Evans & Ors v CBFC Limited

[1993] HCATrans 388

~

~ , _l!'.11 --·J"

IN THE HIGH COURT OF AUSTRALIA

Registry No C20 of 1993

B e t w e e n -

DONALD COLIN EVANS and

MARGARET JOAN EVANS

First Applicant

TRESARC PTY LIMITED

Second Applicant

and

CBFC LIMITED

Respondent

Application for a stay

_;;, ,·

MASON CJ

Evans 1 16/12/93

( In Chambers )

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 16 DECEMBER 1993, AT 9.08 AM

Copyright in the High Court of Australia

MR D.C. EVANS: Your Honour, I appear in person. If it

becomes a question of whether I, as a solicitor,

should also appear for my family company, then I

appear in that capacity also. The practice in the

lower courts has been that the question is not

raised.

HIS HONOUR:	You appear for yourself?
MR EVANS:	I appear for myself.
HIS HONOUR:	And as solicitor for Tresarc Pty Limited?
MR EVANS:	Yes, Your Honour.

MRS M.J. EVANS:  Your Honour, I am the first applicant. I

am not staying for the hearing because my husband

is speaking on my behalf as well.

HIS HONOUR:  Your husband is, what, representing you as a

solicitor in these proceedings?

MRS EVANS:  I will adopt what he says.

HIS HONOUR:  You adopt what he says. Very well. And you

wish to leave, do you?

MRS EVANS:	Yes.
HIS HONOUR:	Very well, you are at liberty to leave.
MR R.G. FORSTER:	May it please the Court, I appear for the

respondent. (instructed by Abbott Tout)

HIS HONOUR:	Mr Evans.
MR EVANS:	Your Honour, I move today on an application

for - - -

HIS HONOUR:	What is the date of the summons?
MR EVANS:	- - - for a stay of execution of a writ of - - -

HIS HONOUR:  What is the date of the summons? 1 December,

is it?

MR EVANS: It is, Your Honour.

HIS HONOUR:  Who is the deponent of the affidavit on which

you move?

MR EVANS:	I am, Your Honour.
HIS HONOUR:	The date of the affidavit?
MR EVANS:	The date of the affidavit is also 1 December.

Evans 2 16/12/93

HIS HONOUR:	Now, how can you succeed in this application?
MR EVANS:	Your Honour, because of the substantial injustice

of the conduct of the proceedings, because of the

substantial issues of law - - -

HIS HONOUR:  But can you make some specific submission,

rather than engaging in general terms. The

immediate problem that faces me is that this writ

has been executed.

MR EVANS:	Yes, Your Honour.
HIS HONOUR:	A matter you did not disclose in your

affidavit.

MR EVANS:  I am sorry, Your Honour. It was executed on the

same day as my affidavit was presented to the

Court.

HIS HONOUR:  But you should have filed an affidavit later

indicating, or have given some intimation to the

Court that the writ had been executed.

MR EVANS:	I apologize for that.
HIS HONOUR:	But the writ having been executed, what can you

do about it?

MR EVANS:  I submit that it is open to the Court to suspend

the operation of the writ, both on the balance of

convenience and because the -

HIS HONOUR:	But it has been executed.
MR EVANS:	Yes, I accept that, Your Honour, but I am seeking

that - - -

HIS HONOUR:  But that is all a writ does. That is the

function of the writ, to be executed so as to give

possession.

MR EVANS:  I am seeking, Your Honour, to have any further

action taken by the plaintiff under the writ

suspended - - -

HIS HONOUR:	What further action?
MR EVANS:	Any action to realize the property, any action to

prevent our access to the property.	We still have
sheep grazing on the property.	We have to shear
them in February to earn income.	It is most

regrettable that I was unable to complete all the

documentation between the date of the refusal of

the Court of Appeal to stay the exercise of the

writ and the date of the actual exercise.

Your Honour, I simply found the preparation at this

Evans 16/12/93

level, the absolute caution in weighing and

assembling the information, ascertaining exactly

what forms I needed to prepare and to reach and to

research cases to give me some standing, or some
substance, before this Court. Unfortunately, time
ran out on me before I was able to reach the Court

and request a stay before the execution.

HIS HONOUR:  Now, tell me, is it correct that the mortgage

was given to secure a loan of approximately

$310,000 to you and your wife?

MR EVANS:	Yes, Your Honour.
HIS HONOUR:	And is it correct that of that $310,000 you

used not less than $260,000 to pay off prior

mortgages?

MR EVANS:	Yes, Your Honour.
HIS HONOUR:	And you have made no offer during the course of these proceedings to repay that $260,000?

MR EVANS: That is correct, Your Honour.

HIS HONOUR:  Or interest on that $260,000?

MR EVANS: That is correct, Your Honour.

HIS HONOUR:  Now, in those circumstances, how can you secure

relief on the footing that the mortgage is totally

void?

MR EVANS:  On the basis, Your Honour, that equity does not

stop its inquiry at the question of whether

restitution should be made. It then receives

submission as to hardship that the imposition of

the restitution would impose and, quite obviously,

I as a solicitor would not be appearing in this

Court had I the means to engage solicitors to

undertake the litigation that - - -

HIS HONOUR:  But one of the principles of equity is: he who

seeks equity must do equity.

MR EVANS:  Your Honour, our submission has been, all along,

that the equity on our·part was to realize the

property in a manner that would acquit both

mortgagee's indebtedness and at the same time

retrieve some moneys to ourselves. Those courses

were in train from early in 1989 when we had

finally severed all connection with the third party

that we say was principally responsible for any

fraudulent conduct in this matter and in 1989 we
then sought to retrieve from the appalling

subdivision that had been created by this third

party, to put it into a form that would enable us

Evans 16/12/93

to realize the property as hobby farms.

Eventually, after interference by both this third

party and a fellow member of the same group of

companies as the respondent here today, interfered

in the process of our obtaining a variation to the

subdivision to put it into a better condition for

hobby farms.

We were then simultaneously hit with three

substantial amounts of litigation concerning this

whole affair, so it was not until September 1990

that we engaged in marketing our lots. The

respondent declined to uplift its mortgage to

allow, in 1990, two lots to be sold, and in 1991,

further declined to allow a third lot to be sold.

If those three lots had gone through and we had

been selling continuously, I have no doubt that we

would have remitted the mortgage.

Now, the respondent will, of course, argue

that it is free to realize property as it sees fit,

security as it sees fit - - -

HIS HONOUR:	Subject to the usual restraints on the exercise of a mortgagee's power of sale.
MR EVANS:	I agree, Your Honour, and my submission, if the matter came on appeal before this Court, would be
that the doctrine extant in Cuckmere Brick would
be - I would put the submissions that the Court
should now adopt Cuckmere Brick as good law in New South Wales.
HIS HONOUR:	Yes, but we are a long way away from Cuckmere

Brick. Cuckmere Brick relates to the exercise of a

power of sale and there has been no attempt yet to

exercise a power of sale.

MR EVANS:  Not by the respondent, but by myself,

Your Honour.

HIS HONOUR:  Cuckmere Brick does not not deal with a sale by

the mortgagor.

MR EVANS:  No, Your Honour, but the relevance of it is that

the respondent has a duty to act honestly in

realizing the property under Cuckmere Brick -

HIS HONOUR:  No doubt, if the respondent does not act

honestly in realizing the property, relief might

then be available. But having regard to the

history of the litigation in this matter, I should

imagine that the respondent would be careful to

comply with the law.

Evans 16/12/93

MR EVANS: Well, Your Honour, it has shown no indication,

and it has had ample opportunity to, and on

those -

HIS HONOUR:  But this is far distant from the matters you

are arguing about - or seeking to argue about.

MR EVANS:  My argument is that that was the situation at a

relevant point reasonably early in the proceedings, in fact during the course of the first year. There

was ample opportunity for the mortgagee to accept

the equity that we were seeking to do. We were not asking the mortgagee to commit funds, we were doing

it on our own moneys, and it was merely a matter of

allowing time for a regular realization of the

property and we demonstrated that we had

solicitors' letters asking for contracts for

exchange.

Now, in the circumstances, Your Honour, that

because of this long burden that we have covered in

the matter, there simply has been no way that

either my wife or I would have been able to

generate moneys to remit the mortgage and, of

course, pay for litigation, pay for a properly

qualified firm of solicitors to undertake the

litigation for us.

One of the difficulties from the outset has

been a want of confidence by the various benches

that my pleadings had sufficient weight in which to

encapsulate real questions before the court.	Now,
I have over the past fortnight assembled the

pleadings as I am seeking to amend them in a matter

that we are acting as plaintiffs in which we have

pleaded our case against 11 defendants. The

difficulty always in these particular proceedings

has been - - -

HIS HONOUR:  I am not concerned with proceedings that you have brought against other people; I am only

concerned with the instant proceeding.

MR EVANS:  Your Honour, if I may continue with that

submission to allow Your Honour fully to appreciate

my case. The difficulty always in our case has

been to link fraudulent conduct by this third party

directly in concert with the respondent.

His Honour Mr Badgery-Parker in December 1991

refused us leave to file a cross claim and also

refused us leave to file a defence that contained a

Contracts Review Act defence.

Now, our submission has been that that failure

on his part cut us out of proceedings - effectively

cut us out of proceedings. So we then said, all

right, we have no alternative but to commence our

Evans 6 16/12/93

own proceedings so that the clear links as between

the respondent and this third party could be

demonstrated.

Now, if the Court in its wisdom determines

that the pleadings in the instant proceedings are

still inadequate, we say that putting the property

out of reach into the respondent's hands is denying

us the opportunity that a properly pleaded and

properly balanced pleadings in the - what I call

the fourth matter - will destroy the basis on which

our case lies.

Ir

The signal difficulty before

Mr Justice Badgery-Parker was that I had too little

time in which to formulate my pleadings. He gave

me a timetable of seven days, effectively three of

those were in drafting, another three were in

typing and editing, and then another day in

travelling backwards from Canberra to Sydney and

Sydney to Canberra. So, in effect, I had no

opportunity properly to prepare my case. It was

inadequately pleaded and, thirdly, His Honour's

conduct of proceedings, which were largely by

continual questioning of me, inhibited me from

putting the case as I might have wished to have put

it.

In particular, His Honour did not give me the courtesy that he extended to counsel for the

respondent, which was to put the matters contained

in section 15 of the Contracts Review Act to

counsel without actually mentioning section 15.

And it was during the course of the day that, glancing through the Contracts Review Act, I found

this section and realized that that was the

substantial basis on which our case should be

pleaded.

Now, in the past fortnight, in this document I

have assembled substantial connections as between

the respondent and the third party to satisfy the	requirement of section 15 of the Contracts Review
Act, remembering all the time that my submission is
that since I was put out at interlocutory
proceedings, I should have the benefit of at least
the standard of proof of having established a prima facie case, not being put on such deep inquiry as
Mr Justice Badgery-Parker and successive judges
have required of me. It simply was, particularly
in Mr Justice Badgery-Parker's case, far too much to weigh upon me and, in the intervening time,
matters have emerged in the public arena,
particularly in relation to the third party, that
have significantly widened the sources of advice
and evidence to me. Indeed, this morning's paper
carries details of committal proceedings of the man

Evans 16/12/93

principally responsible for the fraudulent conduct

in these proceedings. The charges he is facing are

not connected with this case, I hasten to add,

Your Honour, but what I do say is that the welter

of dealings that this man engaged in in the

Bathurst/Orange district on a personal basis and

through his companies, and then through the

company Agricultural Technologists of Australasia

Ltd, he was setting up a welter of fraud and we seemed to have been the only people who actually

carried through and obtained finance from the
respondent and in all other cases the respondent

appears to have lent Agricultural Technologists of

Australasia Ltd or one of its associated companies

the moneys to take up lots in similar schemes to

the one in which we ran foul.

Now, our submission is that at this stage I

have established sufficient in these pleading, and

it is matter No. 1354 of 1991, to show a

substantial basis for a section 15 arrangement.

Now, Your Honour, having established that there is

an arrangement pursuant to section 15, the proper
course, in my submission, is that the court should
have allowed joinder of this third party,

Agricultural Technologists of Australasia Ltd, and

in particular Peter Gordon Flued, so that the

proper interlocutory processes could have proceeded

and, in the fullness of time, the evidence would

have emerged, as Mr Justice Young in - the case

escapes me for the moment, Your Honour - said, in

the way of these things, the evidence of what has

happened appears in the respondent's files, not in

the files of the plaintiff in this case.

Even so, not having had the benefit of those

interlocutory steps, I have collected sufficient

evidence that I am satisfied, as a lawyer - - -

HIS HONOUR: That counts for nothing with me, Mr Evans.

MR EVANS:  I accept that, Your Honour, but I am a

practitioner and one does not lightly draw

conclusions and weigh evidence that someone who is

an ordinary litigant in person may well draw.

On that basis, if joinder were allowed, and we

have the basis in matter No. 1354 of the parties

being joined anyway, it is open to the court, after

weighing the evidence and submissions, to determine

whether restitution is the only remedy; whether

hardship needs to be taken into consideration, or

whether pursuant to section 12, orders be made

against any other party. Now, it has been my

submission that if the respondent turns out to be
utterly innocent of the matter, then the respondent

has its own remedies pursuant to section 12 against

Evans 8 16/12/93

this third party. Now, on the basis that they have

been prepared to lend, as of 1988, $2.5 million, as

I understand from documents available to me, to

companies associated with this Peter Gordon Flued,

the respondent has more than a good knowledge of lender over the period from 1984 to - my record

showed 1991, I have not gone beyond 1991 - has been

a continuous lender to this Agricultural

Technologists of Australasia. The respondent has

ample opportunity, pursuant to section 12, to go

against that party.

Now, Your Honour, in another one of these cases, the respondent's sister company, or fellow

member company, is pursuing us as a second

mortgagee. It knows that it cannot possibly obtain

anything from the property. It has unlimited

guarantees against people like this Flued and some

other directors of Agricultural Technologists of

Australasia; did not even secure any asset

statements from them. When it did ask for them, it

did not pursue them. But it continues to pursue

us. Our submission is that with the Commonwealth

Bank of Australia itself as a party, joined in the proceedings 1354 of 1991, yet another opportunity

is open to this banking group, if its claims are

valid and just and it is serious about retrieving

its depositors' moneys, it will go against the

people who have the money and for whom the benefits

of the contract were originally intended.

Your Honour, I say that that is the

substantial basis on which our claim is founded and

which, in properly prepared and then, I submit,

conducted proceedings, it is open to the court to

find remedies in several directions, and not

necessarily confine the remedy to whether or not we

are able to pay the money or even to pay it into
court. Just a small aside, I can more than say

that I have slaved for the past four years to try

and make the kind of money that would enable me to

come into this Court. In fact, as part of the

proceedings, interference by the corporation that is the overall body of these several Commonwealth

Banking companies resulted in my losing substantial

weight in very important negotiations that would
have enabled me to repay any amount of money that

would have been extant in this matter, and

conducted the proceedings.

So, Your Honour, there has been real hardship

imposed on us by these proceedings. We have tried

to do what we could under the law before

proceedings began to remit the debt, and if we did

not remit it, then we would have had to suffer the

consequences. But the respondent and its fellows

Evans 9 16/12/93

having initiated proceedings, we say that the

equity passes from us and the conduct of the

respondent has to be examined. Now, section 9(5)

of the Contracts Review Act enables the court to
make the kind of inquiries subsequent to the

entering into the contract that was never available

at equity or the law, for that matter. So we say

yet again, there is a statutory basis for the court

to withhold the summary exercise of its

jurisdiction, as Mr Justice Badgery-Parker did, and

cut out the substantial base for our case.

They are my submissions in relation to the

quality of the proceedings that we would wish to

bring. If I may just reiterate that this is a

working property. We have sheep grazing on it
which we would ordinarily shear in February of next

year and we would submit that the property

remaining in our hands, and subject to such order
as the Court may make - and I would envisage that a

simple order would be that we remit agistment

moneys to the respondent for the use of the
property, pending the hearing of the appeals and,
if necessary, pending a stay in the completion of
the proceedings in the substantial matter of 1354

of 1991.

Your Honour, in a case involving the National

Australia Bank, whose citation I am unable to

recollect on the moment, I think it was

Mr Justice Hodgson in the New South Wales Supreme

Court who found that where a mortgagee did not have

possession of the property and sought to sell the
property, it would be a want of duty as a mortgagee

to act properly and he refused to allow the sale to

proceed.

We would submit that if the respondent here

continues to have possession, there would be little
point in the respondent seeking to realize the

property. We make that submission because the

whole of the property is not encompassed within the	security. There is portion of the property that is
outside of the security documents and which acts as such a significant intrusion into the property that
any purchaser noting the disposition of the two
titles would say, "I can't work that property
without substantial cost to myself to build new roads, to build roads through rugged land and
through forested country in order to avoid this
title outside my title".

So, in effect, the respondent, if it sought to

sell the property, would be faced with realizing

very little money whatsoever.

HIS HONOUR: That is a matter for it to determine, Mr Evans.

Evans 10 16/12/93

MR EVANS:  Your Honour, in submitting that the property

should stay within our disposition, I say that is a

signal question of which the Court should take

notice. Having gained possession, the respondent,

really, is not going to retrieve very much at all

for its security.

HIS HONOUR:  But I take it the respondent does not agree

with that.

MR EVANS:  We have never heard the respondent on that,

Your Honour.

HIS HONOUR:  Do you have anything to say on that point,

Mr Forster?

MR FORSTER:  Your Honour, as far as I understand it, the

respondent intends to sell the property at an

appropriate time.

HIS HONOUR:	ttintends to sell at the appropriate timett?
MR FORSTER:	Yes.  I do not know, Your Honour, when that

time will be but as far as I am aware - - -

HIS HONOUR:	Yes, thank you. Yes, Mr Evans.
MR EVANS:	Your Honour, on the basis of that advice from

counsel, I think that that is weight on our side, that the property should remain in our continuous

management. We have a share farmer who is in place

to supervise both the sheep and to visit the

property from time to time to see that it is

functioning properly and, from time to time, I also

am able to make journeys.

Now, that seems to me to be a better

proposition, that the land remain under our

management. If Your Honour's view is that the

writ, having been exercised, that cannot be

interfered with, I think it is within Your Honour's

disposition to direct that the management of the

property remain in our hands pending the appeal

and, further, depending on the appeal, that we pay

to the respondent agistment according to the number

of sheep that we graze, that is to say, the

property is generating its own income and had the

respondent taken action under section 61 of the

Real Property Act it would have been entitled to

any profits, and it has made no attempt to do that.

We see that as being a suitable term on which

to leave management under ourselves and,

furthermore, leaving the property in our management

ensures that the best use will be made of the

property pending the outcome of the cases.	In the
present climate, there of course is almost no

Evans 11 16/12/93

possibility of the respondent retrieving very

little of its principal, let alone its interest, so

if the good times begin to roll now that the GATT

proceedings have opened up possibilities of trade,

as we were told yesterday, there is every

possibility that the respondent, if it ultimately
succeeds, will obtain more by leaving the property

under our management now than by leaving it in its

grasp to realize in its own good time.	Those are
my submissions, Your Honour.

HIS HONOUR:  Yes. There is just one question. What is your

best point for securing a grant of special leave?

MR EVANS:  My best point is the substantial nature of the

claims outstanding; the want of, in my submission,

proper conduct of the interlocutory proceedings

before Mr Justice Badgery-Parker that shut us out

far too early in the proceedings, or the outcomes

were shut out, and secondly, that had I had more

time, I could have pleaded the case on a better

basis than I did, and having been cut out at that

time -

HIS HONOUR:  So it is irregularity in the conduct of the

proceedings rather than any question of substantive

principle?

MR EVANS:	Yes, Your Honour and, on balance, the property is better left in the hands of people who know how to
manage it and know it than in the respondent's
vague company barrels.

If I may just make one more submission,

Your Honour, that I have left out. The reason why we are fighting for the property - and I think any

lawyer would say, "Forget it, just fight the

issues", but we bought the property in order to

obtain a commercial advantage by initiating in a

commercial way organic agriculture in Australia.

Agricultural Technologists, that we would be It was part of the agreement with this third party,	allowed to take those organic regimes on as part of
the management of the property.

The property has remained in this organic

state and thus remains a very valuable asset. It

has had the opportunity for our conservation values

to be balanced in with the organic agricultural
values so that it has extreme potential for us to

realize commercial gain that would be of no

interest to the respondent nor of most farmers.

So, it remains an economic asset that I and my wife

wish to develop to its full and it is with much

chagrin that we have watched things like organic

Vita-Brits come on the market - - -

Evans 12 16/12/93

HIS HONOUR: This is way away from the issues really,

Mr Evans.

MR EVANS:  It is the argument, Your Honour, that it is a

valuable asset in our hands that it is not in the

respondent's. Thank you, Your Honour.

HIS HONOUR:  Now, Mr Forster, what do you say about the

execution of the writ for possession?

MR FORSTER: It has occurred and, in my submission, makes

this application moot and futile.

HIS HONOUR:  What jurisdiction have I got to make any order

in relation to the execution of the writ for

possession?

MR FORSTER:  In my submission, any order Your Honour made

would be futile and, in that sense, it is difficult

to see what jurisdiction exists.

HIS HONOUR: Short of allowing an appeal against the

judgment in which the order for the issue of the

writ was made which, of course, would entail

setting aside the writ and the execution of the

writ. But, of course, that could only be done as a consequence of allowing an appeal against the order

that authorized the issue and execution of the

writ.

MR FORSTER: Yes, Your Honour, and that will have to be

preceded by, of course, a successful application

for leave to appeal

HIS HONOUR:	Yes, that is right.
MR FORSTER:	Your Honour, can I deal just very briefly with

one matter which Mr Evans put to Your Honour?

HIS HONOUR:	Yes.
MR FORSTER: That the management of the property ought to

remain in his hands. That is certainly opposed.

There is no such application before this Court this

morning. There is no equity in the appellants to
seek that kind of relief and the fact that the

respondent intends, in due course, to sell it at

the appropriate time gives no right and there is no

reason why there should be any such qualification.

HIS HONOUR:  No. I gather Mr Evans is proceeding on some

footing that I have an amorphous jurisdiction which

enables me to make orders, the effect of which

would be to exclude your client from possession and

allow him and his wife and the company to continue

to do acts upon the property.

Evans 13 16/12/93

MR FORSTER:  Yes. Well, Your Honour, we would say that no

such application is before this Court today and,

Your Honour, there is no process pursuant to which Your Honour would be in a position to make such an

order.

Your Honour, might I just deal with two

matters if it would be of some assistance.

HIS HONOUR:	What are they? What do you want to deal with?
MR FORSTER:	Your Honour, firstly, I would wish to file in

Court and read an affidavit which deals with the

value of the property, the amount of the debt. It

deals with the balance of convenience as to whether

or not a stay ought to be granted, if Your Honour

were to consider that there is some way around the

problem of the writ having been executed.

HIS HONOUR:  What is it directed to showing in terms of

balance of convenience?

MR FORSTER: That the balance of convenience dictates that a

stay ought not be granted.

HIS HONOUR:	Have you shown this affidavit to Mr Evans?
MR FORSTER:	Your Honour, yesterday afternoon, I am

instructed that a facsimile was sent to Mr Evans

and part of the way through, I am instructed, that

it was interrupted at the recipient end; a fax was

returned on which various comment were made, one of

which was that Mr Evans would not receive any

further fax from my instructing solicitor. My

instructing solicitor this morning did offer a copy

of the affidavit to Mr Evans but I understand that

was refused.

HIS HONOUR:  Do you object to the use of this affidavit?

MR EVANS:  I do, Your Honour.

HIS HONOUR:  Why?

MR EVANS: It contains a signal lie and I do not think that

the Court should receive such humbug. It records a

conversation between the solicitor and a bank

official and it claims that I was - - -

HIS HONOUR:	What solicitor?
MR EVANS:	A solicitor from the - not this gentleman.

HIS HONOUR: Instructing Mr Forster?

MR EVANS:  Not the present instructing solicitor; the one

who normally does, Mr Breen, and it swears that I

Evans 14 16/12/93

was in attendance at the property the day that the

sheriff executed the writ. I was in this Court, as

a matter of fact, Your Honour. It is one of the

more - I just find the conduct disgraceful,

Your Honour.

HIS HONOUR: Yes. Well, I do not think I will receive the

affidavit.

MR FORSTER:  If Your Honour please. The only other matter

was, Your Honour, I was going to hand up to

Your Honour an outline of the respondent's

submissions. I realize that that is normally only

required in Full Court hearings but I thought it

might be of some assistance.

HIS HONOUR:  Yes, you can hand it up. I do not wish to hear

you further, Mr Forster.

MR FORSTER: If Your Honour please.

HIS HONOUR:	Do you wish to say anything in reply?
MR EVANS:	Your Honour, I regret that I have not briefed any

of the cases referred to on page 1. I briefed

Jennings Constructions when it was before - - -

HIS HONOUR:  I do not think they say any more than is in the

outline of argument.

MR EVANS:  Yes, Your Honour. On page 2 the respondent cites

Collier v Morlend Finance. Your Honour, our

submission has been throughout that the particular

passage that the respondent would be drawing

attention to at page 58,444, is the words of

His Honour Mr Justice Meagher in which he said it would be monstrous for an innocent mortgagee to be

denied the fruits of its mortgage by action under

the Contracts Review Act. That case is at odds
with quite a number of cases; in particular,

St Clair v Petricevic in which the Court of Appeal

upheld the long-established equitable principle

that equity is concerned to deal with wrongdoing on
the part of a plaintiff coming before it rather than, peculiarly, the justice of the respondent

mortgagee and, secondly, that conduct of which the

mortgagee is unaware does not react to the

detriment of the mortgagor.

It is our submission, of course, that the

respondent is not innocent and, therefore, the
respondent, in citing Collier v Morlend is citing

the case in our favour, not in its favour.

The other cases - no, my recollection of them

is not sufficient to make any submissions upon

them, Your Honour.

Evans 15 16/12/93

My final submission is that Your Honour's opening comment or observation to Mr Forster was

apt, that is that if special leave to appeal is

granted and the appeal against the judgment is

successful, then the property and/or substantial

restitution would have to be made by the respondent

and that is the jurisdiction that Your Honour has

to stay any further progress of the writ.

HIS HONOUR: 

One other question I wanted to ask you: would

you identify in the draft notice of appeal for me
the irregularity in the conduct of the proceedings

which you rely on as a ground for the grant of

special leave to appeal?

MR EVANS: 

Your Honour, in dashing I have not brought my

copy with me.

HIS HONOUR:	You say you have not got your copy available.
MR EVANS:	The instructing solicitor has been kind enough to

lend me a copy, Your Honour. Paragraph 15 b.,

Your Honour, and I have in fact drafted an amended

notice of appeal to include a ground of appeal that

His Honour Mr Justice Hunt took irrelevant matters

into account and drew such implications about my

conduct as to render making his decision unsafe.

Your Honour, I do not wish to say anything more

about that.

HIS HONOUR:  Thank you, Mr Evans.

This is an application for a stay of the

execution of a writ of possession issued by the
respondent pending the hearing of an application

for special leave to appeal. The application for

special leave to appeal relates to a judgment of

the New South Wales Court of Appeal given on 22

November 1993.

a stay and the judgment of the Court of Appeal in In order to place the present application for

context, it is necessary for me to recite certain

facts.	The applicants are the owners of a property
known as "Colmena" near Boorowa.	The respondent is

the registered proprietor of a mortgage over that
property under the Real Property Act. The mortgage

was given by way of security for the repayment of a

loan of $310,000 approximately and interest. The

applicants defaulted in payment of both interest

and principal.

The respondent commenced proceedings in the

Supreme Court of New South Wales for an order for

possession. According to the primary judge

Mr Justice Hunt, when the proceedings came on for

hearing the amount outstanding under the mortgage

Evans 16 16/12/93

was $595,575.59, an amount which increased to

$595,728.58 when judgment was given for the

respondent. Mr Justice Hunt made orders entering

judgment for possession of "Colmena" against the

applicants, including the company Tresarc Pty

Limited. His Honour also entered judgment against

the individual applicants for the balance of the

debt.

The applicants then appealed to the Court of

Appeal and applied for a stay of execution pending

the hearing of the appeal. On 8 November 1993

Meagher J.A.refused a stay of execution without
giving reasons. The applicants then appealed to a
Full Court under section 46(4) of the Supreme Court
Act 1970 (NSW) to vary or rescind the order made by

Meagher J.A. That application was also refused.

The application was described by Handley J.A. as "a

hopeless application".

At the trial, the applicants had sought to challenge the mortgage transaction on various

grounds. Those grounds included fraud and a claim

for relief under the Contracts Review Act. In the view of the primary judge and the Court of Appeal, the claim for fraud was not properly

particularized. Moreover, relief on the ground of

fraud would, at best, render the mortgage voidable,

not void. The Court of Appeal also pointed out

that if relief were to be granted under the

Contracts Review Act, the court would not declare

the mortgage to be wholly void. That was because
the applicants used at least $260,000 of the moneys

borrowed from the respondent to pay off prior

mortgages. The applicants conceded at trial before

the Court of Appeal, and before me, that they were

in no position to pay off any part of that

$260,000.

The applicants seek special leave to appeal

from the judgment of the Court of Appeal on some 15

grounds, none of which seem to me to raise a

fundamental question of principle on which the

applicants have any significant prospect of

success. Mr Evans says that the principal ground

advanced for the grant of special leave is that

there was a substantial irregularity in the conduct

of the case at first instance, presumably giving

rise to a contention that the administration of

justice in the particular case requires the grant

of special leave.

It seems that that ground, namely that there

was a substantial irregularity in the conduct of

the case, is set out in ground 15 of the grounds of

appeal wherein it is stated that:

Evans 17 16/12/93

a. the First Appellant's claim that their

case had been dismissed too summarily at

a directions hearing, which then

prejudiced their capability to present

their case properly;

b.	the foreshadowing of an additional ground of appeal, viz: that Hunt CJ had taken
such irrelevant matters into account and drawn such implications about the conduct
of the First Appellant in his judgment as to render maintenance of the decision

unsafe;

c. that real matters for trial and appeal

remained to be heard before any writ

ought to have issued and have been
exercised;

and then some further particulars are given in

subparagraphs d, e, f and g.

Having looked at these grounds in the light of

what has been put to me by Mr Evans, I am not

persuaded that there exist significant prospects of

the applicants succeeding in obtaining special
leave on those grounds. Indeed, taking into

account the applicants' prospects of securing

special leave, of succeeding in the appeal should

special leave be granted and of succeeding in
obtaining relief on the basis that the mortgage is

wholly void, I consider the applicants' prospects

of ultimate success to be negligible. To my mind

it is incontestable that a court in the

circumstances of this case would not grant relief

on the basis that the mortgage is wholly void, when

the applicants have had the benefit of at least

$260,000 of the money lent to pay out prior

mortgagees and are unwilling or unable to repay any

part of those moneys.

Mr Evans contends that, on the ground of

hardship which has been or will be suffered by the applicants, section 15 of the Contracts Review Act enables a court to grant relief on a footing that

would deprive the respondent of the right to
exercise its powers under the mortgage. By way of

statements from the bar table, Mr Evans sought to

indicate what that hardship is or would be. I am

not prepared to act on the basis of those
statements; and even if I were to do so, they do
not persuade me that there is such a case of
hardship as would induce any court in the

circumstances to grant relief in relation to the

mortgage of the kind which the applicants are

seeking.

Evans 18 16/12/93

There is a further element in the present case

that creates a formidable obstacle in the way of

granting the stay sought.	The writ for possession
was executed on 1 December 1993.	The applicants

ask that I terminate the operation of the writ and

they seek orders from me - that have not been

formulated - which would enable them to stay in

possession and would, presumably, be intended to

exclude the respondent from possession. For my

part, I doubt that it is within my power to make

any order that affects the execution of the writ.

The execution of the writ has taken place and

stands for better or for worse. What has been done

in that respect, pursuant to the authority of the

primary judge, is something that must stand unless

and until it is set aside on appeal. But even if I

had power to make any of the orders sought, I

would, in the exercise of my discretion, decline to

do so.

In conclusion, I should point out that in

applications of this kind it is necessary to bear

in mind that apart from the exceptional cases in

which special leave to appeal has actually been

granted, the final decision of an intermediate

Court of Appeal is conclusive of the litigation.

Accordingly, it is only in demonstrably exceptional

circumstances such as the immediate threat of the
destruction of the subject-matter of the litigation

or of grave and irreparable damage being sustained

that an application to this Court for a stay can be

justified, and even then, as I have pointed out

earlier, the Court, in determining whether a stay
will be granted, must take into account the

applicant's prospects of ultimate success. In the

result, I refuse the application for a stay.

I would order the applicants to pay the respondent's costs unless you have something to say

to the contrary, Mr Evans?	You cannot really
resist the application, can you?

MR EVANS:  No. I would see no basis on which I could,

Your Honour, hardship not being a consideration.

HIS HONOUR:  Yes. The application is dismissed with costs.

MR FORSTER: If the Court pleases.

AT 10.13 AM THE MATTER WAS ADJOURNED SINE DIE

Evans 19 16/12/93