Howard, John Campbell v PD Mortgage Services Pty Ltd
[1996] FCA 1109
•17 Dec 1996
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No QG 164 of 1996
BETWEEN: JOHN CAMPBELL HOWARD
First Applicant
AND: ELIZABETH MINA BENZ
Second Applicant
AND: P D MORTGAGE SERVICES PTY LTD
(ACN 065 740 847)
First Respondent
AND: ROSS CHARLES McLEOD
Second Respondent
AND: PURVIS DUNCAN (a firm)
Third Respondent
AND: JOHN REGINALD CUFFE
Fourth Respondent
AND: LEWIS WAYNE OSBORNE
Fifth Respondent
AND: T J O’TOOLE
Sixth Respondent
AND: WILLIAM HANRON REDMOND
Seventh Respondent
JUDGE MAKING ORDER: Cooper J
WHERE MADE: Brisbane
DATE OF ORDER: 17 December 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
The notice of motion filed 11 December 1996 be dismissed.
The first and second applicants pay the first respondent’s costs of and incidental to the notice of motion to be taxed if not agreed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No QG 164 of 1996
BETWEEN: JOHN CAMPBELL HOWARD
First Applicant
AND: ELIZABETH MINA BENZ
Second Applicant
AND: P D MORTGAGE SERVICES PTY LTD
(ACN 065 740 847)
First Respondent
AND: ROSS CHARLES McLEOD
Second Respondent
AND: PURVIS DUNCAN (a firm)
Third Respondent
AND: JOHN REGINALD CUFFE
Fourth Respondent
AND: LEWIS WAYNE OSBORNE
Fifth Respondent
AND: T J O’TOOLE
Sixth Respondent
AND: WILLIAM HANRON REDMOND
Seventh Respondent
CORAM: Cooper J
PLACE: Brisbane
DATE: 17 December 1996
REASONS FOR JUDGMENT
This is an application for injunctive relief to restrain the first respondent as mortgagee from exercising its rights as mortgagee with respect to parcels of land owned respectively by the first and second applicants.
On 13 September 1996, the first and second applicants filed in this Court an application and statement of claim against the first to seventh respondents seeking relief under various sections of the Trade Practices Act 1974 (Cth) and for breaches of fiduciary duty and contract. Part of the relief sought in those proceedings related to the exercise by the first respondent of its rights as mortgagee under registered mortgage 700270861 dated 29 September 1994 over the first applicant’s land and under registered mortgage 700246439 dated 22 September 1994 over the second applicant’s land.
On 18 September 1996 the first respondent as mortgagee commenced proceedings in the Supreme Court of Queensland against each of the first and second applicants for recovery of possession of the land the subject of the mortgages. On 14 October 1996 the first respondent as plaintiff in the Supreme Court proceedings sought summary judgment against the first and second applicants as defendants in the respective Supreme Court actions.
The applications for summary judgment were heard before Thomas J in the Supreme Court. Each application was contested. By way of defence it was pleaded that there was no default under the respective mortgages because of a re-negotiation of some of the obligations under the mortgages and a joint venture agreement made between the first and second applicants and a company, Private Mortgage Lending Limited, which re-negotiations, it was alleged, were binding on the first respondent as mortgagee. The allegations pleaded in paragraph 2 of the defence in the Supreme Court proceedings appear in paragraphs 25 to 28 inclusive of the statement of claim filed in the proceedings in this Court. There was also before Thomas J a copy of the application and statement of claim filed in these proceedings. The applicants also filed in the Supreme Court an affidavit in substantially the same terms to the principal affidavit relied upon by them before me for the interlocutory relief which they now seek.
On 22 October 1996 Thomas J gave each of the applicants conditional leave to defend the Supreme Court proceedings. One of the conditions was that the first applicant pay interest of $5,937.50 no later than the fifth day of each month, in default of which the first respondent was entitled to enter judgment for recovery of possession of the land subject to registered mortgage 700270861. One of the conditions of the second applicant’s leave to defend was that she pay interest of $2,562.50 no later than the twenty-second day of each month, in default of which the first respondent was entitled to enter judgment for recovery of possession.
The orders made by Thomas J have not been stayed, varied or appealed. The first applicant made one payment of interest but defaulted thereafter. Final judgment was entered in the Supreme Court on 6 December 1996 against the first applicant as defendant ordering that the first respondent recover possession of the land the subject of registered mortgage 700270861. The final judgment has not been stayed or appealed.
The second applicant has not defaulted in terms of the conditions imposed upon her by Thomas J for leave to defend the Supreme Court proceedings. However, she deposes in an affidavit filed 16 December 1996 in this Court that she cannot make the payment due on 22 December 1996. On that date she will default and in terms of the order of Thomas J the first respondent as mortgagee will be entitled to enter judgment for recovery of possession of the land the subject of registered mortgage 700246439.
The relief which the first applicant seeks against the first respondent as mortgagee has been totally overtaken by the final order of the Supreme Court of Queensland granting possession of the land to the first respondent. The matters in issue between the first respondent as mortgagee and the first applicant as mortgagor in the Supreme Court proceedings are res judicata and have merged in the judgment. Unless set aside on appeal in the Supreme Court, the judgment is binding on the parties to it (Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 at 285, 295; Indrisie v General Credits (1984) 5 FCR 582 at 587). The first applicant’s application must fail on this ground alone and it is unnecessary to go to the issues of serious question to be tried and the balance of convenience.
It was submitted on behalf of the second applicant that this Court should grant the relief sought because the order of Thomas J was interlocutory in nature and no final order in the form of a judgment of the Supreme Court stood in the way of granting such relief. The difficulty with such a submission is that the factual circumstances relied upon by the second applicant for the relief now sought, including the re-negotiated agreement of October 1995, were relied upon before Thomas J as entitling the second applicant to defend the action wherein the first respondent sought to exercise its rights as mortgagee.
Thomas J has adjudicated on that issue and determined that leave to defend be conditional. The effect of his Honour’s order is that for so long as the conditions imposed are complied with the first respondent cannot obtain possession to enable it to exercise its power of sale and deliver vacant possession to any purchaser from it. As I have said, that order has not been stayed, varied or appealed. In fact there has to date been compliance with its terms. What the second applicant seeks in these proceedings is to avoid the consequences of his Honour’s order in other than the forum where the order was made.
It was not suggested by counsel for the second applicant that I had power to stay or vary the order of Thomas J. Rather, it was submitted I could indirectly bring about that result by granting the injunctive relief.
This is not a case where the Supreme Court order was made in ignorance of the proceedings and allegations made in this Court. Nor was it an order made in the absence of the second applicant or in circumstances where she was denied an opportunity to place material before the Supreme Court and be heard in respect of the matter. Whilst Thomas J’s order remains operative and operates to protect the second applicant so long as she complies with the conditions his Honour saw fit to impose, I am of the view that this Court, as a matter of discretion, should not attempt to do indirectly what it cannot do directly, namely vary or set aside the order of Thomas J (see Indrisie v General Credits at 587).
If the second applicant wishes the order of Thomas J to be varied or seeks from him or a judge of the Supreme Court some other interlocutory protective relief in lieu of it, she must apply to that Court. Otherwise, if she defaults on 22 December 1996 in the payment of interest, the first respondent as mortgagee will be at liberty to enter judgment for possession of the land subject to registered mortgage 700246439.
As it is possible that further relief may be sought in the Supreme Court by the second applicant, I express no view on the issues of serious question to be tried or the balance of convenience.
The applications for interlocutory injunctive relief will be refused. The first and second applicants will be left with such remedies in this Court as are not denied to either of them by the Supreme Court orders and judgments.
THE COURT ORDERS THAT:
The notice of motion filed 11 December 1996 be dismissed.
The first and second applicants pay the first respondent’s costs of and incidental to the notice of motion to be taxed if not agreed.
I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment of his Honour Justice Cooper.
Date:17 December 1996
Associate
Counsel for the Applicant: Mr J S Douglas QC
Solicitors for the Applicant: Nicol Robinson & Kidd
Counsel for the Respondent: G C Newton
Solicitors for the Respondent: Deacons Graham & James
Date of Hearing: 17 December 1996
Place of Hearing: Brisbane
Date of Judgment: 17 December 1996
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