JUDGMENT No. 412 SE IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G254 of 1988 GENERAL DIVISION ) BETWEEN: NORTHERN METALS PTY LTD Applicant AND: WESTPAC BANKING CORPORATION Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 8 JULY 1988 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. the application for an interlocutory injunction be dismissed; the defence and counter-claim, if any, be filed and served by 29 July 1988; the reply and answer, if any, be filed and served by 15 August 1988; discovery on affidavit be given by 12 September 1988; inspection take place by 19 September 1988; the matter be set down for further mention on 3 October 1988 at 9.30 a.m.; the applicant pay the respondent's costs of and incidental to today's proceedings, to be taxed, other than the costs which are reasonably attributable to the directions hearing; foevoovedd 8. the costs of the directions hearing be costs in the proceedings. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. 8. the costs of the directions hearing be 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 AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G254 of 1988 GENERAL DIVISION ) BETWEEN: NORTHERN METALS PTY LTD Applicant AND: WESTPAC BANKING CORPORATION Respondent PINCUS J. 8 JULY 1988 EX TEMPORE REASONS FOR JUDGMENT This is an application for an interlocutory injunction. The applicant seeks an injunction restraining the defendant from applying certain moneys held on interest-bearing deposit to the credit of the applicant, in reduction of the applicant's obligation to repay other sums. The applicant borrowed money in a foreign currency, namely Japanese yen, under arrangements made in 1982, and from then until the present has made various agreements with the respondent relating to that borrowing. The borrowing was secured by some real property which was sold, and the resultant cash was lodged with the respondent on interest-bearing deposit as security, or part security, for the debt. The most recent agreement relating to the interest-bearing deposit was made in January 1988 and appears to contemplate the continued holding of the interest-bearing deposit as security. Indeed, the applicant does not claim that the deposit is not held as security. This application was begun on 1 July 1988 and it seeks to obtain relief under the Trade Practices Act 1974 in respect of misleading and deceptive conduct concerning these overseas loan arrangements and connected matters, and also seeks relief under the general law concerning the same subject-matter. The current anxiety about the interest-bearing deposit is caused by the circumstance that it matures on 14 July 1988, that is in six days time, as does another large slice of the obligation which the applicant has to the respondent in respect of the foreign currency borrowings. The applicant's position, as explained by its counsel, is that it is not seeking by the interlocutory injunction to obtain payment of the moneys 1n the interest-bearing deposit, but wishes to ensure that the respondent's liability to it under the interest-bearing deposit arrangement is not set off by the respondent against the applicant's liabilities to the respondent. Mr Williams Q.C., who led for the applicant, explained that the applicant was concerned about the possible application of the time limit set out in s.82(2) of the Act, viz. 3 years. The point seems to me to be this, that 1f the respondent is not allowed to set off the money due by it to the applicant against the liability the other way, then the respondent will presumably have to sue for the money due to it. I would add that on the figures given to me the respondent might have to do that anyway, whether it uses the interest-bearing deposit or not. Then the reasoning seems to be that if the respondent is forced to sue for the money due to it, the applicant may be able to avoid any problem arising from the three-year time limit by taking advantage of the doctrine enabling it to use, by way of defence, a damages claim closely connected with the circumstances giving rise to the debt sued on. For example, in Henriksens Rederi A/S v. T.H.Z. Rolimpex [1974] Q.B. 233 Lord Denning, M.R., said at p.249: ""l.. I think that when a contractor agrees to perform services for a fixed or ascertainable sum and, nevertheless, by his negligence in performing those services, causes loss or damage to the employer, then when the contractor sues for the agreed price, the employer can set up the loss or damage in diminution or extinction of the price. Such setting up is matter of defence, legal or equitable, and is not subject to a time-bar. It is not barred by the statute of limitation, so long as the main action itself is timely." I therefore comprehend, I think, the point of the present application. If the injunction sought is granted, 1t 1s not clear to me what it would oblige the respondent to do. The respondent's claiming to set off the money due on interest-bearing deposit would presumably be signified to the applicant by its declining to pay on the due date, or thereafter, the sum lodged on interest-bearing deposit. Then, presumably, the applicant would sue the respondent for that debt, the respondent would raise by way of set-off the money due to it, and in answer to that the applicant would advance the claim made in these proceedings, seeking to rely upon the exception to the general application of time limitation statutes to which I have already referred. Perhaps the effect of granting such an injunction as is sought would be to force the respondent, instead of merely defending the applicant's claim for the money in the interest bearing deposit, to sue itself. It may be that, looking at the matter more deeply, the practical effect of the injunction if granted would be to oblige the respondent to pay, so perhaps this claim for an interlocutory injunction should be regarded as a claim for an order requiring the respondent to pay over the money; but Mr Williams Q.C. made 1t clear that is not what 1s sought. One basic rule about all ainjunctive relief, and particularly interlocutory injunctions, 1s that the effect of them should be clear, so that if contempt proceedings are taken the Court will not then have for the first time the task of defining what it 1s that the person enjoined was supposed to do or not do. If an injunction is granted in the terms here sought, it would prevent the respondent from applying the moneys in reduction of the applicant's obligation to it. But as I see it, the respondent can take its stance in the matter without doing anything physically on 14 July and can simply decide that it will not pay, with the consequences, presumably, that if the applicant says that is wrong it will have to sue. It is in my opinion clear that an interlocutory injunction should not be granted, if for no other reason than that the effect of granting one would be obscure. A subsidiary reason is that I am by no means convinced that the applicant's position with respect to availing itself of the doctrine exemplified by the authority I have mentioned is worsened in the absence of an injunction such as is sought. I therefore refuse the application for an interlocutory injunction. The orders will be, apart from the orders dismissing the claim for interlocutory relief, that the defence and counter-claim, if any, be filed and served by 29 July 1988, reply and answer, if any, be filed and served by 15 August, discovery on affidavit by 12 September, inspection by 19 September, and the Matter be set down for further mention at 9.30 am on Monday, 3 October. The order will be that the applicant pay the respondent's costs of and incidental to today's proceedings, to be taxed, other than the costs which are reasonably attributable to the directions hearing. As to the latter, they will be costs in the proceedings. { certify that this andthe AL preceding pages are a true copy of the reasons for judgrrent herein of His Honour Mr, Justice Pincus yeters 4 Associate