Kennard, C.C. v AGC (Advanced) Ltd

[1986] FCA 570

570

IN THE FEDERAL COURT OF AUSTRALIA	)
9UEENSLAND DISTRICT REGISTRY	) QLD G67 of 1986
GENERAL DIVISION	)

BETWEEN:

CHRISTOPHER CAMPBELL KENNARD and

MARGARET BETH KENNARD

Applicants

AND: A.G.C. (ADVANCES) LIMITED

First Respondent

A N D :	SYDNEY FRANCIS DEMPSTER and
KRYSTYNA EMILIA DEMPSTER

Second Respondents

AND: A.G.C. (ADVANCES) LIMITED

Cross Clalmant

AND: CHRISTOPHER CAMPBELL KENNARD and

MARGARFT BETH KENNARD

Cross Respondents

MINUTES OF ORDER

PINCUS ORDER: MAKING JUDGE J.

DATE OF ORDER: 2 8 NOVEMBER 1986

MADE: BRISBANE	WHERE
THE COURT ORDERS THAT:
On the first respondent's undertaking not to assign or otherwise
deal with its interest as mortgagee in Bill of Mortgage No.
C513523,

(1) The said Bill of Mortgage be varied by addition of the

following clause:

"Notwithstanding anything herein contalned:

(i) the mortgagee shall bring no suit nor take any

other step t o enforce any personal liability of

a s mortgagee hereunder;

Christopher Campbell Kennard andlor Margaret Beth avallable to It

(11) any sum accruing to the mortgagee in

consequence of a sale of the mortgaged property

shall (after deduction of any reasonable expenses

of sale) be held by it as to one-half for

Christopher Campbell Kennard and Margaret Beth

Kennard and pald to them on demand."

(il) The first respondent not execute a contract for sale of the land subject to the sald mortgage or submlt the same for sale by publlc auctlon wlthout, in the former case,

givlng the appllcants seven days wrltten notlse of Its
lntentlon to do so and the prlce and terms, and, In the
latter case, glvlng the appllcants seven days wrltten
notlce of lts lntentlon to do so and the reserve prlce.
(ili)	The first respondent pay the costs of the appllcants of
and incldental to these proceedlngs, lncludlng reserved costs, to be taxed.

- NOTE : Settlement and entry of orders 1 s dealt wlth In

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)
9UEENSLAND DISTRICT REGISTRY	) QLD G67 of 1986
GENERAL DIVISION	)

BETWEEN:

CHRISTOPHER CAMPBELL KENNARD and

MARGARET BETH KENNARD

Applicants

AND: A.G.C. (ADVANCES) LIMITED

First Respondent

AND: SYDNEY FRANCIS DEMPSTER and

KRYSTYNA EMILIA DEMPSTER

Second Respondents

AND: A.G.C. (ADVANCES) LIMITED

Cross Claimant

AND:	CHRISTOPHER CAMPBELL KENNARD and
MARGARET BETH KENNARD

Cross Respondents

PINCUS J. 28 NOVEMBER l986

SUPPLEMENTARY REASONS FOR JUDGMENT

I gave my reasons in this case and set out my proposed

order on 12 November. Subsequently I heard counsel as to the form

of order, and indeed as to its substance. Counsel for the

applicants, Mr. Muir, contended that I should simply set aside the

mortgage so far as it related to the applicants.

Considering the case from the point of view of

rectification, there is, as I said at my reasons (pp.14, 151, room

2 .

for doubt as to what order would best reflect the basis on whlch

the applicants were led to execute the mortgage. Difficultles of

that sort do not appear to preclude the posslblllty of

rectification: Re Butlin's Settlement Trusts (1976) 1 Ch. 251 at

260, M.R. Hornibrook (Ptv.) Ltd. v. Eric Newham (Wallerawanq) Pty.

Limited (High Court 2 September 1971). The latter case, whlch is

reported on another polnt in 45 A.L.J.R. 523, 1 s one in whlch the

Court appears to have given precise effect to the partles' general

intentlon that there be a "rise and fall" clause In a sub-contract by framlng a suitable one. But whatever the scope of the Court's

discretion to frame a sultable order exerclslng equitable

~urisdlctlon, lt appears to me clear enough that there 1 s a wlde

dlscretlon under s.87 of the Trade Practlces Act to make an order

deslgned to achleve a result whlch 1 s falr and may be hoped to

operate In a practlcal way. As Mr. Hacson Q.C. for the flrst

respondent pomted out, slmply to reduce Its securlty	to	a
mortgage over the Dempsters' half-interest In the land creates

practical difficultles; what was loosely descrlbed in the evldence

as the applicants' equity In the land can be protected otherwise.

I see no reason to assume that the flrst respondent,

which proposes to cause the land to be sold, would do so in a way

which breached its legal obligations as mortgagee; I am confldent

that it is, or wlll be made, conscious of the fact that to do so

would be likely to brlng it back before a court.

On the question of registration of the variation

mentioned in my reasons, I understood that counsel did not regard

that as necessary. on the basis that the first respondent is

3.

willing to undertake not	to	assign or otherwise deal with its
interest as mortgagee.

The orders will therefore be as follows:

On the flrst respondent's undertaklng not to asslgn or otherwlse

deal with its Interest	as	mortgagee in	Ell1	of Mortgage	No.
C513523, it 1 s ordered:

(1) That the sald B111 of Mortgage be varled by addltlon of

the following clause:

"Notwlthstandmg anythlng hereln contalned:

( 1 ) the mortgagee shall bring no sult not- take any other step to enforce any personal 11ablllty of

Cht-lstopher Campbell Kennard and/or Margaret Beth

Kennard hereunder but may take any other step

avallable to It as mortgagee hereunder;

(il) any sum accrulng to the mortgagee In

consequence of a sale of the mortgaged property

shall (after deductlon of any reasonable expenses

of sale) be held by It as to one-half for

Chrlstopher Campbell Kennard and Margaret Beth Kennard and pald to them on demand."

(li) That the first respondent not execute a contract f o r sale of the land subject to the said mortgage or submit the

same for sale by public auctlon without, in the former

case, giving the applicants seven days written notice of

its intention to do so and the price and terms, and, in

the latter case, giving the applicants seven days written

notice of its intention to do so and the reserve prlce.

.

4 .

(iii) That the first respondent pay the costs of the appllcants

of and Incldental to these proceedlnqs, lncludlnq

reserved costs, to be taxed.

Counsel for the Appllcant: Mr. J . D . Muir

Solicitors for the Appllcant:	McCullough and Robertson
Counsel for the Respondent:	Mr. R . V . Hanson Q.C. wlth Mr.
D.C. Andrews
Solicitors for the Respondent:	Henderson Lahey Trout Bernays
Dates of Hearlng.	6 , 7 . 13 November 1986