Bank of South Australia Ltd v Ferguson

Order that O 2 hereof be stayed for twenty-eight days to allow the respondent to make such application as he may be advised to the Full Court or a Judge of the Supreme Court for an extension of the stay pending the outcome of the cross-appeal to the Full Court referred to in O 6 hereof.

Order that the costs of the proceedings before Legoe A-J and the Full Court be determined by the Full Court at a date to be fixed by that Court, such determination to take into account the outcome in this Court.

Special leave granted to the respondent to cross-appeal.

Allow the cross-appeal, set aside the order of the Full Court dismissing the cross-appeal in that Court and remit that cross-appeal to the Full Court for re hearing.

Order that the appellant's costs of the appeal before this Court be set off against the respondent's costs in relation to the cross-appeal before this Court.

The Court delivered the following written judgment: -

25 February 1998 Brennan CJ, Gaudron, McHugh Gummow and Kirby JJ

1. Section 128 of the Real Property Act 1886 SA (the Act) provides that, whenever any land is intended to be charged or made security in favour of any person, the registered proprietor shall execute a mortgage in the appropriate form; such a mortgage has effect as a security but does not operate as a transfer of the land (s 132). Upon registration of a mortgage in the appropriate form, the land becomes liable as security in the manner provided for in the Act (s 67).

2. By action instituted on 30 May 1994 in the Supreme Court of South Australia, the State Bank of South Australia sought an order against the respondent, Mr Ferguson, for delivery of possession of a property near Penola in that State. The appellant, the Bank of South Australia Ltd (the Bank), is the successor in law to the State Bank of South Australia. The area of the holding in question is a little over 1,000 acres. Mr Ferguson is the registered proprietor of the holding and is in default under a registered memorandum of mortgage No 6997921 (the mortgage) which was taken by the Bank from Mr Ferguson in 1990. The Bank provided to Mr Ferguson accommodation totalling $400,000. Of this, $115,000 was used to repay a working overdraft and terms loans provided by another bank. The accommodation provided by the Bank also included a fluctuating overdraft of $25,000 and the balance was for application to a project for the growing of potatoes on part of the land. The Bank sought the order for delivery of possession to enable it to exercise the power of sale conferred by s 133 of the Act and recover the moneys secured by the mortgage. The institution of this proceeding followed the taking of various steps by the Bank, including service of a notice of demand for payment of arrears of principal and interest. These were shown therein as being $509,169.79 when the notice was served on 30 March 1994.

3. The primary judge (Legoe A-J) dismissed the Bank's claim for possession [1] . The Court declared that registration of the mortgage "does not create an indefeasible title to the statutory charge in favour of [the Bank] due to fraud" [2] .

1. Bank of South Australia Ltd v Ferguson (1995) 66 SASR 77. 2. Bank of South Australia Ltd v Ferguson (1995) 66 SASR 77 at 120.

4. The Bank is the registered proprietor of the mortgage (s 68). So far as material, s 69 of the Act states:

The title of every registered proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be notified on the original certificate of such land, be absolute and indefeasible, subject only to the following qualifications:

1. In the case of fraud, in which case any person defrauded shall have all rights and remedies that he would have had if the land were not under the provisions of this Act: Provided that nothing included in this subsection shall affect the title of a registered proprietor who has taken bona fide for valuable consideration, or any person bona fide claiming through or under him.

In his further amended defence, Mr Ferguson had met the Bank's claim by an allegation that, pursuant to s 69I of the Act, the mortgage was void. By his further amended counterclaim he had sought a declaration to that effect. It appears that a claim by Mr Ferguson for breach of fiduciary duty was abandoned during the trial [3] . In any event, Legoe A-J said he considered "no basis for such a duty has been established on the evidence" [4] . By what was described as a counterclaim to that counterclaim, the Bank sought various relief including "repayment" of $506,169.79. Legoe A-J also dismissed the Bank's counterclaim [5] . 1. Bank of South Australia (1996) 66 SASR 120 at 141. 2. Bank of South Australia (1995) 66 SASR 77 at 119. 3. Bank of South Australia (1995) 66 SASR 77 at 120.

5. An appeal by the Bank was dismissed by the Full Court (Bollen and Millhouse JJ, Matheson J dissenting) [6] and the Bank brings this appeal against that order. It submits that the declaration and relevant orders of the primary judge should have been set aside by the Full Court, and that an order for possession should have been made in its favour. The Bank also seeks a declaration as to the indebtedness of Mr Ferguson.

6. The Full Court also dismissed a cross-appeal by Mr Ferguson. In this Court, in the course of the hearing of the Bank's appeal, Mr Ferguson sought special leave to appeal against this dismissal by the Full Court of his cross-appeal. It will be necessary to return to that aspect of the matter later in these reasons.

7. There were lengthy pleadings and the trial proceeded over a number of days. There appears to have been some fluctuation in the formulation by Mr Ferguson of the legal foundation for his defence and counterclaim. However, in his written submissions to this Court, Mr Ferguson submitted that his case had been one of entitlement to rescission in equity of the mortgage, the rescission being justified by what was said to be fraudulent conduct by certain officers of the Bank. Mr Ferguson asserted such entitlement to rescission without the imposition upon him of terms as to repayment of principal and payment of interest. However, both the primary judge and the majority in the Full Court appear to have treated the conduct of the Bank officers in question as founding rights directly derived from s 69I of the Act in respect of that "fraud" which had the consequence of rendering void the Bank's security. As Millhouse J put it, the primary judge "refused the [B]ank the relief it originally sought and left everything else to lie" [7] and the effect of the judgment "was to leave [Mr] Ferguson in possession of his land and without an obligation to repay any of the debt to the [B]ank" [8] .

1. Bank of South Australia (1996) 66 SASR 120 at 149. 2. Bank of South Australia (1996) 66 SASR 120 at 144.

8. By whichever path the matter be approached, it is apparent that the primary judge and the majority in the Full Court were in error in dismissing the Bank's claims.

9. As we have indicated, within the meaning of the Act, the Bank was the registered proprietor of the mortgage. In its terms, s 69I required identification of the rights and remedies which, as a person "defrauded", Mr Ferguson would have had if the land were not under the provisions of the Act. The legislation thus recognises the principle, propounded in an established line of cases dealing with Torrens system legislation, that an equity arising from the conduct of a registered proprietor before or after registration may be enforced against that registered proprietor notwithstanding the indefeasibility of registered titles [9] .

1. Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 612-614, 637-638, 653-654.

10. Section 69I operates to qualify the general principle of indefeasibility only if the case answers the statutory description of "fraud". Not all species of fraud which attract equitable remedies will amount to fraud in the statutory sense. The distinction may be illustrated as follows. In some circumstances, equity subjects the interest of a purchaser of unregistered land to an antecedent interest of which the purchaser has notice. However, in respect of land to which the Act applies, registration of a transfer is not fraudulent in the statutory sense required to qualify the operation of the doctrine of indefeasibility, merely because the transferee knows that registration will defeat an antecedent unregistered interest of which the transferee has notice [10] .

1. Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 652-653.

11. The points of significance for the present litigation are that (i) statutory fraud embraces less, not more, than the species of fraud which, at general law, founds the rescission of a conveyance; and (ii) statutory fraud is not itself directly generative of legal rights and obligations, its role being to qualify the operation of the doctrine of indefeasibility upon what would have been the rights and remedies of the complainant if the land in question were held under unregistered title.

12. With that in mind, we turn to the salient facts.

13. In 1990, the manager of the Penola branch of the Bank, Mr McMellon, had discussed with Mr Ferguson the possibility of his growing potatoes for supply to a factory for the production of potato chips. This was to be established in the Penola district by a corporation known as "SAFRIES". Mr Ferguson had previously run cattle and sheep on his property. He made some inquiries and had further discussion with Mr McMellon. Mr McMellon prepared and gave to Mr Ferguson certain bank forms identified by the primary judge as "cash flow documents" [11] . These were completed by Mr Ferguson and returned, together with a "potato budget" prepared by him. Mr McMellon then prepared a document described as a "Statement of Position" (Ex D3), using a bank form which had not been supplied to Mr Ferguson. Mr McMellon forged the signature of Mr Ferguson to that document and forwarded it, together with other documents, to the regional office of the Bank for consideration of approval of the loan.

1. Bank of South Australia (1995) 66 SASR 77 at 114.

14. At this stage, Mr McMellon was dismissed. Mr Towner took over from Mr McMellon at the Penola branch and had a meeting with Mr Ferguson. Mr Towner made some pencil notes on the documents which had been returned to him by the regional office. He also discussed with Mr Ferguson the value of the land which was to be used to provide security for the advances sought by Mr Ferguson. Mr Ferguson put the value of the land at $420-$450 per acre, giving a total value of between $520,000 and $577,000, but Mr Towner suggested a value of $900 per acre, giving a total value of $944,100. Mr Ferguson thought this was too high. Mr Towner resubmitted the documents to the regional office supported by a valuation (Ex D5) which indicated a land value of $900 per acre. Exhibit D5 was not prepared on advice or information supplied by Mr Ferguson. Mr Ferguson executed the mortgage on about 5 September 1990 and signed his acceptance of the facility letter prepared by the Bank and dated 10 September 1990. This detailed the accommodation to be provided by the Bank and secured by the mortgage. At this stage, both Mr Ferguson and Mr Towner were unaware of the forged signature to the statement of position. Further, Mr Ferguson was unaware of the pencil alterations made by Mr Towner and believed the secured assets to have a value of between $520,000 and $577,000, not the $944,100 stated in Ex D5 [12] .

1. Bank of South Australia (1995) 66 SASR 77 at 116.

15. The primary judge held [13] that the forgery of Mr Ferguson's signature to Ex D3 "was operative" and that it led to the Bank accepting the application to grant Mr Ferguson a loan on the security of a mortgage to be granted by him over his land. His Honour said [14] :

I am satisfied on the facts of this case and make a finding that the actions of the [Bank's] manager had the effect of initial fraud in the first application made by Mr McMellon with the subsequent actions resulting in [Mr Ferguson] being defrauded by his execution of the memorandum of mortgage and acceptance of the facility offer on a false premise. The result, his Honour found, was that Mr Ferguson was a "defrauded person" within the meaning of s 69I so that he was entitled "to such rights at law or equity as [he] may have on an unregistered mortgage, including any rights or liabilities in contract" [15] . 1. Bank of South Australia (1995) 66 SASR 77 at 118. 2. Bank of South Australia (1995) 66 SASR 77 at 118. 3. Bank of South Australia (1995) 66 SASR 77 at 118.

16. Mr Ferguson had also challenged the existence of the indebtedness secured by the mortgage. The primary judge concluded that the Bank and Mr Ferguson "were not ad idem when the mortgage was executed and the facility offer was accepted" [16] . This was by reason of the fraud associated with Ex D3 and the revision, without Mr Ferguson's knowledge or agreement, of the valuation of the land. The result was held to be that the Bank could not enforce the obligations under the contract of loan, the performance of which was secured by the mortgage.

1. Bank of South Australia (1995) 66 SASR 77 at 119.

17. In the Full Court, Millhouse J (with whom Bollen J agreed) accepted the submission by Mr Ferguson that the "broad picture" (consisting of "the forged signature, the alteration of documents the increase in the estimate of the value of [Mr Ferguson's] property") showed "fraud on the part of the [B]ank" [17] .

1. Bank of South Australia (1996) 66 SASR 120 at 148.

18. In his dissenting judgment in the Full Court, Matheson J emphasised [18] that whilst, as a result of Mr Towner's valuation, the Bank perhaps had been under the mistaken impression that the land was worth $944,100 and whilst Mr Ferguson believed it to be worth between $520,000 and $577,000, no expert evidence had been led by either party to prove the actual value of the land [19] . The value of the land was not a term of the mortgage or of the facility letter [20] . Nor had it been established that in executing the mortgage Mr Ferguson had been under a serious mistake about its contents in relation to a fundamental term. His Honour concluded, in our view correctly, that there had been nothing to prevent a consensus ad idem [21] . Nor, in making his pencil alterations, had Mr Towner fraudulently altered or used any documents. No alteration increased the liability of Mr Ferguson or injuriously affected his legal obligations [22] .

1. Bank of South Australia (1996) 66 SASR 120 at 141. 2. Bank of South Australia (1996) 66 SASR 120 at 138. 3. The terms of the facility letter are set out by Matheson J in Bank of South Australia (1996) 66 SASR 120 at 122-123. 4. Bank of South Australia (1996) 66 SASR 120 at 141. 5. Bank of South Australia (1996) 66 SASR 120 at 139.

With respect to the findings of fraud in relation to Ex D3, Matheson J correctly observed that, for fraud to be operative, it must operate on the mind of the person said to have been defrauded and to have induced detrimental action by that person. This was not the case with Ex D3. Nor had Mr Ferguson given evidence that the contents of Ex D3 were inaccurate or otherwise adverse to his interests. His Honour concluded that Ex D3 was not prepared for, and was not used for the purpose of, and did not have the effect of, harming, cheating or otherwise being dishonest to Mr Ferguson [23] . The statement of position was an internal record only. No one in the Bank, including Mr Towner, had apparently known of the forged signature until it was discovered by Mr Towner in the office of the Bank's instructing solicitors shortly before he gave evidence at the trial. Exhibit D3 had not deliberately been withheld from Mr Ferguson. Matheson J said [24] :

[Mr Ferguson] did not give evidence that he was misled as a consequence of the forging by McMellon of his signature on the statement of position (D3), or that he was induced in any way to do anything by his knowledge or lack of knowledge of that forged signature or the preparation of D3. The forging of his signature was clearly dishonest, and is in no way to be condoned, but I am not persuaded that it had any operative effect upon the decision of [Mr Ferguson] to grant the mortgage or to sign the facility agreement. The forgery was probably designed to speed up the process within the [B]ank. I am not persuaded that there was any intention to defraud [Mr Ferguson]. It is simply not correct to say that McMellon forged [Mr Ferguson's] signature on D3 to bind [Mr Ferguson] to obligations to the [Bank] and to give security over the said land. 1. Bank of South Australia (1996) 66 SASR 120 at 137. 2. Bank of South Australia (1996) 66 SASR 120 at 137.

In his judgment, Matheson J correctly represented the position. It follows that there is no proper footing for any conclusion that the moneys secured by the mortgage had not been due and owing but unpaid or that the mortgage was liable to be set aside by reason of fraud practised upon Mr Ferguson by the Bank, still less that the mortgage was "void". Further, even if a case for rescission had been made out, there appears from the facts to have been no reason to deny the application of the requirement of restitutio in integrum. It is scarcely to be supposed that the land might be relieved of the burden imposed by the registered security and the creditor be left not only unsecured but with an irrecoverable loan [25] . It follows that in this Court the Bank succeeds in its appeal.

There remains Mr Ferguson's application for special leave to appeal against the dismissal by the Full Court of his cross-appeal. At the trial, Mr Ferguson had sought to meet the Bank's claim to recover the moneys secured by setting off such damages as might be awarded him upon his counterclaim. Damages were sought on the counterclaim for "innocent and negligent misrepresentation", for "innocent and negligent mis-statement", for breach of contract and for contravention of ss 54, 56 and 58 of the Fair Trading Act 1987 SA. In particular, s 56(1) provides that "[a] person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". The claim for damages for innocent misrepresentation appears to have been based on s 7 of the Misrepresentation Act 1972 SA. In certain circumstances, this confers upon the plaintiff the same rights to damages in respect of non-fraudulent misrepresentation as are given in tort for fraudulent misrepresentation. The heads of damage claimed included "economic loss both past and future arising out of the failure of [Mr Ferguson's] farming business at Penola as a result of entering into the finance facility and potato farming in 1990". Mr Ferguson appears also to have relied upon the alleged misrepresentations as a defence to the enforcement of the terms of the facility letter.

The primary judge dismissed Mr Ferguson's counterclaim [26] . His Honour said that Mr Ferguson had not established "any recognisable loss caused by any of the claims made in his amended counterclaim, that is including claims under the Fair Trading Act, fraudulent misrepresentation, negligent misstatement or the Misrepresentation Act or fraud". He continued [27] :

Consequently, I have not made any findings on the claims for misleading and deceptive representation or conduct because it has become unnecessary having found that [Mr Ferguson] is entitled to an order under s 69 placitum I of the Real Property Act and consequently has a good defence to [the Bank's] claim for possession, and further that [Mr Ferguson] has failed to establish any relevant loss as discussed above. Earlier in his judgment, the primary judge had said [28] : At the end of [Mr Ferguson's] examination in chief I pointed out to counsel that no evidence had been led on the question of the claim for damages. Counsel for [Mr Ferguson] indicated that [Mr Ferguson] had an application before the court seeking declaratory orders and that the matter could be "adjourned off" (as he put it) for an account to be taken or an assessment to be taken at a later time. Counsel for the [Bank] indicated that his instructions were to strenuously oppose the application to amend seeking declaratory orders and after some further discussion I directed that the cross-examination of [Mr Ferguson] commence. 1. Bank of South Australia (1995) 66 SASR 77 at 119-120. 2. Bank of South Australia (1995) 66 SASR 77 at 119-120. 3. Bank of South Australia (1995) 66 SASR 77 at 94.

In the Full Court, Matheson J referred to the remarks of the primary judge that Mr Ferguson had not proved "any recognisable loss" or any "head of damage". However, his Honour noted that this had been said notwithstanding that counsel for Mr Ferguson did argue before the primary judge that he had proved that his client had suffered loss and damage [29] .

1. Bank of South Australia (1996) 66 SASR 120 at 141.

24. Had it been necessary to do so, the majority of the Full Court would have granted Mr Ferguson any necessary extensions of time in relation to the claims made under the Fair Trading Act and the Misrepresentation Act [30] . However, Mr Ferguson's cross-appeal against the dismissal of his counterclaim was dismissed on a particular footing. This was explained as follows by Millhouse J [31] :

The plain fact is that [Mr Ferguson] has had over $500,000 from [the Bank] and as things stand he is not accountable for it. His case on the other hand is that the actions of the [B]ank have ruined him. He would never have gone into potato farming if the [B]ank had not persuaded him, by fraud, to do so. The [B]ank should not have granted him the loan. He has, he says, a claim for substantial damages.

Almost until the end of his submissions [Mr Ferguson's counsel] was resigned, even if he were successful, to the action being remitted to the trial judge or to some other to try the questions of restitution and of his client's damages. The learned President rather talked him out of that by remarking, quite accurately, that his client ran the risk of being awarded lesser damages than the $500,000 odd had from the [B]ank. [Counsel] then suggested that his preferred result was the dismissal of the appeal and of all counterclaims.

From a practical point of view that is easily the most sensible course. It would save time, effort and money which would be expended, probably, for not much change. That is assuming that damages would be not much more or less than $500,000.

1. Bank of South Australia (1996) 66 SASR 120 at 150 2. Bank of South Australia Ltd v Ferguson (1996) 66 SASR 120 at 149-150.

25. The reference in the penultimate paragraph to the trying of the question of "restitution" as well as that of the damages sought by Mr Ferguson is to the Bank's claim to recover the moneys secured by the mortgage. Of this, Millhouse J said that the Bank could not succeed on its claim because to do so it would "have to rely on its own fraudulent actions" [32] . That, as indicated earlier in these reasons, was a misstatement of the position, even if Mr Ferguson had made out his claim to have the mortgage set aside.

1. Bank of South Australia (1996) 66 SASR 120 at 150.

26. It will be apparent from the foregoing that Mr Ferguson's cross-appeal to the Full Court was not dismissed on any basis which involved a determination on the merits of the matters raised with respect to the dismissal by the trial judge of his cross-claim for damages. Rather, it appears to have been dismissed solely on the footing that the indebtedness claimed by the Bank from Mr Ferguson represented the loss or damage which he sought to recover and, the Bank's rights having been held to be "void", that nullified or made it unnecessary to determine the issues otherwise arising on the counterclaim. The allowance in this Court of the appeal by the Bank demonstrates that the issues which arose on the cross-appeal by Mr Ferguson were not to be disposed of in that fashion. Unless he is able to make good his cross-appeal and set off, completely or with a balance in his favour, the damages he recovers against the then current indebtedness to the Bank, the Bank must have its remedies to enforce its security.

27. Accordingly, the interests of the administration of justice in the particular case would indicate a grant of special leave in respect of the dismissal by the Full Court of Mr Ferguson's cross-appeal. However, counsel for the Bank submitted that special leave should be refused because the consequent appeal would be futile. This is because the Full Court, in any event, was bound to dismiss the cross-appeal.

28. As we have indicated, on his pleadings, Mr Ferguson claimed economic loss arising out of the failure of his business as a result of entry into the finance facility and engagement in potato farming. In that regard, Millhouse J said [33] :

At first the venture prospered. However SAFRIES, about which McMellon and Towner had spoken in glowing terms, changed hands. There was a glut of potatoes. SAFRIES took every point with its suppliers, including Ferguson, to get out of the contracts it had made with them.

By 1994 Ferguson's venture into potato growing had ended in disaster. Not only his venture into potato growing but also his sheep and cattle.

1. Bank of South Australia (1996) 66 SASR 120 at 144.

However, counsel for the Bank refers to the passages set out earlier in these reasons in which the primary judge stated that Mr Ferguson had not established any recognisable loss caused by any of the claims made in his counterclaim, and also commented on the conduct of Mr Ferguson's case. As we have indicated, in his dissenting judgment, Matheson J accepted that Mr Ferguson's counsel had argued before the primary judge that he had proved the suffering of loss and damage by his client. Moreover, the written notes of the address of Mr Ferguson's counsel at the trial (provided to this Court by the Bank) indicate that submissions were made seeking to quantify past and future economic loss.

In par 19 of his counterclaim to the Bank's counterclaim to his further amended counterclaim, Mr Ferguson relies upon the alleged fraudulent conduct by the Bank which, on the other branch of the case, founded the relief against the Bank which has been set aside on the Bank's appeal to this Court. Accordingly, allegations to the effect of those in par 19 would be put aside on any reconsideration of Mr Ferguson's cross-appeal.

However, in pars 14 and 16 respectively of that counterclaim, he pleads representations by Mr McMellon and Mr Towner. Counsel for the Bank submitted that the evidence of Mr Ferguson did not come up to proof as to these representations. There is room for debate on these questions. However, it was not demonstrated that in respect of all of the alleged representations Mr Ferguson had either given no evidence or his evidence fell short.

The primary judge accepted Mr Ferguson as a witness of truth and said that he made his findings based largely on Mr Ferguson's evidence [34] . Mr Towner, but not Mr McMellon, also gave evidence. His Honour said [35] :

It was submitted that [Mr Ferguson] had decided to switch to potato growing before he discussed the matter with Mr McMellon, and that he actually made the appointment to see Mr McMellon. Further, it was submitted that even if representations were made, they were neither false nor had it been proved that any representation was false or misleading or deceptive. Further, it was submitted that Mr Ferguson was not induced to grow potatoes by any representations made by bank officers and that he was not induced to seek the financial advances from the [Bank] in consequence of any alleged representations made to him. 1. Bank of South Australia (1995) 66 SASR 77 at 111. 2. Bank of South Australia (1995) 66 SASR 77 at 111.

However, the primary judge made very limited findings on these issues. His Honour found that Mr McMellon "did encourage [Mr Ferguson] to consider growing potatoes on his land in the light of the new SAFRIES factory at Penola" and that he "did invite [Mr Ferguson] into his office and made representations about SAFRIES and the prospects for local potato growers as given in evidence by [Mr Ferguson]" [36] . In the Full Court, Matheson J referred to the paucity of the findings as to what representations were made, which, if any, of them were misrepresentations, and which, if any, of them were relied on [37] .

1. Bank of South Australia (1995) 66 SASR 77 at 114. 2. Bank of South Australia (1996) 66 SASR 120 at 141-142.

It may be that had the Full Court embarked upon a full consideration of Mr Ferguson's cross-appeal the state of the record would have been such as to enable the Full Court itself to make findings of fact further to those made by the primary judge. On the other hand, circumstances may have been such as to necessitate retrial, or the deficiencies in the record may have been the product of the manner in which Mr Ferguson ran his case, so that there was no sufficient cause for appellate intervention to disturb that situation. We express no conclusion as to which outcome would be appropriate in the Full Court. What is important in this Court is that Mr Ferguson's cross-appeal to the Full Court has not been adjudicated on its merits. At this stage, it cannot be said that an adjudication would inevitably go against Mr Ferguson.

In the circumstances which are thus disclosed, including that, at this stage, it cannot be said that the Full Court cross-appeal is bound to fail and, if it were to succeed, it could well have an impact on the relief given to the Bank upon the allowing of its appeal by this Court, it is in the interests of justice and of the administration of justice that Mr Ferguson be granted special leave to cross-appeal to this Court. That appeal should be allowed, the order of the Full Court dismissing the cross-appeal from Mr Ferguson should be set aside, and the matter should be remitted to the Full Court. That was the course taken in somewhat similar circumstances in Jones v The Queen [38] , and it is the course that should generally be taken where an appeal is allowed on the ground that a matter has not been fully dealt with by an intermediate appellate court. The result will be that the cross-appeal remains for further hearing and for determination by the Full Court.

Upon the appeal by the Bank, the order dismissing its appeal to the Full Court should be set aside. In place thereof, the appeal to the Full Court should be allowed. The Bank should have the orders for possession it seeks. However, those orders should be stayed for twenty-eight days to allow for Mr Ferguson to make, as he may be advised, an application to the Full Court or a judge of the Supreme Court for an extension of the stay pending the outcome of his cross-appeal to the Full Court. The outcome of such an extension application will be entirely a matter for the court with the carriage of it.

In its notice of appeal, the Bank seeks a declaration that, on 30 March 1994, Mr Ferguson was indebted to it in the sum of $509,169.79. That was the sum stipulated in the notice of demand which preceded the institution of the present proceeding. A declaration in those terms should be made. However, the Bank seeks a further declaration that Mr Ferguson is indebted in that sum "together with interest on that amount" and seeks an order that the matter be remitted to a judge of the Supreme Court for the determination of that amount of interest. At the trial in mid-1995, it was stated in the written submissions for Mr Ferguson that his indebtedness had, with interest, then risen to approximately $650,000. That further declaratory relief should also be granted to the Bank.

In the Full Court, the matter of costs was adjourned to a date to be fixed. That part of the Full Court order should not be disturbed. Further, consideration of costs by the Full Court should take into account the outcome in this Court. In this Court, the Bank should have the costs of its appeal and Mr Ferguson the costs of his cross-appeal, to be set off.