Foott, M.J. & M.F. v National Australia Bank Limited

[1989] FCA 577

77 r / %=l

JUDGMENT No. ..S ........ . - ........ ., , .

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) NO. NG 286 of 1989
1
GENERAL DIVISION	1

BETWEEN:  MICHAEL JOSEPH FOOTT AND
MARGARET FRANCES FOOTT

First Applicant

BATAK PTY. LTD. (Receivers

and Managers Appointed)

Second Applicant

RIVERLAND ABATTOIRS PTY. LTD.
(Receivers and Managers

Appointed)

Third Applicant

AND:  NATIONAL AUSTRALIA BANK
LIMITED

First Respondent

LINDSAY PHILIP NAXTED

CORAM: M. L. FOSTER, J.

managers appointed), have brought proceedings against the
DATE :	5 JUNE 1989

2 5 SEP 1989

PLACE: SYDNEY.

REASONS FOR JUDGMENT ~RIHCIPCL REGISTRY

(EXTEMPORE)

HIS HONOUR: The applicants, Michael Joseph Fxtt and

Margaret Frances Foott, Batak Pty Llmlted (receivers and managers

appointed), Rlverland ~battoirs Pty Limited (receivers and

National Australia Bank as flrst respondent and Lindsay Philip
Maxted as second respondent seeklng the declarations, orders and

injunctions set out in the appllcatlon.

The proceedings come before the court today on an

interlocutory basis only. The applicants' seek interlocutory
injunctions restraining the respondents from taking steps in
relation to the sale of the second applicant's property in Yana
Street, Swan Hlll and further injunctions restraining the sale of
the applicants' property at Karini Street. I should add that the
first of the properties to whlch I have just made reference is
apparently the applicant's home; the second property is a

commercial warehouse.

A thlrd interlocutory injunction is sought restraining

the puttlng to auctlon tomorrow, 6 June 1989, of a further

property at Murraydale in the State of Victoria. This property

is an abattoir whlch untll early this year had been conducted as a going concern by the third applicant. It ceased to operate as a going concern apparently when it was decided by the receivers

that the property was to be sold.

A further in-junction is sought in relation to the

projected sale of a shop in Blrchip in Vlctoria which is a

butchers shop owned and operated by the flrst applicant.

Evldence has been put before me tending to the

establishment of a prlma facie case under S 52A of the Trade

Practices Act and also under S 52. That evidence relates to

representatlons allegedly made by offlcers of the bank said to
have had a relevantly induclng effect upon the flrst and second

applicants in relatlon to their entering Into a guarantee of the

1 _

existlng overdraft of a company referred to in these proceedings	L-
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as Pronto.	I '.
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The second applicant was a shareholder in that company

and it 1s said that a misrepresentation was made at the time when the relevant guarantee was about to be entered into to the effect that the duties of the receiver then in contemplation would

(lnter alia) involve taking steps to protect the interests of the

guarantor.

I have experienced some difficulty in determining

whether a serious issue to be tried has been demonstrated by the
evldence relatlng to these representations. With some hesitation
I have come to the vlew that I can and should properly find that

there is such an issue.

The questlon then becomes one of determining the balance

of convenience in relatlon to whether or not I grant the

injunctions sought on an interlocutory basis. It is quite clear that the rights of third parties have Intervened in a very substantial way. The receiver has entered into contracts for the sale of the property in Yana Street, Swan Hill, and Karlni Street. Deposits have been taken and the sale of the properties is to be settled very soon.

It 1s clear that the granting of an injunction may have

a detrimental effect upon the sale of the properties,
particularly if any delay of a substantial kind 1s occasioned
through the exlstence of the in-junctions and the exlstence of the
lltigatlon. The same can be sald for the sale of the shop in
Birchip.

The auction of the abattoir premlses is set to take

place tomorrow. It is not the first occasion on which the
property has been about to be auctioned. An auction was arranged

with all the necessary preliminary steps attending an auction for

a date in April. It was cancelled on that occasion because of

caveats which had been lodged agalnst the title by the
applicants. Those caveats were apparently acknowledged to be
defective; they were withdrawn by consent and orders to that
effect made by consent in the Supreme Court of Victoria after the

auction had been abandoned.

What is put to me on behalf of the applicants really

amounts to this: That the abattolr premises and the shop

premises are both the real estate substratum of businesses

hitherto conducted by the applicants and, if the buslness

premises are lost by way of sale, then any subsequent attempt to

calculate damages, should the substantive proceedings here be

successful, would be extremely difficult indeed.

It is put that damages could never be an adequate remedy

for what in effect would be the deprivation of the applicants of
these businesses.

As agalnst that, it is put that even if these Items of

real estate are sold at the contracted prlce or at the prlce
antlclpated as belng reallsable at auction, there will, when
regard 1s paid to the whole of the indebtedness involved in this
case, stlll be a substantial shortfall.

There is also undoubtedly a question of delay that must

be taken Into account. These proceedings are brought so far as
the sale of the abattolr is concerned for the second occasion at
what appears to be the eleventh hour.

I must also take into account such view as one can form

in a situation such as thls as to the relative strength of the
claim made in the substantive proceedings.

I have glven anxious consideration to the substantial

potential hardship that can be occasioned by the sale of these
income-earnlng properties at this polnt of tlme. I also bear in
mind that the respondent bank is, of course, a very substantial
respondent well able to answer a carefully prepared claim for

damages, if that ever becomes appropriate.

I am of the n e w , after some hesitation, but finally

quite flrmly, that the balance of convenience in this matter

favours the respondents. In those circumstances I do not propose

to grant the in-~unctlon sought and I dlsmiss the claim for

interlocutory rellef, wlth costs.

I c e r t l f y t h a t t h i s and	t h e preceding	5 pages
a r e a	t r u e copy of	t he reasons f o r judgment

he re ln of h i s Honour Mr J u s t i c e M . L . Fos t e r .

Dated:  5 June 1989

* s soc i a t e :  bT* Kwd,

A P P E A R A N C E S

APPLICANTS:  R. D. Wilson

RESPONDENTS: T. Simos QC

with W. Houghton

DATE OF HEARING: 5 JUNE, 1989

DATE OF JUDGMENT: 5 JUNE, 1989