we + ae (4G IN THE FEDERAL COURT OF AUSTRALIA Not for Distribution QUEENSLAND DISTRICT REGISTRY QLD. G141 of 1986 GENERAL DIVISION BETWEEN : ELTRAN PTY. LIMITED AND: AND: AND: AND: AND: AND: AND: AND: First Applicant PREMAYDENA PTY. LTD. Second Applicant CRESWELL PLACE PTY. LTD. Third Applicant ADAM'S ROW PTY. LTD. Fourth Applicant CARTER LANE PTY. LTD. Fifth Applicant BERNARD STREET PTY. LTD. Sixth Applicant ORACA PTY. LTD. Seventh Applicant BINON PTY. LTD. Eighth Applicant TREVOR RONALD KING Ninth Applicant WESTPAC BANKING CORPORATION First Respondent JOHN GEOFFREY ALLPASS and ALAN RAPHAEL TUTTLE JUDGE MAKING WHERE MADE: DATE: ORDER : Second Respondents MINUTES OF ORDER SPENDER J. BRISBANE 24 MARCH 1987. THE COURT ORDERS THAT: 1. That leave be given to the first respondent to issue proceedings in the Supreme Court of Queensland against the first to ninth applicants herein claiming the sum of CHF 15,054,794.91 and JPY 173,885,173 in respect of debt and interest thereon from 31 October 1986 to the date of judgment at the rate claimed ain the writ, on the undertaking of the first respondent that until trial or further earlier order, to: (a) proceed with a summary judgment application in the Supreme Court of Queensland against the first to ninth applicants for the said sums and to execute on any judgment obtained on such application to the extent only of the sum being the difference at the date of judgment between the amount claimed by the first respondent in the Supreme Court proceedings and the amount sought to he set off by the first to ninth applicants in these proceedings; and (b) apply to the Supreme Court of Queensland for a mareva injunction against the assets of the ninth applicant herein. nN The relief sought in paragraphs 2 and 3 of the Notice of Motion filed 9 March 1987 be adjourned. 3. Liberty to apply on three days' notice. 4. Costs on the Motion filed on 9 March 1987 be the first and second respondents' in the Federal Court action G141 of 1986 costs in the proceedings. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALTA ) ) QUEENSLAND DISTRICT REGISTRY ) QLD. G141 of 1986 ) ) GENERAL DIVISTON BETWEEN : AND: AND: AND: AND: AND: SPENDER J. BRISBANE 24 MARCH 1987. ELTRAN PTY. LIMITED First Applicant PREMAYDENA PTY. LTD. Second Applicant CRESWELL PLACE PTY. LTD. Third Applicant ADAM'S ROW PTY, LTD. Fourth Applicant CARTER LANE PTY. LTD. Fifth Applicant BERNARD STREET PTY. LTD. Sixth Applicant ORACA PTY. LTD. Seventh Applicant BINON PTY. LTD. Eighth Applicant TREVOR RONALD KING Ninth Applicant WESTPAC BANKING CORPORATION First Respondent JOHN GEOFFREY ALLPASS and ALAN RAPHARL TUTTLE Second Respondents REASONS FOR JUDGMENT Westpac Banking Corporation moves for an order that it have leave to issue proceedings in the Supreme Court of Queensland against the first to ninth applicants in the principal proceedings in this Court, claiming the sum of CHF 15,054,794.91 Swiss francs and JPY 173,885,173 Japanese yen in respect of debt, and interest thereon from 31 October 1986 to the date of judgment at the rate claimed in a specially endorsed writ exhibited to the affidavit filed on the motion by Martin Kriewaldt, of Westpac's solicitors, subject to Westpac undertaking that, until the trial or further earlier order in the Federal Court, 1t will proceed with a summary judgment application against the first to ninth applicants for those sums and execute upon any judgment obtained on such application to the extent only of the sum being the difference at the date of judgment between the amount claimed by 1t in the Supreme Court and the amount sought to be set off by the first to ninth applicants in the Federal Court proceedings. It wishes also to apply to the Supreme Court of Queensland for a mareva injunction against the assets of the ninth applicant. The Notice of Motion has to be understood in the context of interlocutory proceedings in which I gave judgment on 16 October 1986. At that time, Eltran Pty.Limited ('Eltran'), sought declarations that it was not in default under the terms of a loan agreement under which Westpac had advanced sums to Eltran. The payment of those sums has been secured by mortgages granted by the second to eighth applicants and guaranteed by the ninth applicant. In purported pursuance of powers given by clause 13 of the facility agreement, on 2 September 1986, the Manager of Corporate Banking of Westpac wrote to Eltran requiring it to deposit aosum of $A7,723,212.00 within five banking days to Westpac at its branch at Creek Street, Brisbane, and to provide the bank with security over those moneys. In Federal Court proceedings commenced on 3 October 1986, Eltran and the other applicants sought a declaration that it was not in default under the terms of the loan agreement. Moreover, as a result of alleged defaults by Westpac concerning forward currency contracts, the applicants pleaded in the Federal Court Statement of Claim that Eltran 1s andat all material times has been entitled to set-off in equity a total amount of $A9,944,027.00 against the amount of the advance from the first respondent. It alleged that the indebtedness of Eltran to Westpac as at 2 September 1986 was a sum equivalent to $A6,472,171.00. Alternatively, Eltran said that it had suffered loss in an amount equivalent to the difference between $8,000,000.00, being the Australian dollar equivalent of the advance referred to as the amounts advanced in Swiss francs and Japanese yen as at the date of such advance, and the present Australian dollar equivalent of CHF 14,552,725.78 Swiss francs and JPY 167,672,000 Japanese yen. It further claimed that it was entitled to set-off as against the present Australian dollar value of the advance for the loss or damage that is referred to as the difference between the $A8,000,000.00 and the present day equivalent of the sums in Swiss francs and in Japanese yen. On 16 October 1986, I granted injunctions until trial or earlier order against the first and second respondents from proceeding with the Supreme Court of Queensland actions, Nos. 4002 of 1986 and 4052 of 1986 and I made orders restraining the second respondents from exercising their powers of sale and made orders defining their powers as receivers of the properties. The formulation of those powers was as suggested by counsel for Westpac. The basis of those orders and a more detailed history of the relevant events and claims are set out in those reasons of 16 October 1986, and I need therefore not refer to them in any greater detail. Since that time, there have been a number of significant developments. First, the second respondents in the principal proceedings, Mr. Allpass and Mr. Tuttle, were reappointed as receivers and managers in respect of the properties of the second to eighth applicants. Those reappointments are dated 17 November 1986. Moreover, because of difficulties which I adverted to in the Reasons of 16 October 1986 concerning the validity of the letter of demand of 2 September 1986, in October, a further demand, pursuant to clause 13 of the facility agreement, was made on Eltran and the material shows that there has been non-compliance with that demand and with other demands since made. In addition to default concerning the notice pursuant to clause 13 of the agreement issued after my Reasons on 16 October 1986, it is said there have been numerous other defaults, some based on the non-payment of interest, others in respect of non-production of profit and loss statements which requirement is referred to in the facility agreement letter, and is said to bea condition of that agreement; and further, pursuant to the mortgage documents, it is said that there has been a breach of the obligations therein to produce lease documents to Westpac. It is unnecessary to refer in any more detail to the defaults alleged. They are set out in great particularity in a schedule exhibited to the affidavit of John Michel Young filed on 9 March 1987. The material shows that there has been no payment by any of the applicants to Westpac concerning any of those alleged defaults. Based on those defaults and, it seems, in conformity with the spirit of the orders that I made on 16 October, 1986, Westpac seeks leave to pursue, by way of summary judgment, its claim in respect of debt and interest thereon against Eltran and its rights against the other applicants but only so far as the difference between that sum and the ambit of the claims made by the applicants in the Federal Court proceedings. Strictly speaking, leave is not necessary, in that the interlocutory relief I granted related to those named actions, but I appreciate that, consistent with at least the spirit of those interlocutory orders, this motion is brought. One aspect on the motion can be disposed of briefly. It appears that there has been, to put it no higher, confusion between the parties as to whether or not afurther amended statement of claim by the applicants would be issued in the Federal Court proceedings. An amended statement of claim was, consistent with the orders that I made on 16 October 1986, filed on 24 October 1986, but the correspondence and other communications between the solicitors for the various parties since then suggests that there has not been agreement as to what course was going to be pursued so far as the pleadings in the Federal Court proceedings are concerned. I regard the history of the litigation, so far as that aspect is concerned, as neutral as to the fate of the motion. Having regard to questions of costs and efficiency, one can readily accept that 1t is preferable that matters which arise out of a single controversy should be litigated in a non-fragmentary way. I have to consider whether, given the competing factors which clearly appear in this present case, the preferred method of litigation, namely, that 1t should be once and for all, should be departed from. In the present case, no prejudice to the applicants in the Federal Court is suggested if leave as sought by Westpac is granted, other than that costs might be exacerbated. Eltran asserts that the matters on which it relies for its contentions in those parts of the Statement of Claim to which I have earlier referred, has the consequence that Eltran is not, and was not, at any relevant time in default under the loan agreement. I indicated on 16 October 1986 my difficulty with accepting that submission, and I must say that time and further thought has not brought any illumination. The arguability of that contention nonetheless is, of course, a very real question on any application for summary judgment, whether that be in the Supreme Court under 0.18 r.1 of The Rules of the Supreme Court or ona similar course being followed on an anticipated cross-claim by Westpac in Federal Court proceedings, an application for summary judgment being pursuant to 0.20 r.1 of the Federal Court Rules. The provisions of the rules of the Supreme Court and of the Federal Court, while quite similar, do possess differences. Order 18 r.1(1) of the Supreme Court makes quite explicit the question of onus. It in terms provides:- "When a defendant appears toa writ of summons specially indorsed under Order 6, Rule 7, the plaintiff may, on affidavit made by himself or by any other person, verifying the facts on which the claim, or the part of a claim, to which the application relates 1s based and stating that in the deponent's belief there is no defence to that claim or part, as the case may be, apply toa Judge for judgment against that defendant. The Judge may thereupon, unless the defendant satisfies him with respect to the claim, or part of the claim, to which the application relates that there 1s a question in dispute which ought to be tried or that there ought for some other reason to be atrial of that claim or part, give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed." Order 20 r.1 of the Federai Court Rules, so far as is presently relevant, provides simply that:- "Where, in relation to the whole of any part of the applicant's claim for relief, there 1s evidence of the facts on which the claim or part is based, and - (a) there is evidence given by the applicant or by some responsible person that, in the belief of the person giving the evidence, the respondent has no defence to the claim or part; the applicant may move on notice for such judgment for the applicant on that claim or part and the Court may pronounce such judgment and make such orders as the nature of the case requires." The onus, which is clearly cast on the defendant in the Supreme Court of satisfying the Court with respect to the claim or part of the claim that there is a question in dispute which ought to be tried, is not so clearly cast on the respondent if at all, so 1t seems to me in any event, under the Federal Court Rules. There are other differences which are referred to in a short paper by Mr. A.J.H. Morris, Summary Judgment in the Federal Court, to be found in the Queensland Law Society Journal Vol.16 No.4 at p.241 et seq.. In any event, Westpac, one infers from the Motion, wishes to pursue summary judgment in the Supreme Court. One aspect I regard as significant in that respect is s.95 of the Property Law Act 1974. As I earlier indicated, Westpac claims that, because of defaults committed by Eltran in respect of the loan facility agreement, there has been an acceleration in the requirement by Eltran to pay the principal sum. Section 95 of the Property Law Act 1974, as amended, essentially provides for relief against the provision for acceleration of payment. Section 95(3) is in these terms:- "The mortgagor, in any proceedings brought to enforce the rights of the mortgagee or brought by the mortgagor himself, may - (a) upon undertaking to the Court to perform any such covenant or obligation; and (b) upon tender or payment into Court of such instalment, apply to the Court for relief from the consequences of such default; and the Court may grant or refuse relief ..." "Court" in that section means "the Supreme Court or any Judge thereof". I am by no means certain that the power, in terms conferred on the Supreme Court or a Judge thereof by that section, would be able to be exercised by a Federal Court in its accrued or associated jurisdictions. What provisions are made applicable pursuant to the Judiciary Act 1903, have been the subject of decisions, the effect of which are not altogether clear. What provisions of a kind similar to those contained in s.95 of the Property Law Act 1974 are possessed by a Federal Court in 1ts accrued jurisdiction, again, are matters of concern and, for my part in any event, are not capable at the moment of a clear definition. While Lamb v. Moss 49 A.L.R. 533 was not concerned with anything like the question with which I am concerned, there is a useful discussion of some aspects of this question at p.56l. Fundamentally the question here is one of impression as to which course would best serve the interests of justice. Ido not think it materially matters in terms of the costs of litigation whether the claim of Westpac in respect of the amounts claimed to be owing in Swiss francs and Japanese yen is pursued 10. in the Supreme Court as a claim or in the Federal Court by way of a cross-clain. Westpac, by its Motion, seeks to pursue an application for summary judgment in the Supreme Court. Given the stage and the state of the pleadings in the Federal Court matter, that course can be done at least as expeditiously as a similar application could be pursued in the Federal Court. My reservations about the power of the Federal Court in litigation before it to exercise the rights conferred expressly on a Supreme Court by s.95 of the Property Law Act 1974 is a relevant factor in my decision. Similarly, in respect of the application for a mareva injunction, while I have a clear view as to whether such a power exists in the Federal Court, the matter is subject to a reserved decision by the High Court in Jackson v. Sterling Industries Limited. The power of the Federal Court to grant a mareva injunction was the subject of argument before the High Court in that case and the Court reserved its decision on1ll February 1987. That 1s another aspect which prudence suggests should be taken into consideration. Therefore, I propose to grant the leave sought in the Notice of Motion. I wish to hear from the parties as to the form of the orders. | certify that thic- £3: preceding Rages are a true copy of the reasons for Judgment herein of His Honour Mr. Justice Spender '| We 8DeredtH AA 3-2-7 Assoclate Dated