Carter & Carter v Temminck & Ors [1994] QSC 179

I "~o<,.~4(9~ ---- ..... ... .. - - ~ - .. --- - - 8 c q4(t 7~ !..]4• State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION "WILLIAMS J No 803 of 1994 HARRY CARTER and JUDITH LYNNE CARTER and JACOBUS JOHANNES TEMMINCK, FERDINAND PETRONI TEMMINCK and GRAEME BEREFORD ARBUCKLE BRISBANE .. DATE 21/06/94 JUDGMENT REV13EC CCPIES iSSUED S·tate r-~epcrunq Bureau ~ I CJ~U Date _ I +' _../.... Plaintiffs Defendants 4th Floor. The Law Courts. Geor(!e Street. Brisbane. Q. 4000 Telephone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 5 -- r 210694 HIS HONOUR: From in or about the year 1989 the male plaintiff and the defendants were engaged in certain business activities carried on by private companies with which they were associated in various ways. In about the year 1991 one of those companies, Kevlacat International Pty Ltd, required loan funds from Australia and New Zealand Banking Group Limited and the male plaintiff and his wife, the female plaintiff, were able to provide the real property security required by the bank. On 28 October 1991 the male plaintiff and each of the defendants signed a document which recited the bank facility, the mortgage over the land owned by the plaintiffs, and an agreement between the male plaintiff and each of the defendants. That agreement provided that the male plaintiff and the defendants would provide an indemnity and guarantee to the plaintiffs that each would pay a 11 proportionate share 11 of any amount which the plaintiffs were called upon to pay to the bank. That agreement also recognised that a formal indemnity would be drawn up and executed. That deed of indemn~ty was not executed until 15 September 1992. Clause 1 of that deed provided: 11 The indemnifiers jointly and severally agree to indemnify Carters against all loss suffered by them in the event that the bank exercises its rights in respect of the security in recovering moneys due to it by the company. 11 2 JUDGMENT 10 20 30 40 50 60 -- 2 of 5 -- 210694 The indemnifiers were defined in that deed as the male plaintiff and the three defendants. In the events which have happened the bank has called upon the plaintiffs to pay the outstanding moneys which as at today's date amounts in all to $197,896.92. The bank will take action pursuant to the security if that amount is not paid. The second and third named defendants have now agreed to meet their obligations under the deed of 15 September 1992 in terms which are acceptable to the plaintiffs. The first named defendant J J Temminck has disputed liability to indemnify as claimed. Essentially he asserts that his agreement was limited to a joint responsibility and that he was not severally liable to satisfy the obligation to the bank. In practical terms he asserts he could not be called upon to pay more than a one-quarter share of the total liability to the bank. His counsel conceded that he could not rely on non est factum. The available defences were essentially that the deed was procured by misrepresentation or alternatively the plaintiffs were estopped from denying that J J Temminck's liability was limited to a one-quarter share of the total liability to the bank. Each defence relied heavily on the different wording between the minute of 28 October 1991 and the deed of 15 September 1992. What is important in my view is that the defendant 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 5 -- 210694 J J Temminck has not shown an arguable defence to the proposition that he is at least liable to indemnify the plaintiffs with respect to one-quarter of any demand made by the bank pursuant to the security. The plaintiffs commenced proceedings by ordinary writ and then by notice of motion have sought the following final relief relying on Order 57 rule 2: "1. An injunction requiring the defendants to pay to the plaintiffs pursuant to a deed made between the plaintiffs and the defendants on 15 September 1992 all moneys due 10 and owing by the plaintiffs to Australia and New Zealand 20 Banking Group Limited pursuant to a bill of mortgage dated 14 April 1989 in favour of Australia and New Zealand Banking Group Limited and a contract of guarantee dated 29 October 1991 between the plaintiffs and Australia and New Zealand Banking Group Limited. 2. A declaration that pursuant to a deed made between the plaintiffs and the defendants on 15 September 1992, the defendants are obliged to indemnify the plaintiffs in respect of all moneys due and owing by the plaintiffs to 30 Australia and New Zealand Banking Group Limited pursuant to a bill of mortgage dated 14 April 1989 in favour of Australia and New Zealand Banking Group Limited and a contract of guarantee dated 29 October 1991 between the plaintiffs and Australia and New Zealand Banking Group Limited." The Full Court in re Dixon (1994) 1 Queensland Reports 7 40 approved and applied the reasoning in Mcintosh v. Dalwood (No 4) (1930) 30 State Reports New South Wales 415 at 418. The most relevant statement therefrom is the following: "If however the obligation on its true construction is an obligation to relieve a debtor by preventing him from having to pay his debt, equity will in such a case give so relief in the nature of quia timet relief and instead of compelling the party indemnified first to pay the debt, and perhaps to ruin himself in doing so, will specifically enforce the obligation by ordering the indemnifying party to pay the debt." 4 JUDGMENT 60 -- 4 of 5 -- --------------- 210694 That statement of principle is cited with approval in Meagher, Gummow and Lehane Equity Doctrines and Remedies 3rd Edition paragraph 2010. That is the legal principle on which the plaintiffs rely here. Though the relief claimed in the notice of motion refers to an injunction, the remedy is in effect analogous to specific performance. The terminology is not important. That principle applies here. The plaintiffs are entitled to require participation of all defendants before their property is sold to satisfy the indebtedness to the bank. On the material before me I am satisfied that the defendant J J Temminck has no defence to a claim for one-quarter of the amount demanded by the bank. Even on the document of 28 October 1991 J J Temminck is obliged to indemnify the plaintiffs to that extent. In the circumstances the plaintiffs are entitled to a declaration and orders analogous to specific performance with respect to the amount of $49,474.23. If the plaintiffs want to claim more that would have to be determined after a trial. HIS HONOUR: There will be an order as per initialled draft. 5 JUDGMENT 10 20 30 40 50 60 -- 5 of 5 --