Leslie v GE Commercial Corporation (Australia) Pty Ltd [No 2] - [2009] WASCA 28

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: LESLIE -v- GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD [No 2] [2009] WASCA 28

CORAM: STEYTLER P
McLURE JA
BUSS JA

HEARD: 22 DECEMBER 2008

DELIVERED : 22 DECEMBER 2008

PUBLISHED : 30 JANUARY 2009

FILE NO/S: CACV 34 of 2005

BETWEEN: ANNE ELIZABETH LESLIE
Appellant
AND
GE COMMERCIAL CORPORATION (AUSTRALIA) PTY LTD (ACN 000 974 747)
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :BLAXELL J
Citation  :GE COMMERCIAL CORPORATION AUSTRALIA PTY LTD -v- BREVTEX PTY LTD & ORS [2005] WASC 27
File No  :CIV 2305 of 2004

Catchwords:

Contract of guarantee - Triable issue as to whether guarantor liable under the guarantee - Beneficiary of guarantee made payment into court pursuant to the court's order - Guarantor applied for an order that the money paid into court be released and paid to the guarantor to enable her to retain and pay lawyers - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 24 r 9, O 52 r 2

Result:

Application dismissed

Category: B

Representation:

Counsel:

Appellant: In person
Respondent: Mr P G Clifford

Solicitors:

Appellant: In person
Respondent: Lawton Gillon

Case(s) referred to in judgment(s):

Burrell v The Queen [2008] HCA 34; (2008) 82 ALJR 1221
DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Grierson v The King (1938) 60 CLR 431
Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217
Leslie v GE Commercial Corporation (Australia) Pty Ltd [2007] WASCA 65
Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28 FLR 195; (1976) 15 ACTR 45
The State of Western Australia v Wallam [2008] WASCA 117 (S)

STEYTLER P: The appellant, Mrs Anne Leslie, is a defendant in Supreme Court proceedings (action) brought by the respondent, GE Commercial Corporation (Australia) Pty Ltd (GE), against her and three other defendants, Brevtex Pty Ltd, Seabay Enterprises Pty Ltd and Jeffrey Leslie. The action is one for, amongst other things, payment under guarantees executed by the four defendants in respect of moneys allegedly owing to GE by Brevtex Machine Tools Pty Ltd (Brevtex). On 4 March 2005, summary judgment was entered against the appellant in the sum of $500,000 plus interest. She was found to have had an arguable case in relation to advances made by GE to Brevtex in excess of that sum. The appellant was also ordered to execute a legal mortgage, in favour of GE, over property owned by her at 59 Hobbs Avenue, Dalkeith (Hobbs Avenue property).
The appellant appealed against the summary judgment and the order requiring her to execute the mortgage. By judgment delivered on 28 March 2007, this court allowed the appeal: Leslie v GE Commercial Corporation (Australia) Pty Ltd [2007] WASCA 65. The court was satisfied that the appellant had arguable defences to GE's claim and that the primary judge erred in ordering summary judgment for $500,000 and interest and in ordering Mrs Leslie to execute a legal mortgage over the Hobbs Avenue property [36]. The court said, as regards the Hobbs Avenue property (which had subsequently been sold), that the appropriate course was for the primary judge to have ordered that the net balance from any sale of that property (which, by the time of the appeal, had been received by GE) be paid into court (or other similar agreed arrangement) pending the determination of that action [44]. It said that an order to that effect, with necessary modifications in relation to interest, should be made ([44] McLure JA, Steytler P & Buss JA agreeing).
Orders were subsequently made that the appeal be allowed, that the orders made by the primary judge be set aside, that the appellant be given unconditional leave to defend the action and that GE pay into court, within 21 days, the sum of $643,783.73 received by it pursuant to the mortgage, plus interest. GE subsequently paid the sum of $643,783.73 and interest into court in accordance with the order to that effect.
The appellant has applied for an order that the moneys paid into court be released and paid to her. She says that this is necessary in order to enable her to retain and pay legal representatives to conduct her defence of GE's action. Her application was opposed by GE. After hearing submissions from the parties, we dismissed the application and said that we would give our reasons in due course. These are my reasons for dismissing the application.
As I have mentioned, in its judgment allowing the appeal, the court foreshadowed an order that the sum of $643,783.73 plus interest be paid into court by GE (or that some similar arrangement be made) for the purpose of preserving that fund pending the determination of the rights and liabilities of the parties at trial. No similar arrangement having been made by the parties, an order was made for payment into court and, as I have said, that order was complied with. No order was made, or sought, for liberty to apply to vary the order for payment into court if circumstances altered.
As events transpired, GE offered to vary the order for payment into court. It proposed to the appellant that orders be made facilitating the payment of the money paid into court into an interest‑bearing account upon the understanding that interest earned on that money would be paid to the appellant by way of reimbursement of her taxed legal costs in defending the action. The appellant rejected that offer. The offer was repeated during the course of argument in the appeal and again rejected by the appellant.
In circumstances in which the order for payment into court was made on the expressed basis (albeit expressed in the reasons and not in the order) that it was to operate pending the determination of the action, an order for payment out in advance of the trial would, prima facie, be one that re‑opens or recalls the order previously made. In The State of Western Australia v Wallam [2008] WASCA 117 (S), this court concluded that, in the absence of a statutory provision to the contrary, and subject to certain narrow exceptions that were not there applicable, there is no general power, express or implied, given to the Court of Appeal in the Supreme Court Act 1935 (WA), the Rules of Court, or any other statute, to re‑open and re‑consider perfected civil orders: [16], [17] (McLure JA), [42] (Murray AJA), [34] (Miller JA, agreeing with Murray AJA); and see also Grierson v The King (1938) 60 CLR 431; Burrell v The Queen [2008] HCA 34; (2008) 82 ALJR 1221.
In the present case we have not been referred to any statutory provision to the contrary. Nor has it been suggested that there is room for any other exception, such as the operation of the 'slip' rule provided by O 21 r 10 of the Rules of the Supreme Court 1971 (WA). No argument has been addressed to the court concerning the potential operation of O 24 r 9(1) which, as Buss JA points out in his reasons, provides that, subject to

an exception that is not presently relevant, 'money paid into court under an order of the Court … shall not be paid out of court except in pursuance of an order of the Court'. It is consequently unclear whether the court has the power to make an order for payment out of court at this stage of the proceedings (although the argument for the existence of the power might be stronger if the order was to be made by consent: DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 [34]; Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28 FLR 195; (1976) 15 ACTR 45; Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217 [129], [144] ‑ [152]).

However, it is unnecessary to decide that issue, which has not been adequately addressed in submissions from the parties. That is because, if there is power to make an order of the kind sought, I would not make it. There is no suggestion, in the evidence before us, that the position of the parties has altered in any material way since the making of the order for payment of the money into court. The appellant says only that she needs money to pay her legal bills and expenses. She does not depose to her financial circumstances otherwise than by referring to an annexure to an affidavit sworn by her on 4 October 2007. In that annexure, the appellant says that she owns no property or vehicles. She also there sets out a statement of her fortnightly income and expenditure. The statement reveals that she pays rent of $550 a fortnight. However, in an affidavit sworn on 6 October 2008, Peter Larsen (who, with his wife, arranged for the trustee company of their family trust to purchase the Hobbs Avenue property) says that he and his wife offered the appellant the opportunity to continue living at the property with an understanding that a nominal rent would be paid as and when possible. The discrepancy is not explained. Also, the appellant does not say, in any of her affidavits, that she is unable to obtain the funds needed by her for legal expenses from any other source. Finally, on the basis of what is said in the annexure to the appellant's affidavit dated 4 October 2007, there is no basis for concluding that, if the money paid into court is released to, and spent by, the appellant, she would be able to satisfy GE's claim against her if it should succeed at the trial.
In these circumstances, it seems to me that no basis has been shown for varying or discharging the order made with respect to payment into court.
McLURE JA: I agree with Steytler P.

BUSS JA: By Supreme Court action CIV 2305 of 2004, the respondent (GE) claimed against the appellant and three other defendants (Brevtex Pty Ltd, Seabay Enterprises Pty Ltd and Jeffrey Leslie) under 'Secured Guarantees' of moneys allegedly owing to GE by Brevtex Machine Tools Pty Ltd.
On 4 March 2005, Blaxell J entered summary judgment against the defendant companies and Mr Leslie in the sum of $1,514,173 and interest thereon. Those defendants did not appeal against his Honour's decision.
The learned judge also entered summary judgment against the appellant in the sum of $500,000 and interest thereon, and required the appellant to execute a legal mortgage of her property at 59 Hobbs Avenue, Dalkeith. The appellant appealed against his Honour's decision.
On 28 March 2007, this court (Steytler P, McLure and Buss JJA) allowed the appellant's appeal. See Leslie v GE Commercial Corporation (Australia) Pty Ltd [2007] WASCA 65 (Leslie No 1). Those reasons should be read with these reasons. The court made orders, relevantly, as follows:
4.The Appellant be given unconditional leave to defend the action.
5.[GE], within 21 days of the date hereof, pay into court the sum of $643,783.73 plus interest thereon at the rate prescribed by s142 of the Supreme Court Act 1935 (WA) from the date of receipt by [GE] until the amount is paid into court.
Pursuant to par 5 of the orders, GE paid into court the sum of $705,903.65.
Subsequently, the appellant made application for an order that the moneys paid into court by GE be released and paid to the appellant to enable her to retain and pay legal representatives to conduct the defence of GE's action against her. GE opposed the application.
The appellant relied on affidavits sworn by her on 4 October 2007, 6 October 2008 and 19 December 2008. She also relied on an affidavit of Peter Devon Larsen sworn 6 October 2008.
GE relied on affidavits of Kristie Jane Chambers sworn 29 August 2008, John Konstantinos Panegyres sworn 3 October 2008 and 22 October 2008, and Simon Christopher England sworn 22 October 2008.
GE made an offer to the appellant, in the course of oral submissions, to the effect that it would agree to the $705,903.65 being paid out of court and into an interest bearing trust account on the basis that the interest earned on the $705,903.65 would be paid to the appellant in or towards reimbursing her for any taxed legal costs incurred in defending the action. The appellant rejected the offer. A similar offer had been made earlier by GE to the appellant and rejected by her.
After hearing oral submissions from the parties on 22 December 2008, this court dismissed the appellant's application and ordered the appellant to pay GE's costs of the application to be taxed. The court said it would publish its reasons later. These are my reasons.
In the Supreme Court action, GE contends, relevantly and in substance, that:
(a)The sum of $705,903.65 paid into court by GE is its money and should be repaid to it.
(b)Brevtex Machine Tools Pty Ltd is still liable to GE in the sum of $572,516.23 under a bailment agreement, and the appellant is liable to GE in that sum under a continuing guarantee.
(c)If the sum of $705,903.65 paid into court is not GE's money then Brevtex Machine Tools Pty Ltd and the appellant are also liable to GE in that sum.
The appellant, for her part, contends that she has no liability to GE; alternatively, her liability is limited to the sum of $500,000 and that Brevtex Machine Tools Pty Ltd has paid that sum; or alternatively, that the proceeds from the sale of properties owned by her have satisfied or partly satisfied that sum.
In LeslieNo 1, this court held, relevantly, that Blaxell J was in error in finding the appellant had no arguable defence to GE's claim against her to the extent of $500,000 (plus interest), and that she had an arguable defence to the full amount of GE's claim.
The moneys paid into court by GE were received by it in connection with the sale by the appellant in 2005 of her property at 59 Hobbs Avenue, Dalkeith. The appellant sold the property by private treaty. On 22 March 2004, GE had lodged a caveat against the title to the property. The caveat claimed an interest in the property pursuant to cl 7(2)(c) of a guarantee signed by the appellant. By cl 7(2)(b), relevantly, the appellant agreed to grant to GE a legal mortgage of any land 'now or hereafter' held by her, such mortgage to be in the form set out in the Fourteenth Schedule of the Transfer of Land Act 1893 (WA). GE consented to the appellant's sale of the property. At settlement, GE received the sum of $643,783.73 (referred to in par 5 of the orders) in consideration for removing its caveat.
During oral submissions on the appellant's application, a question arose as to whether this court had jurisdiction to order that the moneys paid into court by GE, pursuant to para 5 of the orders, be released and paid to the appellant. This question was raised by a member of the court.
In The State of Western Australia v Wallam [2008] WASCA 117 (S), McLure JA said, in the context of criminal proceedings where the respondent had applied to recall orders made by this court on allowing an appeal by the State of Western Australia against a sentence of immediate imprisonment imposed on the respondent:
My understanding of the law is that, in the absence of a statutory provision to the contrary and subject to certain narrow exceptions that do not apply in this case, a formally recorded order made by an intermediate appellate court cannot be reopened or reconsidered [16].
Earlier in her reasons, her Honour expressed the opinion that the conclusions of Malcolm CJ in Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400, 407, to the effect that the former Full Court had power in a civil case to reopen and reconsider its orders after they had been perfected, was contrary to decisions of the High Court and subsequent appellate decisions in this State (and, by implication, should not be followed) [12] ‑ [15].
The majority in Wallam (Miller JA and Murray AJA), understandably, did not refer to Esther Investments. As I have mentioned, Wallam was a criminal proceeding and the conclusions of Malcolm CJ in Esther Investments related to civil litigation.
Order 52 r 2(3) of the Rules of the Supreme Court1971 (WA) provides that where the right of any party to a fund is in dispute in a cause or matter, the court may order that the fund be paid into court or otherwise secured. By O 24 r 9(1):
Subject to paragraph (2) money paid into court under an order of the Court, or certificate of a Master or a Registrar, shall not be paid out of court except in pursuance of an order of the Court.
Paragraph (2) of O 24 r 9 relates to money paid into court pursuant to an order made under O 14, and is therefore irrelevant in the present case.
I note that:
(a)para 5 of the orders, pursuant to which GE paid into court the sum of $705,903.65, merely requires GE, in effect, to pay the stipulated sum into court, and says nothing about when or in what circumstances all or any part of the money may be paid out of court; and
(b)the appellant's application does not seek to recall or vacate any of the orders made by this court on 28 March 2007.
The parties did not make any coherent submissions on the 'jurisdictional question' raised in the course of oral argument. No reference was made to O 52 r 2(3), O 24 r 9(1), any other Rules of the Supreme Court, or any provision of the Supreme Court Act 1935 (WA). Further, no reference was made to the form of para 5 of the orders or to the fact that the appellant's application does not seek to recall or vacate any of the earlier orders made by this court. It is unnecessary, however, to determine the 'jurisdictional question'. On the assumption that the court has jurisdiction in the present case to order payment out as sought in the appellant's application, I would refuse, on discretionary grounds, to make the order.
This court ordered GE to pay the sum of $643,783.73 (plus interest) into court for the purpose of preserving that fund pending the determination of the rights and liabilities of the parties at trial. The appellant has not established any proper basis for the release of the whole or any part of the moneys paid into court. The conflicting claims of the appellant and GE have not been resolved. If the moneys were released by the court and paid to the appellant for the purpose of expenditure on legal fees and disbursements, GE's claim in respect of the fund (alternatively, its ability to apply to the court for an order that the fund be applied in or towards satisfying any judgment it may ultimately obtain against the appellant) would be irrevocably prejudiced. The affidavit material before the court does not establish any basis for concluding that the appellant would be able to meet GE's claim against her in the event that its action were to succeed and her defence were to fail. Indeed, the evidence is to the contrary. The appellant is unable even to retain and pay legal representatives to defend the action. The balance of convenience is overwhelmingly against varying or discharging par 5 of the orders in the manner sought by the appellant.
Finally, the appellant did not make out any proper basis for this court to depart from the usual order that costs should follow the event.
For these reasons, I joined in the orders made by the court on 22 December 2008.