Murray, L.o.a. v Macquarie Bank Ltd

[1991] FCA 417

JUDGMENT NO. .e....../........ ,-zri,. -qp-

IN THE FEDERAL COURT OF AUSTRALIA	1	No. QG 159 of 1990
QUEENSLAND DISTRICT REGISTRY	)
GENERAL DIVISION	)

BETWEEN: LYNNE ORRELLE ANGELA MURRAY

Applicant

AND: THE MACOUARIE BANK LIMITED

First Respondent

AND: RAYMOND WILLIAM CARLE

Second Respondent

THE MACOUARIE BANK LIMITED

Cross-Applicant

RECEIVED AND: LYNNE ORRELLE ANGELA MURRAY

25 J L ' L 1991 First Cross-Respondent

FPEF~AL COURT OF

AUSTRALIA	AND:	JOHN EXA AND ER BAKER
PRINCIPAL REQISTRY

Second Cross-Respondent

.	-.L_-.
: M A - PINCUS J.

PLACE: BRISBANE

DATE: 24 JULY 1991

REASONS FOR JUDGMENT

bank in 1988 with a view to borrowing about $200,000, that she	The statement of claim says that the applicant approached the
later applied to borrow $235,000, that the respondent Carle made certain misleading statements to her causing her to borrow from the respondent bank and was also guilty of unconscionable conduct. The damage suffered, so the statement of claim says, included loss of opportunity on the part of the applicant to "otherwise organise her affairs", interest and other borrowing costs and any capital loss which might be incurred to repay the loan.
There was no argument before me as to whether the applicant has in the principal proceeding an arguable case against the bank, based on these allegations.
There is a defence and cross-claim filed. Although it is drawn as if the solicitors who filed it were acting for both the bank and Carle, they are in fact acting for the bank only and, in this respect, the defence appears to require correction; it purports to make admissions and other assertions on behalf of "the respondentsu.
It includes a cross-claim by the bank against the applicant, claiming a sum of about $330,000 plus interest and costs.
The bank applied to the Court for summary judgment on its cross-claim and that was given, but in the sum of $235,000 only. Further, the order which was made (on 7 May 1991, as I have mentioned) required the bank to "execute a
partial release of the security to the value of $235,000.00". That order for partial release was included, I gather, at the suggestion of then counsel for the bank, apparently because the Court expressed concern as to whether or not it was fair to give the bank judgment and allow it to retain its security, mortgages over two residential properties, in full. No doubt the purpose of providing for a partial release was to enable the applicant to borrow in order to be able to pay out the respondent bank.
The difficulties which have arisen are two. 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.
The respondent bank now offers, in lieu of giving a partial release, to make an arrangement with the proposed new 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.

The applicant applies for an order that the respondent bank execute a partial release of a certain security and for a stay of execution. The application is, in effect, one to vary orders which the Court made on 7 May 1991.

The principal application brought alleges misleading
conduct against the bank and one of its employees, one Carle.

I

Each of these arrangements might be thought rdughly 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 applicant wishes to have the Court's order of 7 May last varied so that, of the two properties the subject of the respondent bank's security, the bank entirely loses its rights as to the more valuable one. If that is done, so it is said, the new financier will advance enough to pay out the $235,000, to discharge the second mortgage in favour of Westpac and to discharge certain other lesser debts which the applicant owes.

Order 35 rule 7(2) empowers the Court to vary or set aside an order which is interlocutory (para (c)) as well as one which "does not reflect the intention of the Court" (para (e)). It is not clear to me whether an order requiring that a

partial release be executed can ever be interlocutory, but I	am satisfied that there is power to vary or set aside the
order for partial release, as not reflecting the Court's intention. There being two properties subject to mortgage in favour of the respondent bank, the order for execution of a "partial release of the security to the value of $235,000.00", although suggested by the respondent bank itself, could not achieve the intended purpose of making property available ae security for a new loan to the applicant. There is no means
of partially releasing a mortgage up to a certain money sum; a partial release is a dealing which wholly releases from a security some but not all of the properties included in the security.
The submission made on behalf of the applicant would, if accepted, give the applicant more than was intended by the Court on 7 May. That is indeed not concealed; the purpose of the intended variation is to make available to the applicant unencumbered property which, on her case, is worth substantially more than $235,000. It does not appear to me that this can be done by way of variation of the original order.

Variation of the order is not a practical course and

I propose to set the partial release order aside. The

difficulty to which this gives rise, however, is that it seems plain that the order giving summary judgment and the order for partial release were related to one another. The then counsel

the bank should be ordered to effect a partial release of the	should be judgment for $235,000 in favour of the bank and that	for the respondent bank submitted on 7 May last that there
securities "to reflect" the payment.
I think, then, that the proper course is to set aside the whole of the orders made on the motion for summary judgment, including of course the judgment for $235,000
itself. If that is done, then the Court will be free to reconsider, untrammelled by the original ordkrs, what should be done with the motion for summary judgment.
Counsel on both sides informed me that if the original application were to be reconsidered, they would wish to make further submissions. For that reason, I shall not make any order at present, but simply intimate that I have in mind to set aside in whole the orders made on the motion for summary judgment - orders numbers 1, 2, 3 and 4 made on 7 May
1991 - and hear submissions as to what orders should be made
in lieu of those set aside

I certify that this and the

five preceding pages are a true copy of the reasons for judgment herein of his

Honour Mr. Justice Pincus. -

Associate

Date 24 5 ~ q l y \ q l t