Smith v NSW Bar Association and Autodesk v

Dyason, it has been said that it is an exceptional

jurisdiction, and one must establish something in

the nature of - well, not something in the nature

of - but one must establish error, and if I may

just refer Your Honours briefly - - -

DAWSON J:  Can I just interrupt you, Mr Spender: do those

propositions apply in the case of an order that is

not taken out?

MR SPENDER: Yes, Your Honour, they do.

DAWSON J: They do.

MR SPENDER: 

So far as I can recall - I have got one doubt

about one of those cases because it did not appear
as clearly as I would like it - but, all of those
cases concerned orders which had not been taken

out, and if I could just take one or two minutes

referring Your Honours, very briefly, to some of

the passages in dealing with the subject to - - -

DAWSON J: But there is a difference between the actual

order and the form of the order. The form of the

order is always available to be argued before it is

taken out.

MR SPENDER: Well, Your Honour, with great respect, once

judgement has been given, and reasons have been

given, and orders have been handed down by a court

which has applied its mind carefully to the form of

those orders, as is necessary in the case - - -

DAWSON J:  It had not applied its mind carefully to the form

of the order, that is apparent, at least.

MR SPENDER: That is not a proposition that I would easily

accede to, Your Honour, but what we would say is

that the judgment has been given, the orders were

made and in order for the court to be in a

position, with respect, so far as the exercise of

the jurisdiction is concerned, it must find an

error, that is, an error of law, an error of fact,

the denial of an opportunity to be heard. None of

that arose.

McHUGH J:  Mr Spender, in those cases to which you refer,

the applicant for rehearing was seeking to change

substantive rights, were they not, rather than here

where it is not a question of interfering with the

rights that a court has declared, it is a question

as to what orders the Court makes in consequence of

the declaration of those rights.

MR SPENDER:  So far as Autodesk is concerned, that is

certainly right, Your Honour. So far as Smith v

David(3) 7/9/93

NSW Bar Association is concerned, that would also

be right; so far as State Rail Authority of NSW v Codelfa is concerned, that would be right; and so

far as Wentworth v Woollahra was concerned, that

would be right, subject, if I may say so,

Your Honour, to this general caveat that that was

the way in which the jurisdiction of the Court was
sought to be invoked. It was never sought to be argued here and it was never sought to be put to the Court that there should be agreement upon a

particular amount of money. There was no argument

advanced about set off or cross claim as to

whether there are certain consequences following

from the fact, if it be the fact in law, that right

is an equitable right. We put to Your Honours,

with the greatest respect to what has been

said - - -

BRENNAN J: Is that not a demonstrable error affecting the judgment, that here was a claim for the principle

of interest, no question of set off being raised
against it, and yet the present form of the Court's
order sets aside that judgment and without hearing

the party.

MR SPENDER:  But Your Honour, if I may answer that question

or that statement, in these terms: the necessary

consequence of Your Honour's finding was that that

order should be made, since one cannot make an

order in terms of plus or minus. One cannot say,

"Very well, we have given judgment which upholds
the proposition and we then make an order which, as
the notice of motion would rather have it, and the

form in which it is most lately put in the

affidavit would have it, of plus or minus a certain

amount of money". Because, after all, what has

been put by my learned friend as a concession is

simply a convenience - a convenience, Your Honour.

And it may be attractive as a convenience but one

still has to find an error.

BRENNAN J: Should the relief to which you are entitled at

order which had the effect of allowing you to go	the end of the day have not been carried into an
back before Mr Justice Hill in your actions, in
your claim, to recover the amount which you say was owing and paid under a mistake?

MR SPENDER:  Your Honour, we would answer that by saying

that the question that goes back to Mr Justice Hill

is the determination of the amount which is due,

and that is what Your Honours intended should take

place, and the determination of the amount which is

due can only be made when you have a determination

of the issue which was remitted to Mr Justice Hill.

David(3) 29 7/9/93

If I can conclude by just reminding

Your Honours of one or two things, with great respect, and first of all of what has been said

time and time again about the exercise of this

jurisdiction by Your Honour Mr Justice Brennan, for

example, in State Rail Authority v Codelfa, which

is one of the authorities we have given

Your Honours. It is to be found at 150 CLR 29, and

Your Honour dealt with the subject at pages 45 and

46.      What Your Honour said was this:

That jurisdiction inheres in this Court as a

final court of appeal to prevent irremediable

injustice being done by a Court of last

resort, but the occasions of its exercise must

be rare indeed.

And, Your Honour over at page 48 said that this had been rightly described as an indulgence.

Your Honour the Chief Justice, in the same case with His Honour Mr Justice Wilson, said at page 38 at about point 7 that the power has to exercised with great caution:

There may be little difficulty in a case where the orders have not been perfected and some

mistake or misprision is disclosed. But in

other cases it will be a case of weighing what

would otherwise be irremediable injustice

against the public interest in maintaining the

finality of litigation.

That is something which is said again and again.

Your Honour Justice Gaudron has used the expression

"the interests of justice'', but it has been said as

well, as lately, I think, as Smith v NSW Bar

Association, where the same sort of thing has been

said by Your Honours. That is to be found in
176 CLR 265, Your Honours Justice Brennan,

Justice Dawson, Justice Toohey and Justice Gaudron said:

The power is discretionary, and although it

exists up until the entry of judgment, it is

one to be exercised having regard to the
public interest in maintaining the finality of

litigation.

Thus the reasons for judgment having been given,

the power is only exercised if there is some matter

calling for review. We would put, Your Honours,

that that principle applies to the present case,

that the reasons for judgment having been given,
that there must be something approaching

irremediable error shown, and it could never be the case of such error where there is a specific avenue

David(3) 30 7/9/93

for the determination of the question which has not

been availed of.

I do not believe I need to take Your Honours

to the other judgments. Your Honours will all be

familiar with them as they are for the most part

fairly recent, and Your Honours participated in

them, save for Your Honour Mr Justice McHugh who I

do not believe has expressed any view upon this

subject before.

So we put to Your Honours that in summation

there has been no error; there is no injustice of

a nature that cannot be remedied; that the Bank

took a particular course with its eyes open and

should be bound by that course, and that the

material, indeed, which the Bank has relied upon

for its so-called disadvantage situation, that most

misused of words in the English language, is no

more than a drive by valuation to ascertain whether

the outside of the building looks all right or not.

And that material which is near a year old in any

event which is relied upon by my learned friend in

Mr Watkins' affidavit is no more than an internal

statement of matters, an internal view of a Bank

officer which is not in any way a valuation. For

those reasons - - -

DEANE J: Mr Spender, can I ask you this: if, contrary to

your submissions which, heaven forbid of course,

one were -

MR SPENDER:  Heaven probably will not intervene on my side,

Your Honour.

DEANE J:  - - - ultimately not in your favour, what about

the $75,000?	Do you suggest that is inadequate, or
was it $73,000?

MR SPENDER:  Your Honour, I have not any specific

instructions on the subject. I have no reason

personally to think that it is inadequate, but I

have no instructions.

DEANE J:  Thank you.

MR SPENDER: If Your Honours please.

MASON CJ:  Thank you, Mr Spender. Mr Emmett, the issues

seem to have been fairly thoroughly canvassed. Is

there anything else you wish to say?

MR EMMETT:  There were a couple of things I would say be way

of reply if Your Honours have not yet finally made

up Your Honours' minds on the subject.

MASON CJ: Yes, so what is it that you want to say?

David(3) 31 7/9/93

MR EMMETT: Perhaps I ought to respond very briefly. Really

by way of answering the implicit criticism of the

Bank in being here, one needs to look at the

chronology of what happened to indicate that there
can be no justification for any criticism of the

Bank. The comment was made that the Bank make no complaint when judgment was handed down. That is

certainly so, but within five days we had filed

this motion, indicating that we thought there was

something wrong with it. There was then

correspondence in which the appellants were invited

to accede to the request that we are now asking

Your Honours to implement, and the correspondence

is attached to Mr Watkins' affidavit. That brought

nothing.

It is, as I think Your Honour Justice Brennan

observed, for the present appellant to establish

its case, it is not for the Bank to go back and

establish anything. So that there can be no

criticism of the Bank's conduct in delaying things,

if that is what is suggested. The application was

made made promptly, an endeavour was made to

resolve the matter without the need to come back to

the Court. It was only when it was apparent that

nothing further was going to come from the

communications that the affidavit was filed. The

reason why it has taken so long to list the matter

is because of difficulties in getting all of

Your Honours together at one time that was

appropriate for counsel.	I gather there is some
history of that somewhere along the line.	They are
the only matters I wish to say in reply.

MASON CJ: Well, that surprises me, but still.

MR SPENDER: Well, the matter was fixed in May, I am told,

for hearing in September.

MASON CJ: But there is no need to pursue that. All I need

do is register my surprise, that is all.

MR SPENDER:  Your Honour, I did overlook one thing and that

was this. In the event that Your Honours were

against us, we would ask for the costs of the
application since it is not our fault that we are

here, and we are entitled to maintain - - -

MR EMMETT:  Your Honour, I am instructed to say we would not

oppose that order?

MASON CJ: Yes. The Court will take a short adjournment in

order to consider the course it will take in this

matter.

AT 11.48 AM SHORT ADJOURNMENT

David(3) 32 7/9/93

UPON RESUMING AT 12.01 PM:

MASON CJ:  In this case the Court is persuaded that the form

of the orders made was, in all the circumstances,

inappropriate. Accordingly the orders made should

be set aside and, in lieu thereof, the judgment in

the Bank's favour on the claim should be set aside

in part, and the judgment in the Bank's favour on

the cross claim should be reinstated. There should

be a stay of the judgment in the Bank's favour on

the cross claim to the extent of $150,000 until

further order of the Federal Court.

To give effect to what I have just said, and any consequential matters, such as costs, Mr Emmett

should lodge short minutes of order by 1.15 pm,

with a view to the Court making orders at 2.15 pm.

AT 12.02 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.21 PM:

BRENNAN J: Yes, Mr Emmett?

MR EMMETT:  I understand Your Honours have the short minutes

that were filed during the luncheon adjournment.

Could I say two things - - -

BRENNAN J:  Mr Emmett, the Chief Justice will be shortly

seeking the views of counsel on some slight

amendments to the drafts which were submitted. Is

there anything that should be added to that?

MR EMMETT:  Yes, there is one further alteration that is

common ground and should be made. On page 2,

paragraph 2(ii), adding at the end the words "and

interest thereon".

BRENNAN J:  Yes. We understood that that had been probably

agreed by counsel.

MR EMMETT:	Yes.
BRENNAN J:	The Chief Justice will be providing counsel

with, as I say, a slightly amended copy of the form

of orders agreed with a view to inquiring whether
counsel are in agreement with that amendment. If

counsel are in agreement with the amendment then

David(3) 33 7/9/93

the Chief Justice will send the copy in to us as we

sit here and the counsel would then reappear, the matter can be interrupted that we are hearing and

we will make the appropriate order in accordance
with those terms.

MR EMMETT:  May it please Your Honours.

AT 2.23 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 3.13 PM:

BRENNAN J:  Mr Emmett, Mr Spender, I gather that you are in

agreement with regard to a form of order.

MR EMMETT: 

Assuming the form of order that Your Honours

have is the last one we have seen with some
amendments, we are content that that reflects what
Your Honours said before lunch.

BRENNAN J: Yes, I think this is the one with the amendments

since you left the Court.

MR SPENDER:  I am in like position, Your Honour.

BRENNAN J: Thank you, Mr Spender.

Then the order of the Court will be as

follows:

1.       Set aside the orders of 7 October 1992.

2.       In lieu of the orders made on 7 October 1992 make the orders set out in the schedule below.

3.        Order that the respondent pay the appellants'

costs of the notice of motion of 12 October

1992.

Schedule

1.        Appeal allowed with costs.

2.        Set aside the order of the Full Court of the

Federal Court in so far as it relates to the

appellants' appeal from the order made on

11 May 1989 dismissing the appellants'

application and in lieu thereof order that:

David(3) 34 7/9/93

(i)     the appeal to the Full Court of the Federal Court from the order made

11 May 1989 dismissing the appellants'

application be allowed in part.

(ii)   the order of the trial judge made on

11 May 1989 dismissing the appellants'

application be set aside in part, but

only so far as that order:

(a) dismissed the appellants' claim for
reimbursement of payments made to the
respondent pursuant to clause 8(b) of the
loan agreements referable to withholding

tax and interest thereon; and

(b) required the appellants to pay the costs of that claim for reimbursement.

(iii) remit so much of the appellants'

application as claims reimbursement of

payments made to the respondent pursuant

to clause 8(b) of the loan agreement

referable to withholding tax to the trial

judge for determination of the issues:

(a) whether the appellants should be

permitted to call evidence on the issue

of mistake;

(b) whether the appellants paid the

additional amounts because of their

mistaken belief that their contractual

arrangements with the respondent required

the payments; and

(c) whether the respondent changed its

position on the faith of receipt of
payments by the appellants,

in accordance with the judgment of the High

Court and for the entering of judgment

(including costs) accordingly.

3.        Stay, pending further order of the Federal Court, order 1 made by the trial judge on

14 June 1989 to the extent of $US60,000 plus

interest on that amount of $US60,000 in

accordance with order 4 made 14 June 1989.

4.        Stay, pending further order of the Federal

Court, order 2 made by the trial judge on

14 June 1989 to the extent of $US52,000 plus

interest on that amount of $US52,000 in

accordance with order 5 made 14 June 1989.

David(3) 35 7/9/93

That, I take it, was the form of order with which

the parties were in agreement. That is so? Then

that is the order accordingly.

AT 3.17 PM THE MATTER WAS ADJOURNED SINE DIE

David(3) 36 7/9/93