Murphy v Overton Investments Pty Ltd

[2001] FCA 1571

FEDERAL COURT OF AUSTRALIA

Murphy v Overton Investments Pty Ltd [2001] FCA 1571

JOHN JAMES MURPHY v OVERTON INVESTMENTS PTY LIMITED

N 159 OF 1999

DAPHNE MURPHY v OVERTON INVESTMENTS PTY LIMITED

N 946 OF 1999

EMMETT J
8 OCTOBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 159 OF 1999

BETWEEN:	JOHN JAMES MURPHY APPLICANT
AND:	OVERTON INVESTMENTS PTY LIMITED RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	8 OCTOBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.   Leave be given to the applicant to file a fourth further amended application in the form initialled and dated by Emmett J. 

2.   The applicant pay the costs, if any, thrown away by the amendments made pursuant to the leave given in Order 1.

3.   The applicants pay the costs of the motion dated 17 August 2001

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		N 946 OF 1999
BETWEEN:	DAPHNE MURPHY APPLICANT
AND:	OVERTON INVSTMENTS PTY LIMITED RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	8 OCTOBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Leave be given to the applicant to file a further amended application in the form initialled and dated by Emmett J. 

2.The applicant pay the costs, if any, thrown away by the amendments made pursuant to the leave given in Order 1.

3.        The applicants pay the costs of the motion dated 17 August 2001

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

N 159 OF 1999

BETWEEN:

JOHN JAMES MURPHY

APPLICANT

AND:

OVERTON INVESTMENTS PTY LIMITED

RESPONDENT

N 946 OF 1999

BETWEEN:

DAPHNE MURPHY

APPLICANT

AND:

OVERTON INVSTMENTS PTY LIMITED

RESPONDENT

JUDGE:

EMMETT J

DATE:

8 OCTOBER 2001

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1. On 16 June 2000, I ordered that these two proceedings be dismissed, for the reasons that I delivered on 15 June 2000.  The original applications included prayers for relief under the Contracts Review Act 1980 (NSW) (“the Act”). For the reasons that I then gave, I concluded that this Court did not have jurisdiction to make orders under the Act.

2. For reasons delivered on 2 May 2001 the Full Court concluded that this Court does have jurisdiction under the Act, and accordingly, the matter was remitted to me for further consideration of the claims for relief under the Act. When the matter came back before me, Overton moved for summary dismissal of the claims made under the Act on various grounds that might be compendiously referred to as “res judicata grounds”.

3. I have heard argument on those questions and have reserved my decision.  Both parties agree, however, that, irrespective of the view that I reach on the res judicata questions, it would be appropriate that I determine the substantive questions raised under the Act. That is appropriate because of the possibility that there may be an appeal from whatever decision I make on the res judicata grounds. I have not yet heard substantive argument on the claims under the Act.

4. The applicants have sought leave to amend their application. As it presently stands, the following relief is sought pursuant to s 7 of the Act:

   “4.      An order … restraining Overton from recovering outgoings in excess of 39.72% (or in the alternative 45.24%) of the full single pension from time to time from the Applicant as Lessee and from any future Lessee of Unit 53 of the Heritage Retirement Village up to 19 October 2091. 

   5.       An order … that Overton by restrained from recovering as outgoings under the said Lease: 

   (a)       any amount for legal or accounting costs;

   (b)       interest on moneys borrowed raised.”

5. Written submissions have been made in relation to the matters arising under the Act, although as I have said, I have not yet heard full argument on those questions. It is clear enough from the written submissions made on behalf of Mr and Mrs Murphy that the relief under the Act is claimed under ss 7(1)(a) and 7(1)(b) of the Act. Section 7(1) provides as follows:

   “Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following:

   (a)it may decide to refuse to enforce any or all of the provisions of the contract,

   (b)it may make an order declaring the contract void, in whole or in part,

   (c)it may make an order varying, in whole or in part, any provision of the contract,

   (d)it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that:

   (i)varies, or has the effect of varying, the provisions of the land instrument, or

   (ii)terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument. It is common ground that the claim for relief under the Contracts Review Act is made in respect of a land instrument as that term is defined in that Act.”

6. Section 7(3) provides as follows:

   “The operation of this section is subject to the provisions of section 19.”

   Section 19 provides:

   “(1) An order made under section 7(1)(b) or (c) has no effect in relation to a contract so far as the contract is constituted by a land instrument that is registered under the Real Property Act 1900.

   (2) Where an order is made under section 7(1)(b) or (c) in relation to a contract constituted (in whole or in part) by a land instrument, not being a land instrument registered under the Real Property Act 1900, the regulations made under this Act may make provision for or with respect to prescribing the things that must be done before the order, so far as it relates to the land instrument, takes effect.

   (3) The Registrar-General and any other person are hereby authorised to do any things respectively required of them pursuant to subsection (2).”

7. The effect of ss 7 and 19 was adverted to in the written submissions filed on behalf of Overton in relation to the Act claims under the Act. Those submissions prompted the present application for leave to amend, to rely on s 7(1)(d). In lieu of prayers 4 and 5 in the current forms of application, it is proposed to substitute the following prayers:

   “4.A declaration that the Lease dated 20 October 1992, between the Applicant and spouse and the Respondent as Lessor is unjust within the meaning of s 7 of the Contracts Review Act 1980 (NSW).

   5.An order pursuant to section 7(1)(d) of the Contracts Review Act 1980 (NSW) that the Respondent execute an instrument that has the effect so far as is possible of avoiding the unjust consequences of the lease.”

8. The application for leave was opposed by Overton on several grounds.  First, it was said that the amendment was futile on the res judicata grounds.  It was not suggested, however, that any different res judicata question would arise by reason of reliance on s 7(1)(d) from that which would arise in relation to the claims as presently formulated. As I have said, I have reserved my decision on those questions and, in any event, it is possible that the matter might go further. Accordingly, I do not regard that as a reason for refusing leave.

9. Secondly, the proposed amended application, as originally promulgated, sought relief in terms of a specific amendment to the lease to Mr and Mrs Murphy, which is the land instrument in question.  The form of that amendment had difficulties.  Accordingly the proposed alternative prayers were reformulated in the form that I have just indicated.  While there may have been difficulties in granting leave to amend as originally sought, the current form of the amended prayer causes no difficulty.

10. The final matter concerned the time at which this application was made, namely after the close of evidence and after remission following an appeal. There was no evidence advanced initially as to why the application for leave to amend was made at this late stage. One fact that I take into account in deciding this question is the currency of some eighty or more other applications in which similar questions will arise. The circumstances in which these applications have been dealt with are set out in some detail in my reasons of 15 June 2000. In any event, no prejudice has been suggested on behalf of Overton if leave to amend were given. That is based on the assumption that the substance of the claim being made under the Act is not intended to be different following the amendment from the claims as originally formulated.

11. Counsel for Mr and Mrs Murphy has frankly acknowledged that it was an oversight on his part that led to the failure to avert specifically to relief under s 7(1)(d). Having regard to the way in which the matter has been raised, that is an inference that I would have drawn. That, of course, is not of itself a justification for the granting of leave to amend. Nevertheless, in circumstances where there is no prejudice to Overton by reason of the amendment, I consider that, having regard to that circumstance, and to the currency of the other proceedings, it is appropriate that leave be given. I would give leave only to the extent that leave would be necessary to seek the relief contemplated by s 7(1)(d) in lieu of the relief that might be available under ss 7(1)(a), (b) and (c).

12. The respondent has sought an order that the costs should be paid forthwith in accordance with Order 63 Rule 3(2) of the Federal Court Rules.  It seems to me the appropriate course is to order that the applicants pay the costs of the motion and the costs thrown away, but no order should be made that the costs be taxed forthwith.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             6 November 2001

Counsel for the Applicant:	Mr G Moore
Solicitor for the Applicant:	The Aged Care Rights Service
Counsel for the Respondent:	Mr A McInerney
Solicitor for the Respondent:	Gadens Lawyers
Date of Hearing:	8 October 2001
Date of Judgment:	8 October 2001