Northern Metals Pty Ltd v Westpac Banking Corporation

[1988] FCA 412

IN THE FEDERAL COURT OF AUSTRALIA )

QUEENSLAND DISTRICT REGISTRY 1 QLD G254 Of 1988

DIVISION GENERAL 1

BETWEEN: NORTHERN METALS PTY LTD

Applicant

AND:  WESTPAC BANKING CORPORATION

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS	J.
DATE OF ORDER:	8 JULY	1988

WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.	the appllcation for an interlocutory ln~unction	be
dismissed;
2.	the defence and counter-claim,	lf any, be flled and
served by 29 July 1988;

3 .    the reply and answer, lf any, be filed and served by 1 5 August 1988;

other than the costs which are reasonably

attributable to the directions hearing;

4 . discovery on affidavit be given by 12 September

1988 ;

5 .    lnspection take place by 19 September 1988;

6.    the matter be set down for further mention on 3

October 1988 at 9.30 a.m.;

l . the applicant pay the respondent's costs of and

incidental to today's proceedlngs, to be taxed,

8.    the costs of the directions hearing be costs in the proceedings.

NOTE:	Settlement and entry of orders is dealt with in
-	Order 36 of the Federal Court Rules.

8.	the costs of the directions hearing	be costs in the
proceedings.

NOTE:	Settlement and entry of orders is dealt with in
-	Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

QUEENSLAND DISTRICT REGISTRY 1 QLD G254 Of 1988

DIVISION GENERAL )

BETWEEN: NORTHERN METALS PTY LTD

Applicant

AND:  WESTPAC BANKING CORPORATION

Respondent

PINCUS J . 8 JULY 1988

EX TEMPORE REASONS FOR JUDGMENT

Thls is an applicatlon for an interlocutory lnjunctlon. The applicant seeks an injunction restraining the defendant from applylng certain moneys held on Interest-bearing deposit to the credit of the applicant, In reduction of the applicant's obligation to repay other sums.

The applicant borrowed money in a foreign currency,

namely Japanese yen, under arrangements made In 1982, and from

then until the present has made various agreements with the respondent relating to that borrowing. The borrowing was secured by some real property which was sold, and the resultant cash was

lodged with the respondent on interest-bearing deposlt as

security, or part security, f o r the debt. The most recent agreement relating to the interest-bearing deposit was made in January 1988 and appears to contemplate the continued holding of

the interest-bearing deposit as security. Indeed, the applicant

does not claim that the deposit is not held as security.

This application was begun on 1 July 1988 and it seeks

to obtain relief under the Trade Practices Act 1974 in respect of
misleading and deceptive conduct concerning these overseas loan
arrangements and connected matters, and also seeks relief under

the general law concerning the same subject-matter.

The current anxiety about the interest-bearing deposlt

is caused by the circumstance that it matures on 14 July 1988,

that is in six days time, as does another large slice of the

obligation which the applicant has to the respondent ln respect of

the foreign currency borrowlngs.

The appllcant's posltion, as explained by ~ t s counsel,

is that it is not seeklng by the lnterlocutory injunctlon to obtain payment of the moneys ln the interest-bearlng deposit, but wlshes to ensure that the respondent's liability to it under the interest-bearing deposit arrangement is not set off by the respondent against the applicant's liabllities to the respondent.

Mr Willlams P . C . , who led for the applicant, explalned

that the applicant was concerned about the possible application of

the time limit set out in s.82(2) of the Act, viz. 3 years.

The point seems to me to be this, that If the respondent

is not allowed to set off the money due by it to the appllcant against the liability the other way, then the respondent will

presumably have to sue for the money due to it. I would add that

on the figures given to me the respondent might have to do that

anyway, whether it uses the interest-bearing deposit or not.

Then the reasoning seems to be that if the respondent 1 s

forced to sue for the money due to it, the applicant may be able to avoid any problem arising from the three-year tlme limit by taking advantage of the doctrine enabling it to use, by way of defence, a damages claim closely connected with the circumstances

giving r i s e to the debt sued on. For example, in Henriksens

Rederi A/S v. T.H.Z. Rolimpex [l9741 Q . B . 2 3 3 Lord Denning, M.R.,

said at p.249:

" . . . I thlnk that when a contractor agrees to

perform services for a fixed or ascertainable sum and, nevertheless, by his negllgence in performing

those services, causes loss or damage to the

employer, then when the contractor sues for the

agreed price, the employer can set up the loss or damage in dlminution or extinction of the prlce. Such setting up 1 s matter of defence, legal or

equitable, and is not sublect to a time-bar. It is

not barred by the statute of llmltatlon, s o long as

the main action itself is timely."

I therefore comprehend, I thlnk, the polnt of the present

application.

If the injunction sought is granted, lt 1 s not clear to

me what it would oblige the respondent to do. The respondent's

claimlng to	set off the money due	on interest-bearing deposit
would presumably	be signified to	the applicant by its decllnlng to

pay on the due date, or thereafter, the sum lodged on

interest-bearing deposit. Then, presumably, the applicant would

sue the respondent for that debt, the respondent would raise by
way of set-off the money due to it, and in answer to that the
applicant would advance the claim made in these proceedings,
seeking to rely upon the exception to the general application of

time limitatlon statutes to which I have already referred.

Perhaps the effect of granting such an injunction as is

sought would be to force the respondent, instead of merely

defending the applicant's claim for the money in the interest

bearing deposit, to sue itself. It may	be that, looking at the
matter more deeply, the practical effect	of the injunction If
granted would be to oblige the respondent	to pay, so perhaps thls
claim for an interlocutory in~unction	should be regarded as a
claim for an order requirlng the respondent to pay	over the money;

but Nr Wllliams Q.C. made lt clear that is not what 1 s sought.

One basic rule about all in]unctive relief, and

particularly Interlocutory in]unctions, 1s that the effect of them

should be clear, so that if contempt proceedings are taken the

Court will not then have for the first tlme the task of deflnlng

what it 1s that the person enjolned was supposed to do or not do

If an injunction is granted in the terms here sought, it

would prevent the respondent from applylng the moneys in reduction of the applicant's obligation to it. But as I see It, the

respondent can take its stance in the matter without doing

anything physically on 14 July and can simply decide that it will

not pay, with the consequences, presumably, that if the applicant

says that is wrong it will have to sue.

I .

l

5.

It is in my opinion clear that an interlocutory

injunction should not be granted, if for no other reason than that

the effect of granting one would be obscure. A subsidlacy reason

is that I am by no means convinced that the applicant's position

with respect to availing itself of the doctrine exemplified by the

authority I have mentioned is worsened in the absence of an

injunction such as is sought.

I therefore refuse the application for an interlocutory

injunction.

The orders will be, apart from the orders dismisslng the

C	,laim for interlocutory ellef, that the defence and
counter-claim, if any, be filed and served by 29 July 1988, reply and answer, if any, be filed and served by 15 August, discovery on affidavit by 12 September, inspectlon by 19 September, and the matter be set down for further mention at 9.30 am on Monday, 3 October.

The order will be that the applicant pay the

respondent's costs of and incldental to	today's proceedings, to be
taxed, other than	the costs which are reasonably attrlbutable to
the dlrections hearing.	As to the latter, they will be costs in
the proceedings.

t certify t ha t t h l s and the 4 preceding

pages are a tru? copy of t h e reasons for

~udgrrent hcreln of His Honour

M r . Justlce Pincus

&;ate