Franks v Equitiloan Securities Pty Limited [2007] NSWSC 706

New South Wales Supreme Court

CITATION : Franks v Equitiloan Securities Pty Limited [2007] NSWSC 706

HEARING DATE(S) : 10, 11 April 2007 JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 11 April 2007

DECISION : Hearing adjourned. Costs reserved to hearing of application for leave to amend

CATCHWORDS : PROCEDURE – Adjournment – late application for leave to amend – where both parties responsible – when application to amend requires investigation of facts

LEGISLATION CITED : (CTH) Corporations Act 2001 s 444E

CASES CITED : Watts v Rodgers [2005] NSWSC 100 Meagher, Gummow and Lehane's Equity Doctrines & Remedies, 4th ed

Phillip Maurice Franks (plaintiff) Equitiloan Securities Pty Limited (first defendant) Equitiloan Limited (second defendant) PARTIES : Wayne McIvor (third defendant) Mark McIvor (fourth defendant) Equitiloan Limited (first cross-claimant) Equitiloan Securities Pty Limited (second cross-claimant) Windy Dropdown Pty Limited (cross-defendant)

FILE NUMBER(S) : SC 4333/00

COUNSEL : Mr M S Willmott SC w Mr M W Sneddon (plaintiff/cross-defendants) Mr M G McHugh (defendants/cross-claimants)

SOLICITORS : DTA Lawyers (plaintiff/cross-defendant) Tucker & Cowen (defendants/cross-claimants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRERETON J

Wednesday 11 April 2007

4333/00 Phillip Maurice Franks v Equitiloan Securities Pty Limited & 3 Ors JUDGMENT (ex tempore) 1 HIS HONOUR: These proceedings arise from commercial transactions in the late 1990s which broke down in late 2000 whereupon the original Plaintiff, Windy Dropdown Pty Ltd, commenced these proceedings to compel the First Defendant, Equitiloan Securities Pty Limited, to discharge a mortgage it held over Windy Dropdown's development site at North Curl Curl (being folio identifier 8/224940), the development of which was being financed by Equitiloan Securities. The mortgage was ultimately discharged not long after proceedings were instituted, but to procure that discharge Windy Dropdown was required to pay, under protest, an amount that included a component for what is often called penalty interest. Windy Dropdown pursued these proceedings to recover, by way of restitution: from Equitiloan Securities that claimed overpayment; and also from the Second Defendant Equitiloan Limited, an amount that it had paid to Equitiloan under a profit share agreement between Windy Dropdown, Equitiloan Securities and Equitiloan, being Equitiloan's profit share under that agreement in respect of lots 14 and 15 in the subdivision, which Windy Dropdown claims was paid under the mistaken apprehension that there was an enforceable obligation to make the payment when, so it is said, any such obligation was unsupported by consideration moving from Equitiloan. In due course, Equitiloan brought a cross-claim against Windy Dropdown for a further $722,000, said to be its profit share under the profit share agreement in respect of lots other than lots 14 and 15.