Murray, L.o.a. v Macquarie Bank Ltd
[1992] FCA 228
•04 MARCH 1992
Re: LYNNE ORELLE ANGELA MURRAY and THE MACQUARIE BANK LIMITED
And: THE MACQUARIE BANK LTD; RAYMOND WILLIAM CARLE; LYNNE ORELLE ANGELA MURRAY
and JOHN ALEXANDER BAKER
No. Q G159 of 1990
FED No. 228
Practice and Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.(1)
CATCHWORDS
Practice and Procedure - application to vary interlocutory order - uncertainty of earlier orders - conduct of parties - earlier preparedness to accept proposed variation - Federal Court Rules O. 35 r. 7(2)(c)
Federal Court Rules O. 35 r. 7
HEARING
BRISBANE
#DATE 4:3:1992
Counsel for the applicant: Mr P. McQuade
Instructed by: Bennett and Philp
Counsel for the respondent Mr G. A. Thompson
Instructed by: Clarke and Kann
ORDER
The Court orders that:
Within seven (7) days of the passing and entering of this Order, the Applicant shall deliver a Deed of Priority (a copy of which was exhibit "A" to the Minutes of Order handed to the Court on 15.4.92) to the first respondent at care of its solicitors.
The first respondent shall execute the Deed on its receipt by the first respondent's solicitors.
The first respondent shall exchange the Deed for a bank cheque payable to the first respondent for $235,000.00.
The exchange will take place on or before 5.00 p.m. on Friday, 6 May 1992 or such further or other date as shall be mutually agreed on by the applicant, first respondent and the Bank of New Zealand.
That exchange shall take place at the Department of Freehold Land Titles, Brisbane (or such other place as shall be mutually agreed upon by the applicant, the first respondent and the Bank of New Zealand) at a time mutually agreed on between the respective solicitors for the applicant, the first respondent and the Bank of New Zealand.
At that exchange, the first respondent shall produce to the Bank of New Zealand for lodging by it the certificate of title in respect of the building unit described as Unit 15A "Newport" situated at the corner of Parkyn Parade and River Esplanade, Mooloolaba, Queensland (as described in the Deed) to enable a third mortgage from the applicant to the Bank of New Zealand to be registered in accordance with the terms of the Deed. The applicant shall take all such steps as may be within her power to cause the Bank of New Zealand to re-deliver to the first respondent the said certificate of title upon registration of the said third mortgage.
The applicant and the first respondent shall execute all such further documents and do all such further acts as may be reasonably required by the Bank of New Zealand and the Department of Freehold Land Titles in order to give effect to the orders herein.
The applicant shall pay the first respondent's -
(a) costs of and incidental to this motion including any reserved costs to be taxed;
(b) costs of the execution of the said Deed of Priority to be taxed.
Orders numbered 1, 2, 4 and 5 made by this Honourable Court on 21 August 1991 be vacated.
The applicant be released from her undertakings (a), (b) and (c) given by her to this Honourable Court on 21 August 1991.
The applicant and the first respondent shall each have liberty to apply on giving the other two (2) working days' notice.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is a notice of motion by the applicant in the principal proceedings against Macquarie Bank Limited.
The applicant seeks orders pursuant to O. 35 r. 7(2)(c) or (d) of the Federal Court Rules that the order of Pincus J. made on 21 August 1991 be varied by making orders that the first respondent, Macquarie Bank Limited (`the bank') within seven days of receiving a deed of priority in favour of the Bank of New Zealand for the sum of $235,000 only in respect of the building unit described as unit 15A "Newport", situated at the corner of Parkin Parade and River Esplanade, Mooloolaba, execute the said deed of priority; and that within seven days of executing the said deed of priority the first respondent will exchange the said deed for a bank cheque in its favour for $235,000 drawn by the applicant on the Bank of New Zealand.
Order 35 r. 7(2)(c) and (d) provides:
" 7(2) The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where -
...
(c)
the order is interlocutory;
(d) the order is an injunction
or for the appointment of a receiver;
... "
In the principal application, Ms Murray alleges that the bank engaged in misleading and deceptive conduct through one of its employees, Mr Raymond Carle. The statement of claim in the principal proceedings alleges that in 1988 she approached the bank and later borrowed from it $235,000; that that borrowing was caused by certain misleading statements made to her by Mr Carle and it is said that as a consequence she suffered damage, including the loss of opportunity on her part to otherwise organise her affairs.
The cross claim by the bank claims that sums of money are due to it pursuant to that borrowing, an overdraft facility afforded Ms Murray and sums due under a guarantee and indemnity given by her. As I understand it the bank says that the total indebtedness of Ms Murray is of the order of $669,000. The bank presently has security over property which includes the unit at Mooloolaba and a property at New Farm. There is evidence that the property at New Farm is valued at something of the order of $500,000.
The dealings in respect of the unit at Mooloolaba have had a rather sorry history. On 7 May 1991 I gave summary judgment for the bank against the applicant on the bank's cross claim in the sum of $235,000. That sum represented the principal owing to the bank under the fully drawn loan.
In the course of that summary judgment, counsel for the bank suggested that in exchange for the bank receiving that sum it would execute a partial release of its security to the value of $235,000 and that was incorporated in the orders I made on 7 May 1991. Part of the difficulty stems from the lack of precision in those orders. So far as is presently relevant, I ordered that there be judgment for the cross applicant against the first cross respondent in the sum of $235,000; that the costs of the motion for judgment in that part of the cross-claim be reserved and that the applicant execute a partial release of the security to the value of $235,000 and I granted liberty to apply on three working days' notice.
The difficulty stemmed from the order requiring the bank to execute a partial release of the security to the value of $235,000. On 6 August 1991 Pincus J made orders setting aside those that I had made on 7 May 1991.
In his reasons for judgment given on 24 July 1991 his Honour referred to difficulties which had arisen subsequent to my making of that order. He said:
" First there is uncertainty as to precisely what obligation has been assumed by the respondent bank in consequence of the Court's having acceded to its suggestion that a partial release be required. Secondly, although the applicant has found another bank ("the new financier") willing to lend her money in order to discharge the obligation under the judgment, that bank requires first mortgage security. It should be mentioned that there is a second mortgagee at present, namely Westpac; the applicant desires to discharge that mortgage by payment. "
In an important comment for present purposes, his Honour continued:
" The respondent bank now offers, in lieu of giving a
partial release, to make an arrangement with the new
proposed financier postponing its rights as first
mortgagee to those of the new financier, to the extent of
$235,000. An alternative arrangement might be that the
respondent bank should be replaced as first mortgagee by
the new financier, with the latter taking security rights
only to the extent of $235,000. Each of these
arrangements might be thought roughly equivalent in
effect to a "partial release" to the extent of $235,000, but neither is likely to have any useful consequence as far as
the applicant is concerned, even if acceptable to the new
financier. "
The position now is that the applicant is able, in essence, to give to the bank what it then offered to take and the bank for its part is willing to accept that re-arrangement provided the sum it receives is not $235,000, but $260,000.
The complication from the applicant's point of view stems from the fact that on 21 August 1991 Ms Murray gave certain undertakings through her counsel. In the light of what has since happened, it seems to me no longer possible to maintain the confidentiality of the orders made by Pincus J. on that day.
The submissions before me have proceeded on the basis of public recognition of what was then offered and accepted by the court and it is right, it seems to me, to consider the orders then made as if the requirement for confidentiality no longer applied.
On that day, Ms Murray by her counsel gave to the court an undertaking to place on the market for sale her unit at Mooloolaba and to use her best endeavours to effect a prompt sale of the unit at the market value thereof, and for that purpose to list the unit forthwith with agents and to advise and to keep advised the solicitors for the bank of the agent or agents with whom the unit is listed for sale, the instructions given to such agents including instructions as to sale price and to keep solicitors for Macquarie Bank Limited advised of progress in the attempt to sell the unit in a weekly report in writing.
Ms Murray also gave an undertaking forthwith upon sale to pay the balance of proceeds of sale of the unit after deduction of all proper agents' commission, solicitors' fees, adjustments, or other expenses incidental to the sale to an account with the Macquarie Bank Limited without admission of liability by the applicant, and she also offered the usual undertaking as to damages.
On those undertakings, the court ordered that Macquarie Bank Limited be restrained until commencement of the trial in the proceedings or further earlier order or other order from exercising or attempting to exercise its power of sale under the registered bill of mortgage J834165V and from taking possession of or from attempting to take or enforce any right to possession of the lands subject to the said bill of mortgage.
The court also ordered that each party have liberty to apply on two clear days notice in writing and his Honour ordered that the costs of the application be costs in the cause. On 21 August, his Honour ordered further:
" That the terms of the undertaking be reviewed and the matter be listed for further mention on Wednesday, 2 October 1991. "
The conduct by Ms Murray in the light of the undertakings given to the court has been the matter of major concern to me. It appears that initially she listed the Mooloolaba unit for sale at a price of $330,000, a price seemingly unsupported by any valuation evidence in the voluminous material before me. It also appears that she gave instructions to the agents not to communicate to her offers which were not in excess of $300,000. In particular, I have been most troubled by the evidence concerning an offer to purchase the unit for $270,000. According to her own affidavit, Ms Murray says that a Ms. Helen Cotton located a purchaser in late September/early October who was apparently interested in buying the unit at $290,000. The possible purchaser owned a unit on a lower floor and wished to move to one of the higher floors.
Ms Murray says that she was very interested in receiving a formal offer for the $290,000 as Ms Cotton had previously indicated that she felt that the current market value of the unit was somewhere between $285,000 and $295,000. She says:
" Ms Cotton subsequently tendered an offer on my current solicitors,
Messrs. Bennett and Philp, from that particular person. However, the
offer was not for $290,000.00, (a figure that I felt was approaching
a reasonable sale price); instead he offered through a company of his
to buy the unit for $270,000.00 without any of the furniture. "
She says:
" I had not given any instructions whatsoever to Ms
Cotton to negotiate any offer of that sort. "
In an explanation I find less than convincing she speaks of the difficulties she might have in relocating or storing the furnishings in the unit. In the light of the undertakings given to the court on 21 August 1991 and the absence of any roughly equivalent offers until that time, I find it difficult to accept her explanation that she felt it prudent not to take up the $270,000 offer put forward by Ms Cotton, an offer which she says has now been "withdrawn".
She says in her affidavit:
" Given that I had only received this one and only offer of
$270,000.00 (and that from another owner of another unit in the
Newport block) I considered it was more prudent to wait until
Christmas time to see if there were more potential purchasers
available to have a look at the unit. "This sits oddly with the requirement of a prompt sale in the undertaking given to the court in August and the serious concerns voiced by Pincus J. to the solicitor for Ms Murray on 4 October 1991. His Honour indicated that if the unit had not been sold by the next mention date after 4 October 1991 "it might just have to go up for...a quick auction and see what you get".
The difficulty in relation to the orders of Pincus J on 21 August 1991 stems from the room for difference in the meaning of the words "to use her best endeavours to effect a prompt sale of the Unit at the market value thereof", and in particular an assessment of what is a realistic market value.
The somewhat cavalier approach by Ms Murray to that undertaking, as I say, has troubled me very much, but at the end of the day, the position now is that a financier has been located who is prepared to meet what the bank offered to do before Mr Justice Pincus in August 1991. The bank is prepared to enter into those arrangements but on a somewhat higher payment, namely $260,000. I think it unlikely that the payment of $260,000 would be able to be achieved and the matter would be back to its present unsatisfactory position.
On the other hand, if I were to accede to the applicant's application and in respect of the amount of $235,000, the evidence suggests that there is ample security for whatever might be the unpaid portion of the obligation owed by Ms Murray to the bank. It is not unimportant to note that the need for a speedy trial of this matter is now even more urgent than it was when the matter was before Mr Justice Pincus in August of last year.
It is, of course, a matter of real concern when a court is being asked to make an order of the type in the present case, but having regard to the preparedness by the bank in August 1991 to enter into such an arrangement and taking into account its present willingness to do so if the amount paid were some $25,000 more, those concerns are somewhat less acute than they might otherwise be.
There is a matter which has also troubled me and that is that there would have been an entitlement to statutory interest on the judgment that I gave on 7 May 1991. However, until payment of the $235,000, an obligation to pay interest has been running and having regard to the volume of security available to meet the extent of any obligation found properly to be owing by Ms Murray to the bank, that seems to me not to be a crucial consideration.
(There was discussion about the form of orders and about costs.)
I direct that the parties bring in short minutes of orders to give effect to these reasons.
In all the circumstances, I order that the applicant pay the costs of the first respondent.
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