IN THE FEDERAL COURT OF AUSTRALIA } QUEENSLAND DISTRICT REGISTRY ) QLD G67 of 1986 GENERAL DIVISION ) BETWEEN: CHRISTOPHER CAMPBELL KENNARD and MARGARET BETH KENNARD Applicants AND: A.G.C. (ADVANCES) LIMITED First Respondent AND: SYDNEY FRANCIS DEMPSTER and KRYSTYNA EMILIA DEMPSTER Second Respondents AND: A.G.C, (ADVANCES) LIMITED Cross Claimant AND: CHRISTOPHER CAMPBELL KENNARD and MARGARET BETH KENNARD Cross Respondents MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 28 NOVEMBER 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: On the first respondent's undertaking not to assign or otherwise deal with its interest as mortgagee in Bill of Mortgage No. C513523, (1) The said Bill of Mortgage be varied by addition of the z i | following clause: "Notwithstanding anything herein contained: (i) the mortgagee shall bring no suit nor take any other step to enforce any personal liability of Christopher Campbell Kennard and/or Margaret Beth Kennard hereunder but may take any other step available to 1t as mortgagee hereunder; (11) any sum accruing to the mortgagee in consequence of a sale of the mortgaged property shall (after deduction of any reasonable expenses of sale) be held by it as to one-half for Christopher Campbell Kennard and Margaret Beth Kennard and paid to them on demand." (11) The first respondent not execute a contract for sale of the land subject to the said mortgage or submit the same for sale by public auction without, in the former case, giving the applicants seven days written notice of its intention to do so and the price and terms, and, in the latter case, giving the applicants seven days written notice of its intention to do so and the reserve price. (i1i) The first respondent pay the costs of the applicants of and incidental to these proceedings, including reserved costs, to be taxed. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G67 of 1986 GENERAL DIVISTON ) BETWEEN: CHRISTOPHER CAMPBELL KENNARD and MARGARET BETH KENNARD Applicants AND: A.G.C. (ADVANCES) LIMITED First Respondent AND: SYDNEY FRANCIS DEMPSTER and KRYSTYNA EMILIA DEMPSTER Second Respondents AND: A.G.C. (ADVANCES) LIMITED Cross Claimant AND: CHRISTOPHER CAMPBELL KENNARD and MARGARET BETH KENNARD Cross Respondents PINCUS J. 28 NOVEMBER 1986 SUPPLEMENTARY REASONS FOR JUDGMENT I gave my reasons in this case and set out my proposed order on 12 November. Subsequently I heard counsel as to the form of order, and indeed as to its substance. Counsel for the applicants, Mr. Muir, contended that I should simply set aside the mortgage so far as it related to the applicants. Considering the case from the point of view of rectification, there is, as I said at my reasons (pp.14, 15), room 2. for doubt as to what order would best reflect the basis on which the applicants were led to execute the mortgage. Difficulties of that sort do not appear to preclude the possibility of rectification: Re Butlin's Settlement Trusts (1976) 1 Ch. 251 at 260, M.R. Hornibrook (Pty.) Ltd. v. Eric Newham (Wallerawanq) Pty. Limited (High Court 2 September 1971). The latter case, which is reported on another point in 45 A.L.J.R. 523, 15 one in which the Court appears to have given precise effect to the parties' general intention that there be a "rise and fall" clause in a sub-contract by framing a suitable one. But whatever the scope of the Court's discretion to frame a suitable order exercising equitable jurisdiction, 1t appears to me clear enough that there is a wide discretion under s.87 of the Trade Practices Act to make an order designed to achieve a result which 1s fair and may be hoped to Operate 1n a practical way. As Mr. Hanson Q.C. for the first respondent pointed out, simply to reduce i1ts security to a mortgage over the Dempsters' half-interest in the land creates practical difficulties; what was loosely described in the evidence as the applicants' equity in the land can be protected otherwise. I see no reason to assume that the first respondent, which proposes to cause the land to be sold, would do so in a way which breached its legal obligations as mortgagee; I am confident that it is, or will be made, conscious of the fact that to do so would be likely to bring it back before a court. On the question ef registration of the variation mentioned in my reasons, I understood that counsel did not regard that as necessary, on the basis that the first respondent is willing 3. to undertake not to assign or otherwise deal with its interest as mortgagee. On the The orders will therefore be as follows: first respondent's undertaking not to assign or otherwise deal with its interest as mortgagee in Bill of Mortgage No. C513523, (1) (21) it is ordered: That the said Bill of Mortgage be varied by addition of the following clause: "Notwithstanding anything herein contained: (1) the mortgagee shall bring no suit nor take any other step to enforce any personal liability of Christopher Campbell Kennard and/or Margaret Beth Kennard hereunder but may take any other step avallable to 1t as mortgagee hereunder; (il) any sum accruing to the mortgagee in consequence of a sale of the mortgaged property shall (after deduction of any reasonable expenses of sale) be held by ait as to one-half for Christopher Campbell Kennard and Margaret Beth Kennard and paid to them on demand." That the first respondent not execute a contract for sale of the land subject to the said mortgage or submit the same for sale by public auction without, in the former case, giving the applicants seven days written notice of its intention to do so and the price and terms, and, in the latter case, giving the applicants seven days written notice of its intention to do so and the reserve price. 4. (iii) That the first respondent pay the costs of the applicants of and Incidental to these proceedings, including reserved costs, to be taxed. + certify that thic and the 3 preceding paoes are a truacisy of sha reasons for Judtrrent horoia of Hs Henour Mr Justice Pincus va eee a yee oo Asseciate Dated 26 VleserCir /98€, Counsel for the Applicant: Mr. J.D. Muir Solicitors for the Applicant: McCullough and Robertson Counsel for the Respondent: Mr. R.V. Hanson Q.C. with Mr. D.C. Andrews Solicitors for the Respondent: Henderson Lahey Trout Bernays Dates of Hearing. 6, 7, 13 November 1986