Supreme Court New South Wales Medium Neutral Citation: Axis Bank Limited v Gujarat NRE India Pty Ltd [2020] NSWSC 1711 Hearing dates: 10, 11, 12, 13, 14 August 2020 Decision date: 02 December 2020 Jurisdiction: Equity - Expedition List Before: Sackar J Decision: See [470]-[474] Catchwords: BANKING AND FINANCE – GUARANTEE AND INDEMNITY — Australian Securities and Investments Commission Act 2001 (Cth) s 12DA – Whether bank engaged in misleading and deceptive conduct by failing to draw guarantor's attention to the terms of the parties' facility agreement that differed from those set out in term sheets sanction letters, or by failing to advise that it required an unqualified, unconditional and irrevocable guarantee – Where terms of guarantee in facility agreement differed from those in terms sheets and sanction letters – Where both sides to negotiations were sophisticated and experienced and representative for the guarantor engaged in drafting of facility agreement – Where terms sheets and sanction letters made clear the facility agreement was to be the source of contractual obligation – Where true and complete copy of the facility agreement was provided to the guarantor for execution – Whether guarantor relied upon representations made by the bank – Where there was an urgent need for funds – Where guarantor's inattention to terms of guarantee the result of indifference – The bank's conduct was not misleading or deceptive BANKING AND FINANCE – GUARANTEE AND INDEMNITY — Australian Securities and Investments Commission Act 2001 (Cth) s 12CB – Whether the manner in which the bank obtained and set out to enforce an unqualified, unconditional and irrevocable guarantee constituted unconscionable conduct in all the circumstances – Where both sides to negotiations were sophisticated and experienced and representative for the guarantor engaged in drafting of facility agreement – Where guarantor's inattention to terms of guarantee the result of indifference – Where guarantor's decision not to engage lawyers considered to be a choice based on self-confidence – The bank's conduct unconscionable within the meaning of s 12CB ESTOPPEL — Estoppel by representation — Whether the bank is estopped from denying that the guarantee contained in the parties' facility agreement was qualified in the manner set out in term sheets and sanction letters —Estoppel not made out CONTRACTS — GUARANTEE AND INDEMNITY — Formation — Variation — Whether the parties' facility agreement was subsequently varied by way of the provision of a final sanction letter — No variation Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA(7)(k), 12BAB(1)(b), 12BAB(7)(b), 12CB, 12CC, 12DA, 12GF, 12GM, 12GF(1B) Australian Securities and Investments Commission Regulations 2001 (Cth) reg 2B(1)(h) Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law) s 18 Trade Practices Act 1974 (Cth) s 52 Cases Cited: ACCC v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 252 ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640 Amaya v Everest Property Holdings Pty Ltd (2010) 15 BPR 28,695 APS Satellite Pty Ltd (formerly known as "Skymesh" Pty Ltd") v Ipstar Australia Pty Ltd [2016] NSWSC 1898 Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 93 ALJR 743 Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 Byron Shire Council v Vaughan [2002] NSWCA 158 CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd (2005) ATPR 42-042 Commonwealth Bank of Australia v Thompson [2013] NSWSC 149 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Elitegold Ltd v Australia Fair Shopping Centres Pty Ltd (unreported, Federal Court of Australia, 28 October 1994, Hill J) Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167 Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 Gould v Vaggelas (1985) 157 CLR 215 GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440 Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 National Australia Bank Limited v Smith [2014] NSWSC 1605 Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd (2011) 248 FLR 193 Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 Sidhu v Van Dyke (2014) 251 CLR 505 Sutton v A J Thompson Pty Ltd (in liq) [1987] ATPR 40-789 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 Thompson v Palmer (1933) 49 CLR 507 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Westpac Banking Corporation v Lee [2013] NSWCA 375 Winter Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 Texts Cited: n/a Category: Principal judgment Parties: Axis Bank Ltd (plaintiff) Gujarat NRE India Pty Ltd (defendant) Representation: Counsel: C Withers SC, N Riordan (plaintiff) D Pritchard SC, A Macauley (defendant) Solicitors: Thomson Geer (plaintiff) Gillard Consulting Lawyers (defendants) File Number(s): 2019/211297 Judgment 1. The plaintiff, Axis Bank Ltd, sues the defendant, Gujarat NRE India Pty Ltd (GNI or the defendant), on a facility agreement dated 21 June 2013 (the Facility Agreement), entered into between itself, the defendant, Gujarat NRE Ltd (GNL), Gujurat NRE Coke Ltd (GNCL) and Mr Arun Jagatramka, and by which the plaintiff advanced USD$10,000,000 to GNL on terms that GNL would repay the amount within 36 months of the loan being made. 2. The defendant however it is alleged irrevocably and unconditionally agreed to guarantee the performance of the agreement by GNL and in lieu of GNL making payment the defendant would do so on terms on demand. Guarantees were also provided by GNCL and Mr Jagatramka. 3. The issue in this case is whether the plaintiff should be able to succeed on the guarantee entered by the defendant or whether by reason of the plaintiff's conduct the defendant should be relieved of any liability. 4. It is said by the defendant primarily that the conduct of the plaintiff in all of the circumstances was misleading or deceptive or likely to be so as to the nature and terms of the guarantee. 5. Alternatively in the circumstances it is alleged that it is unconscionable within the meaning of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) for the plaintiff to seek to enforce the guarantee. 6. Further and in the alternative it is alleged that the conduct of the plaintiff gives rise to an estoppel precluding the plaintiff from relying upon the guarantee. 7. Again alternatively the defendant alleges that the terms of the guarantee were varied subsequent to the original guarantee such that no liability arises on its part. 8. And finally in the alternative the defendant pleaded that the liability under the guarantee was discharged on 1 September 2017 by reason of an internal book entry in the plaintiff's accounts. However during closing submissions senior counsel for the defendant indicated that this point was no longer pressed (T.267/41). 9. No case has been sought to be made in mistake nor does the defendant seek rectification. 10. The defendant also pursues a cross-claim which seeks injunctive relief in respect of the plaintiff's reliance on the guarantee, and an award of damages in the alternative, relying on statutory relief under sections 12GF and 12GM respectively of the ASIC Act. Background Facts 1. Both sides provided comprehensive chronologies dealing with the negotiations between the parties and the provision of various iterations of the Facility Agreement. There is little to no controversy between the parties regarding what occurred. Rather they differ in relation to the significance of what occurred. Due to the importance of scrutinising each step and in order to capture the totality of the circumstances I have, unashamedly produced below a marriage of the parties' chronologies and find the following facts. 2. On 23 August 2006 GNL and Wonga Coal Pty Ltd (Wonga) were registered as proprietary companies with the Australian Securities and Investments Commission (ASIC). Mr Jagatramka was appointed as a director of GNL and Mr Sanjay Sharma was appointed as a director of Wonga. 3. Further on 15 February 2007 Mr Jagatramka's wife, Mona Jagatramka, was appointed as a director of GNL and Mr and Mrs Jagatramka were also appointed as directors of Wonga. 4. On 11 May 2007 GNCL and Wollongong Coal Ltd (WLC), then known as Gujarat NRE Coking Coal Ltd (GNCCL), entered into a coal purchase agreement pursuant to which GNCL agreed to purchase all "run of mine" coal produced by WLC. 5. On 19 August 2008 the defendant was registered as a proprietary company with ASIC and Mr Sharma, Mr Jagatramka and Mrs Jagatramka were appointed as directors. 6. On 15 July 2010 GNL's annual report for the year ended 31 March 2010 was lodged with ASIC. In the directors' report under the heading "Profiles of Directors and Company Secretary" the report stated, in respect of Mr Jagatramka, "Mr Arun Kumar Jagatramka is a qualified Chartered Accountant with an India 1st rank and gold medal", and, in respect of Mr P R Kannan: "P R Kannan, post graduate in science, banker by profession spent the first two decades of his working life in the Banking Industry where he gathered expertise and specialised in Corporate Finance and Foreign Exchange. From Banking he moved on to the Infrastructure segment, overseeing project Financing and Execution as an independent Director." 1. On 24 July 2010 Mr Sharma was appointed as a director of GNL. 2. On 26 May 2012 WLC issued its 2012 annual report in which Mr Jagatramka was described as "a Charted Accountant with an all India 1st rank and gold medal… A visionary of rare distinction, he has spearheaded the move by establishing Gujarat NRE Coking Coal Ltd in 2004…" 3. On 25 March 2013 WLC entered into a coal purchase agreement with UIL (Singapore) Pte Ltd (UIL) pursuant to which UIL agreed to purchase US$20,000,000 worth of coal from WLC, which purchase price it agreed to pay to WLC in advance. 4. On 26 March 2013 the defendant entered into a Specific Security Deed (Shares) agreement with UIL to secure the performance of WLC of its obligations under the coal purchase agreement with UIL, with the defendant charging 150,000,000 shares in WLC in favour of UIL. The defendant also entered into a Chess Tripartite Deed with Argonaut Securities Pty Ltd (Argonaut) and UIL to perfect UIL's charge over the shares in WLC shared by the defendant. 5. On 31 March 2013 GNCL issued its annual report for the year ending 31 March 2013. Mr Kannan is recorded as the Chief Financial Officer. WLC, the defendant and Wonga are recorded as being Australian subsidiaries. The annual report recorded a number of personal guarantees given by Mr Jagatramka. 6. The defendant's annual report for the financial year ended 31 March 2013 was dated and issued on 9 April 2014. It disclosed that as at 31 March 2013 the defendant had net assets of $4,418. 7. Wonga's annual report for the financial year ending 31 March 2013 disclosed that as at that date it had net assets of $71,146,064. 8. On 20 May 2013 the plaintiff requested information from GNL for the purpose of considering the proposal to lend GNL USD$10,000,000. 9. On 7 June 2013 the plaintiff was informed that Wonga would pledge 70,000,000 shares held in WLC against the proposed USD$10,000,000 loan to GNL. 10. At 10:02pm that day the plaintiff requested a quote from Hunt & Hunt Lawyers for the preparation of a facility agreement. The email, which was copied to Mr Kannan, records in part: "Dear Jill, We are working on a transaction. This is a Foreign Currency Loan (USD) for Gujarat NRE Ltd amounting to USD 10,000,000. The facility is backed by pledge of shares of Gujarat NRE Coking Coal Ltd (a company listed in Australia) and Corporate Guarantee of the same entity. Further there is [a] personal guarantee of promoter directors... " 1. The email attached a draft term sheet for the facility (the First Term Sheet). The security was outlined in part 8 of the term sheet and was said to involve: 1. A pledge of shares in WLC such that the market value of shares was to be at least 1.50 times of the facility amount; 2. "Guarantee" from GNCL, which was to be valid throughout the tenor of the facility, to the extent permissible under RBI guidelines, in a form and manner acceptable to the plaintiff; and 3. DSRA [Debt Service Reserve Account] for one instalment of interest servicing obligation which was to be maintained at all times during the currency of the loan. 1. On 10 June 2013 Jill Milburn advised that her estimated costs of preparing the Facility Agreement and attendant security documentation would be between $10,000 and $12,000 plus GST and disbursements. 2. On 11 June 2013 at 3:55pm Arpit Agrawal (a Gujarat Group employee) sent an internal email containing details of WLC shares (both pledged and available) held by various entities within the Gujarat Group, including GNL, Wonga and the defendant. 3. At 2:42pm Mr Sharma emailed Mr Jagatramka the pledge details of the shares held by GNL and Wonga. At 3:02pm Mr Jagatramka replied directing the information be shared with the plaintiff. 4. At 9:39pm Mr Kannan informed Mr Jagatramka and others that he had spoken to the plaintiff in respect of the details of the shareholdings in WLC and that "no further detail [is] required". 5. At 11:10pm Mr Kannan advised Jill Milburn that Hunt & Hunt should proceed with the preparation of the loan documentation and that "we are ok with the quote". 6. At 11:50pm "Know your Customer" (KYC) required documents were provided to the plaintiff on behalf of GNL. 7. On 12 June 2013 at 12:29am Mr Sharma emailed Mr Jagatramka stating: "Just had a chat with Jill who is currently working on documents based on draft term sheet and Axis wants the docs prepared in syndication form, which makes it quite lengthy. She is trying her best to get them prepared and out by tonight, however, those documents would still need to be changed as she is working on from old documents and she doesn't have current final advise [sic] from Axis." 1. Also on 12 June 2013 at 12:53pm Mr Kannan requested that Jill Milburn copy her emails to "gncfin@gujaratnre.com". The recipients of that email address included Mr Kannan and Mr Jagatramka. 2. At 5:02pm Mr Jagatramka responded to Mr Sharma's 12:29am email copying in Prasanta Das of the plaintiff stating: "Requesting Mr P K Das to advise axis terms for documentation." 1. At 6:21pm Vandana Garg of the plaintiff emailed Mr Kannan and Mr Jagatramka directly (to their individual email accounts) a term sheet for the loan of US$10,000,000 (the Second Term Sheet). That email referred to Mr Kannan and Mr Jagatramka's "discussion with Mr Das". The attached document provided for the terms of the security in part 8. Those were six-fold: 1. Subservient charge on the entire movable and immovable fixed assets of GNCL; 2. Creation and perfection of a mortgage/pledge over 70,000,000 shares in WLC held by Wonga; 3. Additional shares in WLC to be pledged within 60 days of first utilisation such that the market value of the shares would be at least 1.50 times the facility amount, which security coverage ratio is to be maintained; 4. DSRA [Debt Service Reserve Account] for one instalment of interest servicing obligation which was to be maintained at all times during the currency of the loan; 5. Unconditional and irrevocable "Guarantee" to be obtained from GNCL, which was to be valid throughout the tenor of the facility, to the extent permissible under RBI guidelines, in a form and manner acceptable to the plaintiff; and 6. Unconditional and irrevocable "Guarantee" to be obtained from Mr Jagatramka (the "Promoter"), which was to be valid throughout the tenor of the facility, to the extent permissible under RBI guidelines, in a form and manner acceptable to the plaintiff. 1. Compared to the First Term Sheet, conditions 1, 2 and 6 above were new. 2. At 7:12pm Mr Kannan forwarded a copy of the Second Term Sheet to Jill Milburn with the statement "the final term sheet". That email is copied on to "Axis Hk" and "Akshaya Panda", the latter being the Chief Executive of Axis Bank, Hong Kong Branch. 3. At 8:57pm Jill Milburn circulated a first draft of the Facility Agreement, which was based on (and modified from) a 2011 facility agreement for $50 million. Her covering email stated: "Please note square bracketed items and the items highlighted in yellow on which we require further information and confirmation". The email also attached the First Term Sheet, which Jill annotated in handwriting to show where the relevant provisions in the attached Facility Agreement could be located. 4. Section 7 (Clause 18) of the draft Facility Agreement included the guarantee provisions. The guarantors were listed in Schedule 1 as GNCL, "GNW" (which was defined as "Gujarat NRE Wonga Pty Ltd", being a company distinct from and not to be confused with Wonga) and Promoter Individual (Mr Jagatramka). Clause 18.2 was headed "Continuing Guarantee" and the words "The guarantee provided by GNW" and "promoter individual" were in square brackets. 5. On 13 June 2013 at 2:35pm the plaintiff provided Mr Kannan with a copy of its "sanction letter" containing a further version of the term sheet for the USD$10,000,000 loan to GNL (the Third Term Sheet also referred to by the parties as the Original Sanction Letter and the First Sanction Letter). Mr Kannan forwarded the Third Term Sheet to the "GNCL Finance" group email. Again the attached document provided for the terms of the security in part 8. Those were then seven-fold: 1. Subservient charge on the entire movable and immovable fixed assets of GNCL; 2. Creation and perfection of a mortgage/pledge over 70,000,000 shares in WLC held by Wonga; 3. Additional shares in WLC to be pledged within 60 days of first utilisation such that the market value of the shares would be at least 1.50 times the facility amount, which security coverage ratio was to be maintained; 4. DSRA [Debt Service Reserve Account] for two instalments of interest servicing obligation which was to be maintained at all times during the currency of the loan; 5. Unconditional and irrevocable "Guarantee" to be obtained from GNCL, which was to be valid throughout the tenor of the facility, to the extent permissible under RBI guidelines, in a form and manner acceptable to the plaintiff; 6. Unconditional and irrevocable "Guarantee" to be obtained from Mr Jagatramka (the "Promoter"), which was to be valid throughout the tenor of the facility, to the extent permissible under RBI guidelines, in a form and manner acceptable to the plaintiff; and 7. Unconditional and irrevocable "Guarantee" to be obtained from Wonga, which was only to "be obtained only if the same is required for perfection of security on pledge of shares listed in (ii) above, based on the advice of legal counsel". 1. Condition 7 was new and condition 4 was modified to require two instalments of interest as opposed to one (as was the case under both the First and Second Term Sheets). 2. At 6:42pm Nitin Daga (of Gujarat Group) emailed officers of the plaintiff a breakdown of amounts overdue on facilities owed by WLC (being "GNCCL"). In that email Nitin Daga stated: "Please note the following overdue position of GNCCL [WLC] as on date totalling USD 7.679[m]." 1. That figure of US$7.679m was then broken down between: 1. the amount outstanding on the Axis Bank (Singapore) led consortium of a Tranche A loan of US$75m, on which outstanding interest was US$5.276m; and 2. the amount outstanding on the Axis Bank (Hong Kong) led consortium of a US$100m loan, on which outstanding interest was US$2.403m. 1. At 12:15pm the plaintiff sought a quote from an Indian law firm (Trilegal) to assist with the preparation of the transaction documents, specifically: 1. Creation of subservient charge on assets of parent company in India (i.e. GNCL); 2. Corporate Guarantee of parent company in India (i.e. GNCL); 3. Personal Guarantee for promoter Mr Arun Kumar Jagatramka; and 4. Legal Opinions. 1. At 6:43pm, in response, Mr Kannan stated: "The guarantee clause is already in the facility agreement drafted by Jill why is it also included here again." 1. At 8:13pm Jill Milburn circulated a second draft of the Facility Agreement which she said contained further amendments in mark-up. There were mark-ups to, amongst others, clause 18.2 (one of the guarantee clauses). This version also retained the brackets and yellow highlighting contained in the first draft. 2. At 9:01pm a representative of Trilegal provided a quote of 600,000 Indian Rupees to the plaintiff in respect of the work requested. 3. At 9:37pm Mr Jagatramka responded to the quote stating: "...it seems in view of the Trilegal comments regarding NOC from lenders, we may need to request for 6 months' time for security creation over Indian assets. I am asking Mr Kannan to discuss with Trilegal their fee quote which is on a very high side. " 1. On 14 June 2013 at 4:44am Mr Kannan circulated a copy of the draft facility agreement. His email recorded "Suggested changes in track changes". Amongst other changes, Mr Kannan changed the references to "GNW" in the Facility Agreement to Wonga, including in clause 18.2. He also replaced the definition of GNW with a term defining and referring to Wonga and added "/Promoter Individual" to the heading of clause 18.10 so it then read "Guarantee Limitations – GNCL/ Promoter Individual". 2. At 12:42pm Jill Milburn responded to Mr Kannan's email. The email recorded in part: "I am currently reviewing the requested changes made by the Company. My initial concern is that some of the requested changes do not reflect what I understand to be the agreed Terms sheet conditions (attached). Please confirm that the attached Terms sheet is the current agreed version. For example, the terms sheet requires an interest margin of 6% but the Company has change[d] this to 4.5%. In addition, the accounts of GNCCL are required and yet this requirement has been deleted by the Company." 1. The Second Term Sheet of 12 June 2013 was attached to that email. 2. At 1:13pm Jill Milburn in an email addressed to Mr Kannan (and copying others including in the GNCL Finance address) noted she had spoken with the plaintiff. She noted what changes had been agreed and where there had been no change to certain requirements. 3. At 1:38pm Rati Pugalia of the plaintiff circulated a revised sanction letter to Mr Kannan (the Fourth Term Sheet). Again the Fourth Term Sheet provided for the terms of the security in part 8. Those were seven-fold and were unchanged from the Third Term Sheet. 4. At 1:43pm the plaintiff provided the Fourth Term Sheet to Jill Milburn in an email on to which Mr Kannan was copied along with GNCL Finance and which stated: "Please find attached the sanction letter. Please use the same for the facility agreement". 1. At 4:05pm Jill Milburn wrote to the plaintiff and copied in Mr Kannan and GNCL Finance. She stated: "Please clarify the requirements in clause 9 of the term sheet relating to the restriction on a Guarantor disposing of assets in any year of US$10 million dollars. The corporate Guarantors are GNCL and Wonga. Is this restriction intended to apply to any other of the Group companies and secondly is it intended to restrict the other disposals which may be made by GNCCL under the definition of Permitted Financial Indebtedness in clause 1?" 1. At 4:27pm Jill Milburn circulated a third draft of the Facility Agreement. In the covering email, she wrote: "Please find attached a further revised mark-up of the Facility Agreement with the further changes made. Items outstanding include: 1 completion of the details for the Existing Indebtedness and Existing Securities of GNCCL, GNL and Wonga – Gujarat to supply 2 clarification of the question below regarding guarantor covenant by Axis Bank 2 [sic] confirmation of the thresholds under the definition of Permitted Financial Indebtedness from US$75 million to US$100 million. 3 contact details for Axis Bank. I will forward shortly the revised Terms sheet with our handwritten amendments to indicate where in the document the relevant provisions have been included." 1. At 4:30pm Mr Kannan responded to Jill Milburn's email of 4:27pm by stating: "On GNCCL there is no restriction on indebtedness. The permitted indebtedness only reflect[s] that of the borrower i.e. GNL. There is [sic] no financial covenants of any sort so compliance certificate is not applicable." 1. At 4:42pm Jill Milburn responded to Mr Kannan's email of 4:30pm stating: "Under the Terms sheet GNCCL [WLC] is an Obligor as such it is my understanding that it is subject to the negative pledge restrictions in clause 22.13-22.15 of the Facility Agreement and must also supply financial statements. Vaibhav also confirmed to me this afternoon that this is the case. I understand that the reason for this is that GNCCL is the main operating company and this is where the funds will end up Please raise this issue directly with the Bank as a matter of urgency as it is a fundamental point that should be agreed between the parties. We have deleted the financial covenants and the compliance certificate in the draft Facility Agreement which I have just circulated." 1. At 5:32pm a member of Trilegal emailed Mr Kannan and officers of the plaintiff in relation to Reserve Bank of India (RBI) requirements for creating a charge over the immovable/movable property of an Indian corporation (namely, that RBI approval was required). 2. At 5:48pm Jill Milburn circulated to Mr Kannan and members of the plaintiff (including Mr Panda) a copy of the Fourth Term Sheet which she had annotated in handwriting to cross-reference where in the third draft of the Facility Agreement each provision in the Fourth Term Sheet could be found and which clauses remained to be incorporated. 3. In respect of clause 8 of the Fourth Term Sheet which set out the security required under the Facility Agreement Jill Milburn's handwritten annotations indicated that those provisions had been incorporated into the: * definition of "transaction security"; * clause 18 of the Facility Agreement ("guarantee & indemnity"); * clause 23 ("Debt Service Reserve Account"); * clause 28 ("security over GNCCL Shares"); and * "conditions subsequent Sch 2". 1. On 15 June 2013 at 5:50pm the plaintiff advised Trilegal that it had dropped the requirement for a subservient charge over the assets of the parent company in India (i.e. GNCL). This was item 1 in the seven-fold items of security stipulated in the Fourth Term Sheet. At 5:53pm the plaintiff also advised Jill Milburn of this change. 2. On 17 June 2013 at 1:17am Mr Kannan responded to the email from Jill Milburn of 14 June 2013 at 4:27pm. The email says: "Dear All Tried to work on the agreement but could not complete. We have to be clear that GNCCL will not be able to execute the facility agreement as it cannot become a party to same. The best that can be done is the Borrower/GNCL/Wonga as Promoters could provide commitments on a few essential conditions to be complied with by GNCCL. ? The Agreement need to factor this." 1. A copy of the third draft Facility Agreement with edits made by Mr Kannan was attached to that email. 2. At 9:57am Jill Milburn confirmed she was waiting on instructions before the Facility Agreement could be finalised. 3. At 12:51pm Mr Jagatramka responded directly to Jill Milburn's 9:57am email requesting that the CHESS Tripartite Deed (required for the perfection of 70,000,000 shares in WLC to be pledged by Wonga) be executed by Argonaut that day. 4. At 1:16pm Mr Jagatramka thanked Jill Milburn for her confirmation that the CHESS Tripartite Deed had been provided to Mr Sharma for execution. 5. At 6:21pm Jill Milburn circulated the fourth draft of the Facility Agreement. In her covering email she stated: "We attach for review and comment Version 4 of the Facility Agreement with the previous tracked changes accepted and further changes made in tracking. The substantive item outstanding remains the question of whether or not GNCCL is to be a party to the Facility Agreement. Please note that due to FIRB notification requirements the Security to be taken over the GNCCL shares will need to be first notified to FIRB which may take up to 30 days. The grant of the security will therefore need to be a condition subsequent – Axis Bank to confirm. We will prepare the FIRB notification for Axis Bank and forward this to Axis Bank tomorrow for comment. In relation to the Hong Kong DSRA account, Eversheds [Hong Kong lawyers retained by Axis] have asked for details of Gujarat NRE Limited's process agents (or lawyers/agents who will accept legal proceedings on Gujarat NRE Limited's behalf in Hong Kong) – Kannan/Sharma please supply." 1. At 6:37pm Mr Kannan responded to Jill Milburn's 6:21pm email inquiring: "Why would this loan require firb notification could you advice [sic] me." 1. At 6:55pm Jill Milburn responded stating that FIRB approval was required for the plaintiff to take a charge over 70,000,000 shares in WLC because the Indian Government had a more than 15% direct or indirect interest in the plaintiff and the shares to be pledged were more than 10% of WLC's share capital. 2. At 7:08pm Mr Kannan responded to Jill Milburn's 6:55pm email stating: "Ok but the 70 million shares being pledged are around 5.1% of the paid up equity of GNCCL and not 10%". 1. At 7:34pm Jill Milburn responded to Mr Kannan's email stating: "Do the 70 million shares equates to only 5.1 per cent of the issued shares? We are confused as the corporate diagram in the Facility Agreement suggests that Wonga holds a greater percentage of shares in GNCCL – is the diagram out of date?" 1. At 7:39pm Mr Kannan replied: "The holdings are more. But what is being pledged as security as on date to Axis Bank is only 70 million shares. Which is only 5.1% trust that clarifies the issue." 1. At 7:50pm Jill Milburn responded: "Unfortunately it does not help as the FIRB policy notification will still apply to investments below 10 per cent because of the ratchet provision for the increase in the shares…" 1. At 7:54pm Mr Jagatramka emailed Jill Milburn and asked her to call him on a Sydney local number to discuss the issue concerning FIRB notification. 2. At 7:55pm Mr Jagatramka emailed Jill Milburn and inquired: "Could we pledge 70,000,000 now and make the ratchet subject to firb approval." 1. At 9:58pm Teena Jaisinghani of the plaintiff emailed Jill Milburn copying in Mr Kannan and Mr Jagatramka in relation to three matters: 1. whether FIRB approval is required; 2. whether the obligation to pledge 70,000,000 shares in WLC could be made as a condition subsequent, instead of a condition precedent; and 3. confirming that GNCCL (WLC) could be removed as an obligor and signatory to the Facility Agreement. 1. On 18 June 2013 at 4:09am Mr Kannan emailed Jill Milburn providing an extract of FIRB's notification requirements for direct investments and asking whether the matter could be discussed "in a joint con call at around 8am Indian time". 2. At 9:05am Jill Milburn responded stating: "The policy also addresses direct investment below 10 per cent. I will highlight and send this section to you. We confirm that it is very clear that this security is notifiable and are aware from previous discussions with FIRB that this is the case. As discussed this is in practice more of a notification requirement than an approval but it is a pre condition. The best approach is to make the application today if possible and ask for an expedited review." 1. Further at 11:31am Jill Milburn sent to Mr Kannan part of the relevant FIRB policy, marking the relevant section with an asterisk. 2. At 11:48am Mr Jagatramka wrote to Jill Milburn in relation to the FIRB issue stating: "I can confirm that with our holding at 64% out of which about 5-6% are being pledged, none of the clauses as pointed out by you become applicable in this case. Axis is not building up any stake, they would not have any special/veto rights, no control on board of gnccl [WLC], there is no equity bases relationship with gnccl [WLC]. Based on all these, I can be sure that none of the provisions get attracted." 1. At 11:53am Jill Milburn responded stating: "Arun, I can only confirm that FIRB notification is required in this instance. I have had numerous previous discussions in the past with FIRB and this is their policy with regard to secured lending by Banks which are foreign government owned and which are not ADIs. I cannot change this and it is not an issue which FIRB will debate." 1. At 1:10pm Teena Jaisinghani emailed Jill Milburn copying in Mr Kannan and Mr Jagatramka in relation to the issue of FIRB notification stating: "[Axis Bank's company secretary] has confirmed that the Government of India doesn't hold more than 15% stake in Axis Bank and hence we may proceed to have creation of security on 70 million shares of GNCCL as a CP [Condition Precedent] and balance top up to ensure 1.50x cover as a CS [Condition Subsequent] giving 60 days. You may please make the relevant changes in the facility agreement accordingly." 1. At 2:01pm Jill Milburn responded to Teena Jaisinghani's email stating (inter alia): "If the government of India holds a 15% or more direct or indirect controlling interest in the Bank through its agencies and related entities then the policy will apply. If it does not then the policy will not apply." 1. At 2:15pm Mr Jagatramka wrote to Jill Milburn stating: "Lic and other institutions do not hold equity with a view to exercise control but as a pure investment of their investible surplus. Govt does not exercise any control due to such holding. Request that you kindly reconsider the matter and allow the documentation to be done today." 1. At 2:22pm Jill Milburn responded to Mr Jagatramka's stating: "Axis Bank must instruct me that the test as I have outlined below is not applicable. My understanding is that Vaibhav has done this on behalf of Axis Bank in an email to me an hour ago." 1. At 3:39pm Jill Milburn circulated the fifth draft of the Facility Agreement. In the covering email she stated: "Please find attached a further draft of the Facility Agreement with further changes made in mark-up. We have removed GNCCL as an Obligor and reinstated the Wonga Specific Security Arrangement over the 70 million shares as a pre-condition to drawdown. Please let me know as soon as possible of any further changes [that] are required to the document." 1. At 5:30pm Jill Milburn provided copies of draft board minutes and verification certificates for the conditions subsequent under the Facility Agreement. They were sent to Mr Jagatramka, Mr Kannan and Mr Sharma. At that stage the documents were prepared for completion by, inter alia, Wonga. 2. At 6:57pm Trilegal provided comments to Jill Milburn copying in officers from Axis and the Gujarat Group in respect of the Facility Agreement. 3. At 7:02pm Jill Milburn emailed Mr Sharma copying in officers from the plaintiff and stating: "Attached are current PPSR searches for Wonga Coal Pty Ltd and Gujarat NRE Limited. We note that Progress Trusteeship Services Limited holds fixed and floating charge over all assets of Wonga Coal Pty Ltd and Gujarat NRE Limited. Please contact the Trustee and arrange to be forwarded signed PPSR releases in respect of the shares to be secured in favour of Axis Bank and the Borrower DSRA Account." 1. At 7:05pm and 7:07pm Arpit Agrawal circulated by emails to Jill Milburn and the plaintiff copies of the executed board minutes of GNL and Wonga (in the form supplied by Jill Milburn) along with verification certificates for the same entities (again in the form supplied by the plaintiff). 2. At 7:33pm Mr Sharma emailed Jill Milburn in relation to her email concerning PPSR releases: "Please see a letter from Progress Services, confirming that 70,000,000 shares were freed from the pledge and on that basis on these shares were transferred out. I hope this would address the issue raised." 1. At 7:44pm Jill Milburn responded to Mr Sharma's email stating: "No this is a letter to Argonaut regarding the shares and will not suffice. There is a standard PPSR release form that the Trustee will need to sign formally and provide power of attorney details. They will also need to supply a formal PPSR Release for the DSRA account." 1. At 8:14pm Mr Kannan circulated a version of the Facility Agreement (described as "version 5" in the subject line) with further track changes. In the covering email he stated: "Reviewed by me few changes suggested in track changes mode (in red)." 1. There were no changes to clause 18 concerning the guarantees and indemnities. 2. At 9:33pm the plaintiff provided Trilegal's comments on the Facility Agreement to Jill Milburn for review. 3. At 9:36pm Trilegal provided a draft legal opinion (from an Indian law perspective) on the transaction documents. 4. At 9:40pm Mr Kannan wrote to the plaintiff (copying in Mr Jagatramka) in relation to the issue about securing a PPSR release so as to allow the 70,000,000 shares in WLC to be charged as security. Mr Kannan stated (in light of the requirement that a formal PPSR release be obtained from the existing security holder over Wonga): "Suggest we include this as a condition precedent [sic] with 60 days time." 1. On 19 June 2013 at 2:04am Mr Jagatramka wrote to ICICI Bank in Singapore in relation to obtaining the necessary PPSR release in respect of the 70,000,000 shares in WLC to be pledged stating: "Pl get the necessary forms signed by trustees urgently. This Axis facility is for subscription to rights and the proceeds to be used for clearing all banking dues including 200k to icici singapore." 1. At 10:40am Jill Milburn emailed officers of the plaintiff along with Mr Kannan stating: "We have reviewed the suggested changes made by Indian Counsel to the Facility Agreement and agree with their inclusion subject to your comments. Please note Trilegal await confirmation of whether the Form ODI may be a condition subsequent – see page 87 attached. May we please ask in order to expedite matters that the parties now only circulate the pages of the Facility Agreement with the changes they require. If the Facility Agreement is to be finalised today it will assist if all changes are received by no later than 4:00pm Sydney time." 1. Attached to that email were a number of pages from the Facility Agreement containing manual highlighting. They included the pages qualifying the guarantees to be given by Mr Jagatramka and GNCL (being subject to the laws of India and in respect of which the advice from Trilegal had been sought) (the sixth draft of the Facility Agreement). 2. At 11:20am Jill Milburn emailed Mr Sharma, copying in Mr Kannan and various officers of the plaintiff, stating: "Attached is a prescribed PPSR release for your information. This replaces what was the ASIC form release. Please ask the Trustee to arrange for completion and signature. Please also ask the Trustee to provide a copy of their power of attorney." 1. At 6:06pm Jill Milburn circulated the further sixth draft of the Facility Agreement. In the covering email she stated: "Following my discussions with Teena [Jaisinghani] this afternoon I attach what we hope will be the near final form of the Facility Agreement with the changes made in tracking since the previous version was circulated yesterday. It includes all the changes made by Tri-Legal except for the condition subsequent – Axis confirms that the Acknowledgment from the Authorised Dealer will suffice – please see Part 2 of Schedule 2. It al[so] includes some of the changes requested by Kannan yesterday. I will forward a separate note of explanation on the reason for the non-inclusion of some of the items shortly. As previously requested to expedite matters if there are any further changes please now only circulate the pages of the Facility Agreement with the changes you require or set these changes out in an email." 1. At 6:18pm Mr Jagatramka wrote to Jill Milburn: "Could we ensure to execute the documents today. Pl do." 2. At 6:43pm Jill Milburn emailed Mr Kannan, explaining which of the changes he proposed had been adopted and which had not. She explained that all changes were accepted, save for: Permitted Financial Indebtedness exception for further facilities of $75m, which was considered to be "too wide and the preference is for the Borrower to obtain prior consent to further borrowings after consultation"; and The deletion of the covenants regarding the "Lease Agreements or Mining Tenements". 1. At 6:59pm Mr Kannan responded to the email from Jill Milburn noting that a change which was requested was not picked up, namely, "GNCCL to be excluded from definition of 'Group'". 2. At 7:04pm Mr Jagatramka emailed Jill Milburn in relation to the terms relating to Permitted Financial Indebtedness stating: "Need to have permitted indebtedness [of] further 50 million". 1. At 7:11pm Jill Milburn responded to Mr Kannan's last email by stating: "Apologies I missed your tracked change in the definition. The reference to 'Group' is used extensively in the Facility Agreement and each individual reference will need to be considered. To expedite this please let us know which particular clauses you have an issue with as in many instances it will be appropriate that this reference remains." 1. At 8:13pm Mr Kannan emailed (inter alios) Teena Jaisinghani in relation to the documentation of the requirement to obtain a release from Progress Trusteeship Services Limited. 2. At 10:37pm Trilegal provided further comments on the Facility Agreement. 3. At 11:31pm Jill Milburn acknowledged Trilegal's comments and says that "these look fine to me". 4. At 11:39pm Jill Milburn responded to an email from Mr Sharma (inquiring when the final documents would be circulated) noting that Mr Kannan and the plaintiff's legal department likely had more changes to the agreement so that it would not be finalised that evening. Mr Sharma acknowledged her response at 11:46pm. 5. At 11:57pm Mr Sharma asked Jill Milburn whether a conference call would assist to finalise the Facility Agreement. 6. On 20 June 2013 at 7:54am Jill Milburn emailed Mr Sharma in response stating: "Probably a good idea if matters cannot be resolved. However, Kannan has not provided his comments yet. Kannan may have raised these with axis last night but I need to know what these are as soon as possible or we may lose another day." 1. At 9:15am Mr Kannan circulated a PPSR release executed by Progress Trusteeship Services Limited in respect of GNL pertaining to 70,000,000 shares in WLC held by GNL. 2. At 9:34am Jill Milburn advised Mr Kannan in relation to the PPSR release obtained from Progress Trusteeship Services Limited stating: "The release should refer to Wonga Coal Pty Ltd and not Gujarat NRE Limited. In addition the reference to 'Mortgagee' in the released property section should be deleted. Further the release is signed by only one director which is not sufficient… Is there a separate release for the borrower DSRA account." 1. At 9:52am Jill Milburn requested Mr Sharma's assistance in obtaining a release of the security held by one of GNL's existing lenders. 2. At 9.57am Mr Kannan responded to Jill Milburn's 9:34am email stating: "The shares were released from GNL not Wonga… We subsequently transferred the same to Wonga." 1. At 1:57pm Mr Kannan emailed Jill Milburn in relation to certain matters concerning the Facility Agreement: "Permitted Indebtedness – We [need] head room of at least 50 million. (Teena/Akshaya could call to discuss if required) I am OK with mining lease and Tenements I am OK to retain Borrower in Financial Statements But I would require the definition of Group to exclude GNCCL [WLC] as the reference is there on to[o] many places. Best is [to] exclude the same except where it relates to financial statements, mining lease and tenements and environment. So better delete from definition add GNCCL in clause only. Pls circulate the final version with these changes for review." 1. At 2:14pm Jill Milburn responded to Mr Kannan stating: "We will review the Group definition and respond shortly. We note you will discuss the issue of permitted indebtedness directly with Axis Bank. In the meantime, we confirm that Axis Bank requires properly signed copies of the PPSR release from the Trustee in respect of both the 70 million shares and the Borrower DSRA Charge before it will release funds. Please note that the Charges held by the Trustee cover both present and future property of the companies and will attach to the Bank account as soon as it is established." 1. At 3:36pm Jill Milburn further responded to Mr Kannan's comments on the Facility Agreement, namely the definition of "Group" in the Facility Agreement (and the plaintiff's desire to retain the exiting definition of "Group"). Attached to that email were select pages of the Facility Agreement containing handwritten annotations. 2. At 5:26pm Rati Pugalia of the plaintiff emailed Arpit Agrawal of Gujarat Group, copying in Mr Kannan and officers of the plaintiff: "With the change in security structure, we would require the following documents in respect of Gujarat NRE India Pty Ltd" 1. The email proceeded to list various documents concerning the incorporation and constitution of the defendant, although no document as to its financial worth or asset position was sought. 2. At 5:30pm Jill Milburn circulated the seventh draft of the Facility Agreement (although the document was described as "Version 6" in the file description). In her covering email, Jill Milburn states: "Please find attached the hopefully final draft of the Facility Agreement for approval with the further changes made in tracking. The Major changes related to the change in security provide from Wonga to Gujarat NRE India Pty Ltd [the defendant]. Please let me know if possible of any further changes in the next hour." 1. At 5:44pm the defendant provided documents to the plaintiff for the purposes of KYC requirements. They did not include any document as to the defendant's net worth or financial standing. 2. At 5:46pm the defendant provided further documents to the plaintiff for the purposes of KYC requirements. Again they did not include any document as to the defendant's net worth or financial standing. 3. At 6:52pm Jill Milburn circulated an amended CHESS Tripartite Deed and amended Specific Security Deed (Shares) which identified the defendant as the charger of 70,000,000 shares in WLC. 4. At approximately 7pm there was a telephone conference between Mr Jagatramka and (inter alios) Prasanta Das in relation to the substitution of the defendant for Wonga in the Facility Agreement. 5. At 7:04pm Mr Sharma provided the HIN number and account details for the defendant to Jill Milburn, Mr Kannan and Teena Jaisinghani of the Plaintiff (copying in others). 6. At 7:15pm Teena Jaisinghani emailed Mr Jagatramka and others, including Akshaya Panda and Prasanta Das but no one else from the Gujarat Group, the revised terms of security. The covering email states: "Dear all – Description This mail being marked to Company, Axis, HK counsel & Australian counsel As discussed in our telecon this afternoon, please find the revised terms of security for this transaction. Request the company to please confirm the terms ASAP so that Axis can obtain needful approvals at the earliest and counsels can ensure that documentation is in line with the revised agreed terms. Thanks." 1. Attached to that email was a schedule that set out the existing items of security required, as stipulated in the Fourth Term Sheet, and the amended security required (the Fifth Term Sheet or "Modified Sanction Letter"). Relevantly: 1. The defendant was to provide the mortgage/pledge of 70,000,000 shares in WLC instead of Wonga; 2. The DSRA Account was to be changed to be a Cash Collateral Account, to hold US$550,000 and to be provided and maintained by the defendant; and 3. The defendant was to provide an unconditional and irrevocable "Guarantee", which (again, like Wonga) was only to "be obtained only if the same is required for perfection of security on pledge of shares listed in (ii) above, based on the advice of legal counsel". 1. At approximately 7:30pm Mr Jagatramka telephoned Prasanta Das and confirmed his agreement to the terms of the Fifth Term Sheet. 2. At 8:05pm Jill Milburn emailed Mr Jagatramka and various officers of the plaintiff following Teena Jaisinghani's 7:15pm email. She attached the eighth draft of the Facility Agreement (although the document was described as "Version 6" in the file description) and stated: "Dear all, Further to Teena's email I attach the Facility Agreement with the further changes made to clause 24 of the Facility Agreement to reflect the New deposit account terms and cash collateral of USD550,000. Please note the associated changes to the definitions in clause 1." 1. At 8:32pm Mr Kannan provided further comments on the Facility Agreement (being the seventh draft – i.e. the one attached to Jill Milburn's 5:30pm email) stating in the covering email: "Dear All Certain portion about DSRA I have highlighted in yellow need to reword suitably Few place [sic] where I have felt the need I have replaced Group with obligor, pls review and do the needful [sic]." 1. At 8:52pm the defendant provided further KYC documents. Again they did not include any document as to the defendant's net worth or financial standing. 2. At 8:54pm Jill Milburn responded to Mr Kannan's 8:32pm email regarding the Facility Agreement stating (and drawing Mr Kannan's attention to the eighth draft of the Facility Agreement that she has circulated which has replaced the DSRA requirement with the establishment and maintenance of a US$550,000 cash collateral): "Kannan, Please review my most recent email which attached the amended clause 24. Please also resend only the pages you have marked up changes on in the Facility Agreement [as] it is too difficult to work out which are your proposed changes. It is my understanding from our call this afternoon that Arun accepted that no further changes need to be made to the definition of Group. Accordingly, please confirm that you still require these changes as this will delay the finalisation of the Facility Agreement. Unfortunately I need to leave the office now and [will] not be able to progress the matter further this evening. I did ask that comments be sent to me 2 hours ago." 1. At 9:02pm Arpit Agrawal provided the plaintiff with a revised board resolution for the defendant for the opening of a current account. 2. At 9:04pm Mr Kannan commented on the revised CHESS Tripartite Deed and revised Specific Security Deed (Shares) pursuant to which the defendant was to charge 70,000,000 shares in WLC as security for the proposed US$10,000,000 loan under the Facility Agreement. 3. At 9:30pm Jill Milburn responded to Mr Kannan's comments on the revised CHESS Tripartite Deed and the revised Specific Security Deed (Shares). 4. At 9:34pm Mr Kannan responded "thanks" to Jill Milburn. 5. On 21 June 2013 at 10:12am Jill Milburn circulated "clean" versions of the CHESS Tripartite Deed and Specific Security Deed (Shares). 6. At 10:41am she circulated the ninth draft of the Facility Agreement (although it was still described as "Version 6" in the file description). In her covering email she stated: "Please see attached a further marked up version of the Facility Agreement. Kannan – please note the references to Obligor were changed were appropriate (sic). I have not made your changes where they are made in the context of 'Transaction Documents' as these include the Lease Agreements. If there are any further changes required, please let me know by later than 2.00pm Sydney time. Please only circulate the pages which the marked up changes. Teena please confirm when execution versions may be circulated." 1. At 11:52am she circulated revised copies of Board minutes and verification documents required to be completed by the defendant and GNL. In her covering email she stated: "Dear Sanjay, In preparation for signing the Finance Documents (once in agreed form) please forward the current certified copy of the constitution for Gujarat NRE India Pty Ltd. We attach revised copies of the minutes, verification certificates and authority to complete. Please do not complete and send to me until after the Boards have approved the execution versions of the Finance Documents. I confirm that Axis is still to authorise the circulation of the execution versions." 1. At 12:07pm Iain Kemp of Grant Thornton Australia, who were the auditors of WLC, emailed Mr Sharma stating: "Sanjay, Please can you send me the new sanction letter for this bridging loan – this will need to be disclosed as a subsequent event and also the purpose disclosed – i.e. the funds can only be used to bring loan balances up to date." 1. At 2:08pm Jill Milburn emailed Mr Kannan, Teena Jaisinghani and other officers of the plaintiff stating: "Dear Teena, Kannan and all, May [you] let me know by return email if we expect any further changes to the Facility Agreement. If not we will not finalise the document and send a clean version. Teena we confirm we will only release the execution version once we have received your confirmation. Please let us know if this will occur this afternoon or Monday." 1. At 2:12pm Mr Kannan approved the final form of the Facility Agreement. His email stated: "WE are Ok with agreement. The documentation and disbursement is planned for today". 1. At 2:34pm Jill Milburn informed Mr Sharma and others that she would shortly circulate a Conditions Precedent List. 2. At 3:00pm there was a GNI Board Meeting via teleconference with Mr Jagatramka, Mrs Jagatramka and Mr Sharma present. The Board resolved to approve the defendant's entry into the Facility Agreement and other attendant security documents. 3. Then at 3:30pm there was a GNL Board Meeting via teleconference with Mr Jagatramka, Mrs Jagatramka and Mr Sharma present, where the Board resolved to approve GNL's entry into the Facility Agreement and other attendant security documents. 4. At 4:05pm Jill Milburn requested documents from Mr Sharma including the constitution of the defendant. 5. At 4:07pm Mr Sharma provided details of the defendant's shareholding. 6. At 4:12pm Jill Milburn noted by email to Mr Kannan, Mr Sharma and officers of the plaintiff that if final comments of the documents were not received in the next hour, she could not guarantee that the matter would finalise that day. 7. At 4:17pm Mr Jagatramka responded to Jill Milburn's email: "Requesting Teena to try and ensure to get this done today". 8. At 5:04pm Mr Sharma sent to Iain Kemp of Grant Thornton Australia in response to their 12:07pm email the Fourth Term Sheet stating: "Here it is. Trust this assists". 9. At 5:58pm Mr Sharma circulated the CHESS Tripartite Deed as executed by Argonaut. 10. At 6:28pm the plaintiff approved the facility agreement for execution. Teena Jaisinghani emailed various persons, including Jill Milburn, Mr Kannan, Akshaya Panda (of the plaintiff) and Kingsley Ong (Hong Kong lawyers retained by the plaintiff) stating: "Dear Jill / Kingsley We have received sign off in the attached pre-execution versions. You may please circulate the execution versions with detailed execution instructions. Thanks." 1. Attached to that email was "version 9" of the Facility Agreement, along with other transaction documents. 2. At 7:27pm Jill Milburn circulated the execution version of Facility Agreement. In her email she stated: "Dear all, Please find attached the execution version of the Facility Agreement. We confirm that no further changes have been made to the document since the previous version was circulated this morning except for the change of the reference from DSRA to Cash Collateral in the definition of GNI Charge. Please print and arrange for 3 originals of each document to be signed and please pdf a signed copy of the document to us as soon as possible. Please also note the conditions precedent to drawdown to be satisfied in Schedule 2 pages 84-86 of the Facility Agreement." 1. At 7:28pm Jill Milburn circulated execution versions of the CHESS Tripartite Deed and Specific Security Deed (Shares). 2. At 7:41pm Jill Milburn circulated a replacement page 7 to the execution version of the Facility Agreement (which amended the definition of "GNI Charge"). 3. At 7:44pm Jill Milburn emailed Mr Sharma the replacement page 7 to the execution version of the Facility Agreement. 4. At 8:13pm Mr Sharma provided Jill Milburn with a copy of the Facility Agreement executed by him on behalf of GNL and the defendant. 5. At 8:27pm Jill Milburn sent an email to Mr Kannan, various officers of the plaintiff and its Hong Kong lawyers (who were preparing the documentation for the US$550,000 cash collateral account to be established and maintained by the defendant) stating: "Dear all, I understand from Teena and Kingsley that the GNI account will not be created until Monday and therefore an account number will not be available and hence the GNI Charge will be circulated on Monday." 1. At 8:42pm Mr Jagatramka provided to Jill Milburn a copy of the Facility Agreement executed by him on behalf of GNL, the defendant and himself personally. 2. At 8:56pm Mr Sharma circulated a copy of the CHESS Tripartite Deed and Specific Security Deed (Shares) executed by him on behalf of the defendant. 3. At 9:08pm Mr Sharma circulated a copy of the Facility Agreement executed by Mr Kannan on behalf of GNCL. 4. At 9:31pm the plaintiff provided to Jill Milburn, amongst other things, a copy of the Facility Agreement executed on its behalf by Akshaya Panda (Chief Executive of Axis Bank, Hong Kong Branch) and Vaibhav Chadha (Head of Credit for Axis Bank, Hong Kong Branch). 5. On 23 June 2013 at 5:12pm Mr Jagatramka circulated copies of the CHESS Tripartite Deed and Specific Security Deed (Shares) executed by him on behalf of the defendant. 6. At 5:13pm Mr Jagatramka emailed Akshaya Panda, Jill Milburn and others stating "thanks to all". This is in response to a prior email from Akshaya Panda on the same day stating: "Thanks and regards". 7. At 9:40pm Arpit Agrawal provided to the plaintiff minutes in respect of the board meetings of GNL and the defendant and minutes for the management committee of the board of GNCL authorising the entry by those entities into the Facility Agreement and other related security documents. 8. At 9:42pm Arpit Agrawal provided to the plaintiff verification certificates in respect of GNL, the defendant and GNCL. 9. In emails time stamped 9:48pm and 10:40pm Arpit Agrawal provided to the plaintiff financial statements (for the financial year ending 31 March 2012) in respect of GNL, GNCL and WLC (referred to as "GNCCL"). 10. On 24 June 2013 a "Disbursement Advice" was sent from the "Deputy Manager–Credit" to "CEO, Hong Kong Branch" in relation to the disbursement of US$10,000,000 by the plaintiff to GNL under the Facility Agreement. 11. At 12:40pm that day Jill Milburn circulated confirmed signed copies of the CHESS Tripartite Deed and the Specific Security Deed. 12. At 2:13pm Jill Milburn circulated to Mr Sharma, various officers of the plaintiff and Mr Kannan a copy of Schedule 2 of the Facility Agreement with handwritten notes. It recorded various documents as having been received and outstanding documents that were yet to be received. 13. At 2:45pm Arpit Agrawal provided the plaintiff with the defendant's annual report for the financial year ending 31 March 2012. That report recorded that the defendant had total assets of $6,539 and net assets of $6,414. 14. At 4:29pm a utilisation request was sent by GNL to Axis. 15. At 4:32pm Mr Jagatramka emailed a creditor of WLC attaching one of the terms sheets and suggested that the creditor would be paid from funds to be provided under the Axis facility. 16. At 5:15pm the plaintiff requested amendments to the utilisation request. 17. At 5:24pm Mr Kannan emailed Teena Jaisinghani setting out the proposed use of the funds the subject of the Facility Agreement. In that email he stated: "Amount of drawdown in GNL USD 10,000,000 Upfront fee & legal charges (approx) USD 500,000 Net amount to credit to GNL USD 9,500,000 Amount to be transferred from GNL to ICIC USD 200,556 Amount to be transferred from GNL to GNIL [GNI] USD 9,285,000 Amount to be transferred from GNIL to DSRA (approx) USD 520,000 to GNCCL [WLC] account USD 8,760,000 Amount to be transferred from GNCCL (8,726,356) as below To Axis HK (Trustee) for interest USD 2,421,561 To Axis HK addition intt USD 203,087 To various banks (5) for overdue USD 5,275,020 To MCB interest payment USD 824,688" 1. At 5:30pm GNL circulated a revised utilisation request which included the account number into which funds were to be credited. 2. At 6:31pm Jill Milburn requested an update in relation to the conditions precedent under the Facility Agreement. 3. At 6:33pm a Mr Kingsley Ong, a partner of Eversheds (who represented the plaintiff with respect to Hong Kong law), informed Jill Milburn by email that they had released their "HK legal opinion to Axis Bank". 4. At 7:06pm the plaintiff provided an update in relation to the satisfaction of the conditions precedents under the Facility Agreement. 5. At 8:31pm Jill Milburn emailed the plaintiff attaching a "Satisfaction of Conditions Precedent Letter" on Hunt & Hunt Lawyers letterhead. 6. Also on 24 June 2013 the plaintiff Axis advanced US$10,000,000 to GNL, of which GNL received the net sum of US$9,506,000 into its account. That sum of was disbursed as follows (with US$92,639.66 left in GNL's account by 27 June 2013): 1. US$200,355.46 was paid to ICICI Bank; 2. US$7,962,974.88 was paid to GNI which transferred the sum to WLC; 3. US$550,000 was paid into an account in the name of GNI to establish the cash collateral required under the Facility Agreement; 4. US$700,000 was remitted overseas; and 5. US$30 was remitted on account of bank charges. 1. WLC disbursed the sum it received from the defendant between 24 and 26 June 2013 as follows (with US$12,729.81 remaining in WLC's account at the end of that period): 1. US$5,275,019.89 to Axis Bank, Dubai Branch in payment of outstanding interest; 2. US$1,466,945.90 to various banks in payment of outstanding interest, namely: (a) Exim: US$611,227.46; (b) UCO: US$244,490.98; (c) DBS: US$488,981.97; and (d) Afra Asia: US$122,245.49; 3. US$1,170,846.44 to Axis Bank, Hong Kong Branch, in payment of outstanding interest; 4. US$20,000 to Axis Bank, Dubai Branch; 5. US$30 to Axis Bank, Hong Kong Branch; 6. US$18,000 to Axis Bank, Singapore Branch; and 7. US$30 to Axis Bank, Hong Kong Branch. 1. Further on 24 June 2013 the plaintiff prepared an internal disbursement memorandum which referred to the board resolution "accepting sanction" as having been executed and held by the bank; the Facility Agreement as having been executed and held by the back; and the status of security given by the defendant as an unconditional guarantee. 2. On 5 July 2013 at 6:57pm Rati Pugalia of the plaintiff emailed Mr Sharma, copying in Akshaya Panda, Mr Kannan and other officers of the plaintiff, stating: "Dear sir, Please find attached the revised sanction and modification letter. Please arrange to get the authorised signatory to accept the letters. Also please confirm the postal address where we shall courier the original letters." 1. Attached to that email were two documents (the Final Sanction Letters): 1. A letter dated 20 June 2013, setting out the schedule of security circulated on 20 June 2013, save that that schedule had been put onto a formal letterhead, along with other wording (outside the schedule) not present on the originally circulated schedule; and 2. A letter dated 13 June 2013, akin to the Fourth Term Sheet, save that the attached letter had been amended so that, relevantly, in clause 8 (dealing with security) there were only six items of security required, as opposed to seven in the Fourth Term Sheet. 1. On 15 July 2013 at 4:11pm Rati Pugalia of the plaintiff emailed Arpit Agrawal in relation to the Final Sanction Letters stating: "Thanks Arpit, shall dispatch the sanction letter and subsequent modification letter (2 copies) to the address today. Please arrange to get the letter accepted by the authorised signatory and return one copy." 1. On 7 August 2013 the plaintiff received executed versions of the Final Sanction Letters (signed by Mr Jagatramka on behalf of GNL, GNCL, the defendant and himself). 2. On 24 June 2016 the advance of US$10,000,000 under the Facility Agreement became repayable by GNL to the plaintiff. Neither GNL nor any of the other Obligors under the Facility Agreement repaid the US$10,000,000. 3. On 26 December 2016 the plaintiff sent a Letter of Demand to GNL, as borrower, and Mr Jagatramka, as guarantor, demanding repayment of the monies owing under the Facility Agreement. 4. On 30 December 2016 the plaintiff issued a Letter of Demand to GNL, as borrower, and the defendant, as guarantor, demanding repayment of the monies owing under the Facility Agreement. 5. On 2 January 2017 Mr Jagatramka wrote to the plaintiff on behalf of himself and GNCL. 6. On 3 January 2017 Mr Jagatramka wrote to the plaintiff in relation to his 2 January letter asking it "to allow me to withdraw the same and cancel without any effect". 7. On 2 May 2017 the plaintiff wrote to Argonaut Securities Pty Ltd requesting Argonaut Securities to transfer to it the 70,000,000 shares in WLC mortgaged by the defendant as security for the Facility Agreement because an event of default had occurred. 8. On 10 May 2017 a transfer form for a non-market transaction was executed by the plaintiff in respect of the 70,000,000 shares in WLC in the name of the defendant. 9. As at 29 May 2017 the price of each share in WLC was $0.01. 10. On 1 September 2017 the plaintiff made an accounting provision with respect to the facility. 11. As at 28 June 2019 JP Morgan's records indicated that the plaintiff was the registered holder of 116,000,000 shares in WLC. 12. These proceedings were commenced on 8 July 2019 and a freezing order was made by Slattery J in respect of the $8,670,215.34 to be paid to the defendant by WLC pursuant to the Court of Appeal's determination in respect of an appeal brought from orders made by Robb J in favour of the defendant. Those proceedings concerned a claim in debt and for monies had and received which the defendant brought against WLC in relation to the funds the defendant advanced to WLC in June 2013, after the plaintiff provided them to GNL under the Facility Agreement. 13. On 16 July 2019 the Court of Appeal made orders requiring the sum of $8,670,215.34 (plus accrued interest) to be released by Thomson Geer (as solicitors for WLC) to the defendant. 14. On 25 July 2019 the plaintiff sent a letter to GNL stating the balance owing as at 30 June 2019 in respect of the Facility Agreement was US$13,082,989.95 15. On 6 September 2019 the plaintiff sent a letter to GNL stating that the balance owing as at 5 September 2019 in respect of the Facility Agreement was US$13,215,320.24. 16. As at 31 July 2020 the Statement of Account of GNL (currently known as Gujarat NRE Pty Limited) ending in 281 showed a closing balance of -US$9,967,074.25 17. On 12 August 2020 the plaintiff sent a letter to GNL certifying that the balance in GNL's loan account at the close of 31 July 2020 was: Particulars Amount in USD Principal Outstanding 9,967,074.00 Overdue interest and penal interest 4,228,004.78 Total (outstanding) 14,195,078.78 Submissions 1. The plaintiff submits the defendant is liable in contract to it for the unpaid debt, including the principal amount and unpaid interest which it says should be calculated at the time of judgment. As noted above the defendant does not dispute the contract was executed but raises a number of defences. The defendant's submissions The claim for misleading and deceptive conduct – s 12DA of the ASIC Act 1. The defendant submits that in failing to draw its attention to any term of the Facility Agreement that differed from that set out in the Original Sanction Letter (Third and Fourth Term Sheets) as varied by the Modified Sanction Letter (Fifth Term Sheet) the plaintiff, positively represented to the defendant that the terms of the Facility Agreement conformed with the terms of the sanction letters. 2. Further that in failing to advise the defendant that the plaintiff required an unqualified, unconditional and irrevocable guarantee from the defendant the plaintiff, positively represented to it that the Facility Agreement did not contain any such guarantee and that the guarantee from the defendant in the Facility Agreement was qualified in the way set out in the Modified Sanction Letter, namely that it was only to be obtained and be enforceable if "required for [the] perfection of security on pledge of shares… based on the advice of legal counsel." 3. In addition to the various term sheets and sanction letters themselves the defendant submits that the plaintiff's lawyer, Ms Milburn, and officers of the plaintiff positively represented in numerous of the emails set out above that the Facility Agreement had been drafted in accordance with the sanction letters. 4. The defendant submits that the plaintiff having made those representations omitted to mention they were false. It also submits that an unconditional and irrevocable guarantee was never necessary to perfect any contemplated security arrangement, nor was legal advice ever obtained by the plaintiff to that effect. 5. It submits that in the circumstances it was misleading and deceptive (and likely to lead the defendant into error) to present the Facility Agreement (as the plaintiff did) as purportedly congruent with the terms of the Modified Sanction Letter/Fifth Term Sheet. 6. The defendant says this is not a case where an examination needs to be undertaken as to whether a "reasonable expectation" existed (Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [23] (Miller); see further below) but submits that even if it was the outcome would be the same because the plaintiff's conduct gave rise to such a "reasonable expectation". In particular the defendant points to the fact that the Facility Agreement is a substantial document (spanning some 100 pages) which contains a large number of clauses and obligations, the operation of which are diffused over various clauses and schedules; that it was not legally represented; the urgent need for the documentation to be finalised quickly; and the trust between the parties. 7. The defendant submits the representations constituted Mr Jagatramka's belief as to the terms of the Facility Agreement and he (being the relevant mind for the purposes of the defendant: Elitegold Ltd v Australia Fair Shopping Centres Pty Ltd (unreported, Federal Court of Australia, 28 October 1994, Hill J)) relied upon them at the time he executed the agreement as a director of the defendant and urged the other directors to resolve to approve the defendant's entry into it. 8. It submits Mr Jagatramka was not indifferent to whether the guarantee was qualified or unqualified. Rather it submits the contemporaneous evidence shows Mr Kannan (and Mr Jagatramka to a lesser extent but who had trusted Mr Kannan with the task) engaged with the terms of the Facility Agreement and pushed for certain matters. Mr Jagatramka testified that, had an unconditional and irrevocable guarantee been required, it would have been necessary to arrange for the defendant to receive support from other members of the Gujarat Group because of its lack of net assets and so as not to "mak[e] the company insolvent on day one" (T.144/8). 9. The defendant submits the representations were made in trade and commerce and in connection with the supply and/or acquisition of financial services. 10. The defendant submits that the plaintiff's conduct therefore contravened s 12DA of the ASIC Act, entitling it to relief preventing the plaintiff from enforcing the guarantee or damages in the same amount as the sum sued for by the plaintiff in these proceedings. 11. It submits it will suffer detriment if the plaintiff is permitted to sue on the guarantee because it will be liable for an obligation it is otherwise not presently liable to pay and that damage is causally linked to its reliance on the plaintiff's misleading and deceptive conduct because, but for that conduct, the defendant would not have given an unqualified guarantee. The claim of statutory unconscionability – s 12CB of the ASIC Act 1. The defendant submits that the manner in which the plaintiff obtained the unqualified, unconditional and irrevocable guarantee from it constitutes unconscionable conduct contrary to s 12CB of the ASIC Act, in particular for the following reasons. 2. First the defendant submits the existence of the guarantee and its lack of qualification is the product of misleading and deceptive conduct. 3. Secondly the defendant submits it only became a proposed party to the Facility Agreement 24 hours prior to when the agreement was executed and that when it became a proposed security provider it was represented and agreed that the guarantee was to be qualified. 4. Thirdly the defendant submits the inclusion of the unconditional, unqualified and irrevocable guarantee was the product of a mistake and drafting oversight that originated from the plaintiff. It submits the mutual intention of the parties was that the guarantee would be qualified and the plaintiff now seeks (opportunistically) to depart from that mutual intention. It submits it is entitled to seek statutory relief to prevent the plaintiff from enforcing the guarantee without also seeking some other remedy such as rectification. 5. Fourthly the defendant submits the Facility Agreement was executed in a time-pressured environment with the monies the subject of the facility needed urgently to relieve financial obligations owed by WLC to its senior lenders. 6. Fifthly the defendant submits it was not represented by lawyers during the negotiation of the Facility Agreement. 7. Sixthly the defendant submits Mr Jagatramka and Mr Kannan reposed significant trust in the plaintiff arising from their prior dealings with it. 8. Further the defendant points to a disparity of bargaining power between it and the plaintiff (s 12CC(1)(a)), although it says "the issue is not so much as (sic) bargaining power, but rather, size, sophistication and resources". It also says that as a result of the plaintiff's conduct it has been forced to comply with conditions not necessary for the protection of the legitimate interests of the plaintiff (s 12CC(1)(b)) because an unqualified guarantee was not necessary to secure the $10m loan (nor any security arrangement concerning the charging of WLC shares). 9. It submits the fact it and the Gujarat Group were successful and experienced borrowers does not preclude a finding of unconscionability (Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440 (Ipstar)). The claim of estoppel 1. The defendant submits that the plaintiff is estopped from denying that the guarantee was qualified in the way represented in the sanction letters for the reasons already set out above. Variation 1. The defendant alleges that the Facility Agreement was varied on or around early August 2013 by way of the Final Sanction Letter which was attached to Rati Pugalia's email 5 July 2013 to Mr Sharma, Akshaya Panda, Mr Kannan and other officers of the plaintiff and executed by Mr Jagatramka on behalf of GNL, GNCL, the defendant and himself, and returned to the plaintiff on 7 August 2013. 2. The defendant submits the objective evidence demonstrates that the plaintiff sought and obtained GNL, GNCL, the defendant and Mr Jagatramka's formal acceptance of the terms and conditions set out in the Final Sanction Letter. It submits adequate consideration passed in that the Final Sanction Letter also contained other amendments and warranties/representations of potential value to the plaintiff. Further submissions 1. The defendant also made submissions concerning the credibility of its witnesses, Mr Jagatramka and Mr Kannan. It explains Mrs Jagatramka's absence as being due to her no longer being a director of the defendant, residing in India and having refused to provide the defendant with an affidavit in these proceedings. It says that Sharma is also no longer a director of the defendant. He provided two affidavits to the plaintiff in these proceedings (which ultimately were not read). The defendant submits that in any event the documentary evidence supports the contention that he understood that the guarantee was qualified. 2. However the defendant submits that the plaintiff's failure to call Ms Milburn or any of its officers who were involved in the negotiation or execution of the facility agreement permit the Court to draw Jones v Dunkel inferences against the plaintiff. 3. In response to what it describes as the plaintiff's contention that it is estopped from resiling from its representation that it was authorised to enter into and would be bound by the terms of the Facility Agreement (see below), the defendant submits the estoppel cannot succeed because there is no evidence of detrimental reliance, the plaintiff's own records reveal that it shared the mistaken belief as to the qualified nature of the guarantee, and the defendant in these proceedings is not asserting it was not authorised to enter into the Facility Agreement but rather asserts the guarantee was qualified in the manner set out in the Modified Sanction Letter. 4. Further in response to the plaintiff's assertion that it failed to take reasonable care, the defendant submits the contention is untrue. Mr Kannan was delegated the task of overseeing the documentation process. He was suitably experienced and engaged in the drafting process. Notwithstanding those efforts he simply failed to ensure the relevant qualification was included, although the defendant submits that error must be viewed in context. The plaintiff, a trusted counterparty, had repeatedly assured the defendant the guarantee was conditional and, even with its greater resources, legal representation and experience, the plaintiff did not identify the same omission. 5. In any event, the defendant submits s 12GF(1B) (see plaintiff's submission below) is no answer to the claim for statutory unconscionability, and in undertaking any evaluation of how much damages payable to the defendant should be reduced, the Court would come to the conclusion that the predominant cause of loss was the plaintiff's misleading and deceptive conduct. 6. Finally the defendant submits that if the Court was to reject each of its defences the sum of any indebtedness to the plaintiff must be adjusted to take account of the shares in WLC that the defendant pledged as security and which have been forfeited to the plaintiff. The plaintiff's responses The claim for misleading and deceptive conduct – s 12DA of the ASIC Act 1. The plaintiff submits that the simple answer to the defendant's case is that the law does not relieve persons, let alone highly sophisticated and experienced commercial enterprises, from contractual obligations voluntarily assumed (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [39], [42]-[44]). 2. The plaintiff submits that as pleaded the conduct said to constitute the alleged representations concerns alleged failures to disclose pertinent facts, which raises two questions. First whether it had a duty to draw the defendant's attention to inconsistencies between the Facility Agreement and Modified Sanction Letter or advise the defendant specifically that it required an unqualified, unconditional and irrevocable guarantee. Secondly if such a duty arose whether the failure to disclose gave rise to either of the representations pleaded. 3. The plaintiff submits that it had no such duty in the circumstances, which included that the Gujarat Group was a highly sophisticated organisation; it had substantial experience negotiating term loans and its lack of legal representation was a choice; the negotiations were of a purely commercial nature; Mr Kannan approached the negotiations with vigour and attention to detail and sent many emails proposing amendments to the Facility Agreement, which suggested the defendant was looking after its own interests; and the Modified Sanction letter contained numerous qualifying terms that made it plain it was indicative only and the plaintiff had the right to include other conditions it considered necessary. 4. The plaintiff further submits there is no evidence that would establish that a failure to disclose on its part was the result of anything other than inadvertence (see Miller at [14]), and even if that was not the case, it had no duty to "volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence" (Miller at [22]). 5. In relation to the second question the plaintiff submits neither of the representations ought to be found because the Modified Sanction letter included highly qualified terms which directed attention to the actual terms of the Facility Agreement. It submits that it laid before the defendant a true and complete copy of the Facility Agreement which the defendant executed. It also submits that the evidence led by Mr Jagatramka and Mr Kannan of the alleged representation does not accord with the pleaded representations and in any event does not arise from a fair reading of the sanction letters. It says the guarantee was either necessary or it was not, and if it was, the sanction letter indicates an unqualified guarantee clause would be included in the Facility Agreement. 6. The plaintiff also denies the alleged misleading and deceptive conduct induced the defendant to enter the Facility Agreement. It submits it cannot be faulted for the failure of Mr Jagatramka and Mr Kannan to read the complete copy of the Facility Agreement which it provided to them, or obtain legal advice. The plaintiff submits the defendant represented that it had read and approved the Facility Agreement when it provided the Board Resolution and Verification. 7. The plaintiff also submits Mr Kanna cannot be found to have relied upon the Modified Sanction Letter of 20 June 2013 as there is no evidence that it was forwarded to him (by Mr Jagatramka) and by 5 July 2013 when the sanction letter was sent to the Gujarat Group the Facility Agreement had already been executed. Mr Kannan conceded during cross-examination that he had no recollection of believing at the time the Facility Agreement was executed that it contained the qualification to the guarantee and the plaintiff submits that is fatal to the defendant's misleading or deceptive conduct, estoppel and unconscionable conduct defences. 8. It says Mr Jagatramka's evidence that he would not have executed the Facility Agreement until the qualification to the guarantee was inserted does not withstand scrutiny. 9. However in the event the Court is persuaded that the defendant was misled the plaintiff invites the Court to exercise its power under s 12GF(1B) of the ASIC Act to reduce to nil or some nominal amount any damages that may be otherwise awarded to the defendant, having regard to the extent the defendant's failure to take reasonable care contributed to any loss it may have suffered. The claim of statutory unconscionability – s 12CB of the ASIC Act 1. In response to the grounds advanced by the defendant in respect of its unconscionability defence (as summarised above) the plaintiff submits the first ground based on its alleged misleading and deceptive conduct must fail for the same reasons as stated above. It also notes that the defendant does not assert the plaintiff had knowledge of the disconformity. 2. In relation to its alleged unconscionable departure from the parties' mutual intention the plaintiff submits the defendant has not proved there was a mutual intention to the high standard required in a rectification case which the plaintiff says should be applied here because the defendant is seeking to uphold a bargain contrary to the terms of the parties' written agreement. It submits the contemporaneous documents show both parties fully understood the terms of the Facility Agreement at the time it was executed. 3. The plaintiff submits the negotiation occurred over 14 days and Mr Kannan commented upon and provided drafts of the Facility Agreement on six occasions. It submits that to the extent there was time-pressure that was a product of the defendant's own making and the plaintiff insisted the Gujarat Group carefully review the documents. 4. It submits this was not a case where one person was acting under the influence or another or vulnerable due to some disparity in bargaining power; each side was ably represented and gave ground along the way. Further it was the convention of the Gujarat Group not to engage lawyers. The defendant was part of that large corporate group and represented by an experienced management team. Mr Kannan was a banker and regarded himself as equipped with the necessary skills. There was no evidence of disadvantage arising from English being a second language. The plaintiff submits there is no evidence it conducted itself other than as an ordinary arm's length commercial party. 5. The plaintiff submits the defendant would have entered the Facility Agreement irrespective of whether Mr Jagatramka had been aware of the unconditional guarantee it contained. The Gujarat Group it says was desperate for money and the defendant had no material assets at the time (although it does now, being the fruits of its judgment against WLC). The claim of estoppel 1. The plaintiff relies upon its submissions on misleading and deceptive conduct in relation to the defence based on estoppel. Variation 1. The plaintiff submits the evidence in support of this contention is thin and does not bespeak in objective terms of any intention on the part of the parties to vary the terms of the Facility Agreement. 2. The plaintiff further submits there is no evidence of consideration passing between the parties to support the alleged variation which would deprive the plaintiff of the benefit of the unqualified guarantee for which it had bargained. 3. The plaintiff further submits that the sanction letter when read as a whole expressly contemplates entry into the Facility Agreement which means it must pre-date the Facility Agreement. 4. It submits the sanction letters led to the documenting of other agreements such as the Specific Security Deed (Shares), the Charge Over Bank Account and the CHESS Tripartite Deed and that the defendant's argument must mean that each transaction document was varied which "borders on the absurd". 5. The plaintiff submits the communications in July 2013 were a mundane attempt by the plaintiff to finalise the administrative arrangements relating to the transaction. Further submissions 1. The plaintiff also advanced submissions on the credibility of the various witnesses. It says that no adverse inferences should be drawn against it for failing to call witnesses to give evidences as to its belief at the time the Facility Agreement was executed because the defendant brought no rectification case nor alleged any oral agreement or that any oral representations were made to Mr Jagatramka or Mr Kannan and has not advanced evidence to show any employee knew of the defendant's alleged vulnerability. Legal Principles A party is bound by an executed contract 1. It is trite law that a party is bound by the terms of a written contract that he or she executes whether or not he or she has read the document (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [42]-[44]). However as the Court stated in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at [35]: Where parties enter into a written agreement, the court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case. Misleading and deceptive conduct pursuant to s 12DA 1. Section 12DA(1) of the ASIC Act relevantly states: (1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. 1. The test for determining whether conduct is misleading or deceptive or likely to mislead or deceive under s 12DA is the same as that under s 18 of the Australian Consumer Law (previously s 52 of the Trade Practices Act 1974 (Cth)) (see, e.g., GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23 at [100]). 2. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 (Parkdale v Puxu) at 198 Gibbs CJ said: The words of s. 52 require the Court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive. Those words are on any view tautologous. One meaning which the words "mislead" and "deceive" share in common is "to lead into error". If the word "deceptive" in s. 52 stood alone, it would be a question whether it was used in a bad sense, with a connotation of craft or overreaching, but "misleading" carries no such flavour, and the use of that word appears to render "deceptive" redundant. The words "likely to mislead or deceive", which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. (emphasis added) 1. In determining whether the conduct in question is likely to "lead into error" it must be viewed as a whole; "it would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading" (Parkdale v Puxu at 199 (Gibbs CJ)). The determination proceeds by reference to what "a reasonable person in the position of the [representee], taking into account what they knew, would make of the [representor]'s behaviour" (Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [50]). 2. Silence or a failure to provide information is to be assessed as a circumstance like any other (Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (Black CJ)). However as Black CJ went on to say (also at [32]): … To say this is not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or likely to mislead or deceive. To speak of 'mere silence' or of a duty to disclose can divert attention from that primary question. Although 'mere silence' is a convenient way of describing some fact situations, there is in truth no such thing as 'mere silence' because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation in the circumstances of the case, that if particular matters exist they will be disclosed." (emphasis added) 1. See also Gummow J (with whom Black CJ and Cooper J agreed) at [41], approving French J's dictum in Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193 at 53,195. This approach has been approved in numerous subsequent decisions (see, e.g., Westpac Banking Corporation v Lee [2013] NSWCA 375 at [152] (Gleeson JA, Barrett and Emmett JJA agreeing); Miller at [17]-[19] (French CJ and Kiefel J)). 2. The surrounding circumstances which bear upon whether a finding that there was a reasonable expectation to disclose ought to be made may include: 1. The state of knowledge of the person to whom the conduct is directed (Miller at [20]); 2. The existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business (Miller at [20]); 3. What matters of fact each party knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known (Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 at [37]; 4. The defendant's knowledge of the undisclosed fact (Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [66]); 5. The sophistication and experience of the parties in their respective field (Miller at [91]); 6. The relationship between the parties, for instance the existence of a common law or equitable duty to disclose (e.g. a fiduciary duty) (Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd (2011) 248 FLR 193 at [230]). 1. Silence or omission has been found to amount to misleading and deceptive conduct in circumstances where for example positive conduct has given rise to an impression that is in truth contradicted or materially qualified by undisclosed facts (see Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd (2011) 248 FLR 193). Similarly, in circumstances where a true statement has been rendered false by a subsequent change in circumstances (see Winter Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 113). 2. The parties referred to conflicting authority on the question of whether a failure to act or disclose must be other than inadvertent. The defendant submits that it is not necessary for the party alleged to have engaged in misleading or deceptive conduct to have been aware of the undisclosed fact nor that their silence was intentional, citing Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd (2011) 248 FLR 193 at [228]; Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 467 (FC); Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167 at [209(ii)]; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 40; CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd (2005) ATPR 42-042 at [34]. 3. The plaintiff takes the opposite view, relying upon Miller at [14] where French CJ and Kiefel J stated: In determining whether there has been a contravention of s 52 of the Trade Practices Act, it is necessary to determine "whether in the light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive". The term "conduct" is to be understood according to its definition in s 4(2)(a) and (b) of the Trade Practices Act, which includes a reference to "refusing to do any act". That, in turn, includes a reference to "refraining (otherwise than inadvertently) from doing that act" [Trade Practices Act, s 4(2)(c)(i)]. (citations omitted) 1. The ASIC Act contains provisions similar to ss 4(2)(a)-(c) of the Trade Practices Act (see ss 12BA(2)(a)-(c) of the ASIC Act). 2. In any event as French CJ and Kiefel J stated in Miller at [22]: … as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. Yet that appears to have been, in practical effect, the character of the obligation said to have rested upon Miller in this case. 1. An examination as to whether a "reasonable expectation" existed is unnecessary in the case of a false representation, where the undisclosed fact is the falsity of the representation: Miller at [23]. In such circumstances the misleading and deceptive conduct flows from the falsity of the representation, assuming it leads or is capable of leading the representee into error (Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [63]; approved in Miller at [15]-[16]). 2. It is also the case that there must be a causal connection between the representor's conduct and the representee's alleged error or misconception (see ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651; Campbell v Backoffice Investments Pty Ltd 238 CLR 304 at [26]; Sutton v A J Thompson Pty Ltd (in liq) [1987] ATPR 40-789 at 46,607). 3. In Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112 at 135-136 Hill J adopted the statement of principle from Gould v Vaggelas (1985) 157 CLR 215 at 236 where Wilson J set out the principles to be applied in determining whether a party was induced to enter a contract in reliance upon misleading conduct: 1. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. 2. If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. 3. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. 4. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract. 1. At 138 Hill J stated: A case may perhaps be imagined where an applicant is so negligent in protecting his own interests that there will be a finding of fact that the representation complained of was not in the circumstances a real inducement to his entering into a contract. In such a case the element of causation between misrepresentation and damage will have been severed by the intervention of the negligence of the applicant. However, in my view, the present cannot be said to be that case. 1. See also ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651-652. Unconscionability pursuant to s 12CB 1. Section 12CB(1) the ASIC Act relevantly provides: (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of financial services to a person (other than a listed public company);or (b) the acquisition or possible acquisition of financial services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. 1. Section 12CC sets out a number of matters the Court "may" have regard to in determining whether a person has contravened s 12CB in connection with the supply or possible supply of financial services. It has been held that the Court is guided or "aided but not controlled by the factors listed..." (ACCC v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 252 at [37] (Sundberg J); APS Satellite Pty Ltd (formerly known as "Skymesh" Pty Ltd") v Ipstar Australia Pty Ltd [2016] NSWSC 1898 at [127] (Rein J) (Ipstar NSWSC)). However in Miller Gageler J stated that each consideration listed in s 12CC "must be taken into account if and to the extent that it is applicable in all the circumstances" (at [83]). 2. What is clear is that the Court must consider all the circumstances of a case in order to reach a conclusion on unconscionability (Ipstar NSWSC 1898 at [127]). 3. A financier's conduct in relation to the obtainment of a guarantee supporting the advance of money falls within the scope of the supply or acquisition of financial services within the meaning of s 12CB of the ASIC Act (and did in June 2013) (see ss 12BAB(1)(b), 12BAB(7)(b), 12BAA(7)(k) of the ASIC Act and reg 2B(1)(h) of the Australian Securities and Investments Commission Regulations 2001 (Cth); see also National Australia Bank Limited v Smith [2014] NSWSC 1605 at [267] (Slattery J)). Conduct pertaining to the enforcement of such a guarantee is also caught by the section (Commonwealth Bank of Australia v Thompson [2013] NSWSC 149 at [86]-[94] (Harrison AsJ)). 4. The statutory conception of unconscionable conduct is unconfined to conduct that is remedial on that basis by a court exercising jurisdiction in equity (Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 93 ALJR 743 at [83] (Gageler), [144] (Nettle and Gordon JJ) (ASIC v Kobelt)). In ASIC v Kobelt Gageler J concluded that s 12CB "operates to prescribe a normative standard of conduct which the section itself marks out and makes applicable", with the Court's task to "recognise and administer the normative standard of conduct" (see also [122] (Keane J)). 5. However the unwritten law it seems has a part to play in ascribing meaning to the term "unconscionable" as it is used in s 12CB. In ASIC v Kobelt Nettle and Gordon J stated (at [144]): "Unconscionable" is not defined in the ASIC Act and s 12CB is "not limited by" the unwritten law of the States and Territories relating to unconscionable conduct. As will be explained, the nonexhaustive list of factors set out in s 12CC necessarily implies that the statutory conception of unconscionability is more broad-ranging than that of the unwritten law. Nevertheless, the unwritten law has a significant part to play in ascribing meaning to the term "unconscionable" under s 12CB(1). 1. Gageler J stated at [88]-[89]: The Commonwealth Parliament's appropriation in s 12CB of the terminology of courts administering equity in the expression of the normative standard which the section prescribes serves to signify the gravity of the conduct necessary to be found by a court in order to be satisfied of a breach of that standard. "Unconscionability", as has been long and well understood, "is not a slight matter, and behaviour is only unconscionable where there is some real and substantial ground based on conscience for preventing a person from relying on what are, in terms of the general law, that person's legal rights". Parliament's appropriation of that terminology in s 12CB shorn of the constraints of the unwritten law is indicative of an intention that conduct of the requisite gravity need not be found only in a fact-pattern which fits within the equitable paradigm of a stronger party to a transaction exploiting some special disadvantage which operates to impair the ability of a weaker party to form a judgment as to his or her best interests. 1. At [119] Keane J stated that: The legislative choice of "unconscionability" as the key statutory concept, rather than less morally freighted terms such as "unjust", "unfair" or "unreasonable", confirms that the moral obloquy involved in the exploitation or victimisation that is characteristic of unconscionable conduct is also required for a finding of unconscionability under s 12CB. Section 12CB(4)(a) of the ASIC Act does not require a contrary conclusion. The direction in s 12CB(4)(a) means that the application of s 12CB(1) is not limited to conduct that has been held to be "unconscionable" under the general law, but it does not operate to give the term "unconscionable" a meaning different from its ordinary meaning… 1. However Edelman J concluded that the "bar" is lower than that developed in equity (see [295]). 2. Further it has been held that in determining whether conduct meets the threshold of unconscionability the task is not limited to finding "moral obloquy" or a "high level of moral obloquy". For example in Ipstar (a case concerning whether conduct was unconscionable pursuant to s 22 of the Australian Consumer Law) Bathurst CJ explained that: the use of terms such as "moral obloquy" may be of assistance to the extent that they emphasise that what is required is such a departure from accepted community standards as can objectively be seen to be against conscience. 1. This formulation was approved by Kiefel CJ and Bell J in ASIC v Kobelt at [59]. Also in that case Gageler J confirmed that what his Honour meant by the term "high level of moral obloquy" in Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525 at [188] was that the relevant conduct must be "so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience (ASIC v Kobelt at [92]). 2. Kiefel CJ and Bell JJ further stated at [14]: The values that inform the standard of conscience fixed by s 12CB(1) include those identified by Allsop CJ in Paciocco v Australia & New Zealand Banking Group Ltd [(2015) 236 FCR 199; [2015] FCAFC 50 at [296]]: certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage. 1. Allsop CJ had gone on to include: recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon. 1. Conscious impropriety or dishonesty is not necessarily required (see, e.g., PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 at [104], [107] and [110] (Sackville AJA, McColl and Leeming JJA agreeing)). 2. However the standard of conduct expected of a person in the commercial context is not that of a fiduciary and a contracting party is not required to subordinate its interests to those of the other party. Inequality of bargaining position alone is insufficient (Ipstar NSWSC at [127]; see also Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at [11], [14]). Estoppel by representation 1. As Giles JA (Sheller and Heydon JJA agreeing) stated in Byron Shire Council v Vaughan [2002] NSWCA 158 at [37]-[39]: Estoppel by representation is a common law estoppel, arising where one party makes a representation as to existing fact (sometimes said to include the legal complexion of facts) on which the other party founded an assumption and it would be unjust to permit the representor to depart from the assumption: see for example Thompson v Palmer (1933) 49 CLR 507 at 547; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 657, 674-6; Waltons Stores (Interstate) Ltd v Maher at 398, 413-5… The relevant detriment is that flowing from representee's original change of position, his action or inaction in reliance on the representation. According to the doctrine, the relief must be by holding the representor to the representation because only in that way will the change of position not bring detriment. Equitable estoppel "has its basis in unconscionable conduct, rather than the making good of representations": Waltons Stores (Interstate) Ltd v Maher at 405 (Mason CJ and Wilson J), see also at 416 (Brennan J). It may operate through the making of a representation as to fact, existing or future, and by precluding the representor from departing from the assumption, although it may operate in other ways. The possible common factual basis is one reason for the question whether there can be brought about "a single overarching doctrine" or "a general doctrine of estoppel by conduct", see the citations in the reasons of Handley JA (in Giumelli v Giumelli now at CLR 112-3). But because the relief is equitable relief it is discretionary, and because equity operates to prevent unconscionable (or unconscientious) conduct the relief will not necessarily be by precluding the representor from departing from the assumption, see Verwayen v The Commonwealth (1990) 170 CLR 394 at 412 (Mason CJ), 429 (Brennan J), 445 (Deane J), 454 (Dawson J), 487 (Gaudron J) and 501 (McHugh J). 1. With respect to the requirements of an estoppel premised upon a representation Dixon J (McTiernan J agreeing) stated in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-675: The principle upon which estoppel in pais is founded is that the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations. This is, of course, a very general statement. But it is the basis of the rules governing estoppel. Those rules work out the more precise grounds upon which the law holds a party disentitled to depart from an assumption in the assertion of rights against another. One condition appears always to be indispensable. That other must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption. In stating this essential condition, particularly where the estoppel flows from representation, it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. … Fulfilment of the condition which so far I have discussed is not enough to make it just to preclude a party from setting up a state of facts. The justice of an estoppel is not established by the fact in itself that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. 1. His Honour then cited (at 676) what he had stated in Thompson v Palmer (1933) 49 CLR 507 at 547 in relation to the circumstances in which it will be unjust to permit a departure from an assumption: … He may be requires to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct… ; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. 1. It has been held that "mere silence or inaction cannot amount to a representation unless there be a duty to disclose or act" (Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 at 110). However silence may found an estoppel if the omission to communicate in conjunction with other surrounding circumstances creates an implied representation (see Amaya v Everest Property Holdings Pty Ltd (2010) 15 BPR 28,695 at [156]). 2. In relation to the requirement of reliance Gageler J stated in Sidhu v Van Dyke (2014) 251 CLR 505 at [90]-[91]: … The respondent did not need to establish that the belief to which she was induced by the appellant's representations was the sole or predominant cause of the course of action or inaction she took but, in the language of Rich, Dixon and Evatt JJ in Newbon v City Mutual Life Assurance Society Ltd…, she did need to establish that the belief was a "contributing cause". To establish that the belief to which she was induced by the appellant's representations was a contributing cause to the course of action or inaction which she took, the respondent needed to establish more than that she had the belief and took the belief into account when she acted or refrained from acting. She needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have so acted or refrained from acting if she did not have the belief. (my emphasis) The Evidence Mr Sharan 1. The plaintiff called only one witness. Its case otherwise was entirely documentary. 2. Mr Nilay Nischal Sharan was called for the plaintiff and he affirmed one affidavit of 20 September 2019. 3. He is an officer of the plaintiff. 4. He set out the uncontroversial documentary trail, the dates of advance of funds, demands for repayment and the outstanding balance ([4]-[12] and [17]-[19]). 5. He was asked in examination in chief about his calculation of the current amount outstanding and he indicated it was USD$13.5m (T.73/35-40. 6. He was then asked about certain entries in the records of the plaintiff. He explained that provision was made in the banks' records indicating the bank took the view the likely recovery was nil (T.74/35-45). 7. In cross examination he explained the enquiries he had made about the provision and the entry made (T.75/40-50). He was not personally responsible for the entry (T.76/1-10). 8. His opinion as to the provision was based entirely upon an examination of the underlying documents (T.76/10-20). 9. He has been with the bank since 2007 and had nothing personally to do with the particular transaction (T.77/30-35). 10. He indicated that Mr Panda is still with bank and works in the Mumbai head office. He has not spoken to Mr Panda about the transaction (T.78/1-10). Mr Jagatramka 1. Mr Jagatramka was the first witness for the defendant. He affirmed one affidavit in the proceedings dated 12 December 2019. He lists his occupation as Industrialist. 2. Up until 1 January 2018 he was chairman and managing director of GNCL. Prior to that time GNCL was one of the largest metallurgical coke producers in India. As at January 2018 he had held the position of chairman and managing director of GNCL for about 10 years ([3]). 3. As at 2013 GNCL was listed on the Bombay Stock Exchange and on the National Stock Exchange in India. It was the principal trading entity of a group of companies called the Gujarat Group ([4]). 4. On 11 January 2018 GNCL was placed into liquidation ([5]). 5. The Gujarat Group comprised a number of companies including Gujarat NRE Limited (GNL) now called Gujarat NRE Pty Ltd, GNI (the defendant), Gujarat NRE Coking Coal Limited which is now called Wollongong Coal Limited (WLC) but is also referred to as GNCCL, and Wonga Coal Pty Ltd ([6]). 6. Mr Jagatramka was a director of GNL from 23 August 2006 to 28 April 2015, a director of Wonga from 15 February 2007 to 28 April 2018, a director of the defendant from 14 August 2008 to 28 April 2015, and a director of WLC from 12 October 2004 to 14 February 2014 ([7]). 7. As at June 2013 the directors of the defendant were Mr Jagatramka, his wife (Mrs Mona Jagatramka), and a Mr Sanjay Sharma ([9]). 8. At the same time Mr Sharma was also a director of a number of other companies in the Gujarat Group (including GNL, the defendant and Wonga) ([10]). 9. In June 2013 WLC was engaged in mining coking coal from two coal mines in the Illawarra region. It was listed on the Australian Stock Exchange (ASX) but its shares are currently suspended. The running of these operations required significant capital expenditure ([15] and [19]). 10. As at 2013 WLC had with the assistance of other members of the Gujarat Group had borrowed significant sums of money. It had a loan facility with a consortium of banks including the plaintiff for USD$175,000,000. Another consortium loan again involving the plaintiff for USD$50,000,000, another loan from the plaintiff (Hong Kong branch) for USD$100,000,000, and another loan from the plaintiff (Hong Kong branch) for USD$10,000,000 ([22]). 11. In addition WLC had raised significant sums by way of equity issuance in the order of $639,373 ([23]). 12. Mr Jagatramka had had a long engagement with the plaintiff over a ten year period and had a close personal and professional relationship with the plaintiff ([24]-[27]). 13. The operational parent company of the Gujarat group was GNCL and in Australia WLC was the operational parent company of the group ([28]). 14. By reason of his role as executive chairman and managing director of both GNCL and WLC his role included liaising and negotiating with financial institutions to meet the financial needs of the various companies in the group. Although he would negotiate the terms of loan arrangements, he did not involve himself in the process of formally documenting the various loan facilities. He left that task to Mr Kannan, the CFO of GNCL and the group, as he did not have the time to review the documentation himself ([29(a)]). 15. He was also engaged in a whole range of commercial activities for example raising equity capital, entering agreements with third parties for the provision of services, meeting with regulatory authorities and the like ([29(b)-(g)]). 16. He received hundreds of emails daily along with those he received by reason of email distribution. He did not read all the emails he received ([31]-[32]). He relied especially on Mr Kannan to raise any matter of importance that required his attention ([35]). 17. In June 2013 WLC (and the Australian members of the Gujarat group) were experiencing "considerable financial distress". On 31 January 2013 a takeover bid was launched on-market for the shares in WLC. In addition WLC and its subsidiaries were "struggling to pay their creditors". In March 2013 a number of companies in the Gujarat group had received demands for payment ([39(a)-(c)]). 18. He set out other financial difficulties in great detail (at [40]-[45]). 19. Not only was WLC struggling to pay its suppliers it was overdue in meeting its interest payments on facilities it had with the plaintiff (and others) at the time. As at 13 June 2013 the amount outstanding owed to the plaintiff on two secured loans totalled USD$7.679m ([46]). 20. The genesis of the USD$10m loan was the overdue interest on the loans from the plaintiff ([46]-[49]). 21. As a result Mr Jagatramka commenced discussions with Mr Das from the plaintiff about the prospect of borrowing further money to assist WLC with its financial difficulties ([51]). 22. From May to June 2013 Mr Jagatramka had discussions with Mr Das about the proposed USD$10m facility sometimes in company with Mr Kannan ([53]-[54]). Mr Kannan was responsible for overseeing the documentation of the facility ([54]-[55]). 23. He said that although he could not by reason of time constraints review the documentation he did review the "shorter" term sheets and sanction letters and he assumed that the facility would be drafted in accordance with the agreed term sheet and the sanction letters ([60]). 24. He said he was specifically aware of the terms and conditions of what was required at or around 7 June 2013. 25. He also said he remembered an issue about the ability on the part of GNCL to provide a charge over its property prior to the intended drawdown of the facility. Ultimately on 15 June 2013 the requirement for GNCL to give a subservient charge was dropped ([76]). 26. He then dealt with various of the emails and various drafts of documents circulated at the time and his understanding at various points ([77]-[93]). 27. But he did accept that he did not read some of the emails and/or their attachments even though he received them ([82], [84] and [93]). 28. As is clear from [94]-[104] Mr Jagatramka did not have a clear recollection of the events over the days leading up to 18 June 2013 (see in particular [96], [98] and [101]). 29. In the period 18 to 20 June again he received many emails and attachments and although he did not read the attached documents he made an assumption without checking that the facility agreement was in accord with the 13 June 2013 sanction letter ([108]-[112]). 30. He did recall the fact but not the detail of telephone call on the morning of 20 June to the effect that Wonga was to be replaced by the defendant because Wonga was the subject of a charge and could not pledge the required shares ([114]). He recalled reading an email of 20 June revising the terms of the security ([115]). He said he read that document carefully and was comfortable with its terms and as far as he was concerned he was comfortable with it and understood the facility agreement remained unchanged and that it would be drafted in accordance with the letter ([116]-[117]). 31. He said that he understood that the unconditional and irrevocable guarantee was to be obtained from the defendant (instead of Wonga) only if required to perfect the contemplated security involving the pledging of the shares with such a requirement to be based on the advice of legal counsel ([118]). 32. Mr Jagatramka said he telephoned Mr Das from the plaintiff and confirmed he agreed with the "revised terms schedule of security" ([119]). 33. He said he received a further email on 20 June at 8.05pm (AEST) but as with prior documents he did not review the facility agreement but believed it had been amended to reflect the revised schedule ([122]-[123]). 34. He then referred to the board meetings in connection with the loan and stated that he was not involved with the drafting of any of the board documents and does not have any recollection of the meetings ([127]-[131]). 35. He stated that at the time of the 21 June board meetings he believed that the terms of the facility agreement accorded with the terms set out in the sanction letter of 13 June as modified by the schedule of security circulated on 20 June ([132]). 36. He stated that he did not read through the facility letter when he executed it and believed that, on the basis of his discussions with Mr Das the terms of the sanction letter of 13 June and the revised schedule of 20 June, its terms were consistent with the sanction letter and the schedule and that the guarantee would only come into force and effect if necessary to perfect the security involving the pledging/charging of shares in WLC based on legal advice ([137]). 37. Had he been aware he would have insisted the position be clarified and amended and would not have executed the facility agreement until the position was clarified ([138]). 38. He then dealt with the utilisation of funds and the subsequent events in July and the final form of the sanction letter ([143]-[148]). 39. Mr Jagatramka said that he was a chartered accountant and he had won a gold medal and came first in his final examination in 1983. He also agreed that he was referred to as a 'visionary of rare distinction' (T.84/10-35). 40. He also agreed that he was a highly experienced and capable businessman (T.86/20-30). His wife was also a director and she was in his view capable of being a director of a publicly listed entity like WCL (T.86/35-45). 41. WLC has entered into loan arrangements in the order of $900m with many different banks (T.88/35-50). 42. Mr Kannan was the CFO of GNCL and the group generally and it was his role to oversee the documentation of loan facilities (T89/5-20). 43. He found it difficult to read some of the attachments on his phone because of the definitions and that is why he had assistance from Mr Kannan (T.90/25-30). It was Mr Kannan's responsibility to oversee the finalisation of the transaction documentation (T.90/45-50). 44. He also agreed that the Gujarat group does not routinely use lawyers in negotiation and preparation of finance documents (T.91/20-25). 45. He understood that the firm Hunt and Hunt were the bank's lawyers and were not acting for the Gujarat parties (T.92/8-10). 46. He accepted that as managing director it was his responsibility to ensure that any financing documents that were to be executed accurately reflected the terms of the agreement (T.92/35-40). 47. Banks always seek a standard form of resolutions which need to be carefully considered and he knew a board resolution would be passed to that effect (T.93/15-30). 48. Mr Kannan had been with the Gujarat group since about 2007 and he had previously worked in the banking industry (T.95/15-30). He also placed a great deal of trust in Mr Kannan to oversee the negotiation and formalisation of finance facilities (T.96/40-45). 49. In this case he was quite interested in how the finalisation of the loan facility was coming along (T.99/45-50). That was because WLC desperately needed funds (T.100/1-10). 50. He agreed that he had said in evidence in 2017 that if funds had not come from Axis WLC would have collapsed by 24 June which, had it happened, would have had a very significant impact on the rest of the Gujarat group (T.101/5-15). 51. It is likely he opened some of the emails that were received (T.102/1-10). But he agreed that he relied heavily relied upon Mr Kannan and Mr Sharma to send him anything important that needed to be brought to his attention (T.103/10-25). 52. It was routine for him to be asked to give a personal guarantee and by that stage he had given personal guarantees to the tune of about $421m (T.104/10-15). He expected that Mr Kannan would read the whole of the finance facility (T.104/25-30). 53. If he had known that Mr Kannan had not read the whole document he would have signed it as long as the agreement was being done with a counterparty like Axis. He also accepted that he would have signed anything they put to him (T.105/15-20). 54. At this point in time WLC had interest outstanding on an existing loan with Axis and the money was basically going to meet the outstanding interest obligation (T.107/25-35). 55. He understood that the bank was going to be responsible for drafting the loan documentation (T.108/48-50). He agreed that Hunt and Hunt were neither acting for nor advising the Gujarat parties (T.110/5-20). 56. At no time did he ever actually read the finance facility. He did not think he could read it fully (T.114/5-15). 57. He asserted that he did not appreciate until the commencement of these proceedings that the guarantee was not qualified in the way it should have been and had he read it in the June of 2013 he would have realised that it was not qualified as it should have been (T.115/20-30). 58. He has signed many documents in relation to many facilities and he has never really been concerned with the detail (T.116/30-35). 59. He believed it was acceptable for Mr Kannan to simply have relied upon the bank and their lawyers to prepare the documentation consistently with the sanction letter (T.117/35-40). He said he was entitled to presume that the bank would prepare the documents in the way they should have been prepared and there was no reason for anyone from Gujarat to read the documents (T.118/25-30). 60. He agreed that if he had at the time read the email from the bank with the draft minutes he would have seen the bank was referring to a guarantee from the defendant (T.122/35-40). He agreed that a resolution was passed at a board meeting on 21 June (T.123/45-50). 61. He was asked directly whether it was truthful to say that the board had carefully considered the documents prior to the resolution and eventually he accepted he and the board relied on the bank (T.126/1-10). 62. Mr Kannan never said to him that he had not had time to review the entire facility agreement (T.128/1-10). 63. At the time the group had significant facilities which involved guarantees and charges and a $10m facility was not significant, or rather, not out of the way or extraordinary (T.133/10-15). 64. He agreed that WCL had creditors who were pressing for repayment and he was giving assurances the money was coming (T.134/5-15). The loan of $10m was he thought a precursor to another loan (T.134/20-25). He agreed that WCL had undertaken an unsuccessful rights issue which put more pressure on them to finalise the loan from Axis (T.134/25-40). 65. He agreed that the monies received from the plaintiff were effectively paid out the same day (T.135/25-30). 66. He was shown an annual report for the defendant. He agreed that for the financial year ended 31 March 2013 the company suffered a loss of $1,996 and it had total equity of $4,418 and the company had no generating assets. It also had a debt that matched out the value of shares which were almost all pledged (T.141/1-9). Basically the company had no assets (T.141/30-35). 67. It was put to him that he would have been perfectly happy for the bank to take a guarantee from a company within the Gujarat group that did not have any assets. He said "no" as that would make the company insolvent on day one (T.144/5-10). 68. He agreed that as at June 2013 WCL was in extreme financial difficulty, in desperate need of the $10m to discharge its interest obligation to the plaintiff and that it would otherwise be in default. If the funds had not been received by 24 June the company would have collapsed and the company needed to attend to the preparation of the documents on an urgent basis. He agreed that the defendant had no assets at the time and the personal guarantee he was providing was quite small when compared with guarantees already supplied by GNCL (T.144/20-50). It was put that on that basis he did not bother reading the finance agreement. His response was that he could not have read all the documents that were required to be signed by him as CEO (T.145/5-10). 69. He agreed that he did not read the finance documents because he placed trust and confidence in the bank (T.145/40-45). He agreed that both resolutions were passed as a matter of formality to satisfy the legal requirements of the lawyers (T.146/30-45). Mr Kannan 1. The next witness was Mr Kannan. His stated occupation is that of executive. He swore on affidavit of 14 December 2019. 2. He is currently employed in the renewable energy sector in India. He received a Master of Science degree from Bombay University (now known as Mumbai University) in 1981 ([2]). 3. Between August 2007 and January 2016 he was the CFO of Gujarat NRE Coke Ltd (GNCL). 4. At the time GNCL was a company listed both on the Bombay Stock Exchange and the National Stock Exchange of India. It was one of the largest independent producers of metallurgical coke in India ([3]). 5. At the time he worked for GNCL he was based in Kolkata, India. 6. As at June 2013 WLC (previously Gujarat NRE Coking Coal Limited (GNCCL)) was engaged in mining coking (metallurgical) coal from its coal mines in the Illawarra region of New South Wales. 7. The mines were acquired for the purpose of providing a guaranteed supply of high quality coking coal for GNCL which produced coke in India. At the time the mines were in care and maintenance and therefore required considerable capital expenditure in order to re-establish them as commercially viable ([11]). 8. WLC therefore with the assistance of other members of the Gujarat group borrowed significant sums from various banks ([12]-[14]). 9. As at June 2013 Mr Kannan was not only the CFO of GNCL but also for the Gujarat group and was responsible for the overseeing the financial management of all of the companies within that group. Particular activities he was responsible for included overseeing and finalising the documentation of loan facilities. On this aspect of his work he reported to Mr Jagatramka as and when issues arose ([15(a)-(e)]). 10. Historically Mr Kannan had extensive dealings with the plaintiff with regard to the various loan facilities WLC had with it ([20]). 11. As at June 2013 WLC was experiencing considerable financial difficulties. There were overdue creditors, including secured creditors. WLC was seeking to raise an additional USD$50m to address these various matters ([25]-[26]). 12. As a result of a takeover bid (although it ultimately failed) and a heavily undersubscribed rights issue WLC was placed under further pressure ([28]-[29]). 13. On 13 June 2013 the plaintiff informed WLC it was overdue in respect of its secured loans. The genesis of the $10m loan was in the context of the outstanding interest obligations ([31]-[33]). 14. He accepted he was concerned with the documentation of the $10m facility and as a result he had many conversations with Mr Jagatramka and persons from the plaintiff ([34]-[36]). 15. His first involvement with the transaction was in receiving an email of 7 June 2013 from Ms Rati Pugalia of the plaintiff. It was sent to Jill Milburn of Hunt & Hunt Lawyers (who acted on behalf of the plaintiff) and was copied to him (along with others) ([37]). 16. He had been involved in the finalisation and documentation of a number of loan facilities from the plaintiff. He stated that his focus was on updating the representations and warranties made in the facility, checking interest rates, fees and checking the proposed assets to be charged ([42]). He also said he relied on the plaintiff accurately to record the terms of the term sheet in the facility agreement ([43]). 17. By reason of his significant duties with the group he did not he said have time to review the entire facility agreement so he focussed on certain matters ([44]). 18. His statement chronicled each email, of which there are many, that he received and those he circulated. 19. He stated that he knew that the proposed facility contained a guarantee clause ([49]-[52]). He also knew that apart from a corporate guarantee a personal guarantee was also to come from Mr Jagatramka ([49]). 20. As at 13 June he understood that an unconditional and irrevocable guarantee was required from Wonga but that such a guarantee was only to be obtained and to come into effect if necessary to perfect the pledge of shares by Wonga, with such a necessity to be based on the advice of legal counsel ([54]). 21. At all times he trusted and believed that the facility agreement would be drafted and finalised consistently with the terms of the sanction letter ([65]). 22. On 14 June he received various documents from the plaintiff's solicitor with a marked-up "Terms Sheet" that cross referenced the provisions in the sanction letter of 13 June and the facility agreement ([71]). He still believed that the facility agreement would be in accordance with the sanction letter but he did not have time to check all the references ([72]). 23. By 17 June there was urgency in finalising the matters so that funding could immediately be obtained ([80]). 24. He continued to exchange emails with the plaintiff's solicitor concerning versions of the facility agreement with tracked changes and comments and in relation to FIRB notification requirements ([81]-[85]). 25. He stated that as a result of Wonga being the subject of an existing PPSR charge in respect of all of its property there was a need to change the identity of the party to provide the shares to be secured in favour of the plaintiff. This lead to the defendant becoming a party to the facility ([92]). 26. By 19 June he still believed that the terms of the facility agreement were in accordance with the sanction letter of 13 June as modified to remove the requirement for GNCL to give a charge over its property ([101]). He was being pressed by Mr Jagatramka to have the documents executed on 19 June because of the considerable financial difficulties the Gujarat Group and WLC were facing ([102]). 27. Some time was taken on the issue of substituting the defendant for Wonga and numerous emails were exchanged ([109]-[111]). However he believed that the transaction remained the same as outlined in the sanction letter of 13 June ([114]). 28. When he next reviewed the facility agreement he did not review every clause ([118]). He stated that copies of the facility agreement were sent around for execution on 21 June 2013 ([125]-[131]). Mr Kannan stated that at the time he executed the facility agreement he believed that the terms of that agreement were consistent with the 13 June sanction letter ([132]). Namely that the guarantee from the defendant was qualified and only enforceable if necessary to perfect the pledge/charge of the shares by the defendant, with such necessity to be based only on the advice of legal counsel ([133]). 29. He then dealt with the utilisation of the funds ([137]-[139]). 30. In cross examination he stated that he worked as a banker from 1980 to 1998. He joined Gujarat NRE Coke in 2004 as vice president, later became senior vice president and then became CFO in 2007 (T.152/30-45). 31. He accepted that he had very significant experience in the field of project finance and he was quite capable of reviewing and understanding commercial agreements (T.154/10-22). 32. Mr Jagatramka told him not to assume that he had read all emails he received (T.155/15-23). He also agreed that Mr Jagatramka had delegated to him the task of negotiating and finalising the terms of the finance facility with the plaintiff. He replied that he did that for other banks as well (T.155/30-40). 33. It was also part of his responsibility to take charge of the process of documenting the finance facility and bring any matters of importance to Mr Jagatramka's attention (T.155/35-45). 34. He presumed that Mr Jagatramka was not reviewing the finance facility, (T.156/1-10). He understood that Mr Jagatramka was dependent upon him to finalise the documentation and do so carefully (T.156/9-15). 35. He would go through the drafts to see if there was any matter he was interested in (T.156/35-45). 36. He agreed that in 2013 he was responsible for the finances for the whole Gujarat group (T.156/45-50). He was aware that WCL had creditors making demands on overdue payments (T.157/30-35). The $10m loan was for interest (T.157/48-49 - T.158/1). 37. He did most of the documentation without lawyers except for convertible bonds (T.160/15-25). 38. He realised that the solicitors were for the plaintiff and not for the Gujarat parties (T.163/10-15). 39. He knew that the document the solicitor was using was based on a 2011 facility agreement and the email of 12 June indicated he had to identify where the bracketed and highlighted items were (T.165/15-25). 40. He also accepted that the solicitor was not telling him he did not need to read the document (T.166/45-50). He probably looked at the document the day he received it (T.168/1-10). 41. He knew guarantees, both corporate and promoter, were called for (T.169/20-35). They were the kinds of things he was looking for when he started reviewing the agreement (T.170/7-10). 42. He agreed he had read the draft facility agreement of 13 June and in particular cl18 which contained the guarantee (T.173/1-10). And he checked to see if the guarantee was required from the parent company and Mr Jagatramka (T.173/19-25). 43. The question of whether or not a guarantee would be required was something at the forefront of his mind (T.176/40-45). 44. He accepted that that on 13 June the draft facility did not contain the qualification in the sanction letter (T.177/6-18). He would however only focus on tracked changes (T.179/20-25). 45. He was asked if he had an interest in checking clause 18 of the facility agreement to see whether it reflected the qualification in the sanction letter. He did not go through the document because he was more focussed on other areas (T.180/30-45). He was just going through the tracked changes (T.180/40-45). 46. He accepted that he did make changes to the document attached to his email of 14 June (T.181/35-45). He then insisted he made changes to clause 18.2 without reading clause 18.1 (T.183/44-50 - T.184/1-4). 47. The cross examiner upon resumption the next day said that some of the tracked changes he had previously suggested the witness had made were in fact made by the solicitor for the plaintiff (T.193/25-35). 48. He agreed that when he first sent the draft finance agreement back he made no comment on paragraph 18.1 or 18.2 (T.195/25-35). 49. He had seen the sanction letter of 13 June but still made no comments on clause 18.1 or 18.2 (T.196/5-25). He asserted that at the time he did read clause 18 but did not object to it and he could have required the solicitor for the plaintiff to have drafted a clause so as to make the facility agreement consistent with the sanction letter (T.198/20-35). 50. He was referred to his affidavit at [134(c)] in which he said he would have inserted a clause himself and he indicated he would withdraw the paragraph because he was not "100% qualified for putting a new clause" (T.199/15-20). 51. He said he was speaking to the plaintiff's solicitor on the phone "during the whole period right from when the documentation started, off and on" but he agreed that he did not mention that fact in his affidavit (T.199/35-50). 52. He again agreed that he knew on 14 June that clause 18 had no qualification consistent with the sanction letter (T.200/35-45). 53. On 14 June he again sent back tracking changes and at that time he was fully conscious of the fact that the guarantee in the draft was not qualified (T.202/1-5). He then had his attention drawn to [58] of his affidavit in which he had said that the first time he became aware the facility agreement did not contain a clause qualifying the guarantee was in these proceedings and whether in the light of the evidence he had just given he wished withdraw [58]. He said "yes" (T.202/20-50 and T.203/1-4). 54. He agreed that he understood that the plaintiff was not obliged to provide any facility unless the documentation was completed to the satisfaction of the bank (T.204/30-45). He also agreed that the sanction letter did not include all of the terms that were ultimately to be included in the finance documentation; it was "indicative only" (T.205/15-25). 55. He also accepted that he would have needed to review the whole document from beginning to the end (T.205/34-38). 56. Guarantee clauses are "always there" and if he had wanted to look at the agreement he would know exactly where to look (T.206/20-35). 57. He agreed that the second time he sent the facility agreement back he made no changes or comments on clause 18 (T207/18-25 and T.208/5-15). 58. He accepted that on 18 June he sent back the facility agreement for the third time with comments but without commenting or changing clause 18 of the draft (T.210/20-25). He appreciated at this time that the bank was going to require a resolution that the directors had carefully considered the finance document (T.212/10-20). 59. He agreed that for a fourth time he sent the draft facility agreement back without suggesting any changes to clause 18 (T.214/30-45). 60. He agreed that on 20 June the transaction was being finalised in urgent circumstances and the bank wanted certain payments to be paid "before the next week" (T.215/40-50). He insisted that the sanction letter of 13 June "remained in place" (T.216/25-30). 61. Later on 20 June he sent the facility agreement back again having reviewed it and made two comments but not in relation to clause 18.1 (T.224/5-10). That was the fifth time he sent the draft back to the solicitor for the plaintiff (T.225/1-5). As at 20 June he knew there was no qualification to clause 18 (T.226/45-50). 62. Later again on 20 June he for the sixth time sent the draft facility agreement back without seeking any change to clause 18 (T.227/20-30). But he could not remember whether he had checked clause 18 (T.228/10-20). 63. He agreed that between the 20 and 21 June he did not get any email attaching a copy of the facility agreement which included a qualification to clause 18 (T.229/25-35). 64. He was referred to [133] of his affidavit in which he said he believed the qualification would have been incorporated into the facility agreement and that somehow prior to execution clause 18 would be made consistent with the sanction letter (T.231/5-10). It was a matter of importance but pressure of time meant he did not check (T.232/5-20). 65. He suggested that clause 18 might have been discussed with the solicitor for the plaintiff (T.233/25-40). But he agreed that he did not refer to that conversation in his affidavit (T.234/15-20). 66. In re-examination he said that "we" were not agreeable to the original guarantee by Wonga (T.237/5-7). He also said that his first contact with the solicitor for the plaintiff was in 2007 or 2008 and he had dealt with the solicitor on at least three or four occasions (T.237/33-39). Nitin Daga 1. Nitin Daga affirmed one affidavit of 16 December 2019 and was not cross-examined. 2. Mr Daga is (and has been since 2009) an employee of GNCL. His evidence is of no great moment given that he was not involved in the negotiations with the plaintiff or the drafting of the Facility Agreement ([10]). 3. However he was involved in company secretarial duties in relation to the "Know You Client" portion of the conditions precedent ([11]). 4. He set out the emails he sent and received in relation to the loan facility between 7 and 18 June 2013 ([12]). Kaitlin Greer 1. Kaitlin Greer affirmed two affidavits, one dated 17 December 2019 and the second dated 12 August 2020. She was not cross examined. 2. In her first affidavit Ms Greer provided details of various communications she had with Mona Jagatramka in which Mona Jagatramka confirmed she was not willing to give evidence in the proceedings. 3. In the second she stated that her search of the Hunt & Hunt Lawyers website showed that Jill Milburn was still a partner at the firm. She gave evidence that this was confirmed during a telephone conversation she had with a receptionist at Hunt & Hunt Lawyers named Julie. Consideration 1. First I should say something about the plaintiff's case. It is accepted that the relevant parties signed the contractual documents and that subject to the issues raised in defence the signed documents constitute a binding contract. 2. The case both factually and legally focused in effect entirely on the defence and whether in all the circumstances the conduct of the plaintiff was misleading and deceptive or unconscionable such that the defendant should be relieved of any liability under the contract. 3. It is uncontroversial that there emerged an inconsistency between the sanction letter so-called and the terms of the Facility Agreement in one relevant respect, namely the precise circumstances in which a guarantee was to be provided by the defendant. The cause of the inconsistency is unexplained but that given the limited scope of the defence is not in my view relevant. 4. The defendant does not rely upon mistake nor does it seek rectification. 5. The evidence relied upon for the defendant was that of Mr Jagatramka and Mr Kannan. Their affidavits much like their evidence had a certain textual symmetry about them. My overall impression of the defence brought by the defendant is that it is one of a level of contrivance and opportunism. 6. I was not impressed with either's attempt to explain why they had not picked up the inconsistency at the time given their respective roles in the transaction. I found neither of them able in my view having heard them give their evidence to give a plausible explanation for not having done so. 7. I do not accept that at various critical moments they simply did not apply their minds to the documentation because they were just too busy, or the Facility Agreement was too long or that they just assumed that the solicitor for the plaintiff would make the sanction letter and Facility Agreement consistent. 8. I do not accept that either had any conversation with any officer of the plaintiff about the topic of the terms of the relevant guarantee. There is no contemporaneous support for such. 9. The very documentation relied upon, being the sanction letters, made it clear that the Facility Agreement was to be the source of all relevant the contractual terms and I am satisfied that they must have known that. In numerous emails in which Ms Milburn circulated drafts of the Facility Agreement she directed them to the terms of the actual agreement and asked them to review it. And Mr Kannan went to the Facility Agreement on numerous occasions and adjusted it with track changes. 10. The reality of the situation is that the group was in severe financial distress. It was about to collapse with multiple creditors baying for payment. This facility would not really do more than bring the group's interest obligations back into order. It would provide the needed liquidity for the group and it might as Mr Jagatamka volunteered have been a prelude to further lending but it was an immediate commercial necessity which needed urgent attention. 11. There was a pressing need to effect this transaction. Mr Jagatramka was I am satisfied desperate to keep the group afloat whilst Mr Kannan was tasked with trying to keep the group running. 12. Mr Jagatramka is a highly sophisticated and experienced businessman and a chartered accountant who felt able to describe himself with the lofty title of "industrialist". He was no stranger to negotiating deals such as this one which he regarded clearly as vital from a strategic point of view as opposed to the size of the actual facility which he somewhat trivialised in his evidence (see, e.g., T118/2-3: "Let me remind you that the amount was less than 2% of the total borrowings based on me personal guarantee"). He had personally negotiated the group's multi-million dollar facilities with its various bankers which included the plaintiff with Mr Kannan always attending to the documentation. 13. I am satisfied that he did not bother himself with the detail of any documentation in relation to loan facilities big or small. He expected guarantees corporate and personal would routinely be required and he himself gave evidence that he was personally liable under numerous, for amounts exceeding $400m. If he relied upon anyone it was Mr Kannan who accepted that role expressly. 14. Because of his anxiety to have this facility completed urgently I do not consider that for a moment he would have cared one way or the other as to terms of any guarantee that may requested or required. He said his relationship with the bank was such that he would have signed anything (see T.105/20-35, T.106/1-11). I therefore do not consider he relied on the sanction letter to the exclusion of the Facility Agreement which he and his fellow directors executed. If the precise terms of any aspect of the guarantee were of real importance he would I am satisfied have specifically paid close attention to the matter. He did nothing of the sort. 15. The two matters I am satisfied he did consider were the amount to be borrowed to rectify the default, and even that was really dictated by the calculations, and the question of whether Wonga could pledge the shares. Any other detail in the drafting was more of mechanical nature and left entirely to Mr Kannan. 16. As for Mr Kannan he also was a very sophisticated and experienced businessman who for many years had worked as a banker. He accepted that he had negotiated many deals for the group and had attended routinely to the detail of the documentation of those deals. 17. Again I do not accept that he relied on anyone to iron out any inconsistencies in the documentation. He was inextricably involved in the detailed drafting of the Facility Agreement and on no less than six occasions communicated via email with the solicitor for the plaintiff about the many changes to be effected to the document and not once sought to make an issue of any alleged inconsistency of the sort alleged or the terms of clause 18 which contained the guarantee. That was not out of incompetence, inattention or because he was just too busy. It was in my view out of sheer indifference. 18. The decision not to engage lawyers when dealing with the plaintiff was I am satisfied out of self confidence, familiarity with the type of documentation the plaintiff usually required and not out of any reliance upon the basis that the plaintiff or its lawyer would somehow look out for the defendant's interest. Mr Jagatramka and Mr Kannan conceded the obvious, namely that they knew the plaintiff's lawyers were not acting for the defendant. 19. When all of the relevant circumstances are viewed objectively I am unable to find that the inconsistency or the plaintiff's conduct operated so as to be misleading and deceptive in the relevant sense. Given the terms of the sanction letters themselves I would not find that the alleged representations have been made out. Further given what I have said about the sophistication and experience of Mr Jagatramka and Mr Kannan as well as their state of knowledge with respect to the contents of the Facility Agreement, I would not find the circumstances gave rise to a reasonable expectation that the plaintiff would explicitly disclose the inconsistency between the sanction letter and the final form of the Facility Agreement. And in any event I am not satisfied that Mr Jagatramka, Mr Kannan or any other director relied on the plaintiff or any representation said to have been made by it in the sanction letters or otherwise (Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112 at 135-136, 138; Sidhu v Van Dyke (2014) 251 CLR 505 at [90]-[91]). 20. For the same reasons I would neither find the defendant's claim of estoppel made out, nor its claim of unconscionable conduct. With respect to the latter claim, again having regard to the relative sophistication of the parties, their numerous rounds of review of the terms of the Facility Agreement itself which Mr Kannan participated in, the terms of the sanction letters, the defendant's indifference, and the fact the defendant was provided with a final true and complete copy of the agreement for execution, I do not consider the plaintiff's conduct then or now, in attempting to enforce the guarantee, "so far outside societal norms of acceptable commercial behaviour" so as to warrant its condemnation as unconscionable pursuant to s 12CB of the ASIC Act. 21. I would also reject the defendant's variation defence for the reasons posited by the plaintiff. It seems to me that the provision of the "Final Sanction Letter" on 5 July 2013 was an attempt by the plaintiff to finalise the administrative arrangements relating to the transaction and did not in my view amount to a variation of the Facility Agreement. 22. I would therefore find that the defendant is bound by the terms of the guarantee in clause 18 of the parties' Facility Agreement and it follows that the plaintiff must succeed in its claim and the defendant's defence and cross-claim must fail. I invite the parties to bring in short minutes of order to reflect these reasons. I would hear the parties further on the question of costs if necessary and also on consequential orders in relation to the discharge or not of the current interlocutory regime. 23. Further the plaintiff sought judgement for the principal outstanding, together with interest that has accrued under the facility to be calculated at the time of judgment. However the defendant submitted that if the Court was to reject each of its defences the sum of any indebtedness must be adjusted to take account of the shares in WLC that the defendant pledged as security and which have been forfeited to the plaintiff. I would also hear the parties further on this point if necessary. 24. ******* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 December 2020