Rahme & Anor v Commonwealth Bank of Australia

[1993] HCATrans 350

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl75 of 1993

B e t w e e n -

ANTOINE MAROUN RAHME and

THERESE RAHME

Applicants

and

COMMONWEALTH BANK OF AUSTRALIA

Respondent

Application for a stay

DEANE J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 16 NOVEMBER 1993, AT 10.16 AM

Copyright in the High Court of Australia

Rahme 1 16/11/93

MR G. SPEDDING:  I am the instructing solicitor in the

matter. (of I.S.P. Law)

MR B.J. TAMBERLIN, OC:  I appear with MR J.E. MARSHALL for

the respondent. (instructed by Mr L.E. Taylor,

Commonwealth Bank Solicitor)

HIS HONOUR:	Yes, Mr Spedding?
MR SPEDDING:	As I think has been advised to the Court,

Mr Perram of the New South Wales Bar was to appear

for the applicants, or hopefully will appear for

the applicants today.	He, unfortunately, missed a
flight from Sydney this morning.	I have only had
an opportunity to speak to his clerk.	My

understanding of the matter is he is driving to

Canberra as we speak. Needless to say, we apologize profusely both to the Court and to our

friends, but in the circumstances we seek an

adjournment to 2 o'clock today by which time, I

understand, he will be present.

HIS HONOUR:  Mr Spedding, it has always been understood in

this Court that it is the function of the legal

profession to be here when matters are listed and

that it is not appropriate to work on the basis

that planes will not be delayed or cancelled or

missed. Now, having said, what is your approach to

this, Mr Tamberlin?

MR TAMBERLIN:  Your Honour, I am instructed to oppose the

adjournment.

HIS HONOUR:  I understand that but, really, it is an

interlocutory application. If, because of what has

happened, it was not properly heard, I would not

take steps which would preclude the application

being renewed. Well now, that being so, while you

are obliged to make noises, it is probably really

in the interests of all concerned that it stand in

the list until it be dealt with.

MR TAMBERLIN:  Yes. We, of course, have the inconvenience

of having come down here and so forth but, having

said that, I appreciate what Your Honour says.

HIS HONOUR:	What are your commitments in relation to getting back?
MR TAMBERLIN:	I think we can get on a plane - we have not

tried yet - later in the day, Your Honour. I have

not any commitments in Sydney which I must be back

for this afternoon. I do not know about my

friends. I am not aware of any. I think it will

probably finish in the time available if we start

about - we cannot be sure of that, Your Honour.

Rahme 16/11/93

HIS HONOUR:  We trust so. The matter can remain in the

list. You have not any idea when Mr Perram will be

here, Mr Spedding, if he is a safe driver?

MR SPEDDING: That is the only qualification, Your Honour.

As I understand it, it is about a 2 and a half - 3

hours trip, and I understand he left Mascot at

about half past 8.

HIS HONOUR:  In that case, I will stand the matter down the

list until Mr Perram is here but, for your

convenience and also, to some extent, for mine, I

will say not before 12.

MR TAMBERLIN: If Your Honour pleases. Your Honour, would

there be any objection from my friend - we would

have no objection to Your Honour reading the

affidavit material if Your Honour would wish to do

that.

MR SPEDDING: There is no objection to that.

HIS HONOUR:  I will do that.

MR TAMBERLIN: If Your Honour pleases.

AT 10.20 AM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.00 PM:

MR N. PERRAM: If it please Your Honour, I appear for the

applicants. (instructed by I.S.P. Law)

Before I deal with any other matters, I

give the Court my profound apologies for my

lateness this morning.

HIS HONOUR:  Yes, Mr Perram, as I said to Mr Spedding, the

Court simply could not function if we were expected

to work on the basis that cases would proceed

provided there was not a delay in planes from

Sydney, and that simply is an approach that does not conform with the expectation of the Court.

MR PERRAM:  Yes, Your Honour.

HIS HONOUR: Subject to that I have not been greatly

inconvenienced. I think you should be concerned

about the inconvenience to Mr Tamberlain and

Mr Marshall.

Rahme 16/11/93

MR PERRAM:  I thank Your Honour for the indulgence. I take

the opportunity to extend my apologies to my

learned friends, Mr Tamberlain and Mr Marshall.

HIS HONOUR:  I have read the documents which means that you

can get straight to the substance of it.

MR PERRAM:  Your Honour, the motion is one which invites you

to stay a judgment of Mr Justice Studdert in the

court below, which is a judgment for possession,

and that was given on 4 September 1992. That

judgment for possession came about in circumstances

which, I think, are familiar to the Court, but
which essentially arise out of guarantees given by

the current applicants of the debts of two

companies, David Securities Pty Ltd and A.T. Rahme

and Sons Limited.

HIS HONOUR:  You can assume, as I say, that I have read the

documents, that I am conscious of the facts. If it

is of assistance to you I will indicate the areas I

think you should be particularly concerned about.

MR PERRAM:	Yes, Your Honour.
HIS HONOUR:	The first is the nature of this Court's

jurisdiction to grant interlocutory relief pending

an application for special leave. The second is,

as I understand it, that unless these guarantees be

somehow - or the guarantee be somehow rendered

unenforceable, it is common ground in excess of

$2.5 million is due under it.

MR PERRAM: Subject to a qualification which I shall take

Your Honour to in a while, the answer to that is

yes.

HIS HONOUR:	The next, of course, is that in the context of the extraordinary jurisdiction involved in granting
interlocutory relief at this stage, looking at the
document it seems to me that all that is involved
are the rents of a block of flats for a period,
bolstered by a submission not supported by
evidence, that there is some threat that the Bank will sell, or seek to sell, between now and the application for special leave being disposed of.

MR PERRAM: Dealing with Your Honour's first question, which

is the question of jurisdiction, it has been said

by Mr Justice Brennan in Jennings Construction Ltd

v Burgundy Royale Investments (No.1), (1986)

161 CLR 681 and the relevant passage is at 685,

that the jurisdiction is an inherent jurisdiction.

That having been said, in the more recent cases a

refinement has been suggested in that principle.

That refinement was suggested by His Honour

Justice Toohey in the case of Manfal Pty Ltd (in

Rahme 16/11/93

liquidation) v Trade Practices Commission, (1990)

65 ALJR 256. What His Honour says in that case is

a subtle refinement of the approach adopted by

Justice Brennan.

It might be helpful if I take Your Honour to

the relevant passage in Justice Toohey's judgment.

That passage is at page 257D in the first column,

and there His Honour says:

There is no need to rehearse for

decisions of this Court which recognise the

power of the Court to stay proceedings below.

Although described in terms of the "inherent

jurisdiction" of the Court -

and His Honour cites Jennings Construction -

it may be that in truth what is involved is

the scope and extent of the power incidental

and necessary to the exercise of the

jurisdiction which the Court has in respect of

the application for special leave to appeal.

His Honour refers there to Jackson v Sterling

Industries, of record to grant Mareva injunctions.

which of course is the case where this

The significance of that observation is this,

Your Honour: it means that once a special leave

application is filed, this Court has an incidental

power, albeit an extraordinary one, to make sure

that the subject-matter of the litigation before it
is preserved so that the jurisdiction conferred by

the special leave application can properly be

exercised. That would be our answer to

Your Honour's first question.

It would be our submission that a special

leave application having been filed in this matter,

jurisdiction is attracted and the Court is seized

of jurisdiction to grant the stay which is sought.

There is no doubt, however, that the jurisdiction

is an extraordinary one, and all the cases make

that very clear.

In my submission, there are a number of things

which I have to make out before I would be

entitled, or indeed before my client would be

entitled, to ask this Court to grant a stay. We

would first have to satisfy Your Honour that very

substantial prejudice has been suffered or will be

suffered unless the stay is granted. There is also
refinement of that and there is an indication in
some of the authorities that where, if the stay

were not granted, it would be very difficult for

Rahme 16/11/93

this Court to put its orders in a meaningful way,

that will also attract the same principles which

apply in relation to prejudice not being able to be
avoided.

So far as the irreversible prejudice which would be suffered is concerned, it involves a

factual statement which Your Honour has raised with

me, and that is the proposition that if the Bank is

allowed to go into possession, that it will

eventually seek to sell the premises. Your Honour

has put to me that there is no evidence in support

of that proposition. I have to concede that. I

would say in support of it, however, that it is

highly likely that is the case.	Your Honour is not
precluded from ignoring that.

In the case of Grassby v Reg, (1989)

63 ALJR 348, His Honour the Chief Justice had this

to say at page 348E:

However, in the light of the history of

the case, the nature of the judgment of the

Court of Criminal Appeal -

and this is a point I would emphasize,

Your Honour -

and the fact that the refusal of a stay will

almost certainly result in the applicant's

committal for trial, with a consequential
change in the nature of the proceedings now on

foot, which in turn might create difficulties

in terms of the relief -

I will not read on at this point in that passage.

The aspect of that I would place emphasis upon is

the reference to "almost certainly result in the

applicant's committal for trial". So too in this

case. There is no evidence and it would be

impossible for the applicants here to give evidence

of what the state of mind of the Bank is; it is

simply not available to us. We do not control the

mind of the Bank but, in the normal course of

events, banks take possession and they sell.

Whilst not putting it as high as judicial notice,

it is a matter which Your Honour is entitled and

ought to take account of.

HIS HONOUR:  Yes, except I am not disposed to think that in

the ordinary course of events with an application for special leave to appeal pending, a bank sells

privately in circumstances where the owner would

not have adequate foreknowledge of the intention to

sell. In other words, that would mean that the

Bank has not really tested the market.

Rahme 6 16/11/93

MR PERRAM: If I apprehend Your Honour's question correctly,

and I am not sure that I do, that amounts to saying

that if the Bank gave an undertaking in these

proceedings that it would not seek to exercise any

power of sale - - -

HIS HONOUR: 

No, the point I was making is this: this Court cannot function if everyone who has an application

for special leave to appeal applies immediately for

interlocutory relief. That being so, an
application simply should not be made unless there

are grounds for a conclusion that something

irreparable is going to happen before the

application for special leave to appeal is heard, because if the application is refused, the matter resolves itself. If it is granted, those who have

dealt with the application for special leave can

normally adjust the position pending the hearing of

the appeal.  What I am saying is as a matter of

speculation, because you have left it to

speculation, it seems to me to be highly unlikely

that the Bank would privately sell between now and

the hearing of the application for special leave.

This sort of property one normally expects these

days to see sold by a mortgagee by auction.

MR PERRAM: 

That is the manner in which we expect it would be sold as well. I think I can answer

Your Honour's question, or at least the point

Your Honour is putting to me in this way: at first

blush it seems that possession, in fact, is a

fairly reversible thing. If the Bank goes into

possession they can be removed from possession if

this Court thinks it appropriate, or if it is

referred back to the Court of Appeal and that court

thinks it appropriate.

However, because of the labrynthine nature of

these proceedings and also because of the nature of
the mortgage which the Bank has, that first

impression, in fact, is not correct, and it is not

correct for this reason, Your Honour. Under the

mortgage, the Bank has a contractual right to take
possession when a power of sale arises. It also

has a right to take possession pursuant to

section 60 of the Real Property Act. In fact, in
the proceedings before Mr Justice Studdert, it was
held, in fact finally adjudged, that a power of

sale had arisen.

The applicants find themselves in this

quandary and it is this: if the Bank did threaten

to exercise a power of sale, and as Your Honour

said it is a matter of speculation, we would be

unable to restrain them, and for this reason. If

we sought an injunction in the supreme court, we

would be met with an issue estoppel.

Rahrne 16/11/93

Mr Justice Studdert has finally adjudged that a

power of sale exists. The only court which we

could conceivably approach would be this Court, and

as Your Honour knows the jurisdiction is very

rarely exercised here to grant an interlocutory

injunction. It is only because of the nature of

the proceedings and the issue estoppel which arises

out of Mr Justice Studdert's judgment that this

problem arises. But once the power of sale has

been threatened there is nothing that the

applicants can then do because we are estopped by

an old fashioned Anshun-type estoppel, if you will,
and there is nothing we can do. Therefore, if the

sale is to be avoided - and it is a strange

result - it has to be scotched at this stage.

Now, Your Honour might think that the proper approach would be to seek an injunction restraining

any power of sale now, but a moment's analysis

reveals that not to be the case. The Bank is not

threatening to exercise a power of sale, and you cannot get an injunction on a purely speculative

basis. If it was possible to get an injunction on

a speculative basis that is what we would seek to

restrain, the power of sale.	However, we cannot
speculate about the power of sale.	We only know

for sure that the Bank will soon go into

possession, and it is that which we ask the Court

to intervene with. Once the Bank is in possession

procedural estoppels bar our path, and we will be

out of any relief whatsoever.

HIS HONOUR:  Well, except they only bar your path if you

fail in any appeal to this Court.

MR PERRAM:  Other than this, Your Honour, and we enter in

the realms I concede again as speculation, and that
is, that the Bank does not attempt to exercise its

power of sale before the special leave application

is heard.	Anyone who has spent time on the list in
which the special leave applications are heard will

know that an application for special leave

involving a power of sale where it transpires that

the power of sale has been exercised is an exercise

in futility, and the Court will not entertain the

special leave application.

Just such a case came up the other week in the

Sydney sittings. It was the case of Topfelt &

Another v State Bank of New South Wales. In that

case it was sought to say in the court below that the power of sale was invalid and had not arisen.

The Court of Appeal rejected that argument. In the

special leave application it transpired, unbeknowns

to counsel who was appearing for the applicant at
the time, that, in fact, the property had been

sold, and once that came to be known by the Court,

Rahme 16/11/93

there was simply no way it was an appropriate

vehicle for special leave.

Unless one can be certain that the power of

sale will not be exercised prior to the special
leave application, then one is left in a situation

that now is the only time we can act.

HIS HONOUR:  So I can understand, are you saying that this

Court, on an application for special leave, refused special leave because power of sale which it was

sought to challenge in the appeal had been

exercised in a period in which the application for

special leave was pending?

MR PERRAM: Precisely, Your Honour, that is precisely what

happened.

HIS HONOUR:	When was that refusal?
MR PERRAM:	I do not have the precise date to hand, but it

was the last Sydney sittings. It was about two

weeks ago, I think.

HIS HONOUR:  And that was the reason given?

MR PERRAM:  No reason was given, Your Honour. It simply

became apparent. The applicant having put its

case, the respondent announced that the property

had been sold and the Court dealt with the matter

no further, simply saying that it was an

inappropriate vehicle. With respect, that must be

right. How can the validity or otherwise of the

power of sale be discussed in any meaningful sense
between the parties when the property, the subject

of that power of sale, has gone? It is an exercise

in hypothetical reasoning.

HIS HONOUR:  What, the sale had been completed?

MR PERRAM:  Yes.

HIS HONOUR: Well, you are not really suggesting, are you,

there is any possibility that in this case there

will not only be a sale, but a completed sale

before the complete application is served?

MR PERRAM:  Your Honour, I do not suggest that that must be

case, but I suggest that there is a significant

risk that it may be. As Your Honour said at the

beginning, we are in the realm of speculation.

Your Honour may be right; none of this may occur.

By the same token, it may well occur. We here are

singularly ill placed to decide issues such as

that.

HIS HONOUR: Well, one might have views about why that is.

Rahme 9 16/11/93

MR PERRAM:  We put the case in terms of there being a

substantial risk. We do not say that what we fear

must come to pass, and that is never the case in

quia timet relief. But we fear, timeo, that is

what the cases say. I cannot put the point any

more highly than that.

In any event, whether we suffer substantial

prejudice if the stay is not granted, there is

another basis upon which it is appropriate to grant

a stay - - -

HIS HONOUR: Well now, before we come to that, there are two

possibilities, putting aside the possibility that

you fail in the application for special leave and

the possibility that your appeal, if you get

special leave, is completely dismissed: one

possibility is that you get some relief involving

the amounts involved in terms of the withholding

tax. The other possibility is that you get

complete relief, and that somehow you succeed in

establishing this Court, or the Court of Appeal, if

the matter goes back to it, in these proceedings

that the guarantee has been rendered unenforceable.

Now, in the case of the first possibility,

that is that you get some pecuniary relief, or
declaratory relief, in terms of the withholding tax
amounts, or anything short than a declaration of

unenforceability of a guarantee, in that scenario,

do you suggest you are entitled to a stay or any

other form of interlocutory relief?

MR PERRAM:  I do not fully comprehend Your Honour's

question. Does Your Honour mean that if the

matter - the relief this Court is asked for is

simply that the point raised below be allowed to be

raised below -

HIS HONOUR: Well, now, what point?

MR PERRAM:  This is the repudiation point. We do not

directly ask that this Court determine that point,

so we do not seek relief. We do not ask this Court

to decide that the guarantees have been terminated.

This is not an appropriate place for that issue to

be tried.

HIS HONOUR: That is one point. There is also another

point, is there not?

MR PERRAM:  There are two point put: one is that the court

erred in failing to give an amendment - allowing an

amendment. The second point is that, in so far as

the amendment was not granted because the point was

futile, it erred in failing to follow a Privy

Council decision, Egbert - it is in the papers.

Rahme 10 16/11/93

That question would be resolved in much the

same way that this Court resolved Wickstead v

Broome, which is, it would not be saying that that

is the law, it would be simply saying that that is

arguably the law. The point before the Court of

Appeal, in considering whether an amendment should

be granted, is not whether the applicants for

amendment must put forward an amendment which must

succeed; the test really is "could" succeed, and

all this Court would be saying is, yes -

HIS HONOUR:  But there are two questions: one is whether

the guarantors are ultimately entitled to the

benefit of any overpayment of withholding tax, am I

correct in that?

MR PERRAM:	Yes.
HIS HONOUR:	The second question is, if they are, has the

Bank's conduct created a situation in which the

guarantee has become unenforceable?

MR PERRAM:  Yes. They are the two points. Your Honour puts

them better than we do.

HIS HONOUR: Well now, what I was asking you is this: do

you suggest that if the first point were the only

point involved, you would be entitled to a stay in

the circumstances of this case?

MR PERRAM:  Yes, we do, because in that case it would follow

that we were entitled to the amendment, and it may

be that the Court of Appeal would determine the

repudiation point in our favour.

I made some submissions to Your Honour a

moment ago about the irreversible prejudice to be

suffered by the applicants. There is another basis

upon which the jurisdiction can be attracted as

well, and that is where, because of events which

take place, it would be impossible for the Court to

give meaningful orders.

I referred Your Honour to Grassby v Reg

before, and the relevant passage is that of the

Chief Justice at page 348E.

HIS HONOUR:  Mr Perram, I do not think you need take undue

time on that. There are many statements by

individual members of the Court suggesting

differing tests. I think you can assume on the

basis that until the Full Court says something, I

take a fairly relaxed approach to the scope of the

jurisdiction, but the one thing is clear, and that

is, all members of the Court are unanimous that it

is a quite exceptional or extraordinary, or

whatever adjective you use, jurisdiction.

Rahme 11 16/11/93

MR PERRAM: Subject to that, I would simply say that the

Chief Justice's view is adopted in Manfal by

Justice Toohey, and I say no more.

HIS HONOUR:  There have been cases where both the

Chief Justice and I have intervened to grant bail

pending an application for leave to appeal on

criminal matters which, of course, do not fall into

the destruction of the subject-matter. There was

no suggestion of hanging.

MR PERRAM: Turning aside from that point, one of the other

points on which I must satisfy Your Honour was that

a stay was sought in the court below, and that is

the case. A stay was sought.

HIS HONOUR:  Yes, I saw that.

MR PERRAM:  I say no more about that. The difficulties the

applicants find themselves in in this case is this:
the Court of Appeal has indicated that it may not

grant its reasons for a period of time, 21 days.

They said perhaps. It is therefore hard but, in my

submission, not impossible for us to construct what

precisely our special leave points are. I say not

impossible because this Court has in the past

looked at judgments on their face and deduced from

the judgments what exactly was the moving mind

behind them. An example of that approach was taken

in Clough v Frog, (1974) 48 ALJR 481. There are

two relevant passages, in my submission. The first

is on page 482 in the first column. It was example

of fact, and I will not take Your Honour to it, but

essentially the judgment appealed from in Clough v

Frog, the judge did not deliver any reasons for his

refusal to grant an amendment. If Your Honour goes

to page 483C in the first column, His Honour says:

It follows then that we differ from the

primary judge. In reaching his conclusion his

Honour either failed to apply the correct

principle which is to be applied in

considering applications for leave to amend pleadings or he misconceived the nature and character of the claim of prejudice made by the respondent in opposing the applications.

This is not authority for the proposition that it

is right for the Court to deduce what the rationale

underlying the decision of the court below is, but

it is an example of this Court embarking on such an

exercise, and that is the exercise which the

applicants invite Your Honour to embark upon in

this case. It is not quite the formidable exercise

it looks at first in any event.

Rahme 12 16/11/93

Once the repudiation point was raised, and it

was raised early on the morning, there were a

number of reasons which the Court of Appeal could

conceivably have declined to grant the amendment.

The first is that the amendment was sought to be

raised too late.	We say, as a matter of fact, that
that conclusion could not be supported.	The

repudiation, if it arose and, of course, we say it
did, arose only the night before, and it was not
possible for the applicants to elect to terminate
or rescind or cancel at any time prior to that
time. So that the raising of the point, first

thing in the morning, was not an exercise in

tardiness on the part of the applicants, and the

Court of Appeal - - -

HIS HONOUR:  But, if a repudiation occasion first came about

on the day preceding the hearing in the Court of

Appeal, how could it be suggested that the judgment

for possession stopped advantage being taken of it?

MR PERRAM: This raises the question whether there are

accrued rights under a contract of suretyship. The

view of the applicants is that once a contract of

suretyship has gone, it has gone for all purposes.

It is a contract of strictissimi juris in that once

it is sought to change that which the sureties are

liable for, the sureties are liable for nothing.

All their obligations are gone, and that includes

both their present obligations - - -

HIS HONOUR:  So be it. If the bases on which somebody is in

possession is subsequently destroyed, I mean if,

for example, he enters into a contract that he will

deliver up possession, do you really suggest that

the earlier judgment of possession precludes his

possession being terminated?

MR PERRAM:	In this case, Your Honour, the Bank is not in possession. It is not a question of possession
somehow being retrospectively terminated by some
nebulous operation -

HIS HONOUR: Well, if, before they went into possession, the

Bank had entered into a contract with your client

that it would not go into possession, do you

suggest that the judgment for possession would mean

that the courts would be powerless and the Bank

could just go into possession notwithstanding the

contract, and that you would be estopped or - it is

a novel proposition. Or let us take the extreme

case, presume that the day before this appeal came

on you paid out the amount owed to the Bank, would

you suggest there would be estoppels and so on if

you tried to stop the Bank going into possession?

Rahme 13 16/11/93

MR PERRAM:  It is clear, in the circumstance, that if the

moneys were paid out there might be a legal right

to take possession, but it has always been

abundantly clear that that is a legal right which

equity would not hesitate to restrain and, in my

submission, that may be the proper analysis

that - - -

HIS HONOUR:	Yes, a judgment of possession does not prevent the right to enter or remain in possession being
lost inter partes by a subsequent action, be it
rescission of the security entitling possession, or
what have you.
MR PERRAM:	The situation is this, in my submission,

Your Honour. The parties have rights between them.

Those rights may, or may not, support the right of

Bank to go into possession. There comes a time in proceedings when the Bank perfects its right in the

form of a judgment, and that judgment is the fruit,

as it were, of those rights. If the rights

underlying the judgment go, and the judgment is

left stranded, as it were, I cannot submit to you

that the judgment is of no effect because it is a

judgment of the superior court of record and is

presumed valid and binding until shown to be

otherwise and, indeed, it is a piece of legal

property.

But, what will happen in the circumstance if

the rights underlying such a judgment go, or
evaporate, is that equity will restrain the

exercise of the rights then perfected in the

judgment, and that is what happens in a case where

a power of sale arises say, for example, under

section 58 of the Real Property Act, but the moneys

are, prior to the sale actually being carried, paid
to the mortgagee. There is no doubt but that in

that situation the mortgagee has a legal power of

sale, but equity will not allow the unconscionable

exercise of that power of sale when the underlying right, that is, the mortgage which has now been	redeemed, has collapsed.
In my submission, there is an analogy, an almost precise analogy, with this case; the Bank is
undoubtedly armed now with a judgment for
possession given by His Honour and, as I submitted
before, it is that judgment which works estoppels
against us preventing us from bringing injunctions,
but equity is not fooled by judgments. If the
rights giving rise to that judgment, if the rights
which are perfected in that judgment subsequently
are scattered, are gone, equity will not allow the
Bank to exercise those rights. That is what we say
the effect of the repudiation argument is. It is true, at the end of the day, if the repudiation

Rahme 14 16/11/93

argument be right, there may be left some residual

judgments floating around, as it were, of the

conflict which has gone before, but that is all

they are; they are the formal artifacts of the

rights of the parties.

That was the first basis upon which the Court

of Appeal could conceivably have refused leave to

amend and that he said it was too late, and we say

the facts do not support that. I can take

Your Honour through the affidavit if you like, I am

happy to do so, but we say the point simply arose

at such a late date that we cannot be held

responsible and, indeed, no blame can be sheeted

home to us for the time at which it was raised.

The second basis upon which we say the Court

of Appeal could have declined leave to amend was on

the basis that the argument was utterly futile, and
that certainly, having sat in the court that day,

was a point which seemed to command the attention

of the Court of Appeal. Indeed it is a point which

finds itself echoed in the Bank's written

submissions today.

The basis upon which it is said the argument

is futile, however, is based upon the misconception

of just how the guarantees and the mortgage

interact. It is not nearly so obvious as it

appears at first glance. There are three relevant

documents, Your Honour: there is a guarantee in

relation to David Securities; there is a guarantee

in relation to AT Rahme & Sons and then, standing

behind those two guarantees is, what I think in the

business is called, an all-moneys mortgage. The

mortgage document is expressed only to be a

mortgage in relation to AT Rahme & Sons debts, but

the reality is, because of its all-moneys nature

and because of the existence of the David

Securities guarantee, it effectively guarantees the

Al, money becomes payable - and I stress that word	debts of David Securities. Under the first clause of our mortgage, clause	"payable" - upon a demand being made by the Bank.
This is not a statutory demand; this was simply a
demand at all. The Bank made two such demands, and
they are in evidence if Your Honour wishes me to
take you to them. They were made on 18 October
1990. One demand was made in relation to the
AT Rahme debt and one demand was made in relation
to the David Securities debt. The reason those
demands were made was because it was only upon the
making of those demands that the money became
payable under the mortgage. It was only when the
money was payable under the mortgage that the Bank

Rahme 15 16/11/93

was entitled to issue the section 57(2)(b) notice

that it did.

That is why the Bank finds itself, in my

submission, in the following conundrum. It was

said by us in the Court of Appeal below that the
refusal to grant the credit for the withholding tax
in relation to the principal debtor's overpayment
resulted in the section 57(2)(b) notice being
substantially overstated and, hence, we said on

principles which are firmly established in New

South Wales law, at any rate, are accordingly

invalid. The Bank's answer to that was that they

were entitled - and I will use a colloquial phrase

here - to top up the amount in the AT Rahme debt by

the amount then payable by David Securities, so
that although the amount only demanded was

$286,000, the Bank was able to say, "All right,

reduce that by $60,000-odd. That brings you to

$220,000, but you owe $1.1 million to David

Securities. You guaranteed that debt. Therefore,

as Mr Justice Powell said in the Court of Appeal,

there is no substantial overstatement. If

anything, there is a grotesque understatement."

That argument, on its face, is an attractive one.

The problem with it is this: in asserting

that the Bank is entitled to demand the full David

Securities debt, it is asserting that the David

Securities debt is payable. The David Securities

debt is payable only if a valid demand was made. A

demand which was made on the guarantors in relation

to the David Securities debt was an amount which

did not include the set-off which we now say exists

for withholding tax.	So the Bank finds itself
caught between a scylla and a charybdis really.	On
the one hand, its 57(2)(b) notice is overstated.
It can save that, but only by asserting that it
made a valid demand in relation to the David

Securities debt, and they can only do that if they

concede that the David Securities demand is

overstated. In our submission, there is simply no

way out of that for the Bank.

That argument depends upon close examination

of the underlying structure created by the

mortgage, and the key to it is that the moneys are

only payable on demand. By asserting that the debt

is payable in relation to David Securities, the

Bank asserts that it made a valid demand under the

mortgage. And in addition to the grounds of

repudiation which were relied upon prior to the
hearing, the applicants are quite entitled to say
that that was yet another act of repudiation.

That brings me to another point which the Bank made in the court below, which was that it was

Rahme 16 16/11/93

entitled to rely upon the right to possession

conferred by section 60 of the Real Property Act.

That argument highlights the point I have just made

even more strongly than the 57(2)(b) notice. The

right to possession under section 60 arises only

when there are defaults under the mortgage. In
raising the section 60 argument the Bank is able to

abandon the section 57(2)(b) notice and say that it

is entirely irrelevant. When the Bank does that

the cold light of day is focused very clearly upon
the two demands made, the demand for the A.T. Rahme

debt and the demand for the David Securities debt.

The Bank cannot assert that there have been

defaults in those demands because the amounts

demanded - - -

HIS HONOUR:  I follow the trend of your argument if, at the

end of the day, there is a real likelihood that you

will succeed in having the guarantee and mortgage

declared unenforceable on the ground that the Bank

has wrongly taken the position, assuming in your

favour that it has, that it does not have to give

any credit to the guarantors for payments made in

respect of withholding tax. But unless you

surmount that difficulty, I really am at a loss to

see how you can say that in the circumstances of

this case it would be appropriate to grant

interlocutory relief or to stay the judgment below

on the ground that somehow in this Court it might

be held that a mortgagee's notice was given for the

wrong amount in a case where millions are, in any

event, outstanding.

MR PERRAM:	Two points, Your Honour: the first is the applicants do not ask this Court to decide that
issue. The point which is sought to be made is that - - -
HIS HONOUR:	The applicants are asking this Court in

circumstances where, apart from the argument as to

unenforceability, they are guarantors in circumstances where millions are owing and where they are making no offer or tender of payment of

~ the amount which is owing. In that context, if you

fail to demonstrate that there is a reasonable

argument that because you say the Bank took a wrong

approach to its rights you are entitled to avoid

the guarantee completely, quite frankly this

application has me at a complete loss as to why the

time of the Court has been taken up with it.

MR PERRAM:  I put the submission this way: the question

whether the Court of Appeal erred in refusing to

grant the amendment, which is the question we seek

to ventilate in this Court, turns in part upon

whether the repudiation point is arguable. If it

was not arguable, then it was proper for the Court

Rahme 17 16/11/93

of Appeal not to grant the amendment. If it was

arguable, then the amendment, subject to other

points which can be made, should have been raised.

So far as the repudiation argument is

concerned, my clients only have to bring themselves

up to the standard of demonstrating that that

argument could possibly succeed in the Court of

Appeal below.

HIS HONOUR:  Yes, that is what I am saying. Would you like

to address the argument that assuming the Bank

said, "Under the guarantee we don~t have to give
you credit for the $50,000 payment of withholding

tax that the High Court has said didn't have to be

made", but the effect of that is that your client

can say, "Right, the guarantees and the mortgages

are at an end."

MR PERRAM:  Your Honour, there are two cases which assist me

in putting that to Your Honour. The first is a

decision of this Court, Ankar Pty Ltd.

HIS HONOUR:	I am aware of that case.
MR PERRAM:	I need not take Your Honour to it?
HIS HONOUR:	If you feel you can get anything directly to

the point out of it, yes.

MR PERRAM:	The only point we seek to extract from it is that where a creditor seeks to fix the surety with
obligations which the surety does not otherwise
have, the guarantee is discharged. That is what we
say has happened in this case. We have a liability
under the guarantee for X dollars.  The Bank
asserts it is entitled to recover from us, and persists in possession proceedings in seeking to
recover from us, X plus Y dollars under the guarantee. We say fundamentally that is an
attempted alteration of the - - -
HIS HONOUR:	So whenever a party claims more from a

guarantor than the guarantor is liable to pay, the

guarantor, even if it be under a mistake of law and

even if it does not involve a variation of the

contract guaranteed, is entitled to tear up the

guarantee.

MR PERRAM:	No, Your Honour, that does not
HIS HONOUR:	Then what is the proposition?

MR PERRAM: That proposition does not follow because, in the

case where an excessive demand for money is made and the creditor seeks to recover the money, the prejudice suffered by the surety is easily

Rahme 18 16/11/93

redressed simply by not allowing the creditor to

recover the money in question. Your Honour will be

aware, for I have cited it in my list of

authorities, of a decision in Egbert v National

Crown Bank.

HIS HONOUR:  If anything, that case is against you on this

point.

MR PERRAM:  With respect, it demonstrates why I must make

the concession but why I am allowed to continue the

point I am making. In that case all that happened

was that the creditor made an overdemand. In that

case the sureties were not discharged. It was

simply held that the creditor could not recover

from the sureties the overdemand. But that is a

country mile from the facts in this case.	The Bank
is not seeking to get from us the money.	What it

is seeking to do on the basis of a purported

alteration in the rights of the sureties is to

recover possession.

Your Honour, if all they did was demand the

money, I would be completely without a middle

stump, as it were, because, as Your Honour quite

rightly makes the point, all that would be
necessary to do is to say that they are not
entitled to recover the withholding tax from you.

But that is not the case; the Court cannot say that. There is no deduction which can be allowed.

It is an all or nothing situation.	The Bank is
either entitled to possession or it is not.	It has
asserted, in order to enliven its right to

possession, a right to recover moneys which it is

not entitled to recover.

Your Honour raised briefly the prospect of the

guarantor accidentally making an overdemand, but

that is not the case here at all. This point has

been put to the Bank.	It has been invited to
withdraw its claim and it has persisted.

HIS HONOUR:  I said to you, assume in your favour that the

Bank is maintaining that it does not have to allow

credit. It was on that assumption that, in all the

circumstances of this case, I was suggesting you

demonstrate that it is arguable, or strongly

arguable - whatever one likes - that you can avoid

the guarantee.

MR PERRAM: There is one case which supports me,

Your Honour. It is National Bank of Nigeria v

Awolesi, (1964) 1 WLR 1311. That, Your Honour, is

a decision of the Privy Council.	The relevant
passage is at page 1317 at about point 3.	My copy

has a handwritten amendment at the top of the first

Rahme 19 16/11/93

paragraph there which is supported by a little note

at the front of the case.

HIS HONOUR:  Mine has not, so you had better tell me what it

is.

MR PERRAM:  The original version seems to say, "Taiwo as

principal debtor" and the anonymous hand which has
been through my copy says, "Awolesi as guarantor".

I have at the front of my copy one of those little

noting up stickers. I do not think anything turns

on the point, Your Honour. What happens here,

going down to about point 4 on the page:

On this footing the bank would be entitled to

judgment for the full amount of

10,023 pounds 14s. 3d. as claimed and not for

the lesser sum of 9,610 pounds 14s. 4d.

awarded by the trial judge. The bank is now

content to accept the lesser sum as

representing an approximation of the amount

which would be due if the various accounts had

in truth been operated as one. They were not

operated as one and the question is whether
the respondent has been substantially
prejudiced by the way in which the accounts
were in fact operated. Their Lordships are of
the opinion that by acting as it did, outside
the terms of the guarantee, the bank increased
the burden on the respondent as guarantor and

that the respondent's guarantee was discharged

whichever construction of the document is

adopted.

The facts of that case very briefly were this,

Your Honour. The guarantor guaranteed the account

of one of the customers and the customer

subsequently opened other accounts and paid money

into those other accounts so that the bank in that

case stood, in a similar way, to the Bank in this

money flowing the other way withholding tax, in the	case; so far as it stands with David Securities~ there is money owing on one account, but there is
other account. We say that the same situation
applies, by refusing to grant the set-off claimed,
the Bank operates the two accounts and, accordingly, so we say, it is discharged.

In fact, what flows in this case is even if

the Bank stood up now and said, "No, no, we see the

error of our ways", it would be too late. The

reference in prejudice in that case has to be read,

in my submission, in the light of Ankar, and,

particularly, in the light of Your Honour's

decision, where it is suggested that the really

correct analysis is one of considering whether

Rahme 20 16/11/93

there has been an alteration of rights. Those are

my - - -

HIS HONOUR:  I do not want to take time, but that seems to

me to be in a different league to a case where what

is involved on the assumptions I am prepared to

make in your favour, which I notice the Bank would

deny anyway, is a dispute between guarantor and

creditor about guarantors' liabilities. That is

quite different to a case where the creditor and

the principal debtor, by their conduct, alter the obligations of the guarantor under the guarantee, without regard to the position of the guarantor.

You are just in a different area of discourse.

MR PERRAM:  I will not take, Your Honour, much more time with this point but - - -

HIS HONOUR:  No. I am not trying to stop you putting your

argument. I am trying to help you, really, by

directing your attention to the things I see you

have to deal with.

MR PERRAM:  I accept the force of what Your Honour has just

said but it is really a question of perspective.
There are, as between the principal debtors and the

creditor in this case, two relevant amounts: one in excess of a million dollars and one all up - I

am not apprised of the precise figure but, for the

sake of argument, say less than $120,000.

HIS HONOUR:  But take the common case where the creditor

says to the guarantor, "Well now, I want you to pay

the amount you have guaranteed, and that includes

both principal, interest and legal costs", and the

guarantor says, "I am not liable for legal costs

under the guarantee", and the creditor says, "Yes,

you are", and they have a fight about it, and then

assume that the creditor goes into possession. Do

you really suggest that if the guarantor has not

tendered the amount due to destroy any substantive

wrongly claimed the guarantee covers legal costs	right to possession that the fact the creditor has
means that the guarantor can tear up the guarantee?

MR PERRAM:  It depends what the creditor seeks to get from

enforcing the guarantee. If one finds oneself in

an Egbert-type situation, that is, where the

creditor simply demands money, then the answer to

Your Honour's question is a clear no. The

situation can be fixed simply by not allowing the

creditor to recover. If one finds oneself in an

extreme position where instead of directly seeking

the enforcement of the money, judgment or the

obligation under the guarantee, the Bank asserts

some ancillary right in respect of which it is not

possible to make an Egbert-type deduction, if I may

Rahme 21 16/11/93

call it that, then the answer to Your Honour's

question is yes.

That is where the National Bank of Nigeria v

Awolesi comes in, because when one looks at the

position between the creditor and the principal

debtors in this case, as I was saying before, there

is standing to the credit of the Bank in the

relationship a figure in excess of $1 million.

There is standing to the credit, and I use that in
a very broad sense, of the principal debtor a
figure in the vicinity of, say for arguments sake,

of $120,000 - I am not precisely appraised of the

figure, and clearly one exceeds the other, let

there be no dispute about that. But the reason it

is like Awolesi is because by refusing to set off

one against the other, which is, in effect, the

situation here, one finds oneself in the situation that that which is sought to be enforced against a

surety is substantially greater than that which is

contracted.

One often hears in this case it said that the

amount involved and the withholding tax is a

frivolous quantity. All matters are relative, I

suppose, but $120,000, or whatever the sum is, I

think the stays which have been granted are $50,000

and $60,000 is not an insubstantial sum. In any

event, in my submission, it is not particularly

relevant how big the sum is, so long as it is not

frivolous, so long as what the Bank seeks to do is

to thwart as it were, a change in the position of
the sureties. Those are my submissions on that

point.

HIS HONOUR:  Thank you, Mr Perram.

MR PERRAM: There is one very small matter, if I could

address you briefly on, and that is that unlike

most stay applications, the applicants in this case

find themselves in a slightly awkward position not

having the reasons of the Court of Appeal. Having
regard to the submissions, if Your Honour were

minded to accept them, I made in relation to

prejudice and futility of the Court's orders, that

puts an applicant in our position in a very awkward

position. If they fail, if the applicant fails
because he cannot make out the special leave

application because there is an absence of reasons,

in my submission, there is a serious injustice

wrought. So that even if the Court were not minded

to stay the judgment for possession, pending the

special leave application, it would not be

unreasonable, nor would it do any injustice to

anyone to stay the judgment for possession pending

the production of the Court of Appeal of its

reasons, so that at that time the question of

Rahme 22 16/11/93

whether there are special leave points meriting the

intervention of this Court can properly be

addressed. I say no more about that point.

HIS HONOUR:	Mr Tamberlin, Mr Perram, I propose to adjourn for about five minutes to consider what course I
will take in this matter.

AT 3.03 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.14 PM:

HIS HONOUR:  I need not trouble you, Mr Tamberlin.

MR TAMBERLIN: If Your Honour pleases.

HIS HONOUR: This is an application for interlocutory relief

pending the hearing of an application for special

leave to appeal to this Court from an order of the New South Wales Court of Appeal, (Mahoney, Sheller

and Powell JJ.A) dismissing an appeal by the

present applicants from a judgment for possession
of certain land owned by the applicants on which a

block of units is erected.

The judgment for possession was made by

Studdert J. in the Supreme Court and was in favour of the present respondent, the Commonwealth Bank of

Australia. The interlocutory order which the

applicants now seek is an order staying that

judgment for possession either until the hearing of

the application for special leave to appeal to this

Court or until some time after the Court of Appeal,

which has not as yet published its reasons for

dismissing the appeal to it, publishes those

reasons.

The basis upon which the respondent Bank

claimed to be entitled to possession was as

mortgagee under a mortgage given by the applicants

as supporting security for a guarantee of any

indebtedness of two companies, David Securities

Pty. Ltd. and A & T Rahme & Sons Pty. Ltd.

I find it unnecessary for the purposes of dealing with this interlocutory application to set

out the complicated background facts or to trace

the lengthy history of the present litigation which

goes back to February 1988. It suffices that I

identify the reasons which lead me to the

conclusion to which I have come.

Rahme 23 16/11/93

If it be assumed that the guarantee and the supporting mortgage remain enforceable against the

applicants, it seems to me to be quite clear that

in all the circumstances the application for a stay

should be refused. On that assumption, there is

dispute between the applicants and the Bank about

the precise amount which will eventually be secured

by the guarantee and the mortgage. That

uncertainty results from the fact that the question

whether any, and if so what, financial adjustments

flow from the decision of this Court in David

Securities Pty. Ltd. v Commonwealth Bank of

Australia awaits determination by the Federal

Court. It is, however, apparent that on the worst

scenario from the Bank's point of view the
consequence of all the litigation to date is that
the amount secured by the guarantee and mortgage

(if still enforceable) is well in excess of $A2.5

million.

The material before me indicates that the

applicants have made no tender or offer of payment of that amount or any part of it, nor have they in the proceedings before me indicated any willingness

to submit to a requirement of such payment as a

condition of the grant of a stay of the judgment

for possession or other interlocutory relief. Such

a failure to tender payment, or to offer to submit
to a condition of payment, does not, in my view,

constitute a bar to the grant of a stay of a

judgment for possession or to the grant of other

interlocutory relief to a mortgagor to stay or

prevent the exercise of disputed powers of sale or
entry into possession. It is, however, a very
weighty consideration, militating against the grant
of such relief in all the circumstances of the

present case.

However, the applicants wish to raise in the

Court of Appeal, if this Court sets that court's

order dismissing the appeal aside, an argument to

the effect that the guarantee and supporting

mortgage have become unenforceable for the reason

that the Bank has not allowed the applicants, as
guarantors, credit for the total of the amounts
received or attained by the Bank in respect of

withholding tax, which this Court has held that

David Securities Pty. Ltd and A & T Rahme & Sons

Pty. Ltd were not legally obliged to bear. The Court of Appeal refused the applicants leave to

supplement their notice of appeal to that Court to

enable that argument to be developed. While,

pending publication of the Court of Appeal's

reasons, one can only speculate about the grounds

of that refusal, perusal of the transcript of

proceedings before the Court of Appeal discloses

that the members of the Court of Appeal displayed a

Rahme 24 16/11/93

fairly obvious lack of enthusiasm for the

applicants' prospects of success if the desired

amendment to the notice of appeal were allowed.

In these circumstances, it is necessary that I

address the question whether there is a reasonable

likelihood that the applicants will ultimately

succeed, as a consequence of a successful appeal to

this Court, in establishing that the guarantee and

assessment of the likelihood of special leave to

supporting mortgage are no longer enforceable.

appeal to this Court being granted, of the

likelihood that, if such leave is granted, this

Court will overrule the Court of Appeal's refusal

to allow the amendment, and of the strength of the

argument that, in all the circumstances of the

case, the effect of the Bank's conduct has been to
render the guarantee and the mortgage

unenforceable. In circumstances where the decision

whether special leave to appeal should be granted

must be made by a Full Court of this Court in the

exercise of a discretion entrusted to it, it

appears to me to be undesirable that I seek to

canvass in detail the considerations relating to

the question whether, in all the circumstances of

this case, special leave to appeal is or is not

likely to be granted. In circumstances where it is

conceivable that the question whether the guarantee

and mortgage have been rendered unenforceable by

events subsequent to the judgment for possession

might subsequently arise for consideration in the

Supreme Court or in the Federal Court, it also

seems to me to be undesirable that I express any

detailed views in relation to that question on this

interlocutory application to the possible future

embarrassment of a judge of the Supreme Court or of

the Federal Court. In that regard I would
expressly note that some of the comments made by me
in the course of Mr Perram's argument were made for

the purpose of identifying issues rather than for

the purpose of expressing any firm view on

particular points of law involved.

In the result, it seems to me to be

appropriate that I confine myself to indicating

that, having taken account of my assessment of the

matters which I have mentioned, I have come to the

conclusion that there is insufficient likelihood of
the ultimate success of the applicants'
unenforceability argument in or as a result of the

present proceedings to justify a grant by me of the

interlocutory relief which they seek. Lest what I

just said be ambiguous, I should make clear that in

forming an assessment of the likelihood of the ultimate success of that argument I have taken

account of the three components which I have

Rahme 25 16/11/93

mentioned: that is, my assessment of the

likelihood of a grant of special leave to appeal;

my assessment of the likelihood of such an appeal
succeeding; and my assessment of the likelihood

that in the event that such an appeal does succeed

the unenforceability argument will finally be

vindicated.

Nor do considerations of balance of

convenience support the grant of a stay of the

judgment for possession or of other interlocutory

relief, in all the circumstances of the present

case. To the contrary, they make manifest how

inappropriate a grant of interlocutory relief would

be.

Apart from the exceptional case in which

special leave to appeal to this Court has been
actually granted, the final decision of the highest

appellate court of a State or Territory is

conclusive of the particular litigation. That
being so, it is only in demonstrably exceptional
circumstances, such as the immediate threat of the
destruction of the subject-matter of litigation or

of grave and irreparable damage being sustained,

that an application to this Court for interlocutory

relief or for a stay of judgment can be justified.

In the present case the only immediate threat

is that the Bank will enter into possession of a

block of units pursuant to a judgment in its favour

and receive the rental income. If the applicants

do obtain special leave to appeal to this Court and

ultimately succeed completely against the Bank,

with the result that it is ruled that the Bank has

no entitlement to those moneys, the Bank will

inevitably be required to account for them. It is

argued on behalf of the applicants that without a
stay, the Bank "will almost certainly take the step

of seeking a purchaser", and the result of that

will be that "these proceedings will be transformed

into a case about the exercise of powers of sale".

There is, however, nothing in the evidence to

sustain the suggestion that there is a threat by

the Bank to purport to sell the premises in the

period between now and the hearing of the

application for special leave to appeal. Even if

there were evidence of such a threat, I would not,

for the reasons which I have given, be prepared to

make an interlocutory order in all the

circumstances of this case. In the absence of

evidence establishing any such threat, it is

apparent that the case is not one in which there
existed any justification for invoking the
extraordinary jurisdiction of this Court to grant a
stay of a judgment which has been affirmed by the

highest appellate court of New South Wales.

Rahme 26 16/11/93

Accordingly, application for a stay of the

judgment of possession is refused.

Mr Perram, Mr Tamberlin, that leaves the question of costs.

MR TAMBERLIN:	Yes, we would seek costs, Your Honour.
HIS HONOUR:	And I suppose you would ask that they be costs

1 in the application for special leave to appeal.

MR PERRAM:  I would make that submission, yes.

MR TAMBERLIN: It is really unrelated. It is an independent

application .... we have not come down here to meet a

difficult case that my friend has put forward.

HIS HONOUR:  I see the force of what you are saying. other side of that is the matter will be coming
before a Full Court. If I make a final order for The

costs, a perhaps expected approach in terms of the

manner in which this litigation seems to be

conducted, would be to put an appeal on so that my

order for costs could be tested before the Full

Court if - - -

MR TAMBERLIN:  We are pleased to take that risk,

Your Honour.

HIS HONOUR:	Very well.
MR TAMBERLIM:	Your Honour, it is a discrete matter, it is

independent, it is a stay application. In relation

to the, for example, the argument about selling, we

were never asked as to whether we had any intention

to sell, it was never put to us and it was strongly

relied on by my friend. But we rely on the fact,

basically, it is a discrete application and it has

not succeeded by a fairly wide margin.

HIS HONOUR:

If you insist on that approach I will hear what

you have to say, Mr Perram, on costs.

MR PERRAM:  I will deal with one point first. I would like

to tell Your Honour that there is no risk of that,

and I would seek those instructions but the client

is not here and we all know the client in this

matter.

HIS HONOUR:	I was not trying to deter you from appealing.
MR PERRAM:	I assure Your Honour I will try it to bring

about the appropriate deterrents. In terms of

costs, if in fact it transpires that the special

leave point succeeds, or it transpires that that which I indicated was the fear of the applicants this afternoon, that is that the Bank would attempt

Rahme 27 16/11/93

to exercise some power of sale, an order for costs

in favour of the Bank with that backdrop would be

unusual. The ordinary course of events would be

simply costs in the appeal, or costs in the

application. In those circumstances and

particularly having regard to how things may look a

little further down the track when all the facts

pan out, it would be inappropriate to depart from

that ordinary approach.	They would be my
submissions.

HIS HONOUR:  Thank you, Mr Perram.

While I see the force of what Mr Perram has

said, I consider that the appropriate order in this

application is that the applicants pay the

respondent's costs of the application. It being an

interlocutory application, Mr Tamberlin, do I need

to certify for - the Deputy Registrar will know.

Do I need to certify for senior counsel? And I

certify for senior counsel.

MR TAMBERLIN:	Thank you, Your Honour.
HIS HONOUR:	The Court will now adjourn.

AT 3.32 PM THE MATTER WAS ADJOURNED SINE DIE

Rahme 28 16/11/93