Rahme v Commonwealth Bank of Australia

[1993] HCA 62

HIGH COURT OF AUSTRALIA

DEANE J

ANTOINE MAROUN RAHME AND ANOR v. COMMONWEALTH BANK OF AUSTRALIA

(1993) 117 ALR 618

16 November 1993

Orders

Application for a stay of the judgment for possession refused.

Decision

DEANE J 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 JJA) 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.

2. 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.

3. 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. Limited and A. and T. Rahme and Sons Pty. Limited.

4. 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.

5. 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 ((1) (1992) 175 CLR 353) 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 $2.5 million.

6. The material before me discloses that the applicants have made no tender or offer of payment of that amount or of 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 by a mortgagee 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.

7. However, the applicants wish to raise in the Court of Appeal, if this Court sets aside that court's order dismissing the appeal, 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 retained by the Bank in respect of withholding tax which this Court has held that David Securities Pty. Limited and A. and T. Rahme and Sons Pty. Limited 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 fairly obvious lack of enthusiasm for the applicants' prospects of success if the desired amendment to the notice of appeal were allowed.

8. 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 supporting mortgage are no longer enforceable. Consideration of that question requires some assessment of the likelihood of special leave to 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 supporting mortgage unenforceable.

9. 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 discretionary judgment, it appears to me to be undesirable that I seek to canvas 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 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.

10. 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 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.

11. 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.

12. 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 the litigation or of grave and irreparable damage being sustained, that an application to this Court for interlocutory relief can be justified.

13. 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 that 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 interlocutory relief pending the hearing of an application for special leave to appeal.

14. Accordingly, the application for a stay of the judgment for possession is refused.