The Colonial Mutual Life Assurance Society Ltd v Growth Plus Investments Pty Ltd

[1990] FCA 781

JUQGMENT No. ?.X l / .... .?o..

THE F - COURT OF AUSTRALIA ) No. QG149 of 1990

ICT REGISTRY 1

E E N E W DIVUK!N 1

BETWEEN :	THE COLONIAL M W A L LIFE ASSURANCE
-

Applicant

AND :  8

First Respondent

AND : GRAHAMME McDOUGALL

Second Respondent

AND :  PEBORAH JANE McDOUGAU

Third Respondent

AND r PUNCAN FIMISTER FLYNN

Fourth Respondent

AND: PAULA MAREE FLYNN

~ i f t h Res

MINUTES OF ORDER RECEIVED

30JAN 1991

FaERAL COURT OF

JUDGE W I N G ORDER:	PINCUS J.	AUSTRALIA
-8

3. Ae against the first and fifth respondents, interest will run at 14 per cent on the first and third sums

W E R E M E 8 BRISBANE

1.    Judgment be entered as against the first, second and fifth respondents in respect of the amounts claimed in the application, viz. as against the first and fifth respondents, judgment will go for $217,771.07 and as against the second respondent the amount of the judgment will be $107,466.44.

2.    There be included in the sums for which judgment is given against the respondents interest at a rate of 14 per cent.

mentioned in the application (i.e. $76,800.44 and $110,304.63) from 15 November 199b to the date of judgment, 18 December 1990: and oh the sum of $30,666.00, interest will run at 14 per cent from 27 June 1990 to the date of judgment.

4.   As against the second respondent, interest will run on the sum of $76,800.44 at 14 per cent from 15 November 1990, and on the sum of $30,666.00 from 27 June 1990, in each case to the date of judgment, 18 December 1990.

5.   The first, second and fifth respondent6 pay the applicant's coats of and incidental to these proceedings, to be taxed.

6.   The matter be next mentioned on Monday, 11 March 1991 at 9.30 &.m.

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

a THE FEDERAL COURT OF AUSTRALIA	1	No. QG149 of 1990
1

RAL DIVISIQly 1

BETWEEN: THE COLONIAL MUTUAL LIFE ASSURANCE

NCIETY LIMITED

Applicant

AND: GROWTH INVESTMENTS PTY. LTD.

First Respondent

AND: m McDOUGALL

Second Respondent

AND: DEBORAH JANE McDOUGALL

Third Respondent

AND: PUNCAN FIMISTER FLYNN

Fourth Respondent

AND: PAULA MAREE FLYNN

Fifth Respondent

a:  PINCUS J.

M: BRISBANE

W:  18 DECEMBER 1990

EX TEMPORE REASONS FOR JUDGMENT

In this application the claims vary in that the first respondent, and also the third, fourth and fifth respondents have had claimed against them all the sum8 mentioned in the application, whereas the second respondent ha8 had claimed against him only two of those sums. The third and fourth respondents have not been served, but judgment ie sought to be entered today against the first, second and fifth respondents.

The matters which are pleaded in the statement of claim appear to me to be, at least in substance, made out by the material which is filed, and there is a letter produced which is Exhibit "Nu to the affidavit of Mr. Condon, which reinforces the view that the claim is one to which there is no

defence .

The fifth respondent, Mrs. Flynn, has appeared today and has produced an affidavit in which she says as follows:

"I am married to the Fourth Respondent, Duncan
Fimister Flynn who is a Director of the
First Respondent, Growth Plus Investments Pty
Ltd.

I have no position or power whatsoever in the First Respondent, Growth Plus Investments Pty Ltd, and I took no active part in the Company whatsoever.

I had no knowledge whatsoever of any of the events listed as Point 7 through to and including Point 20: and Point 22 through to

and including Point 24 in the Applicant's

Statement of Claim.

All of the facts, matters and circumstances herein deposed to are of my own knowledge true and correct.

I ask that no judgment for claims and interest as applied for by the Applicant be made against myself, the Fifth Respondent".

The paragraphs of the statement of claim which are
excluded from the category of matters which the deponent says
that she has no knowledge of, are 1 to 6 and 21. Paragraph 6
is the allegation of execution of an indemnity, a guaranteed
indemnity by each of the third, fourth and fifth respondents.

The position as to the fifth respondent is that she informs me that she was asked to, and did sign, the guarantee, but had no particular reason to do so, and I accept that she has no knowledge of the matters which she refers to in the affidavit.

The affidavit is drawn on the assumption that the Court has a discretion to decline to give judgment against a guarantor on grounds such as those mentioned by Mrs. Flynn, namely that she was lacking in power over the events in question as well as knowledge of them.

It seems clear that I have no right to refuse
judgment against Mrs. Flynn, on the ground she is legally

liable, and however much sympathy one may feel for a person in

dealt with in detail, because they are set out in substance	her unfortunate position, the Court must apply the law. The facts, as it seems to me, do not need to be
accurately in the statement of claim, so that I do not propose to repeat them. The reeult is that I propoee to give judgment as against the first, second and fifth respondents in respect of the amounts which are claimed in the application. That is, as against the first and fifth respondents judgment will go for the sum of $217,771.07 and as against the second respondent, the amount of the judgment will be $107,466.44. The applicant also seeks judgment for interest under s.51A of the Federal Court of Australia A c t 1976. Since there does not seem to be any good cause to the contrary, I propose to order that there be included in the sum for which judgment is given against the respondents, interest at a rate which I propose to fix.
The present medium term rate of interest on government loans has fallen a little below 12 per cent; that is, it has fallen fairly sharply recently. In my opinion an appropriate rate of interest is 14 per cent, and interest will be included at that rate.

A8 against the first and fifth respondents, interest

will run at that rate, namely 14 per cent, on the first and third sums mentioned in the application (that is the sum of $76,800.44 and the sum of $110,304.63) from 15 November 1990

to the date of judgment, that is 18 December 1990; and on the	sum of $30,666 interest will run at 14 per cent from 27 June
1990 to the date of judgment.
As against the second respondent, interest will run on the sum of $76,800.44 at 14 per cent from 15 November 1990, and on the sum of $30,666 from 27 June 1990, in each case to the date of judgment, which is today. The respondents must pay the costs of the applicant, that is the first, second and fifth respondents must pay the costs of the applicant to be taxed.

I will adjourn for mention on Monday 11 March 1991

at 9.30 a.m.

I certify that this and the

four preceding pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Pincus.

Date I R . I ' Z 90