Re Mgica Limited v Mid-West Finance (Act) Pty Limited; Growth Industries Pty Limited (In Provisional Liquidation); Permanent Trustee Australia Limited and Hambros Australia Limited [1991] FCA 46 (25 February 1991)

FEDERAL COURT OF AUSTRALIA

Re: MGICA LIMITED
And: MID-WEST FINANCE (ACT) PTY LIMITED; GROWTH INDUSTRIES PTY LIMITED (In
Provisional Liquidation); PERMANENT TRUSTEE AUSTRALIA LIMITED and HAMBROS
AUSTRALIA LIMITED
No. WA G134 of 1990
FED No. 53
Judgments and Orders

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Judgments and Orders - variation of default judgment - slip - discretionary order sought - basis not apparent on pleadings - not advanced on original motion for judgment - limited variation ordered.

Trade Practices Act 1974 s.87

Federal Court Rules, O.35 r.7

HEARING

PERTH
25:2:1991

Counsel for the Applicant: Mr C.R. Einstein QC and Mr J.T. Gleeson

Solicitors for the Applicant: Northmore Hale Davy and Leake

Counsel for the Third Respondent: Mr J.D. Heydon QC and Mr J.L.B. Allsop

Solicitors for the Third Respondent: Mallesons Stephen Jaques

ORDER

On the applicant's motion filed 19 February 1991:

Paragraph 1 of the judgment given on 15 February 1991 be varied
by adding the words "and any further loans approved pursuant to
the agreement of 28 July 1989 and on subsequent occasions
referred to in para.11 of the amended statement of claim".

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

DECISION

On 15 February I gave judgment by default in favour of the applicant as against the first and second respondents. The terms of that judgment included an order that:

"...it be declared that the applicant is not obliged
under the Guarantee Agreement between the applicant
and the first, third and fourth respondents dated 30
June 1989 to pay to the first respondent any amount in
relation to the loan agreements entered into between
the first respondent and certain borrowers, full
particulars of which loan agreements are contained in
Schedule A to the amended statement of claim."

2. Other orders were made as part of that judgment which it is not necessary to refer to for present purposes. Relief had also been sought as against the first and second respondents relating to an agreement of 28 July 1989, and the basis for that part of the claim is explained in the reasons for judgment of 15 February. The orders sought were pursuant to s.87 of the Trade Practices Act 1974 declaring the whole of the 28 July 1989 agreement and the amendments thereto to be void or alternatively void ab initio. I declined to give that relief, and I did so for reasons which were dealt with at p 16 of the judgment of 15 February where I said:

"I consider in the circumstances that it is appropriate
to award such declaratory relief as is necessary to
conclude the issue so far as it relates to the rights
inter partes of MGICA, Mid-West and Growth Industries.
In my opinion, however, in circumstances where like
issues remain to be litigated with other parties, I
should not go beyond what is strictly necessary to
achieve that result. Declarations of misleading or
deceptive conduct and breach of fiduciary duty do go
beyond that limit. It is sufficient that MGICA is not
obliged under the Guarantee Agreement and that it have
its money judgment, interest and costs. As to the
relief sought under s.87, it seems to me that the
operation of the agreement of 28 July 1989 as pleaded
is dependent upon that of the Guarantee Agreement.
The claim for s.87 relief in respect of that agreement
becomes academic once the obligations under the
Guarantee Agreement are found to have been
extinguished."

3. And the relevant effect of the agreement of 28 July, as pleaded, and subsequent letters affecting its operation, was to bring additional loans under the umbrella of the Guarantee Agreement. It was for that reason, as indicated, that I thought it sufficient to deal with the Guarantee Agreement. I accept, however, that the loans referred to in para.1 of the order made in my judgment are limited to those contained in Schedule A to the amended statement of claim. It was an oversight on my part that having declined to award the s.87 relief in relation to the agreement of 28 July 1989, I did not extend the category of loans covered by the Guarantee Agreement to include those which had been brought into it, in effect, by the agreement of 28 July 1989 and subsequent correspondence. That is a slip which, in my view, can be corrected under the provisions of O.35 r.7. And I propose to correct the terms of para.1 to deal with that slip. By a motion filed on 19 February 1991 counsel for the applicant nevertheless seeks the orders claimed in the amended application in relation to the 28 July 1989 agreement by reason of certain other aspects of the agreement which do not appear explicitly from the pleading. In my opinion, the basis upon which the case was put in the amended statement of claim, and the basis upon which I understood the case to be put to me on the motion for default judgment, was concerned with the agreement of 28 July 1989 and subsequent correspondence so far as it had the effect of bringing additional loans under the operation of the Guarantee Agreement. In my opinion, the relief that is to be granted at this stage in accordance with the principle I enunciated in the judgment of 15 February should be limited to that which extinguishes the obligations under the Guarantee Agreement as between the applicant and the first respondent in relation to the loans under that agreement and those brought into it by the later agreement and correspondence. And that, I think, will also dispose for the moment of any contention that there has been, as it were, a departure from a concession made that the orders sought could not be relied upon as against the third respondent. On that point, counsel for the applicant has accepted that he now contends no more than that the third respondent cannot deny the fact that the judgment exists as against the first and second respondents. I don't know what edifices of argument can be built upon that rather drab foundation but that is a matter of law which can, if necessary, be debated at a subsequent time. It does not need to affect any discretion that I may now exercise and in particular would not move me to rescind the order in para.1 as counsel for the third respondent, on an oral motion in the course of argument, asked me to do.

4. On the question of whether, at some later time, further relief should be given in the exercise of the discretionary powers conferred by s.87 of the Trade Practices Act 1974 as against the first respondent in relation to the agreement of 28 July 1989, it is not necessary for me to deal with that now. If the applicant wishes to argue at some later stage that it is open to the Court to make such orders and that such orders ought to be made, then that can be dealt with in its appropriate factual context. At this stage, all that I propose to do is vary the terms of para.1 of the judgment given on 15 February by adding to it the words which I have already outlined to counsel, i.e. "and any further loans approved pursuant to the agreement of 28 July 1989 and on subsequent occasions referred to in para.11 of the amended statement of claim".