Scott, W.R. v Beneficial Finance Corporation Ltd (ACN 007 597 202)

757 1 9 3 .

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DMSION 1

GENERAL DMSION No. NG699 of 1993
BETWEEN: WWTER ROBERT SCOTT

RECEIVED

AND: BENEFICIAL FINANCE CORPORATION

FEDERAL COURT OF

AUSTRAUA

PRINCIPAL

LTMITED (ACN 007 597 202)

Coram:	Beazley J
Place:	Sydney
Date:	15 September 1993

EX TEMPORE REASONS FOR JUDGMENT

Application is made by Walter Robert Scott to restrain the respondent in these

proceedings, Beneficial ~ i G n c e Corporation Limited, from taking any further

proceedings in the Supreme Court of New South Wales pending the hearing of this

matter. The reference to the proceedings in the Supreme Court of New South Wales

is a reference to proceedings number 50418 of 1992 commenced by Beneficial

Finance Corporation Limited in the Commercial Division of the Supreme Court of
New South Wales against Mr. Scott, the applicant in this court.

The basis of the application is that Mr Scott has a claim against Beneficial Finance

two companies of which he was a director, Shelldale Corporation Pty Limited and

Corporation Limited arising out of agreements entered into on 10 December 1986 by

Golden Ponds Corporation Pty Limited and guarantees which he, Mr Scott, gave

personally in respect of the borrowings by those companies. Those borrowings were

subject to variations on a number of occasions up to and including 1989. In addition, the claim arises out of a further borrowing by those companies and guarantees by Mr Scott of those borrowings on 27 May 1991. The essence of the claims made against

Beneficial Finance is that the various loan agreements were unconscionable and were

entered into as a result of misrepresentations made by officers of Beneficial Finance.

The proceedings in the Supreme Court were commenced by summons filed on 28

September 1992 and served upon Mr Scott pursuant to an order for substituted

service on 3 December 1992. Those proceedings have been the subject of 14 directions hearings in the commercial division, during which time Mr Scott was

represented by a solicitor and counsel. During the course of those various directions
hearings, opportunities were given to Mr Scott to file defences and cross-claims.

While those opportunities were avalled of, although not always in accordance with the

orders made, they have eventually resulted in Giles J making orders that the cross-

claim be taken to be removed from the file or alternatively struck out, and that

paragraphs 12 to 15 of that part of the document purporting to be a defence be

struck out, so that the matter is to proceed before the court on the basis of paragraphs 1 to 11 of the defence document. I should add at this stage that the

matter is set down for heamg in the Supreme Court on Wednesday 22 September
1993, that date having been set about 4 months ago.
There is no issue between the parties but that the claims made 'in the statement of
claim in this court could have been raised by Mr Scott in the Supreme Court
proceedings. In other words, there was no jurisdictional bar to his doing so, the only

bar having arisen as a result of orders made by the Supreme Court in relation to the

conduct of the proceedings.

There is nothing new to which counsel for the applicant has been able to take me

which would make this an appropriate case for this court to interfere with what are
the proper processes of the Supreme Court. In other words, there is no discretiona~y
matter to which he has directed my attention which makes it appropriate for me to
interfere with orders made by the Supreme Court, and its case management

procedures. In those circumstances I refuse the application.

-

I order that the applicant pay the respondent's costs of the motion.
I certify that this and the preceding 2 pages are a true copy of the Reasons for
Judgment herein of her Honour Justice Beazley.

Counsel for the Applicant: Mr. J. McGrath
Solicitors for the Applicant: John Dowling
Counsel for the Respondent: Mr. P. Wood
Solicitors for the Respondent: Mallesons Stephen Jaques
Date of hearing: 15 September 1993

Walter Robert Scott sought to restrain Beneficial Finance Corporation Limited from continuing with proceedings in the Supreme Court of New South Wales, which was a claim over loan agreements and personal guarantees made by Mr Scott for two companies, Shelldale Corporation Pty Limited and Golden Ponds Corporation Pty Limited. The application was made on the basis that Mr Scott had a counter-claim against Beneficial Finance Corporation Limited, arising from alleged unconscionability and misrepresentations by the Corporation’s officers in relation to the loan agreements.

The primary legal issue before the court was whether there were grounds for the Federal Court to interfere with the Supreme Court’s procedural orders. The court needed to determine if the Federal Court should intervene in the Supreme Court’s processes and if there was any discretionary matter that warranted such intervention. The court also had to consider whether the claims made by Mr Scott in the Federal Court could have been raised in the Supreme Court proceedings and whether there were any jurisdictional barriers to doing so.

Justice Beazley found that there was no jurisdictional bar to Mr Scott raising his claims in the Supreme Court proceedings. The only bar was due to the Supreme Court's orders regarding the conduct of the proceedings. Furthermore, the court found that there were no discretionary matters presented that would justify interference with the Supreme Court's processes and orders. Therefore, the application was refused.

The final order of the court was that Walter Robert Scott pay the respondent's costs of the motion. This decision underscored the principle that the Federal Court should not ordinarily interfere with the processes and orders of the Supreme Court unless there are compelling reasons to do so.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Counsel for the Applicant:	Mr. J. McGrath
Solicitors for the Applicant:	John Dowling
Counsel for the Respondent:	Mr. P. Wood
Solicitors for the Respondent:	Mallesons Stephen Jaques
Date of hearing:	15 September 1993