Saad, J. v Deutsche Bank (Asia) A.G

[1987] FCA 657

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) NO. G583 Of 1987
1 1-
GENERAL DIVISION	1 ?.

I

t

i

BETWEEN: JULIE SAAD AND NEVI~LE SAAD

Applicant

AND: DEUTSCHE BANK (ASIA) A.G.

(Formerly European Asian

Bank A.G.)

0

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	BEAUMONT J.
DATE OF ORDER:	25 NOVEMBER 1987
WHERE MADE:	SYDNEY
THE COURT	ORDERS:

1.    Application for interim relief refused.

2.     Costs of thls appllcatlon to be the respondent's

costs in the proceedings.

3.    Transfer the matter to the Supreme Court of New South Wales.

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

' I

!

I N THE FEDERAL	COURT	OF	AUSTRALIA	)
1

NEW SOUTH	WALES	DISTRICT	REGISTRY	)	N O .	G583 Of	1987
1

GENERAL DIVISION )

BETWEEN:	J U L I E SAAD AND NEVILLE SAAD
A p p l i c a n t
Respondent

!

CORAM :	BEAUMONT J	I
PLACE :	SYDNEY
DATE :	25 NOVEMBER, 1987

REASONS FOR JUDGMENT

! ,

BEAUMONT J . T h e a p p l l c a n t s , Mrs. J u l i e S a a d a n d h e r

husband , M r . Nev i l l e Saad , have commenced p roceed ings aga ins t

I.

t he r e sponden t , Deu t sche Bank ( A s i a ) A.G. ( " t h e Bank" ) s e e k i n g

t o r e s t r a l n t h e e x e r c l s e b y t h e B a n k o f a n y p o w e r of s a l e

c o n f e r r e d upon t h e Bank by a mortgage o v e r p r o p e r t y owned by

Mr. and Mrs. S a a d , b e i n g U n i t s 1, 5, 6 , 7 , 9 , 10, 1 2 and 1 4 a t

6 0 - 6 4	M e e h a n	S t r e e t ,	G r a n v i l l e ;	i n	t h e	p r o c e e d i n g s ,	t h e
a p p l i c a n t s a l so	seek	damages	unde	r	s . 82	of	t h e T r a d e P r a c t i c e s

i	A c t
- 1 9 7 4 ( " t h e A c t " ) ; t h e y f u r t h e r seek a n o r d e r u n d e r
s . 8 7 ( 2 ) ( b ) o f t h e Act v a r y i n g t h e terms o f t h e m o r t g a g e . , '

L '~

The present applicatlon is f o r an interim injunction restraining any sale by the Bank pending the final hearlng of	..
. -.
the principal proceedlngs.	!
In late 1981, Mr. Vlncent Tanna, Mrs. Saad's brother, suggested to her that members of the famlly, including Mr. and Mrs. Saad, borrow a large amount from an overseas lender. This suggestion was acceptable to Mr. and Mrs. Saad and early In 1982, documentatlon was executed by Mr. and Mrs. Saad, the
Bank and other parties which included	a mortgage over the
subject property.	In 1983, Mr. Vincent Tanna told Mrs. Saad

that he and his father wanted to borrow more funds. In about October 1983, Mr. and Mrs. Saad and other members of the Tanna family and the Bank executed further documentation for this purpose. In about September 1985, Mr. and Mrs. Saad, and other members of the Tanna family, executed a supplementary loan agreement with the Bank.

Subsequently, a dispute arose between the present

parties as to the amount owed by Mr. and Mrs.	Saad to the
Bank. In essence, Mr. and Mrs. Saad contend that they are

liable for their "proportion" only of the amount borrowed
(which proportion they clalm to have repaid or virtually
repaid) : the Bank, on the other hand, claims that Mr. and

Mrs. Saad are liable for the full amount borrowed by the Tanna family, which is some millions of Swiss francs.

I . I, ,l

i

It would appear that on the face of the documentation

executed, Mr. and Mrs. Saad are liable to the Bank for the

full amount ot the famlly borrowlngs. By c1.11.03 of the loan

agreement dated 28 June 1982, the securities glven (including the sub~ect property) are expressed to be "collateral each one to the other for the repayment by the borrower to the lender of the loan and all monies owing from time to time by the

borrower to the lender"; the supplementary loan agreements
dated 4 November 1983 and 3 October 1985 do not appear to

touch upon the point.

I'

But Mr. and Mrs. Saad now seek to avoid this

liability on three principal grounds. In the first place,

they claim that the transactions were void for mistake; secondly, they say that the transactions were unconscionable and therefore voidable I n equity; and thlrdly, they claim that their entry into the borrowing arrangements was induced

L -

by conduct of the Bank which was misleading and deceptive (see	. .
s.52 of the Act).	Mr. and Mrs. Saad also allege further

misleading conduct on the part of the Bank in November 1986. Mrs. Saad claims that she was then assured by Mr. Gleeson, an officer of the Bank, that because Mr. and Mrs. Saad had paid

the several properties mortgaged to be sold.	their debt to the Bank, their property would be the last of
Before going to the evidence relied upon by Mr. and Mrs. Saad to support their claims for relief, reference should
be made to the subsequent history of the matter. On about 7 September 1987, the Bank served on Mr. and Mrs. Saad statutory

:: '

notices of default under their mortgage. Approximately six ! '

weeks ago, the Bank, by ~ t s real estate agent, Jones Lang

l ' .

I 4 .

Wootton, commenced to advertlse the auction of the sub~ect

property.	The auction was advertised to take place at 12.30
p.m.	on Thursday 19 November. Shortly before the auction

date, at approxlmately 12 noon on Wednesday 18 November, Mr.

I

and Mrs. Saad approached the Court seeking urgent interlocutory relief restrainlng the sale. I granted short

leave for this purpose and made the matter returnabale at 3.00

p.m. on that day. When the matter was called on at 3.00 p.m.

the solicltor for the Bank sought an adjournment on the ground

that its counsel was engaged In associated proceedings then	..
being heard by Young J.	in the Supreme Court of New South

Wales. I therefore stood the matter over to 10.15 a.m. on the

following morning. On the morning of 19 ,November, the matter

was heard. The parties on both sides of the record read

I lengthy affidavits: there were ob]ectlons made and argued to

many parts of the affidavit evidence; two deponents were

cross-examined on their affidavits.	Late in the morning, I
was informed that	the auctlon of the subject property would

not occur untll that afternoon. However, the matter still

being part heard, I granted an interim injunction restralnlng

the sale until the hearing of the matter was concluded. The

matter was further argued in the afternoon of 19 November. Upon the conclusion of argument, because of the size of the affidavit materlal relled on by the parties, I indicated that I wished to reserve my decision in order that I would have an opportunity to consider that material. I therefore granted an interim injunction restralning the respondent from selling the subject property pending the delivery of judgment whlch I

flxed for Wednesday 25 November.	It was made clear that this
was a temporary inlunction only and s h o u l d riot be seen d s an Indication of a view that a restraint pending a final hearing was appropriate.	I
It is first necessary to determlne whether the evidence discloses that there is a serlous question to be
tried.	Mrs. Saad says that in late 1981 her brother, Mr.

:.

Vincent Tanna, approached her and said: "I can get cheap

L.

money at about 8% interest". She sald: "How come?" He said:

!

"If we borrow a large amount overseas we can get preferential

rates. If all the family join in we would get a good deal." There were further discussions in late 1981 and early 1982

regardlng a proposed loan from the respondent (then known as

European Asian Bank A.G.) . In early 1982, Mr. Vincent Tanna

said to Mrs. Saad: "The loan has been approved. ..we should I '

all use the one solicltor. I will make the arrangements." , .

Subsequently, as has been said, the documentation was

executed. In her affidavit, Mrs. Saad says:

"6.	I believed that my husband and I would be borrowing sufficient monies to discharge
Trustee Company and that from the date of our exlsting llabllity to the Perpetual settlement thereafter we would be paying
a reduced rate of interest and would
therefore have more funds available for
our own purposes.

7.      At no time did any officer of the Bank or any other person explain to me or my husband the exact terms and conditions of the proposed loan.

8.     I cannot read or write English but I am able to slgn my name. My native language

is Lebanese. I can understand simple

English.

9.

If the terms	and conditions had been
explained to	me by an officer of the

Bank, I w o u l d o b t a l n e d h a v e t h e

a s s l s t a n c e o f my s o n or o t h e r members of

my f a m i l y t o e x p l a i n t h e d o c u m e n t o r

documents t o m e I n L e b a n e s e .

10.

I n o r a b o u t J u n e , 1 9 8 2 I r e c a l l t h a t my

b r o t h e r V i n c e n t c o n t a c t e d me a n d s a i d

words t o t h e e f f e c t "The l oan documen t s

a r e r e a d y . We h a v e t o go t o B a r w i c k s

O f f i c e t o s i g n them."

11.

I n o r a b o u t J u n e , 1 9 8 2 I , t o g e t h e r w i t h

o t h e r members o f t h e f a m l l y t r a v e l l e d t o

Barwick & C O ' s o f f i c e t h e i n c i t y .

P r e s e n t were N e v l l l e S a a d , V i n c e n t a n d

Te resa Tanna Kenne , th Tanna , James Tanna

a n d M r T e r r y McCabe, S o l l c l t o r , a n d

a n o t h e r e m p l o y e e o f t h a t f i r m w h o s e name

I do no t r emember .

1 2 .

We were shown from t h e r e c e p t i o n a r ea

i n t o a n o f f i ce . Mr McCabe S o l i c i t o r said

words t o t h e effect of "You must a l l s i g n

t h e s e f o r m s w h i c h I show you". Each of

u s t h e n s i g n e d t h e d o c u m e n t s w h e r e we

were t o l d t o s i g n . I d o n o t now r eca l l

t h e t i t l e of s u c h d o c u m e n t s o r t h e n u m b e r

or t y p e of such documen t s . The na tu re

a n d e f f e c t o f t h e d o c u m e n t s were n o t

e x p l a i n e d t o u s b y McCabe o r anyone a t

a l l . E a c h of u s t h e n s i g n e d o n t h e

documen t s where we were t o l d t o s l g n b y

Mr McCabe. I d i d n o t u n d e r s t a n d a t t h a t

time t h e e f fec t of t h e d o c u m e n t s t h a t I

was s i g n i n g o t h e r t h a n t h e y were

s o m e t h i n g t o l o a n t h e w i t h d o

a r r a n g e m e n t s . I was aware t h a t it

i n v o l v e d t h e r e p a y m e n t o f o u r . e x l s t l n g

l o a n a r r a n g e m e n t .

13 . A t n o time d i d Mr McCabe o r t h e o t h e r

member	of	h i s	o f f i c e	s t a f f	who	was
p r e s e n t ,	w h o s e	n a m e	I	d o	n o t	r e c a l l ,

e x p l a i n t o u s w h a t t h e d o c u m e n t s were.

14. I b e l i e v e d t h a t my h u s b a n d a n d I were

b o r r o w i n g	a p p r o x i m a t e l y	t h r e e	h u n d r e d	a n d
s i x t y	o n e	t h o u s a n d	( $ 3 6 1 , 0 0 0 . 0 0 )	w h i c h
was	s u f f i c i e n t	t o d i s c h a r g e	o u r	e x i s t i n g
mor tgage	to	t h e P e r p e t u a l	T r u s t e e	Company

and enough t o c o v e r some l e g a l costs.. ."

I n my o p i n l o n , t h e e v i d e n c e d o e s n o t d i s c l o s e a

s e r i o u s q u e s t i o n t o b e t r i e d o n a n y of g r o u n d s s u g g e s t e d , t h a t

is to say, mistake, unconscionability or misleading conduct.

The Bank and Mr. and Mrs. Saad were at arms' length; Mr. and

Mrs. Saad had their own solicitor; the origlns of the

transactions may be traced to the actlons of	Mr.	Vlncent
Tanna; he was not the Bank's agent in any sense; nor was the Bank guilty of any misrepresentation of any kind whlch could be seen as the foundatlon of a clalm that it had engaged in	,	..
mlsleading or deceptive conduct.

I am not, of course, requlred to undertake a

prellminary trial of the issues in the principal proceedings.

On the other hand, before interim relief may be granted, I . .1

need to be satisfied that there is a question to be tried

whlch is sufficiently serious to warrant the intervention of the Court at this stage. I will deal with each suggested head

i

of claim In turn.	I '
!

As to mistake, the suggestion seems to be that Mrs. : .

Saad had- a partlcular understanding with respect to the

operation of the loan documentation.	But, if there were any
misapprehension, it was unilateral and not induced by any

conduct by or on behalf of the Bank; moreover, it appears to be a mistake as to the legal effect of the documents. It is

difficult to see any case for rellef here	(see Greig and
Davis, The Law of Contract at	pp.894-6).

Nor, in my view, is there any serious questlon ralsed that the Bank has been gullty of unconscionable conduct (see	I	.
I

Grelg and Davis, op. cit. at pp.973-7). Mrs. Saad had

previously had some experience in property matters and there

were perceived benefits In the transactions for all of the

members of the Tanna family. There is no suggestion of any

pressure by the Bank to enter Into the arrangements.

Finally, in my opinion, there is no serious reason

advanced why it should be concluded that the Bank has engaged in misleading or deceptlve conduct within the meaning of s.52 of the Act. Rellance is placed upon the conversation with Mr.

i ..

Gleeson in November 1986. According to Mr. Gleeson, hls

reference to the subject property being last sold was made in

1

the context of, and conditionally upon, execution of fresh documents by Mr. and Mrs. Saad, an event which it is common ground never occurred. In cross-examination, Mrs. Saad was disposed to agree that thls was the context in which Mr. Gleeson's suggestion was made. In any event, it is hard to see how any such suggestion could have misled or deceived Mr. and Mrs. Saad in any relevant sense because they were already committed to the borrowings.

However, even if I be wrong in concludlng that there

is no serious question to be trled, it would not be appropriate to grant interim relief because of the delay on

the part of the applicants in institutlng these proceedings.

:

:.

In Carlton and United Brewerles (N.S.W.) Pty. Limlted

v. Bond Brewing New South Wales Ltd. (Full Federal Court, unreported, 19 November 1987) the Full Court sald:

'The grant of injunctive relief, Interim or flnal, I .I

I

9.

ls, of course, dlscretionary. Delay by an applicant in Instituting or In prosecutlng a clalm for an injunction may be a ground for refusing rellef, even at a final hearing. Where an interim injunction is sought on the basis that the applicant need show only a “serlous“ question of fact or of law, delay In seeklng that relief is an important discretionary consideration (see Meagher,

Gummow and Lehane, Equity - Doctrines and Remedies,

2nd ed., para. 3606, p.7581.’

Mr. and Mrs. Saad sought, and obtalned, legal advice

i

.I

in relation to these transactions as early as December 1986.	L.
As has been said, notices of default were given in early September 1987. The debt owed by Mr. and Mrs. Saad 1s payable

in Swiss francs; and since early September 1987, the

I

i

Australian dollar has depreciated signlficantly; there	is a
risk of further depreciation.	If sale of the subject property

were to be restrained pending a final hearing, it would be six

months or longer before the Bank could exercise its power of	r
i
sale. In that perlod,	a margin of securlty could be lost

elther because of a further depreciation of the Australian dollar or because of a fall in property prices In Sydney, or

L .

both. Given the delay on the part of Mr. and Mrs. Saad in

making this application, it would be un~ust now to grant them

urgent interim relief.	As Meagher, Gummow and Lehane, op.
cit. say (at p.568):

“why should a court grant urgent rellef when the

plaintiff’s tardiness in applylng for it casts

doubt on the reality of his alleged injury?”

In my opinion, an interim injunction restraining sale

pending a final hearing should not now be granted. Costs of

this application should be the Bank‘s costs in the

proceedings.

It is appropriate that these proceedings be heard in the same Court as the associated proceedings	in the Supreme
Court already mentioned.	Counsel for Mr. and Mrs. Saad no
longer oppose this	course.

I make the followlng orders:

L

L i

1. Appllcatlon for interim relief refused.

2. Costs of this application to be the

respondent's costs in the proceedings.

3 . Transfer the matter to the Supreme Court

of New South Wales.

I certify this and the /v,&€ ( 9 )

preceding pages to be a true copy of
the Reasons for Judgment of his Honour

Mr. Justice Beaumont.

m.

Associate 4 . ~ . ~ A ~ . V J $ O ~

. .

I