Rackemann, E.M. v Westpac Banking Corporation

[1992] FCA 572

5 7 2 / Crz

JUDGMENT No. .,.. , ,., ,,,..

FEDERAL COURT OF AUSTRALIA	1	No. QG 33 of 1 9 9 2
QUEBXS-LANLANDDDLSSTRICT	1
GENERAL DIVISION	1

BETWEEN:

EDNA I4AY RACKEMANN

Applicant

AND :

WESTPAC BANKING CORPORATION

Respondent

JUDGE MAKING ORDER:

DATE OF ORDER:	4 August,
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1. Paragraphs 1

.(a) and 2 of the application are struck If the applicant intends to seek leave to re-plead, she must file her notice of motion with supporting material within 2 8 days of today, with all material being served on the respondent within 2 1 days of today. !

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out.

2 .	The whole of	the statement of claim is struck out.	1
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3.

Order 36 of the Federal Court Rules. j :

1. In the event that the applicant does not file her notice of motion seeking leave to re-plead within 2 8 days of today, then the action will stand dismissed.

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1. The respondent have the costs of the proceedings on

its notice of motion. I i , .

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NOTE:	Settlement and entry of orders is dealt with in	I
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FEDERAL COURT OF AUSTRALIA	No. QG 33 of 1992
QUEENSLAND DISTRICT
GENERAL DIVISION	1

BETWEEN:

EDNA MAY RACKEMANN

Applicant

AND :

WESTPAC BANKING CORPORATION

Respondent

, Coram:	Drummond J
- Date:	4 August, 1992

' ~lacei Brisbane

EX TEMPORE REASONS FOR JUDGMENT

By notice of motion the respondent in the action (the "respondent") seeks, firstly, an order that the entire application be dismissed pursuant to Order 20, rule 2 of the Federal Court Rules and, secondly, limited relief in the

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strike out from the proceedings the statement of claim insofar	alternative. Part of the limited relief sought is designed to
as it relies upon S. 52A of the T - 1, i
(Cthl. It is conceded by counsel for the applicant that he cannot sustain the action insofar as the applicant relies upon S. 52A.

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If one goes to the statement of claim to identify what is left of the claims pleaded, it appears from that document that the applicant claims what I think has been i

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rightly described as quia timet relief under S. 87 of the	l
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Trade Practices Act on the basis of conduct alleged to	!
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infringe S. 52. That is the only claim clearly pleaded in the I i

statement of claim, although in the application, damages are	I
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claimed under S. 87 in respect of, among other things,	I_
misleading conduct and there is some reference to that matter in the statement of claim to which I will return.
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The circumstances giving rise to the granting by the applicant of the mortgage to the respondent, which is the	it
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subject of the proceedings, are somewhat complicated.
The respondent granted a Swiss franc loan to a particular company. AGC (Advances) Ltd., under anterior arrangements with the company, provided a guarantee to the respondent of repayment of that Swiss franc loan by the company. Under those anterior arrangements, AGC was entitled to call on the company for additional security. It did so, and the company provided the additional security by calling on
the respondent itself. In response to that call, the	respondent executed a bank guarantee in favour of AGC to the
extent of $30,000.00. In other words, the respondent undertook a liability to pay to AGC the sum of $30,000.00 in respect of the accommodation granted by AGC to the company in the form of the AGC guarantee to the respondent that the respondent required before it would make the Swiss franc loan to the company. The applicant came into the picture because the respondent required security from an outsider, in this case a mortgage from the applicant, to secure the guarantee for the sum of $30,000.00 which the respondent gave, at the company's request, to AGC.
Paragraph 4 of the statement of claim alleges misleading conduct by an officer of the respondent inducing the applicant to grant the mortgage securing the guarantee given by the respondent.
The relevant limitation period in relation to the conduct alleged to be in breach of S. 52 is three years from the accrual of the cause of action: see s. 87(1CA)(b). In State of Western Australia v Wardlev Australia Ltd. (1991) 30 F.C.R. 245, the Full Court of this court said, at page 261, in relation to relief claimed under S. 87 in a case in which the applicant alleged it had been induced by conduct infringing the Trade Practices Act to grant an indemnity to another:

by the expression 'likely to be suffered', and it is	appeal to determine precisely what is meant in S. 87 "It is unnecessary for the purposes of the present
presently impossible to determine whether the State was so placed forthwith on 26 October 1987

(which I interpolate was the date on which the State granted
the indemnity there in question.)

However, the expression in question should at least mean 'a real chance or possibility' that loss or damage be suffered: ..."

On the uncontested material before me the applicant's cause of action for S. 87 relief with respect to the avoidance of the mortgage arose, in my view, when the company became insolvent on 18 August, 1988. The evidence, uncontested, as I have mentioned, shows that the company was then hopelessly insolvent. That event occurred outside the limitation period prescribed by S. 87 for the filing of the application, if the applicant was to be in time to pursue such a claim for relief with respect to avoidance of the security. The application was only filed on 25 February, 1992.

I will therefore strike out so much of the statement of claim and the application that seek S. 87 relief in the form of an order avoiding the mortgage.

I decline, however, to strike out the application in its entirety, at least insofar as it contains a claim for damages under S. 87 for misleading and deceptive conduct. The statement of claim sets out a case designed to support avoidance of the mortgage under S. 87, but as I have said, it

including damages under S. 87 sought in the application.	also claims, by reference to the application, the relief,
Claims can be brought in reliance on S. 87 where actual damage, as opposed to prospective damage has been suffered by conduct contravening S . 52. Just such conduct is alleged in the statement of claim. Whether a claim under S.
87 for damages in respect of actual damage suffered by conduct

in contravention of S. 52 was time-barred by 25 February, 1992 when the application was filed, would depend upon how such a claim is ultimately formulated. Since the application is so framed as to encompass such a claim, and since a partial outline of such a claim is pleaded in the statement of claim,

I have decided not to strike out the whole application, but to

direct that if the applicant wishes to pursue a claim for damages she must make application fop leave to re-plead within 28 days. I will not grant leave now in view of counsel for the respondent's foreshadowed objections based on prejudice that will flow to the respondent, if such leave is granted.

I certify that this and the preceding

four pages is a true copy of the
reasons for judgment herein of the

Honourable Mr. Justice Drummond.

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Associate:

Date:  4 August, 1992