COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Gummow(1), Hill(2) and Cooper(3) JJ

CWDS
  Practice and Procedure - application for leave to appeal from orders
striking certain paragraphs in amended statement of claim - no basis to
certain claims to relief - leave to replead other claim - previous decision on
issues of law followed by primary Judge.
  Arnold v State Bank of South Australia (Full Court of the Federal Court, 18
November 1992, unreported).
  Warner v Elders Rural Finance Limited (Full Court of the Federal Court, 26
March 1993, unreported).

HRNG
ADELAIDE, 11 May 1993
#DATE 11:5:1993
  Applicant for leave appeared in person.
  Counsel and solicitors for the respondents:  Dr R.J. Baxter instructed
                                               by Finlaysons.

ORDER
THE COURT ORDERS THAT:
    (1) The application for leave to appeal be dismissed.
    (2) The applicant pay the costs of the respondents.
Note:  Settlement and entry of orders is dealt with by Order 36 of the Federal
Court Rules.

JUDGE1
GUMMOW J  This is an application for leave to appeal from orders made by a
Judge of this Court (O'Loughlin J) on 12 February 1993.  His Honour ordered
that certain paragraphs be struck out of the applicant's amended statement of
claim, which he had filed on 26 October 1992.
2.  However, the primary Judge also ordered that the applicant be at liberty
to file and serve a further amended statement of claim in terms not
inconsistent with the reasons published by his Honour on that day.
3.  The effect of the orders made by the primary Judge was to leave
unchallenged paras 1, 2, 3, 4, 5 and 6.  Paragraphs 7, 8, 9, 10, 11, 13, 14
and 15 dealt with what his Honour described as "the book entry credit
argument".  His Honour ordered that those paragraphs be struck out.  He also
ordered that para 12 be struck out.  This was not because the paragraph was
fatally bad in law as was the position with the book entry credit allegations.
The point here was that para. 12 alleged to claim in negligence which, whilst
defective as it stood, should not be struck out with no opportunity to replead
it.
4.  Paragraph 16 also was struck out.  This raised a point as to the proper
execution of the mortgage in question under the statute law of South
Australia, in particular, the Real Property Act 1886 (S.A.), ss. 246, 247,
267, 268 and 269.  The issue already had been dealt with by a Full Court of
this Court in Arnold v State Bank of South Australia (18 November 1992,
unreported).  O'Loughlin J referred to this decision in his reasons for
judgment as indicating why para. 16 raised a point which was bad in law and
therefore should be struck out.
5.  Paragraphs 17 and 18 remained.  They plead a case of misrepresentation.
Paragraphs 19-21 were struck out.  They dealt with what was said to be the
binding effect in the legal system of this country of Magna Carta and of
certain passages in the Bible. Allegations to like effect had been dealt with
in Arnold's Case supra. They have been dealt with further, since the delivery
of O'Loughlin J's reasons for judgment, by the Full Court in Warner v Elders
Rural Finance Limited (26 March 1993, unreported).
6.  In addition to what is said in these authorities as to the complete lack
of substance in what I might call the Magna Carta point, I would refer also to
what was said by Wilson J in the High Court in Re Cusack (1985) 60 ALJR 302 at
303-4.  Wilson J there refers to what was said by Griffith CJ in Chia Gee v
Martin (1905) 3 CLR 649 at 653.
7.  Paragraph 22 was struck out.  This involved an argument as to the
operation of the time limitation provisions in the Trade Practices Act 1974.
Again, this paragraph clearly was badly pleaded in accordance with the
decisions referred to by the primary Judge.
8.  The present is not a case where the applicant for leave complains of the
striking out of the whole of a pleading, so that there is no case to go
forward.  The position is that those portions of the amended statement of
claim which were clearly bad have been struck out, but in the case of one
claim - that based on negligence - it is conceivable that the applicant might
be able to replead a good case and leave has been reserved to enable this to
be done.  Likewise, the misrepresentation claim remains on foot and was
untouched by the orders of the primary Judge.
9.  The points of law which were dealt with by the primary Judge were clearly
covered by earlier authority.  No case has been made out for the interference
by this Court in a decision upon matters of practice and procedure.
10.   I would dismiss the application for leave to appeal.
11.  The appropriate order is that the applicant for leave pay the costs of
the respondents on the motion.

JUDGE2
HILL J  I would agree that the application for leave to appeal be refused.
2.  I would add just this.  It should by now be clear that howsoever it be
pleaded, a case cannot be made out in Australia that mortgages are invalid on
the ground that the operations of banks or finance companies in making loans
involve the creation of credit.  Particularly the decision in First National
Bank of Montgomery v Jerome Daly (1968), County Court, Credit River,
Minnesota, whether or not correctly decided under the law of Minnesota, is not
part of the law of Australia.
3.  If the various matters sought to be argued in cases such as Arnold v State
Bank of South Australia (Full Court, unreported, 18 November 1992) and Warner
v Elders Rural Finance Limited (Full Court, unreported, 26 March 1993) are
henceforth sought to be reargued in this Court, it is my view that the party
seeking to reargue these matters may face an order for indemnity costs.

JUDGE3
COOPER J  I agree that the application for leave to appeal should be dismissed
for the reasons given by my brothers.  I have nothing further to add.
2.  (The parties addressed on costs.)