Eltran Pty Ltd v Westpac Banking Corporation

Not f o r Distrlbutlon

l 46

IN THE FEDERAL COURT OF AUSTRALIA

) 1

QUEENSLAND DISTRICT REGISTRY

)	QLD. G141 of 1986

)

DIVISION

GENERAL

BEXFEEN

ELTRAN PTY. LIMITED

First Applicant

AND:

PREMAYDENA PTY. LTD.

Second Applicant

.AND :

CRESWELL PLACE PTY. LTD.

Third Applicant

AND :

A D A M ’ S ROW

PTY.

LTD.

Fourth Applicant

AND :

CARTER LANE PTY. LTD.

Fifth Applicant

AND :

BEP.NARD STREET PTY. LTD.

Slxth Applicant

AND :

ORACA PTY. LTD.

Seventh Applicant

BINON PTY. LTD.

Eiqhth Applicant

AND :

TRWOR RONALD KING

Nlnth Applicant

AND:

WESTPAC BANKING CORPORATION

First Respondent

AND :

JOHN GEOFFREY ALLPASS and A m

RAPHAEL TUTTLE

Second Respondents

MINUTES OF ORDER

JUDGE MAKING ORDER:	SPENDER J.	,---	- .
WERE MADE:
W:

2 .

THE COURT ORDERS THAT:

1. That leave be glven to the first respondent to issue proceedlngs in the Supreme Court

of	Queensland against the first to ninth

applicants hereln claiming the sum of CHF 15,054,794.91 and JPY 173,885,173 in respect of ’debt and interest thereon from

3 1 October 1986 to the date of ~udgment at

the rate claimed In the wrlt, on the

undertaking of the

first respondent that

until trial or further earller order,

to:

(a)

proceed with a summary

~udgment

appllcatlon

the

Supreme

Court

Queensland against the first to ninth

applicants

for

the

said

sums

and

execute on any judgment obtained on

such

appllcatlon to the extent

only of the sum

bemg the dlfference at the date of ludgment between the amount clalmed by

the flrst respondent

In the Supreme Court

proceedings and the amount sought to

set off by the flrst to

ninth applicants

in these proceedlngs; and

(b)

apply to the Supreme Court

of Queensland

for a mareva ~n~unction aqalnst the assets of the nmth appllcant herem.

2 . The rellef sought in paragraphs 2 and 3 of the Notlce of Motlon flled 9 March 1987 be adjourned.

3 . Llberty to apply on three days’ notlce.

4 .

Costs on the Motion filed

on 9 March 1987 be the

flrst and second respondents’ in the Federal Court

actlon G141 of 1986 costs In the proceedings.

NOTE:	Settlement and entry of orders is dealt with in Order 36
of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

1 1

PUEENSLAND DISTRICT REGISTRY

QLD.

G141 of 1986

DIVISION

GENERAL

BETWEEN:

ELTRAN PTY. LIMITED

First Applicant

AND:

PREMAYDENA PTY. LTD.

Second Applicant

AND :

CRESWELL PLACE PTY. LTD.

Thlrd Applicant

AND:

ADAM'S ROW PTY. LTD.

Fourth Applicant

AND :

CARTER LANE PTY. LTD.

u t h

Applicant

AND:

BERN?.RD STREET PTY. LTD.

Slxth Appllcant

AND :

ORACA PTY. LTD.

Seventh Applicant

AND:

BINON PTY. LTD.

Eiqhth Appllcant

TREVOR RONALD KING

Ninth Appllcant

AND :

WESTPAC BANKING CORPORATION

First Respondent

AND :

JOHN GEOFFREY ALLPASS and

RAPHAEL TU'ITLE

Second Respondents

SPENDER J.

BRISBANE

24 MARCH 1987

REASONS

FOR J U D G M B

Westpac Banking Corporation moves for

an order that

have

leave to issue proceedings in the Supreme Court

Queensland against the first

to ninth applicants in the principal

proceedings in this Court, claiming the sum of CHF 15,054,794.91

Swiss francs and

JPY 173,885,173 Japanese yen in respect of debt,

and interest thereon from

31 October 1986 to the date of judgment

at the rate clalmed in

a specially endorsed wrlt exhibited to the

affidavit flled on the motlon by Martln Krlewaldt, of Westpac‘s solicitors, sub~ect to Westpac undertaking that, until the trial or further earlier order in the Federal Court, It will proceed

wlth a

summary judgment application agalnst the flrst to

n m t h

appllcants for those sums and execute upon any

~udgment

obtalned

on such appllcatlon to the extent only

the sum belng the

difference at the date of ~udgment

between the amount clalmed by

It In

the Supreme Court and the amount sought to be set off by

the flrst to ninth applicants in the Federal Court proceedlngs.

It wlshes also to apply to the Supreme Court

of Queensland for a

mareva ~n~unctlon

against the assets

of the nmth appllcant.

The Notice of Motlon has to be understood in the context

of lnterlocutory proceedmgs in which I gave judgment on 16

October 1986.

At that time,

Eltran

Pty.Limited

(‘Eltran’), sought

declarations that it was not in default under the terms of

a l an

agreement under which Westpac had advanced sums

to Eltran.

The

payment of

those sums has

been secured by mortgages granted by

the second

to eighth applicants and guaranteed by the ninth

applicant.

In purported pursuance of powers

given by clause 13

of the facility agreement, on

2 September 1986,

the Manager of

Corporate Banking of Westpac wrote to Eltran requiring it to

deposit

a sum of $A7,723,212.00 within five banking days to

Westpac at its branch at Creek Street, Brisbane, and to provide the bank with security over those moneys.

In Federal Court proceedings commenced

on 3

October

1986, Eltran and the other applicants sought a declaration that

was not in default under the terms

of the loan agreement.

Moreover, as a result of alleged defaults by Westpac concerning

forward

currency

contracts,

the

applicants

pleaded

the

Federal Court Statement

of Claim that Eltran

1 s

and at all

rnaterlal tlmes

has been entitled to set-off

In equity a total

amount of $A9,944,027.00 agalnst the amount of the advance from the flrst respondent. It alleged that the Indebtedness of Eltran

to Westpac as	at	2	September	1986 was a sum equlvalent to
$A6,472,171.00.

Alternatively, Eltran sald that It had suffered

loss in

amount equlvalent to the difference between

$8,000,000.00,

being the Australian dollar equivalent

of the advance referred to

as the amounts advanced in Swiss francs and Japanese yen

as at

the date

such advance, and the present Australian dollar

equivalent of CHF'

14,552,725.78 Swiss francs and JPY 167,672,000

Japanese yen. It further claimed that it was entitled to set-off

as against the present Australian dollar value

of the advance for

the loss or damage that is referred to

as the difference between

. '.

the $A8,000 ,000 .00 and the

present day equivalent

of the sums in

Swiss francs and in Japanese yen.

On 16 October 1986, I granted injunctions until trial

earlier order against the first and second respondents from

proceeding wlth the Supreme Court

of Queensland actions, Nos.

4002 of 1986 and 4052 of 1986 and I

made orders restraming the

second respondents from exercising their powers

sale and

made orders definlng thelr powers as receivers

of the properties.

The formulation	of those powers was as	suggested by counsel for
Westpac.

The basis of those orders and a more detailed history

the relevant events and claims are set out in those reasons of

October

1986, and

I need therefore not refer to them

In any

greater detall.

Since that tlme, there have been a number

of slgniflcant

developments.

First,

the second respondents in the prlnclpal

proceedlngs, Mr. Allpass and Mr.

Tuttle, were reappolnted as

recelvers and managers in respect

of the propertles of the second

to eighth applicants. Those reappointments are dated

17 November

1986. Moreover, because

of difficulties which

I adverted to in

the Reasons

of 16

October 1986 concerning the valldlty

of the

letter of demand of 2 September 1986, in October, a further

demand, pursuant to clause 13 of the facility agreement,

was made

on Eltran

and

the

material

shows

that

here

has

been

non-compliance with that demand and

with other demands since

made.

In addition to default concerning the notice pursuant to

clause 13 of the agreement issued after my Reasons on 16 October 1986, it is said there have been numerous other defaults, some

based on the non-payment

of interest, others in respect

non-production of profit and loss statements which requirement is

referred to in the facility agreement letter, and is said

to be a

condition of

that agreement;

and further, pursuant

the

mortgage documents, it is said that there has been

a breach of

the obllgatlons therein to produce lease documents to Westpac.

It is unnecessary to refer in any more detall to the defaults

alleged.

They are set out in great particularity in a schedule

exhlbited to the affldavit

John Michel Young flled on

9 March

1987. The material shows that there

has been no payment by any of

the

applicants

Westpac

concerning

any

of those

alleged

defaults.

Based on those defaults

and, It seems, In conformity

wlth the spirlt of the orders that

I made on

16 October, 1986,

Westpac seeks leave to pursue, by way of summary

~udgment,

Its

clam In respect of

debt and Interest thereon agalnst Eltran and

Its rlghts against the other applicants but only

far as the

difference between that sum and the ambit

the claims made by

the applicants in the Federal Court

proceedmgs.

Strictly speaking, leave is not necessary, in that the

interlocutory relief

I granted related to those named actions,

but I appreclate that,

consistent with

at least the spirit of

those interlocutory orders, this motion is brought.

One aspect on the motlon can

be disposed of briefly. It

appears that there

has been, to put it no hlgher, confusion

between the parties

as to whether or .not

a further amended

statement of claim by the applicants would

issued in the

Federal Court proceedings. An amended statement of claim was, consistent with the orders that I made on 16 October 1986, filed on 24 October 1986, but the correspondence and other

communications between the solicitors

for the various parties

since then suggests that there

has not been agreement

as to what

course was going to be pursued

so far

as the pleadlngs in the

Federal Court proceedings are concerned. I regard the history of the litigatlon, s o far as that aspect 1 s concerned, as neutral as to the fate of the motion.

Havlng regard to

questlons of costs and efficiency, one

can readily accept that

It is preferable that matters whlch arlse

out

a slngle

controversy

should

be lltlqated

non-fragmentary

way. I have to

consider

whether,

given

the

competlng factors which

clearly appear in this present

case, the

preferred method

litlgatlon, namely, that It should be once

and for all, should be departed from.

In the present case, no prejudice to the applicants in the Federal Court is suggested if leave as

sought by Westpac is

granted, other than that costs might

exacerbated. Eltran

asserts that the matters on which it relies for its contentions in those parts of the Statement of Claim to which I have earlier

referred, has the consequence that Eltran is

not, and was not, at

any

relevant

time

default

under

the loan

agreement.

. *

. L

Indicated on

16 October 1986 my difficulty with

accepting that

submission, and I must say that time and further thought

as not

brought any illumination.

The

arguability of that contention

nonetheless is, of course,

avery

real

question

any

application for summary judgment, whether that be in the Supreme Court under 0.18 r.1 of The Rules of the Sumeme Court or on a simllar course being followed on an antlcipated cross-claim by

Westpac in Federal Court proceedings,

an application for summary

judgment belng pursuant to

0.20 r.1 of the Federal Court Rules.

The provlslons of the rules of the Supreme Court and

the Federal Court, while quite similar, do possess differences.

Order

r.l(l) of the Supreme Court makes qulte expllcit the

question of onus. It in terms

provides:-

"When

a defendant appears to a writ

of summons

specially indorsed under Order 6, Rule 7, the plaintiff may, on affidavit made by hlmself or by

any other person, verlfylng the facts on whlch the

claim, or

the

part

a clalm,

to whlch the

applicatlon relates

1 s based and statlng that in

the deponent's bellef there is no defence to that clalm or part, as the case may be, apply to a

Judge for ~udgment

against that defendant. The

Judge may thereupon,

unless

the

d fendant

satisfies him wlth respect to the clalm,

or part

of the

claim, to whlch the applicatlon relates

that there is a question in dispute

which ought to

be trled or that there ought

for some other reason

to be

a trlal

of that claim or part, give such

~udqment

for the plaintiff against that defendant

on that clalm or part

as may be lust

havmg regard

to the nature of the remedy or relief claimed."

Order 20 r.1 of the

Federal Court Rules,

so far as is presently

relevant, provides simply

that:-

"Where, in relation to the whole

of any part of

the

applicant's claim for

rellef, there

1 s evidence of

the facts on which the clalm or part is based, and

(a)

there is evidence given by the applicant or

some responsible person that, in

the

bellef of the person giving the evidence,

the respondent has no defence to the claim

or part;

...

the applicant may move on notice for

such judgment

for the applicant

on that claim or part and the

Court may pronounce such ludgment and make such orders as the nature of the case requires."

The onus, which is clearly cast on the defendant in the Supreme Court of satisfylng the Court with respect to the claim or part of the claim that there is a question in dispute whlch ought to be tried, is not so clearly cast on the respondent if at all, so

It seems to me

In any event, under the Federal Court Rules.

There

are other dlfferences which are referred to In a short

paper by Mr. A.J.H.

Morris, Summary Judqment in

the

Federal

Court, to be found in the Queensland Law Soclety Journal Vo1.16

No.4 at p.241 et seq..

In any

event, Westpac, one infers from

the

Motion,

wlshes

to pursue summary

~udgment in the Supreme Court. One

aspect I

regard as

signlflcant in that respect

1 s s.95

of the

Property Law Act

1974. As

I earlier indicated, Westpac claims

that, because

of defaults committed by Eltran in respect of the

loan facility agreement, there has

been an acceleration in the

requirement by Eltran

to pay the principal sum. Section

95 of

the Propertv Law Act 1974, as

amended, essentially provides for

rellef

against the provision

for

acceleration

of payment.

Section 9 5 ( 3 ) is in these terms:-

”

. L

“The mortgagor,

any

proceedings

brought

enforce the rights

of the mortgagee or brought by

the mortgagor

himself, may -

(a)

upon undertaking to the Court to perform any such covenant or obligation; and

(b)

upon tender or payment into Court

of such

instalment,

apply to the

Court

for

rellef

from

the

consequences

of such default;

and the Court may

grant or refuse relief

...”

“Court“ in that section means	“the Supreme Court or	any Judge
thereof”.

am by

means certaln that the power, In terms

conferred on the Supreme Court

or a Judge thereof by that

section, would be able

to be exercised by a Federal Court in its

accrued or

assoclated jurlsdictions. What provlsions are made

applicable pursuant to the Judlciarv Act

1903, have been the

subject of decisions, the effect

which are n o t altogether

clear.

What provlslons of a klnd slmilar to those contalned in

5 . 9 5

of the

Propertv Law Act 1974 are possessed by

a Federal

Court in Its accrued ~urlsdiction,

again, are matters of concern

and, for my part In any event, are not capable at the moment

of a

clear

deflnltlon.

While

Moss 49

A . L . R .

5 3 3

was not

concerned with anything like the questlon

wlth whlch I am

concerned, there	is a useful discussion of some aspects of thls
question at p.561.

Fundamentally the question here is one of impression as

which course would best serve the interests

of justice.

I do

not think it materially matters in terms

of the costs

litigation whether the claim

of Westpac in respect of the amounts

claimed to be owing in Swiss francs and Japanese yen is pursued

10.

in the Supreme Court as a claim

or in the Federal Court by way

a cross-claim.

Mestpac, by

its Motion,

seeks to

pursue an

applicatlon for summary

~udgment

in the Supreme Court.

Given the stage and the state

of the pleadings in the

Federal Court matter, that course can

done at least as

expeditiously as

a similar applicatlon could be pursued in the

Federal Court. My reservations about the power

of the

Federal

Court in litigation before it to exerclse the rights conferred

expressly on a Supreme Court by

s . 9 5 of the Property Law Act 1974

is a relevant factor In my declsion. Similarly, In respect of the application for a mareva mjunction, while I have a clear view as to whether such a power exlsts In the Federal Court, the

matter is

sub~ect

a reserved decision

by the H13h Court in

Jackson v. Sterllnu Industrles Limlted. The power of the Federal

Court to grant a mareva

~ n ~ u n c t ~ o n

was the subject

of argument

before the

H1gh Colurt

m that case and

the Court reserved its

decision on 11 February 1987.

That 1 s another aspect which

prudence suggests should be taken into conslderatlon.

Therefore, I

propose to grant the leave sought in the

Notice of Motlon.	I wish to hear from the parties as to the form
of the orders.

I certify that thir r

I : c/ preceding

P a i 3 S are a true copy of

the reasons

for

fbldgrnent herein of

HIS Honour

Mr. Justice Spender \\\- 6 4 - a

[1987] FCA 146

24 Mar 1987