Re Colin John Donkin and Heather Kaye Donkin v AGC (Advances) Limited< N [1991] FCA 359 (9 August 1991)

FEDERAL COURT OF AUSTRALIA

Re: COLIN JOHN DONKIN and HEATHER KAYE DONKIN
And: A.G.C. (ADVANCES) LIMITEDNo. G107 of 1989
FED No. 478
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Practice and Procedure - Claim for judgment for liquidated sum said to be owed pursuant to Finance Facility Deed - appointment of receiver under security - whether judgment for liquidated sum or order for the taking of accounts.

HEARING

BRISBANE
9:8:1991

Counsel and Solicitors for Applicants: A. Harrison QC with T. Somers

Instructed by: Hempenstall O'Donoghue

Counsel and Solicitors for Respondent: R. Morrison QC with J.C. Sheahan

Instructed by: Feez Ruthning

ORDER

That (a) an account be taken by the Registrar of (i) the amount or amounts owing by the applicants to AGC pursuant to the provisions of the Finance Facility Deed being Part of Ex. 32 (document 45A) and (ii) the amount or amounts owing by AGC to the applicants by reason of the appointment by AGC of receivers and managers of any assets of the applicants mortgaged to AGC and (b) that any amount, certified by the Registrar on taking the account to be due to any party, be paid to him, her or it.

Direct that, in the first instance, the accounts deal with matters other than AGC's claim for legal expenses incurred.

Costs reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

REASON FOR JUDGMENT (No. 6)
(On cross-claim)
By its cross-claim, AGC claims that, as at 5 June 1990, the amount owed by the applicants to it pursuant to the Finance Facility Deed was $2,782,126.28. AGC also claims other amounts by way of legal expenses incurred and by way of interest. AGC now claims judgment for these amounts.

2. In their defence to the cross-claim, the applicants raised a number of special defences which are no longer pressed. The applicants also question, in one respect, the manner in which the principal sum claimed is calculated. I will defer dealing with that contention at this stage.

3. The applicants also claimed that AGC had wrongly charged them with interest and withholding tax, but, as has been mentioned in the Reasons (No. 2), as corrected, this is no longer in issue.

4. The matter now remaining for resolution on the cross-claim arises in the following way. Pursuant to the powers given it by its securities, AGC has appointed receivers and managers in respect of the assets secured, including the hotel and nightclub businesses. The receivers have carried on these businesses. The applicants claim that (1) the receivers have received monies in the course of conducting these businesses and (2) the applicants should now be credited with the amount of these monies in ascertaining what is due from them to AGC. On behalf of the applicants, it is submitted that, at this stage, the case is thus one for an order for the taking of accounts, and is not a case for the entry of a money judgment for a liquidated sum.

5. By O.35 r.1 of the Federal Court Rules, the Court may pronounce such judgment or make such order as the nature of the case requires. By O.39 r.1(1), where a party claims an account or makes a claim which involves taking an account, the Court may (a) order that the account be taken and (b) order that any amount certified on taking the account to be due to any party be paid to him.

6. On behalf of the applicants, reliance is now placed upon the reasoning in Poulett v Hill (1893) 1 Ch 277 where it was held that a receiver being in receipt of rents, the mortgagee could not sue the mortgagor on the personal covenant in the mortgage to pay principal and interest by a specially endorsed writ for a liquidated sum. Reference was there made by Lindley L.J. (at 280) to Farrer v Lacy, Hartland and Co. (1885) 31 ChD 42 at 51 as to the appropriate form of judgment after the fusion of law and equity. Lindley L.J. said (at 280):

"Before the Judicature Acts, a personal order for payment
could only be obtained by bringing a common law action, in
which interest could only be recovered down to the date of
the writ, and a personal order for payment of the subsequent
interest could only be obtained by a fresh action; but now
that a personal order can be obtained for payment of what is
found due on taking the account, such second action is
unnecessary."

7. Poulett v Hill was followed in Lynde v Waithman (1895) 1 QB 180 where it was pointed out (per Kay L.J. at 187; per A.L. Smith L.J. at 188) that the mere fact that a receiver had been appointed does not mean that the plaintiff should not have leave to sign judgment, since the receiver may have received nothing. But if, as Lord Esher M.R. put it (at 184), "there is a plausible dispute as to the amount which the plaintiff is entitled to recover", summary judgment should not be allowed to be signed in the face of such dispute.

8. In my opinion, this reasoning is applicable, at least by analogy, in the present case. Here, it is common ground that, although AGC has been paid certain monies by the receivers (for which the applicants will receive credit), there have been other amounts received by the receivers which have not yet been paid over to AGC. It is not yet known what these amounts are.

9. In my view, the appropriate form of judgment to be entered on the cross-claim is not a judgment for a liquidated sum, i.e. for the amount owing under the Finance Facility Deed, but an order, pursuant to O.39 r.1 - (a) that an account be taken by the Registrar of (i) the amount or amounts owing by the applicants to AGC pursuant to the provisions of the Finance Facility Deed and (ii) the amount or amounts owing by AGC to the applicants by reason of the appointment by AGC of receivers and managers of any assets of the applicants mortgaged to AGC and (b) that any amount, certified by the Registrar on taking the account to be due to any party, be paid to him, her or it. I propose so to order and to reserve the costs of the cross-claim.

10. In order to achieve the reasonable expedition of the taking of the accounts, I direct that, in the first instance, the accounts do not deal with AGC's claim for legal expenses incurred; that is to say, the accounts should first deal with the other matters which arise so that those other matters may be the subject of an interim certificate by the Registrar.