Re Francis C Mason Pty Ltd; Francis Charles Mason and , Judith Ashley Mason v Citicorp Australia Limited [1984] FCA 389 (13 December 1984)

FEDERAL COURT OF AUSTRALIA

Re: FRANCIS C. MASON PTY. LTD.; FRANCIS CHARLES MASON and ,
JUDITH ASHLEY MASON
And: CITICORP AUSTRALIA LIMITED
No. VG323 of 1984
Trade Practices

COURT

THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.

CATCHWORDS

Trade Practices - misleading or deceptive conduct - refusal of injunction to restrain respondent from proceeding with Supreme Court action - delay by applicants in taking steps to relieve alleged misleading conduct - application for leave to appeal refused.

Trade Practices Act 1974, ss. 52, 87

HEARING

MELBOURNE
13:12:1984

DECISION

This is an application for leave to appeal against an order by Northrop J. made on 20 November 1984 refusing to restrain the respondent, Citicorp Australia Limited, from proceeding in its action in the Supreme Court of Victoria against two of the applicants, Francis Charles Mason and Judith Ashley Mason. The action in the Supreme Court was commenced by writ issued 22 June 1984 and served on the applicants early in July 1984.

2. The action is for money alleged to be due under an agreement in writing dated 2 September 1981 made between Citicorp Australia Pty Limited of the one part and the applicants, Francis Charles Mason and Judith Ashley Mason, of the other part.

3. The making of the agreement is not denied. The action is for money alleged to be due by the applicants to the respondent under that agreement, the principal of moneys advanced under the agreement and interest alleged to be due thereon.

4. The applicants commenced a proceeding in this court against the respondent to that proceeding and a company, Francis C. Mason Pty. Ltd. is a party as the third applicant.

5. The applicants allege inter alia misleading conduct on the part of agents of the respondent connected with the making of the agreement and misleading conduct connected with events occurring during the performance of the agreement.

6. The applicants claim relief against the respondent in respect of that misleading conduct of several kinds. One kind of relief sought is orders in exercise of powers conferred by section 87 of the Trade Practices Act to vary the agreement.

7. One specific order specified in the application as sought is an order that the interest payable under the agreement as from the commencement thereof be reduced to such amount as the court deems fit, but Mr. Dalton, who appeared with Mr. Sutherland for the applicants, indicated that an order might also be sought varying the agreement with respect to the provisions concerning repayment of the principal sum agreed to be advanced or some part thereof.

8. Last July a summons for final judgment was issued in the Supreme Court action, and on 3 September a notice of motion for an order restraining Citicorp from proceeding in the Supreme Court action was filed. Mr. Justice Northrop considered a volume of material on affidavit and exhibits, and came to the conclusion that he was not satisfied that for the purposes of the motion the claims made in this proceeding by the applicants Francis Charles Mason and Judith Ashley Mason are genuine.

9. He expressed the opinion that those claims have been made and the proceedings in this court have been instituted for the purpose of delaying the Supreme Court proceedings and without any real basis to support the federal claims. Upon those conclusions his Honour rested his refusal of the motion. Mr. Dalton has undertaken a careful argument designed to show that his Honour was in error in the conclusions which I have just summarized, and Mr. Dalton also put forward arguments designed to show to me in what respects his Honour had misapprehended the evidence and had failed to give particular parts of the evidence the significance and weight that they deserved.

10. He sought in that way to show there was a reasonable chance of establishing on appeal, if leave to appeal were granted, that his Honour's conclusions were incorrect, and that the order which should have been made was an order granting the motion. Mr. Dalton conceded that it was for him to show not only that, but also that the order made, if allowed to stand, would work a substantial injustice to the applicants or to one of them. He pointed to the derogatory nature of the findings which his Honour made, but I do not think he contradicted the suggestion I made in argument that the applicants would have an opportunity to repudiate that derogatory judgment at the trial of the proceeding which would not be so very much later than the hearing of an appeal.

11. He maintained that if Citicorp Australia Limited is not restrained from proceeding in the Supreme Court action there is a real liklihood that Citicorp Australia Limited, the respondent, will obtain a judgment in that action. He submitted that once a judgment had been obtained no order varying any of the terms of the agreement in this proceeding by this court would displace the judgment. He suggested that the applicants would suffer the injustice in those circumstances of being unable to avoid the obligation to pay the amount claimed in the Supreme Court action, and would be unable, or at least might very well be unable, to obtain any relief in the proceeding in this court which would counterbalance or nullify that disadvantage.

12. That submission raises perhaps some difficult questions. It may be that if a judgment can be obtained in the Supreme Court action, and if it be satisfied by payment by the two applicants or by one of them, they or that applicant could obtain an order pursuant to section 87(2)(c) in this proceeding that Citicorp Australia Limited refund that money.

13. It may be that that could not be achieved. However, whatever prejudice the applicants may suffer in consequence of the respondent obtaining judgment in the Supreme Court action is, in my opinion, principally due to their own failure to take steps to seek timely relief in respect of the misleading conduct which they allege.

14. All of this conduct had occurred before the end of 1983 and had been exposed to the minds of the applicants before the end of 1983 for what, in their contention, is misleading conduct causing damage and disadvantage to them.

15. A number of steps and actions have been taken under the agreement since the making of the agreement and performance of the agreement has involved substantial changes of position for each of the parties to the agreement. Further, it seems to me in the highest degree unlikely that the powers conferred by section 87(2)(b) would be exercised in this case having regard to the circumstances to which I have referred.

16. I think it in the highest degree improbable, therefore, that the applicants will suffer by reason of the entry of judgment in the Supreme Court action the kind of prejudice Mr. Dalton outlined. There was a further prejudice to which he referred, that is to say he indicated his instructions that his clients might well be brought to bankruptcy or might have to suffer the processes of execution of such a judgment as the respondent seeks in the Supreme Court action.

17. There was not any evidentiary material in support of those statements but I do not rely upon the absence of evidence. I think that the appropriate time for the court to consider whether or not prejudice of that kind should be avoided by the court's order, if the court has power to make an order obviating that kind of prejudice, is at a later stage.

18. Of course, it is possible that the court may come to the conclusion that after judgment there is a deficiency of power to restrain execution of the judgment. I am inclined, as at present advised, to think that power would not be lacking - but I shall assume in the favour of the applicants for the purpose of this application that there would be lacking power to restrain the respondent from levying execution on the judgment. Even when that consideration is put into the scales in favour of the applicants in their application for leave to appeal, I do not think that it tips the scales in their favour.

19. It is in my opinion a very grave step to take to interfere by injunctive order with the proceedings in another superior court and while there are several risks of prejudice to the applicants if Mr. Justice Northrop's order stands the risks are not shown, in my opinion, to be so grave, nor the prejudice, if suffered, so unjust to them that the application should be granted.

20. Among the considerations that must be weighed are, I think, particularly the delay in taking steps to restrain the proceedings in the Supreme Court from the time when the Supreme Court writ was served. Mr. Dalton pointed out that it was not very long after service of the writ that indications were given by or on behalf of the applicants that they were going to maintain a claim for relief in this court which would in their contention make it inappropriate that the Supreme Court proceedings be allowed to go on in the meantime.

21. In my view, the delay from early July until 14 August, when the application instituting this proceeding was issued, and the further delay until 3 September, when the motion for a restraining order was issued, is a serious delay and one that has to be weighed in the exercise of the discretionary power to grant or withhold leave to appeal.