Warner, A.A. v Elders Rural Finance Ltd

[1992] FCA 827

i IN THE FEDERAL COURT i

OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION	No. G147 of 1992
BETWEEN:

ADRIAN S L A N WARNER AND JULIE FRANCES WARNER

Appellants bv Appeal

Respondents bv Cross-Appeal

m:  ELDERS RURAL FINANCE LIMITED

First Respondent bv Appeal

First Appellant bv Cross-Appeal

AND:

- KEITH RICHARDSON

Second Respondent bv Appeal

Second Appellant bv Cross-Appeal

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AND:  QUEENSLAND INDUSTRY DEVELOPMENT CORPORATION

Third Respondent by Appeal

JUDGE MAKING ORDER:	Cooper J.
WHERE MADE:	Brisbane
DATE OF ORDER:	3 November, 1992

MINUTES OF ORDER

THE COURT ORDERS:

1.        The application for an interlocutory injunction is dismissed.

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

2.        The applicants pay the costs of the first and second respondents of the notice of motion to be taxed.

IN THE FEDERAL COURT

OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION	No. G147 of 1992
BETWEEN:	I

ADRIAN ALLAN WARNER AND JULIE FRANCES WARNER

Appellants bv Appeal

Res~ondents bv Cross-Appeal

ELDERS RURAL FINANCE LIMITED

First Res~ondent bv Appeal

First Apoellant bv Cross-Appeal

KEITH RICHARDSON

Second Respondent bv Appeal

Second Appellant bv Cross-Appeal

QUEENSLAND INDUSTRY DEVELOPMENT CORPORATION

Third Respondent bv Appeal

C O W :	Cooper J.
PLACE :	Brisbane
DATE:	3 November, 1992

REASONS FOR JUDGMENT

This is an application for an injunction pending determination of appeals filed by the applicants, restraining

the first and second respondents exercising powers under a

stock mortgage by entering upon the applicants' land and

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taking possession of livestock, the property of the

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applicants.

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The applicants filed their originating application

and statement of claim on 28 July, 1992. The statement
claim was struck out by Beaumont J. on 27 August, 1992 as

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disclosing no cause of action and as being embarrassing in	v ,
form. His Honour gave the applicants leave to re-plead.
On 23 September, 1992 I refused to grant an injunction to restrain the first and second xespondents from exercising their powers under the stock mortgage. In reasons given at that time I expressed the view that the new draft statement of claim disclosed no serious question to be tried.
On 7 October, 1992 Beaumont J. struck out the new statement of claim as disclosing no cause of action. On that date His Honour granted leave to the applicants to appeal against his order striking out the statement of claim and against my refusal to grant interlocutory relief on 23 September, 1992.
Notice of appeal was filed on 8 October, 1992 and the appeals, on present indications, will be heard by the Full Court in Brisbane in the sittings commencing 16 November, 1992.

The applicants submit that :-

(a)	The first and second respondents intend to attempt to exercise their rights under the stock mortgage before the appeals can be heard. This is not disputed by the first and second respondents.
(b)	The applicants will suffer irredeemable loss if their flock of wool growing sheep is taken and they will thereby be deprived of their livelihood.
(C)	There is no practical benefit in moving the sheep now as, it is asserted from the bar table, the property has recently had 1 - 1.5 inches of rain. The first and second respondents do not concede that it has rained or that if it has rained, the sheep are no longer at risk from drought conditions on the applicants' property.
(d)	As a matter of law the first and second respondents ought not to be permitted to exercise rights under the stock mortgage where the validity of that mortgage is the issue on appeal and ultimately in the action if the applicants succeed on appeal.

The first and second respondents submit that the applicants have no reasonable prospect on appeal and that the appeals are frivolous.

They further submit that if the applicants

ultimately succeed in the action, the first and second respondents would be exposed to an award of damages for trespass and wrongful conversion of the livestock. In that sense they submit that any appeal would not be rendered nugatory as the applicants would receive a money sJm '

representing the loss of the sheep and any other consequential
damsgen flowing f r o m an unlaw4ul inCerfersncs wiCh the land

and sheep. They submit that there is no eviaence before the Court that their security is other than at risk of diminution as it is submitted was the situation on 23 September, 1992 when the original application for an injunction was ultimately

re£ used.

The applicants have not offered to pay in the money claimed under the stock mortgage or otherwise secure payment of it. The applicants contend that they are not at law obliged to do so.

I have considered the grounds of appeal. The matter alleged in. paragraph 5 ( c ) waa not argued before me on 23 September, 1992. In any event, there is evidence that demand was made by the respondents after the original application was filed and before the initial application for injunction was heard.

The other grounds of appeal raise the matters

considered by me and Beaumont J. The substance of the grounds

was struck out, and which re-appeared in the form of a claim	contained in the applicants' original statement of claim which
under section 52 of the Trade Practices Act has been considered by other judges in this Court.

In Fisher v. West~ac Bankinu Corporation (Unreported

WAG 81 of 1992: 18 August, 1992) French J. in Perth struck out a statement of claim raising the same issues as not disclosing a cause of action. So too ~'~oughlin J. in Adelaide in Arnold v. State Bank of South Australia (SG 49 of 1992; 24 August, 1992) similarly struck out the statement of claim. In Brisbane, Spender J. has similarly struck out a statement of claim raising the same issues.

Having regard to the views taken by a number of judges to the issues raised, I am not persuaded that the applicants have any reasonable prospect on appeal or that there is a serious question to be tried. The applicants' grounds in the statement of claim struck out by Beaumont J. are wider than the original statement of claim and raise allegations under section 52 of the Trade Practices Act not included in the original statement of claim. Nevertheless, I

am not persuaded that the applicants have any reasonable

prospect on appeal in relation to these additional grounds. In striking them out, Beaumont J. also must have been of the view that the additional allegations did not disclose a cause of action.

In coming to my decision I take into account the

following factors :-

(a)	The first and second respondents intend to act under a stock mortgage executed by the applicants which prima facie entitles the first and second respondents to take the action it foreshadows.
(b)	There are, in my view, no reasonable prospects of success on appeal and there is not a serious question to be argued.
(C1	If the exercise of the powers under the mortgage are shown in this litigation to have been unlawful, the first and second respondents will be exposed to a claim for damages for all consequential loss flowing from the wrongful exercise of the alleged powers under the stock mortgage. In this sense, the applicants' cause of action in the principal application and on appeal will not be rendered nugatory. I am conscious that the immediate impact of taking possession of the sheep will be to substantially interfere with the applicants' conduct of their wool growing business on their property.
(d)	On the state of the evidence before me today, I am unable to say whether or not the sheep are at risk by remaining on the property or by being moved.

(e)	The first and second respondents, in the absence of the payment of the money sum claimed due under the stock mortgage or the provision of alternative security, and in the absence of some demonstrably arguable vitiating factor affecting the mortgage, are prima facie entitled to exercise the right to enter onto the property and take the stock in execution of their security for the debt claimed.
(f)	The applicants are not in a position to give any worthwhile undertaking as to damages.

On balance, I am of the opinion that the application

ought to be refused.

I am conscious of the fact that the applicants appeared in person and that they see the conduct of the first and second respondents as arbitrary, unreasonable, unfair and prejudicial to the applicants' interests. However, the application must be determined in the proper exercise of a discretionary judgment applying the principles applicable to the exercise of the discretion. Those principles are set out

in Erinford Pro~erties	Ltd. v. Cheshire County Council 119741
1 Ch. 261.
THE COURT ORDERS:

1.        The application for an interlocutory injunction is dismissed.

The applicants pay the costs of the first and second

respondents of the notice of motion to be taxed.

I certify that this and the six (6)

preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Cooper.

Date:  3 November, 1992

~ E I ~ d l l i t z r t ?

Associate

Applicant: in Person:	Mrs. J. Warner
Counsel for the Respondent:	P. Applegarth
Solicitors for the Respondent:	Corrs Chambers Westgarth
Hearing Date:	3 November, 1992, Brisbane