Killalea, R.M. v Australia & New Zealand Banking Group Ltd

[1990] FCA 282

JUDGMENT No. a%..%/ ....... --

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	No. G845 of 1989

)

GENERAL DIVISION 1

Applicant

AND: AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIHITED

First Respondent

AND: RICHARD TORY Trading as

VICTORY FINANCE

Second Respondent

AND: RESERVE RESOURCE MANAGEMENT

PTY LIMITED

Third Respondent

AND: AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

Cross Claimant

REGISTRY

AND: REX MYLES KILLALEA, EUNICE

MAY KILLALEA, AUSTIN WILLIi.iY

-	KILLALEA, NIGEL ROSS
KILLALEA, LEIGHTON SYDNEY KILLALEA
Cross Respondents

RECEIVED

FEDERAL COURT OF

AUSTRALIA PRINCIPAL

C O N :	WILCOX J
PLACE :	SYDNEY
DATE :	23 HAY 1990

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. A separate trial be held on the issue of liability.

2. That the parties give discovery upon all matters relating to liability within a period of one week, such discovery to be by informal production of documents to the opposing solicitors.

If it is possible for the parties to agree on the
relevant facts, a statement of agreed facts be filed
and served within a further two weeks thereafter,
that is to say, by Wednesday, 13 June; alternatively,
all affidavits upon which the applicants will rely be

filed and served by that day.

Any amended Statement of Claim be filed and served by

13 June.

Leave be granted to the first respondent to amend the cross-claim so as to claim the sum of $3,800,293.44.

6.         Judgment be entered in the cross-claim for the cross-claimant in that sum but the enforcement of that judgment be stayed pending further order.

7.         Judgment be entered for possession of the land described in para.1 of the Notice of lotion filed in this Court on 20 April 1990.

8.        Leave be granted to the cross-claimant to issue a Writ of Possession forthwith; the operation of this order to be stayed for a period of 14 days.

9.         The applicants in the principal proceedings pay the cost of the first respondent in respect of the cross-claim, the claim for possession and the motion heard today.

10.       The matter to be stood over for mention at 9.30am on Friday, 15 June.

Note:	Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	NO. G845 of 1989

)

GENERAL DIVISION 1

BETWEEN: REX MYLES KILLALEA, EUNICE

HAY KILLALEA, AUSTIN WILLIAM
KILLALEA, NIGEL ROSS
KILLALEA, LEIGHTON SYDNEY
KILLALEA, Trading as R & E

KILLALEA PASTORAL COMPANY

Applicant

AND: AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIHITED

First Respondent

AND: RICHARD TORY Trading as

VICTORY FINANCE

Second Respondent

AND: RESERVE RESOURCE MANAGEMENT

PTY LIMITED

Third Respondent

AND: AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

Cross Claimant

AND: REX MYLES KILLALEA, EUNICE

HAY KILLALEA, AUSTIN WILLIAM
KILLALEA, NIGEL ROSS
KILLALEA, LEIGHTON SYDNEY

KILLALEA

Cross Respondents

CORAM :	WILCOX J
PLACE:	SYDNEY
DATE :	23 M Y 1990

REASONS FOR JUDGMENT

There are three applications before the Court by the

first respondent, Australia and New Zealand Banking Group
Limited. Two of them are for essentially the same relief, the
first application having been filed when the matter was before
the Supreme Court of Queensland and the second application
after the matter was transferred to this Court by order of
McPherson J, of the Supreme Court, pursuant to the

cross-vesting legislation.

Those two motions seek summary judgment on the first

respondent's claim for possession of the property owned by the

applicants, which was mortgaged to the first respondent.

The material which has been put before me satisfies

me that the first respondent is entitled to possession of the

property. No defence has been filed to the claim for
possession and nothing has been put before me on behalf of the
first respondent to suggest that the first respondent is not

entitled to possession.

However, counsel for the applicants submits that I

should stay an order for possession of the property pending
the trial of the matter, that is to say, the claims raised by
the applicant.

I am not persuaded that this course is a desirable course. It appears that the debt owed by the applicants to the first respondent has now reached some $3.8 million and

interest in accruing at the rate of 22.25 per cent, or
$2,577.30, per day. Although there is no evidence of the
present value of the property, I note that it was purchased
for $1.4 million and it appears certain that there will be

insufficient obtained by way of sale of the property to pay

out the amount claimed by the first respondent. If the

applicants are entitled to the damages which they seek then
those damages can encompass any loss which they have sustained
as a result of the transaction into which, as they would say,
they entered because of the acts and default of the first

respondent. That would include any loss in respect of the

sale of the property. It seems to me that it is in the

interest of everybody concerned for the property to be sold as

soon as possible, subject to a reasonable price being

obtainable, and thereby reducing the amount of the debt and

consequently the future interest payments.

Accordingly I propose to accede to the motion for

possession. I make orders in accordance with paragraphs 1 and

2 of the Notice of Motion filed in this Court on 20 April

Counsel for the first respondent also seek an order

summarily dismissing the claim made by the applicants against
their client. In the course of their submissions counsel
summarised the case which is made against their client in the
statement of claim and in particulars which have been
supplied. The summary which they made was accepted as
accurate, subject to some additional material, by counsel for

the applicants.

That summary is as follows:

1.	That, prior to the relevant transaction there was no banker/customer relationshrp between the applicants and the first respondent.
2.	That the application for finance was made to the first respondent through the intervention of persons other than the applicants.

3. That no request was made by or on behalf of the applicants for the provision of advice by the first respondent concerning

the loan.
4.	That no advice was in fact given by the first respondent before the loan was granted and accepted.

Counsel submit that the relationship between the

parties was merely that of lender and borrower and they submit
theat there is no duty by a lender to give advice to a
borrower where none is requested. They say that this

furnishes an answer to all of the claims, although pleaded in

different forms, made against their client.

In the course of their submissions counsel for the

applicants accepted the summary which I have just mentioned,
but they added some other matters including the fact that the
amount of the loan equalled 100 per cent of the amount
required to purchase the property; that the loan was being
made prima facie on the basis of security rather than the
ability of the borrowers to repay; and it was said that, after
the loan agreement was made, the parties entered into the
relationship of banker/customer, which is something different
from a mere lender/borrower relationship. It was said that,
having regard to all of these matters, the duties alleged in

the Statement of Claim did arise as a matter of law.

AS indicated to counsel for the first respondent, I

felt there were difficulties about the case which he sought to make but I am concerned that the matter should not be disposed of upon the basis of assumed facts. The matters referred to

and, if the question of whether there is a duty is to be	by counsel are not adverted to in the Statement of Claim
determined with regard to those facts, it is better for the Statement of Claim to be amended so as to contain those allegations, and indeed any other allegations of fact upon which the applicants would wish to rely.

I am of the opinion that the appropriate course is to

refuse the application for summary dismissal but to order a

separate trial of the issue of liability. I am told by

counsel that such a trial would be short and would probably be
on the basis of agreed facts once the relevant documents had

been inspected.

Accordingly the course that I propose to take is to

order that the parties give discovery upon all matters
relating to liability within a period of one week, such
discovery to be by informal production of documents to the
opposing solicitors. If it is possible for the parties to
agree on the relevant facts a statement of agreed facts is to
be filed and served within a further two weeks thereafter,
that is to say, by Wednesday, 13 June; alternatively, all

affidavits upon which the applicants will rely are to be filed

and served by that day. I will stand over the matter for

mention at 9.30am on Friday, 15 June.

If possible I will then fix a hearing date, which I

hope can be fairly soon after that date.

1 certify this and the five
preceding pages to be a true copy of
the Reasons for Judgment of

his Honour Justice Wilcox.

Associate:

Date:  23 May 1990

APPEARANCES

Counsel for the Applicant:	Mr V Bruce QC and Mr C Lonergan
Solicitors for the Applicant:	V Ranzetta & CO
Counsel for the
First Respondent:	Mr W w Caldwell QC and Mr G 0 Blake
Solicitors for the
First Respondent:	Norton Smith & CO
Date(s) of hearing:	23 May 1990