Dalgety Farmers Ltd & Dalgety Rural Finance Ltd v McRachnal & Ors [1991] QSC 310

TRA~@~f PT OF PROCEEDINGS State Reporting Bureau, 4th F1oor, The Law Courts, George Street, BRISBANE, 0. 4000 Tel. (07) 227.4360 . (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 CHAMBERS MASTER WHITE DALGETY FARMERS LIMITED A.C.N. 004 034 917 and· DALGETY RURAL FINANCE LIMITED A.C.N. 000 034 917 AND LACHLAN MCRACHNAL MCCLYMONT, ROSEMARY DUFF MCCLYMONT, GREGORY LACHLAN MCCLYMONT, RANALD ALEXANDER MCCLYMONT, and JULIE ANNAH NASH DALGETY FARMERS LIMITED A.C.N. 004 034 917 and DALGETY RURAL FINANCE LIMITED A.C.N. 000 034 917 AND LACHLAN MCRACHNAL MCCLYMONT, ROSEMARY DUFF MCCLYMONT, GREGORY LACHLAN MCCLYMONT, RANALD ALEXANDER MCCLYMONT, and JULIE ANNAH NASH, 1 ~I' ~ 1550 of 1991 PLAINTIFF DEFENDANTS 1549 of 1991 PLAINTIFF DEFENDANTS -- 1 of 9 -- 111091 JUDGMENT BRISBANE .. DATE 11/10/91 2.30 P.M. JUDGMENT 10 10 20 20 30 30 40 40 50 50 60 60 Govt P<inter, Old. 2 -- 2 of 9 -- 10 20 30 40 50 60 111091 JUDGMENT MASTER: These are two applications for summary judgment; No 1549 of 1991, being for $11,124,011.66 together with interest for moneys lent by the plaintiffs to the defendants; and No 1550 of 1991, being to recover possession of land. Both applications have been considered together, and what are submitted to be triable issues are common to both. The defendants are members of the McClymont family - parents, two adult sons and an adult daughter who variously live on three rural properties in the Longreach, Richmond district. The properties are known as "Arizona", "Baratria", and "Burleigh" and are the subject land in action No 1550 of 1991 of which the plaintiffs seek possession. The two plaintiff companies, I shall refer to compendiously as Dalgetys, this later. though something more needs to be said about Briefly in early 1988, the defendants sought and were given finance by the plaintiffs to purchase the cattle property "Burleigh" and to pay out their indebtedness to their previous financier. The defendants had been clients of Dalgetys for at least 11 years and Mr McClymont Senior in the vicinity of 30 years. Up until 1988, the defendants had not obtained principal finance from Dalgetys but had operated a working account with them. This is a seasonal lending account which is similar to an overdraft facility. The interest rate varied from time to time and was secured by stock mortgages. 3 10 20 30 40 50 60 -- 3 of 9 -- 111091 JUDGMENT The loan which the defendants sought from Dalgetys was for 6.4 million for three years maturing on 14 March 1991 with interest fixed at 14.5 per cent per annum. Interest which accrued quarterly was debited to the defendant's working account. The loan was secured by a mortgage over the 10 10 subject properties and by way of stock mortgages. Dalgetys advanced a further loan to the defendants of 1.5 million in November 1989. It was for a fixed sum of one year maturing on 9 November 1990 and interest at 20. 5 per cent per annum.· Interest outstanding was to become part of the principal, 20 20 although this is in dispute. This was secured as was the earlier loan. When that loan matured, it could not be repaid and was debited to the working account. To 29 September 1991, the amounts owing on the account were $3,843,022. The earlier loan was unable to be repaid on its 30 30 maturity date. The defendants swear t_hat thei_r understandin~ was that on _ maturity date :the 102.n wou1d s:L.c1ply be refinanced. Documentation shows it to .. be a possibility. Funding was agreed to be provided by Dalgetys after the 40 40 maturity date to_ permit the defendants to carry on their cattle business and the terms and conditions were set out in a deed of variation dated 23 April 1991. · By that deed, the defendants agreed to offer for sale by tender the three properties, the tenders to close on 30 May 1991. The 50 50 properties were not sold by tender and Dalgetys: made demand upon the defendants by notice dated 11 July 1991 for the whole of all moneys lent, including interest and those moneys advanced under the working account. By notice dated 29 August 1991, a demand to deliver up possession of the 60 60 Govt. Printer, Qld. 4 -- 4 of 9 -- 10 20 30 40 50 60 ·111091 JUDGMENT properties was given. The defendants raise what are submitted to be three triable issues: 1. That the plaintiff, Dalgety Farmers Limited, is not a licensed money lender. 2. That an agreement collateral to the deed of variation was entered into whereby there would be no enforcement action taken against the defendant until after the sale of the three properties. 3. What may be succinctly described as an Jμnadio type defence with respect to the role of William Hart in the preparation of the mortgage documents. As to 1, Dalgety Rural Finance Pty Ltd has been granted an exemption from registration as a money lender. The position with respect to Dalgety Farmers Limited (it being exempted from compliance with ss 7 and 8 of tl)e Banking Act_ (Canmonweal th)) was · th·at · the defendants dealt wi-.th Dal getys afld ··wer-e: - not concerned to ascertain with which corporate capacity they were doing business. Mr Quinn for the defendants submits that this is a triable issue, it being plain that Dalgety Farmers are not registered and are not exempt under the Money Le11;ders Act (now repealed but conceded to apply to the. relevant transaction). Whatever the conclusion here, it would seem that the defence, one would have thought, could only go to the question of the interest charged, see s 4C (3) of the Money Lenpers Ac~. Govt. Printer, Qld. 5 10 20 30 40 50 60 -- 5 of 9 -- 111091 JUDGMENT The position of Dalgety Farmers is that if any advances of money were made by it to the defendants they were [£lade · by .: i.t as . ineidental to their -role as· stock and station agent : ... They rely upon Brown v Br.oo~~ (1971) 125 CLR 275. The general assertion of Mr Francis, 10 10 20 the finance manager of the plaintiffs, that Dalgety Farmers was/is not a money lender, I have not let into evidence as seeming to me to swear to a matter that must necessarily be regarded in issue. Europe~n ~s~an Bank ~Kat~ik~lis (1988) 1 Qd.R. 42, a decision of the Full Court of this Court held that the question of whether a party was a money lender was a matter for the trial, but it must be said that that was decided on facts vastly different from the present. The second matter raised as a triable issue is that of the 20 30 30 40 50 60 collateral agreement. The defendants argue that the deed of variation does not contain all the terms of the agreement reached between the parties in 1991. The letter from the defendants'·tnen solicitor, Mr William Hart, of 15 March 1991 to the pla~ntiff s ,an(:l the reply from Dalgetys of 20 March 1991 with 40 the deed of variation was said- ·rt, constitute the agreement:be:tweerr the parti s. They have been exhibited to Mr McClymont's affidavit, and I do not propose to set them out here. Mr McClymont further deposes to a= variation. :to that agreement which is set out .in'.:pq,:i;-as 13 to 16 of his affidavit which would put the date after which demand might be made at least until the end of August, if not-at some indeterminate time in the future. However, on 4 July 1991, Dalgetys. sought to have the defendants acknowledge their indebtedness by way of an Govt. Printer. Qld. 6 50 60 -- 6 of 9 -- 10 20 '111091 JUDGMENT acknowledged defau~ t of the tenns of the deed of variation which 0 they declined to do and the notice of demand by the plaintiffs upon the defendants was made on 11 July 1991. Even though Mr Morris for the plaintiffs has submitted that this was an unlikely agreement being open-ended and for which the plaintiffs could draw no comfort as to when their money might be pai~ in the context of rural properties and the special relationship which existed between the defendants and the plaintiffs, it cannot be said to be so unlikely as to have no prospects of success. There can, in my opinion, though be no defence of estoppel raised flowing from the continued payment of the $60,000 per month working expenses to the defendants by the plaintiffs after the June conversations which were referred to above and set out in Mr McClymont's affidavit. It must be said that a great deal is 10 20 30 30 40 50 60 in dispute about those particular conversations. The other triable issue raised is a somewhat unhappy one. The defendants have raised, through their counsel, an Amadio type defence. They say that clause 16 of the mortgage is oppressive, that it should have been drawn to their attention by Mr William Hart, who had been himself or in previous generations of solicitors through his firm, solicitors for the defendants or some of them for at least 40 years. The defendants thought that he was acting on a general retainer to look after their interests. He sent them the mortgage documents for execution and they signed, happy in the belief that he had considered their interests. But Mr Hart says in his affidavit: "5. I did not act on behalf of the defendants in Govt. Printer, Old. 7 40 50 60 -- 7 of 9 -- 10 111091 JUDGMENT relation to those mortgage documents. 6. I did not advise the defendants in detail of the true meaning and effect of the documents and, in particular, I gave rio advice as c.o the effect of the attornment clause set out in clause 16 of that document, and how it purports to empower Dalgety's to take possession of the mortgaged premises whether or not there is any default by the mortgagor." The clause in question allows the plaintiffs, as Mr Hart has said in his affidavit, to enter and take possession of the lands mortgaged without default and without notice. It would 10 20 20 30 40 so appear to be inconsistent with ss 276 and 279 of the Land Act 1962. It would appear then on Mr Hart's material that he was the agent of the plaintiffs for the purposes of the mortgage documents. Whatever actions the defendants might have against Flower & Hart, there seems no basis for any action based on unconscionable conduct which could be attributed to Dalgetys. I should also say that there is a dispute about the capitalisation of interest, but I find that unnecessary to decide (although I should say in passing that the documents would seem to permit this) in view of the decision which I propose. In conclusion, I find that triable issues have been raised with respect to the money lending issue and with respect to the varied or collateral agreement deposed to by Mr McClymont in June of this year. In due course, it may well be that the money lending issue becomes the only issue if a certain course is taken by the plaintiffs. If that is so, then it could become quite a short issue for trial. The 30 40 50 ~ ~ Govt. Printer, Qld. 8 -- 8 of 9 -- 10 30 40 50 60 111091 iIUDGMENT decision of the Court is then that the defendants have unconditional leave to defend. In the absence of any submissions to the ccntrary, I would propose that the costs of and incidental to this application be costs in the cause. It is further ordered that the defendants deliver their defence and counterclaim on or before 4 p.m. on 25 October 1991. It is further ordered that the plaintiffs deliver their reply and answer on or before 4 p.m. on 8 November 1991. Hovi. Printer, Old. 9 10 20 30 40 50 60 -- 9 of 9 --