Endormer Pty Ltd (in liq) v Australian Guarantee Corporation Ltd [2001] FCA 15 (11 January 2001)

Last Updated: 19 January 2001

FEDERAL COURT OF AUSTRALIA

Endormer Pty Ltd (in liq) v Australian Guarantee Corporation Ltd [2001] FCA 15

ENDORMER PTY LIMITED (IN LIQUIDATION) (RECEIVER & MANAGER APPOINTED) & ORS v AUSTRALIAN GUARANTEE CORPORATION LIMITED & ANOR

NG 3244 OF 1995

LINDGREN J

11 JANUARY 2001

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3244 OF 1995

BETWEEN:	ENDORMER PTY LIMITED (IN LIQUIDATION) (RECEIVER & MANAGER APPOINTED) FIRST APPLICANT
	KWIKDAY PTY LIMITED SECOND APPLICANT
	GLENN ROBERT JARRETT THIRD APPLICANT
	DAVID COLIN PATERSON FOURTH APPLICANT
	JARRETT HOLDINGS PTY LIMITED FIFTH APPLICANT
	ALINBOW PTY LIMITED SIXTH APPLICANT
AND:	AUSTRALIAN GUARANTEE CORPORATION LIMITED FIRST RESPONDENT
	PETER JAMES HEDGE SECOND RESPONDENT
AND:	AUSTRALIAN GUARANTEE CORPORATION LIMITED CROSS CLAIMANT
AND:	KWIKDAY PTY LIMITED FIRST CROSS RESPONDENT
	GLENN ROBERT JARRETT SECOND CROSS RESPONDENT
	DAVID COLIN PATERSON THIRD CROSS RESPONDENT
	JONNIE MACLEAN STIRLING PATERSON FOURTH CROSS RESPONDENT
	DEBORAH ALLISON JARRETT FIFTH CROSS RESPONDENT
	TRACEY CORALIE PATERSON SIXTH CROSS RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	11 JANUARY 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Execution of the writ of possession issued on 6 December 2000 be stayed until midnight on 18 January 2001.

2. The fourth cross-respondent pay the cross-claimant's costs of the motion brought by notice of motion filed by the fourth cross-respondent on 8 January 2001.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3244 OF 1995

BETWEEN:	ENDORMER PTY LIMITED (IN LIQUIDATION) (RECEIVER & MANAGER APPOINTED) FIRST APPLICANT
	KWIKDAY PTY LIMITED SECOND APPLICANT
	GLENN ROBERT JARRETT THIRD APPLICANT
	DAVID COLIN PATERSON FOURTH APPLICANT
	JARRETT HOLDINGS PTY LIMITED FIFTH APPLICANT
	ALINBOW PTY LIMITED SIXTH APPLICANT
AND:	AUSTRALIAN GUARANTEE CORPORATION LIMITED FIRST RESPONDENT
	PETER JAMES HEDGE SECOND RESPONDENT
AND:	AUSTRALIAN GUARANTEE CORPORATION LIMITED CROSS CLAIMANT
AND:	KWIKDAY PTY LIMITED FIRST CROSS RESPONDENT
	GLENN ROBERT JARRETT SECOND CROSS RESPONDENT
	DAVID COLIN PATERSON THIRD CROSS RESPONDENT
	JONNIE MACLEAN STIRLING PATERSON FOURTH CROSS RESPONDENT
	DEBORAH ALLISON JARRETT FIFTH CROSS RESPONDENT
	TRACEY CORALIE PATERSON SIXTH CROSS RESPONDENT
JUDGE:	LINDGREN J
DATE:	11 JANUARY 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 There is before the Court a motion which was brought by notice of motion filed before me as Duty Judge on 8 January. By the notice of motion, the fourth cross-respondent ("Ms Paterson" - to be distinguished from the sixth cross-respondent to whom I will not refer further) seeks an order staying orders made by Gyles J on 27 November in so far as they relate to a property at 22 Barclay Road, North Rocks ("the Property"), until further order of the Court.

2 I will give only a brief outline of the background to this matter which has, apparently, had a lengthy history.

3 The first respondent ("AGC") provided finance to the first applicant ("Endormer"). The finance was secured by deed of charge given by Endormer. Pursuant to the deed of charge, AGC appointed the second respondent as a receiver.

4 The other applicants are associated in various ways with Endormer. The fourth applicant (and third cross-respondent) ("Mr Paterson") was a director of Endormer. AGC cross-claimed for, relevantly, relief in respect of two properties which were mortgaged to AGC by way of collateral security for the finance provided by AGC to Endormer. The one that is relevant for this morning's purposes is a second mortgage over the Property which Mr and Ms Paterson gave to AGC at a time when their marriage had been dissolved. The Property was subject to a first mortgage to Westpac Banking Corporation ("Westpac").

5 Gyles J published reasons for judgment on 21 November. He dismissed Endormer's claim against AGC which was for damages. In relation to AGC's cross-claim, his Honour rejected defences of unconscionability, duress and undue influence and a claim that the second mortgage by Mr and Ms Paterson over the Property had been induced by the misleading and deceptive conduct of AGC. Importantly, he held that he did not have jurisdiction to hear and determine a claim made in their defence (to AGC's cross-claim) for relief under the Contracts Review Act 1980 (NSW).

6 His Honour did not make orders on 21 November but stood over the proceeding. He made orders on 27 November and they were entered on 6 December. In addition to dismissing Endormer's application, his Honour gave judgment for AGC against, relevantly, Mr and Ms Paterson for $1,637,278.30. He also ordered that Mr and Ms Paterson give AGC possession of the Property, that AGC have leave to issue a writ of possession, but that execution be stayed until 28 days from 27 November, that is, until 25 December.

7 On 18 December 2000, Endormer filed a notice of appeal in respect of the judgment of Gyles J. Apparently, if successful, the appeal would at best result in an award of damages to Endormer against AGC.

8 AGC caused a writ of possession to be issued on 6 December but apparently no steps were taken to execute that writ until after 25 December. Indeed, it was the receipt by Ms Paterson of a notice to vacate issued by the Office of the Sheriff and dated 3 January 2001 which prompted the filing of her present notice of motion on 8 January.

9 On 29 December 2000, that is, after the expiry of the 28-day period but prior to her receipt of the notice to vacate just mentioned, Ms Paterson filed a notice of motion returnable on 8 February seeking, relevantly, an order that the orders of Gyles J in relation to the Property be stayed until further order. That motion is not before the Court this morning.

10 The notice to vacate dated 3 January 2001 from the Office of the Sheriff advised Ms Paterson that the Sheriff was commanded to place AGC in possession of the Property and warned her that she must vacate without delay, and, in any event, no later than 10 am this day, 11 January, "otherwise action to evict will proceed without further warning."

11 Ms Paterson has read in support of her present motion an affidavit by her sworn 29 December 2000 and two affidavits by her sworn 7 January 2001. The affidavits give some background and go to the question of the hardship that would be suffered if she had to vacate today. Her daughter who is unmarried and lives with her, gave birth in the latter part of last year, and, with her baby, is still partly dependent upon Ms Paterson's resources.

12 The evidence shows that there is another proceeding pending in this Court, NG 367 of 1996, commenced by Westpac as first mortgagee against Mr and Ms Paterson in relation to the Property. According to Ms Paterson's affidavit that proceeding was heard by O'Connor J and judgment is reserved. I have been told that that proceeding raises a cross-claim for relief under the Contracts Review Act 1980 (NSW).

13 It seems to me that a striking consideration militating against the grant of a further stay this morning is that Ms Paterson has neither filed a notice of appeal from the orders of Gyles J nor filed an application under the Contracts Review Act 1980 (NSW) in the Supreme Court of New South Wales seeking relief in respect of the second mortgage which she and Mr Paterson gave to AGC. There is not even evidence that Ms Paterson intends to appeal on the basis of a draft notice of appeal.

14 In my opinion it is not shown that there is a serious question to be tried as to the granting of final relief to Ms Paterson with which execution of the writ would be inconsistent.

15 Ms Merkel of counsel, who has appeared on short notice for Ms Paterson and who was not briefed on the hearing before Gyles J, has put all that could be put in the difficult circumstances mentioned in favour of a further stay being granted. She submitted that in the other proceeding mentioned, O'Connor J may decide, contrary to what Gyles J decided in this proceeding, that this Court has jurisdiction after all to entertain a claim for relief under the Contracts Review Act 1980 (NSW). But this falls far short of a persuasive submission that arguably Gyles J erred. The way to give some force to such a submission is to appeal, but Ms Paterson has not done so.

16 When Gyles J was considering the orders to be made on 27 November 2000 a number of matters were advanced before him as to why there should be a stay of execution. One matter that was raised was that of the time needed to vacate (this appears to have been raised chiefly in relation to the property the subject of the other mortgage to AGC (by a Mr and Mrs Jarrett) but seems to have been taken into account by his Honour in relation to Ms Paterson as well).

17 Another matter mentioned to his Honour was the pending proceeding NG 367 of 1996 before O'Connor J. This was mentioned in relation, in particular, to the claim for relief under the Contracts Review Act 1980 (NSW). But it seems to me that the grant of the stay for 28 days was, in the light of Gyles J's decision that he lacked jurisdiction to determine that claim, simply the allowing of time for Ms Paterson to appeal or to apply under that Act in the Supreme Court of New South Wales, according to the legal advice to be given to her. As I said earlier, Ms Paterson has taken neither step.

18 I should record that counsel who appeared for Ms Paterson before Gyles J did not read in support of his client's position the affidavit that she had filed in this proceeding. I have not seen that affidavit but either it did or did not include evidence appropriate to support a claim for relief under the Contracts Review Act 1980 (NSW). If it did not, the claim apparently could not have been supported in any event before Gyles J. If it did, counsel for Ms Paterson apparently decided that the issue was not worth pressing before his Honour.

19 Another matter put by Ms Merkel this morning is that there is an arguable issue as to whether his Honour had jurisdiction to determine AGC's cross-claim at all in so far as it related to the Property. This submission has not been developed by counsel and my impression is that it lacks merit. Apparently it was not put by counsel who appeared for Ms Paterson on the hearing before Gyles J. AGC's claim to enforce the second mortgage from Mr Paterson, a former director of Endormer, and his former wife, seems to me to be part of the single justiciable controversy of which Endormer's head claim against AGC for damages also forms part. But be this as it may, again no notice of appeal has either been filed or even prepared formulating any such submission, and the submission has not descended to detail or included reference to any authorities.

20 I raised during the course of the hearing the question of the time it would take for Ms Paterson to vacate the Property. Although there is no affidavit evidence on this question before the Court, Ms Merkel obtained instructions from her client to the effect that Ms Paterson thought it would take her about a month to obtain alternative accommodation. This is a matter with which, of course, the legal representatives of AGC had not come prepared to deal today since there had not been any affidavit evidence filed and served in support of an extension of time on the basis of such considerations of practical necessity.

21 With some misgiving, I think that the appropriate course is to grant a stay for a short period of seven days on the basis that I infer that some few days would be involved in vacating. That is as far as I would be prepared to go and in granting the seven-day stay I am relying upon considerations of practical necessity, not the various grounds that have been relied on by Ms Paterson.

22 Accordingly, on the motion brought by notice of motion filed 8 January 2001 I order that execution of the writ of possession issued on 6 December 2000 be stayed until midnight on 18 January 2001, and that Ms Paterson pay AGC's costs of that motion.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated: 18 January 2001

Counsel for the Applicant:	Ms J. F. Merkel
Counsel for the Respondent:	Mr S. J. Rushton SC and Mr R. J. Brender
Solicitor for the Respondent:	Clayton Utz
Date of Hearing:	11 January 2001
Date of Judgment:	11 January 2001