Supreme Court New South Wales Medium Neutral Citation: Pirovic v Barbieri [2020] NSWSC 1892 Hearing dates: 29, 30 October and 12, 13, 26 November 2020 Further written submissions received from the plaintiffs on 8 December 2020 Decision date: 21 December 2020 Jurisdiction: Equity - Expedition List Before: Sackar J Decision: See [394]-[395] Catchwords: CONTRACTS — MORTGAGES AND SECURITIES — Mortgages — Mortgage contracts — Whether certain monies were advanced to plaintiffs and intended to be secured by mortgage — Where contract contained an "all monies" clause — Construction of "all monies clause" CONTRACTS — MORTGAGES AND SECURITIES — Mortgages — Mortgage contracts — Covenants — Construction of convents concerning repayment of principal and interest — Where mortgagor liable to repay mortgage and accrued interest on demand for repayment CONTRACTS — Formation — Consideration — Where mortgagee promised mortgagor that she and her husband could live in property subject of the mortgage for as long as they wished and he would not call upon the mortgage until the property was sold — Whether mortgagor's promise part of the consideration provided for mortgage contract ESTOPPEL — Promissory estoppel — Where mortgagee promised mortgagor that she and her husband could live in property subject of the mortgage for as long as they wished and he would not call upon the mortgage until the property was sold at the time mortgagor executed mortgage document — Whether mortgagee estopped from making demand under mortgage prior to conditions being fulfilled MORTGAGES AND SECURITIES — Mortgages— Whether demand made Legislation Cited: Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law) ss 23, 237(1)(a)(ii), 243(a) and 244 Contracts Review Act 1980 (NSW) ss 7, 9, 19 Conveyancing Act 1919 (NSW) s 91(1) Cases Cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Ayoub v Euphoric Pty Ltd [2004] NSWCA 457 Bank of Baroda v Panessar [1987] Ch 335; [1986] 3 All ER 751 Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491 Crane v Colonial Mutual Fire Insurance Co Limited [1920] 28 CLR 305 Electricity Generation Corporation v Woodside Energy Pty Ltd (2014) 251 CLR 640 Esso Petroleum Co Ltd v Alstonbridge Properties Ltd [1975] 3 All ER 358 Estoril Investments Pty Ltd v Westpac Banking Corp (1993) 6 BPR 13,146 Fox v Percy (2003) 214 CLR 118 Gleeson v Gleeson [2002] NSWSC 418 Murphy v Lawrence [1960] NZLR 772 Ogilvie v Adams (1981) VR 1041 Oversea-Chinese Banking Corp Ltd (OCBC) v Malaysian Kuwaiti Investment Co (MKIC) and Aljade [2003] VSC 495 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 Re Piccolo, McVeigh (Trustee of the Estate of John Peter Piccolo) the National Australia Bank Limited (2000) FCA 187 Sidhu v Van Dyke (2014) 251 CLR 505 State Lotteries Office v Burgin CA (NSW) 19 May 1993, CA 40133/93 Unreported Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Verduci & Anor v Golotta [2010] NSWSC 506 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Texts Cited: E.L.G Tyler, Fisher and Lightwood's Law of Mortgage (LexisNexis Butterworths, 3rd ed, 2013) Category: Principal judgment Parties: Antun Pirovic (first plaintiff) Zorina Pirovic (second plaintiff) Anita Victoria Barbieri (defendant) Representation: Counsel: J Drummond (plaintiffs) A Cheshire SC (defendant) Solicitors: Delaney Lawyers (plaintiffs) William Roberts lawyers (defendant) File Number(s): 2019/199597 Publication restriction: n/a Judgment 1. The question in this case concerns the enforceability of a mortgage which was entered into between the plaintiffs and a company controlled at the time by the second plaintiff's father, now deceased, and how much if any money is owed under it. The defendant is the second wife of the deceased and his executor. 2. There is no doubt the relevant parties signed a mortgage document in 1983. 3. The plaintiffs had for some time been seeking to have the mortgage discharged so they can sell the subject property. On 10 July 2019 the court made orders directing the discharge of the mortgage on certain terms and conditions, one of which required the payment into a controlled monies account the sum of $1,918,196.95. 4. The plaintiffs in these proceedings sought a declaration that the amount required to discharge the mortgage as at 12 July 2019 was $161,500 and an order that the defendant cause to be paid to the plaintiffs' solicitors the money held in the controlled monies account, less the sum of $161,500, which is to be paid to the defendant in her capacity of executor. However despite their pleadings the plaintiffs later contended that there is no money owing under the mortgage. 5. By her cross claim the defendant seeks a declaration that as at 12 July 2019 the amount required to discharge the mortgage was in fact $1,918,382.69 or such other amount as the court may determine. That amount is said to be made up of the principal sum, additional advances and interest. She pleads that the additional advances were $20,000 (in 1985), $49,000 (in 1987), $43,002 (in 1988) and $75,000 (in 1989), totalling $187,002. However in written submissions she claimed $119,262 for additional advances, made up of $1,260 (for a typewriter in 1985), $14,000 (for the payment of a loan to Antun's father in 1987), $22,502 (for a vehicle purchase in 1987), $1,500 (for a TV and sound system in 1988), $5,000 (for furniture in 1988), and $75,000 (for payment of debts in 1989). 6. The dispute turns upon several issues, including whether the plaintiff received the additional sums as alleged and if so whether they were secured by the mortgage, further whether the covenant concerning interest is enforceable and if so whether any valid demand was made such that interest became payable on the sums due. The plaintiffs also raise a number of defences to the defendant's cross claim which are set out below. Backgrounds Facts 1. The deceased, Frank Bakaric, was born on 28 May 1922. His first wife, Gloria Elizabeth Bakaric, was born on 15 March 1930. They were married on 6 May 1950. 2. Their first child, Irene, was born on 14 August 1951. Their second child, Frank, was born on 1 December 1952. 3. The couple's third child and the second plaintiff in these proceedings, Zorina, was born on 23 May 1956. 4. Their fourth child, Peter, was born on 4 July 1960. 5. The defendant, Anita Barbieri, was born on 19 September 1964. 6. The deceased, his then wife and their four children emigrated from New Zealand in late 1970. In December that year they purchased 653 New South Head Road, Rose Bay. 7. On 3 July 1970 Universal Associates Australia Pty Ltd (Universal) was incorporated. Precisely who was a director of Universal at any particular point in time is not clear, as can be shown in the exchange that was had with senior counsel for the defendant at T.358/30-50, T.359/1-10. 8. In 1972 Zorina met her husband Antun, the first plaintiff in these proceedings (collectively, Zorina and Antun are referred to as 'the plaintiffs'). On 15 March 1975 Zorina and Antun married and commenced to reside at 653 New South Head Road. 9. Irene and her husband, Niko, purchased as joint tenants the property known as 579 Old South Head Road for $100,000 on 19 April 1979. The deceased/Universal advanced to Irene and Niko $30,000 to complete that purchase and a mortgage in favour of Universal was registered over the property. They had also been living at 653 New South Head Road. 10. On 7 August 1980 the plaintiffs purchased 476 Old South Head Road as joint tenants for $120,000. They contributed $40,000 to the purchase, the balance being supplied by the deceased/Universal. The deceased/Universal then advanced further funds to assist the plaintiffs to renovate, those renovations being completed by September 1991. 11. At or about 1982 Zorina ceased working for the Commonwealth Bank of Australia and commenced to work for Universal, performing administrative duties. 12. Gloria, the deceased's wife, died on 23 June 1982. 13. The mortgage over Irene and Niko's property at 579 Old South Head Road was discharged on 3 September 1982. 14. On the same day the plaintiffs terminated their joint tenancy of 476 Old South Head Road and thereafter held the property as tenants in common as to 75% to Zorina and 25% to Antun. The relevant memorandum of transfer was not registered until 3 August 1983. 15. Likewise Irene terminated her joint tenancy with her husband and they became tenants in common as to 80% to Irene and 20% to Niko. 16. A mortgage was executed by Irene over her property in favour of Universal for $62,300 then later $111,300 in February 1983. 17. On 1 February 1983 Zorina executed a mortgage (Mortgage T542549, 'the mortgage') over her 75% interest in the 476 Old South Head Road property for $161,500 in favour of Universal. The mortgage was registered on 19 May 1983. Relevantly, the mortgage contains the following terms: FOR THE CONSIDERATION OF AFORESAID Zorina Pirovic hereby: (a) irrevocably appoints the mortgagee the attorney of the mortgagor immediately or at any time after any breach or default by the Mortgagee to exercise in the name of the mortgagor all rights, powers and remedies of the Mortgage express or implied herein and to receive any monies payable to the mortgagor in respect of the Mortgaged land whether in respect of the insurance compensation or otherwise and to do all things required to be done by the mortgagor and to execute all documents and to do all things necessary in regard to such matters; (b) covenants with the Mortgagee as follows: firstly: the mortgagor will pay to the Mortgagee the principal sum or so much thereof as shall remain unpaid on the seventh day after demand for payment shall have been made (First Covenant); secondly: the mortgagor will pay interest on the principal sum or so much thereof as for the time being shall remain unpaid and upon any judgment or order which this or the preceding covenant may become merged at the rate of 15% per centum per annum as follows, namely- By equal monthly payments on the days of each month in each and every year until the principal sum shall be fully paid and satisfied, the first of such payments computed from the date of expiry of demand for repayment, to be made on the same date (Second Covenant); thirdly: the mortgagor will observe the provisions set forth in the memorandum filed in the Registrar General's Office as number Q860000 which provisions are deemed to be incorporated herein (Third Covenant); fourthly: the term of the said principal terms shall be deemed to include such further or other monies as may be advanced from time to time by the Mortgagee to the mortgagor (Fourth Covenant). 1. The plaintiffs allege that the deceased required the mortgage to be executed (without the payment of any further monies (i.e. consideration)) and represented to each of Zorina, Antun and Irene: 1. that the Mortgage was just as security should Zorina and/or Irene die or divorce their respective spouses; 2. that each of Zorina and Antun and Irene and Niko could each reside in their respective properties for as long as they wished; and 3. that the deceased/Universal would not call upon either mortgage held by Universal until either Zorina and/or Irene either sold their respective homes or it was sold by reason of their death or divorce 1. In June 1985 the defendant commenced to reside with the deceased at 653 New South Head Road. She was appointed a director of Universal on 14 August 1989. However she was never a signatory to the Universal cheque account (T.342/20-40). 2. On 17 April 1986 at the direction of the defendant AUD$1,000,000 was transferred from an account at CSFB Effecten Bank, Frankfurt (account number 571476364) to Australia. 3. On 18 April 1986 Peter purchased 71 Kings Road, Vaucluse for $880,000 with funds paid from the account of Gloria Elizabeth Bakaric Trust. 4. On 18 January 1988 Zorina's solicitor wrote to the deceased about the mortgage denying any debt. 5. On 2 February 1988 Mallesons Stephen Jacques (Mallesons) acting for the deceased/ Universal asserted to Zorina's solicitor that she owes $185,262. 6. On 24 November 1989 the deceased wrote to Mallesons asking "if we have legal rights according to our mortgage on the property, please write and inform the mortgage will no longer be interest free". He wanted to claim "normal bank rate interest". 7. On 30 November 1989 Mallesons responded to the deceased, giving advice that the only rate he could claim was 15% as provided in the mortgage and in relation to other matters. 8. On 8 July 1991 the deceased received a letter from Mallesons advising him that they had reviewed Zorina's wage records. The letter asserts she received $71,093.78 over approximately six years. Advice was given to the deceased about the options open to him in relation to the mortgage. Mallesons said he could "bring the matter to a head by issuing demand for repayment of the loan and if this demand is not met attempting to enforce your rights under the mortgage". Mallesons proposed a second option, namely that he write a letter to Zorina reminding her that the loan had not been repaid and was still secured by the mortgage and that he was reserving his rights to take further action. The letter asked for instructions. 9. On 23 July 1991 Mallesons wrote to Zorina's solicitor, noting that there had been no correspondence since 18 May 1988 and simply reserving Universal's rights under the mortgage. 10. The deceased married the defendant on 21 October 1995 in Fiji. 11. On 23 December 2002 Universal executed a transfer of the mortgage from Universal to the deceased for $1. The solicitor acting on the transaction was Mr Rodgers from Brock Partners. 12. On 29 March 2011 the deceased executed his last will. Clause 4(b) was in the following terms: "I give, devise and bequeath... (b) to my grandchildren Vince Pirovic and Antonia Pirovic my interest as Mortgagee in NSW registered Mortgage T542549 for their sole use and benefit absolutely including all monies secured by the said Mortgage from the date of my death to be paid to them upon them attaining the age of 30 years in equal shares". 1. Clauses 6 and 7 further provided as follows: "6. I forgive: (a) any monies due to me or my estate by my daughters Irene Zorina Borkovic and Zorina Janice Pirovic other than the monies secured by NSW registered Mortgage T542549; (b) any monies due to me or my Estate by my daughter Zorina Janice Pirovic and her husband Antun Pirovic to the date of my death in respect of monies loaned to them for building works at the property at 476 Old South Head Road, Rose Bay, NSW 2029 other than the monies secured by NSW registered Mortgage T542549; (c) any monies due to me or my estate by my daughter Irene Zorina Borkovic and her husband Niko Borkovic to the date of my death in respect of monies owed to them and secured by an IOU to enable them to purchase their family home and for house renovation works including outside buildings and brick fence around the whole property of 579 Old South Head Road, Rose Bay, NSW 2029 and the sum of $29,000 taken without my permission. 7. I have made no other provision in this Will for any of my children (including my son Frank Ivan Bakaric) as I have adequately provided for each of them during my lifetime including gifts of properties and renovations thereto, monies, motor vehicles, domestic appliances, furniture, fixtures, fittings, education, overseas trips and other financial assistance. In respect to my two daughters Irene Zorina Borkovic and Zorina Janice Pirovic, I have not had contact for at least 20 years with them nor have I had any contact with their children or grandchildren out of respect for the wishes of both my daughters". 1. It seems that also some time in 2011, likely prior to the execution of his will, the deceased made a handwritten note and statement concerning the amounts he recalled providing to the plaintiffs, which he signed. 2. Universal was deregistered on 29 November 2015. 3. The deceased died on 14 December 2015. 4. In early 2016 the defendant retained Mr Rodgers from Brock Partners. She had a conference with him on 15 March. In June Mr Rodgers prepared an affidavit for the defendant as executor. 5. On 27 June 2016 the defendant attended on Mr Rodgers and gave him instructions as to the deceased's probate. 6. In the application for probate dated 20 July 2016, supported by an affidavit of 26 June 2016, the defendant stated that the mortgage from Zorina was valued at $180,000. 7. On 31 August 2016 probate was granted to the defendant. 8. The plaintiffs have been seeking a discharge of the mortgage since about July 2017. On 17 July 2018 Zorina's solicitors requested a pay out figure for the mortgage. 9. On 13 August 2018 Mr Rodgers attended a conference with the defendant and it seems advised that because the defendant could not locate any formal demand, interest could not be claimed, and she should discharge the mortgage. The defendant denies receipt of that advance as well as the receipt of a draft letter under cover of an email dated 24 August 2018. 10. Mr Rodgers issued the letter on 28 September 2018. It stated that the payout of the mortgage was $161,500. 11. On 26 February 2019 Zorina suffered a stroke. 12. On 8 March 2019 the defendant sought a transmission of the mortgage from the deceased to herself in her capacity as executor. 13. The plaintiffs commenced proceedings on 19 June 2019 seeking a discharge of the mortgage over the property at 476 Old South Head Road. Submissions Plaintiffs' submissions 1. The plaintiffs assert that Zorina did not receive many of the subsequent advances pleaded by the defendant but otherwise says that none of the subsequent amounts were secured by the mortgage. They also say she is not liable to pay interest at the rate of 15% per annum from 1985. Additional advances 1. The plaintiffs submit that the letter from Wong & Mayes, the accounts retained by the deceased and Universal, dated 28 January 1988 discloses that as at the date of that letter, no additional sums had been advanced by Universal to Zorina. They say the only sums the deceased "instructed Wong & Mayes to have been advanced by Universal as at 28 January was the sum of $23,762 comprising the Honda motor vehicle purchased on 2 January 1986 for $24,830 and a Typewriter purchased on 31 October 1983". Zorina denies she was notified or consented to those amounts being secured by the mortgage. 2. The plaintiffs submit there is no documentary evidence that the additional amounts the defendant says were advanced to Zorina were advanced by Universal, the mortgagee. They say the documentary evidence, to the extent it exists, discloses that any additional advances made (which are denied) were made by the deceased not Universal, and in the absence of any valid assignment by the deceased to Universal they were not and did not become advances made by Universal and thereby secured by the mortgage. 3. The plaintiffs submit that because the mortgage was stated to be for the sum of $161,500 any variation would require an amendment to the mortgage in accordance with s 91(1) of the Conveyancing Act 1919 (NSW) and no valid amendment of the mortgage has been established. 4. The plaintiffs submit that even if it was found that Zorina received any additional amounts from the deceased they were not secured by the mortgage and were subsequently forgiven by the operation of clauses 6(a) and (b) of the deceased's will (that forgiveness being justified by the matters identified in clause 7). They say the deceased's 2011 March statement and preceding handwritten note (see above), in failing to contain any statement or indication regarding the amounts allegedly advanced by the deceased/Universal that were "secured by Mortgage 542549", make clear that each of the amounts those documents say were advanced were not secured by the mortgage. The plaintiffs submit the evidence of Peter Bakaric further supports this position. 5. The plaintiffs further submit that each of the additional advances identified by the defendant fall outside the Fourth Covenant, which the plaintiffs submit is equivalent to an "all monies clause" for the reasons summarised below. All monies clause 1. The plaintiffs refer in particular to the decisions of Estoril Investments Pty Ltd v Westpac Banking Corporation Limited (1993) 6 BPR 97441 at 13150-13151 and 13154; State Lotteries Office v Burgin CA (NSW) 19 May 1993, CA 40133/93 Unreported at p 7; Ayoub v Euphoric Pty Ltd [2004] NSWCA 457; (2004) 12 BPR 22735 at 22742; Oversea-Chinese Banking Corp Ltd (OCBC) v Malaysian Kuwaiti Investment Co (MKIC) and Aljade [2003] VSC 495 at [32] and [35]; Re Piccolo, McVeigh (Trustee of the Estate of John Peter Piccolo) the National Australia Bank Limited (2000) FCA 187 at [84]. 2. They submit that an all monies clause must be construed by reference to the context of the transaction in which the clause appears and the commercial purposes of the transaction the clause was intended to secure. They say that in order to secure later indebtedness or advances, the mortgagee is required to make clear its intention that the "all monies clause" was intended to secure the latter particular advancements. 3. The plaintiffs submit that when Zorina entered into the mortgage on 3 September 1982 the clear intention of Zorina and the deceased on behalf of Universal was that the amount to be secured by the mortgage was limited to the amounts advanced to purchase the property and some but not all amounts used to renovate the house, totalling $161,500. They submit that the clear intention and contemplation of the parties was to secure to Universal that sum only, not for the benefit of the deceased and/or Universal but ultimately to provide that sum for the benefit of Zorina's children (see clauses 4(b) 6(b) and 7 of the deceased's will). 4. They submit the mortgage was prepared by the deceased and/or Universal without consultation and presented to Zorina on the basis of the being "accepted, like it or not", which is relevant "in construing a term that may appear ambiguous or uncertain" (State Lotteries Office v Burgin CA (NSW) 19 May 1993, CA 40133/93 Unreported at p 7). The plaintiffs submit the Fourth Covenant does not provide any clear specification as to the types of future advances that may fall within it and gives rise to clear ambiguity. 5. The plaintiffs submit that each of the advances the defendant says were made to Zorina were of a "fundamentally different character or kind" to that contemplated at the time of entry into the mortgage, they were not intended to be secured by the mortgage, and therefore fall outside of the Fourth Covenant. Construction of the mortgage and uncertainty 1. The plaintiffs submit that the Second Covenant is either void for uncertainty and therefore unenforceable, or in the absence of a formal written demand, no interest can be claimed. 2. They submit that the mortgage did not require Zorina to pay any money prior to any demand being made. They submit that the making of a valid demand would substantially alter Zorina's obligations and pursuant to the Second Covenant she would then be required to pay by equal monthly instalments, the principal sum then outstanding together with interest at the rate of 15% per annum. 3. They submit that interest only accrues upon "so much" of the principal sum as "remains unpaid" at the expiration of the 7 day period following service of a formal demand; interest would not accrue prior to a formal demand being made (or the sale of the property). 4. The plaintiffs submit that the mortgage contains no terms specifying when the principal sum was due or the mortgage was to terminate. Accordingly, they submit that neither the mortgagee nor the mortgagor had the means by which to determine what the equal monthly principal amount to be paid was, let alone the amount of interest due. 5. They submit that the deceased, the defendant and Universal knew about the issue concerning the enforceability of the mortgage as early as 1991 and they received advice from Mallesons that by reason of s 91 of the Conveyancing Act 1919 the deceased was required to obtain the consent of Zorina to a "payment plan" and to amend the mortgage. That did not occur. 6. They also submit that the defendant received advice from Mr Rodgers of Brock Partners, the solicitor retained to act for the estate, in 2018 that the only amount due under the mortgage was $161,500 and that the mortgage did not permit a claim of interest. Repayable on demand 1. Again the plaintiffs submit that prior to any valid demand being served there was no obligation on the part of Zorina to pay any amount of principal or any interest, and the making of a demand would substantially alter Zorina's obligations under the mortgage. They submit the parties clearly intended that such a change would require a Notice of Demand and the mere issue of proceedings does not constitute a demand (referring to Ogilvie v Adams (1981) VR 1041 at 1049; Esso Petroleum Co Ltd v Alstonbridge Properties Ltd [1975] 3 All ER 358 at 367; Murphy v Lawrence [1960] NZLR 772 at 775; Gleeson v Gleeson [2002] NSWSC 418 at [49]; Verduci & Anor v Golotta [2010] NSWSC 506 at [90]). 2. The plaintiffs submit that absent a valid demand in writing the mortgage was unenforceable and therefore the defendant's cross claim should be dismissed. Whether demands were made 1. The plaintiffs submit the evidence clearly shows no such Notice of Demand or even any oral demand was provided to Zorina at any time by Universal, the deceased or the defendant. The plaintiffs submit the fact there were no demands is consistent with the deceased's choice, following the advice provided to him by Mallesons in the 8 July 1991 letter, to merely reserve his rights under the mortgage (see the 23 July 1991 letter sent by Mallesons to Zorina's solicitors). They point to the advice the defendant received from Mr Rodgers on 13 August 2018 where he stated that because she could not locate any "formal demand" interest could not be claimed. 2. The plaintiffs deny the receipt of any oral demands and say that if any of the alleged oral demands were made one would expect either Universal and/or the deceased to have served a further written demand and/or commenced proceedings to recover the monies or exercise powers of sale or to enter into possession. 3. They point to the terms of the deceased's will, as well as his March 2011 statement and preceding handwritten note, and submit that the deceased in each of those documents failed to make any mention or indication that a formal written or any demand had ever been made by that date, as he would have if one had been made. Again the plaintiffs submit the evidence of Peter Bakaric supports this position. 4. The plaintiffs also say that the issuing of a demand would have been contrary to the representations the deceased made upon Zorina's entry into the mortgage, Zorina and Antun having not divorced or separated. Further, Antun gave evidence that had a demand been made he would have sold the property because he did not have the means to pay interest at a rate of 15%. Waiver or estoppel 1. The plaintiffs submit that by the representations the deceased made on behalf of Universal and himself when Zorina entered into the mortgage (set out above at [24]), the deceased waived compliance with both the First and Second Covenants, at least until the plaintiffs either separated, divorced, died or sought to sell the subject property 2. Accordingly the plaintiffs submit that for the deceased to issue any of the alleged demands would not only be contrary to those representations but also amount to the deceased approbating and reprobating as to the terms, force and effect of the mortgage (citing Crane v Colonial Mutual Fire Insurance Co Limited [1920] 28 CLR 305 at 326-327). 3. The plaintiffs also submit that in circumstances where no consideration was given for the mortgage it is clear that Zorina relied upon each of the representations and would not have entered into the mortgage but for those representations. 4. They submit that as the defendant is the legal representative of the deceased, he being the representative of Universal, the defendant is seeking to reprobate and is thereby estopped from making the claims in her cross summons. Unconscionable conduct 1. The plaintiffs submit that the deceased exercised unconscionable conduct in causing Zorina to enter into the mortgage and therefore it should be set aside (Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 at 462, 467). They submit that Zorina had limited education and restricted cognitive ability. The mortgage was prepared by solicitors retained by Universal and Zorina was not given an opportunity to obtain legal advice or review its terms. 2. The plaintiffs submit the deceased knew no consideration was provided for the mortgage. However they also submit he knew Zorina did not wish to execute the mortgage but that the plaintiffs had no ability to repay the monies previously advanced and would be required to sell the property in order to do so. They say that as a result Zorina was not only at a disadvantage but known by the deceased to be a person not capable of making a worthwhile judgment as to whether she should enter the mortgage. Unfair term 1. The plaintiffs submit that the Second Covenant was by reason of the representations made by the deceased on behalf of Universal an unfair term of the mortgage within s 23 of the Australian Consumer Law (ACL) and the court, being empowered by ss 237(1)(a)(ii), 243(a) and 244 of the ACL, should declare the mortgage void and unenforceable from 1 January 1991. False and misleading representations 1. The plaintiffs also submit that the representations were misleading and deceptive pursuant to ss 30(1)(b) and/or s 18 of the ACL and the court should declare the mortgage void and unenforceable from 1 January 1991. Contracts Review Act 1. The plaintiffs submit that, given the representations made by the deceased and the purpose for which the deceased acquired the mortgage, namely to provide something for Zorina's children, the First and Second Covenants were unfair terms within the meaning of s 7 of the Contracts Review Act 1980 (NSW). They say they are unjust in requiring Zorina to repay to either Universal or the deceased the principal sum, together with any additional advances and interest on service of a valid Notice of Demand regardless of whether the plaintiffs had separated, died or intended to sell the property. They submit the court would be permitted to exercise the powers under s 9 of the Contracts Review Act and, notwithstanding s 19 of the Contracts Review Act, make an order under s 91 of the Conveyancing Act 1919 (NSW) to vary the mortgage by deleting the First and Second Covenants. No monies established due under the mortgage as and from January 1988 1. The plaintiffs further contend that no money is due under the mortgage because Antun made an agreement with the deceased on behalf of Universal pursuant to which he worked for Universal from 1976 or early 1977 until 1984 or early 1985 for only $50 per week, the balance of his wages being retained by Universal to pay down the amounts advanced by Universal to purchase and partly renovate the plaintiffs' property. They say neither the deceased nor Universal attempted to bring to account the balance of Antun's wages retained by Universal during that period. Credit 1. The plaintiffs also provided extensive submissions concerning the defendant's credit and alleged that much of her evidence was either inconsistent or contrary to concurrent documents or her own subsequent evidence. 2. They also submit that consistent features of the evidence given by Stojanovski, Markos and Koganov (see below) were that no notes of the alleged conversation were prepared and that although the defendant was said to have been present no evidence is given of any response or statement by her. They were the plaintiffs submit, unable to provide any clear evidence of any oral demand made by the deceased. Defendant's submissions 1. The defendant alleges that there is no dispute that the principal sum secured by the mortgage ($161,500) is payable to the defendant in her capacity as executrix. The dispute she says is as to whether the additional principal sums are owing and secured and whether interest on the total is also owing and secured. Additional advances 1. The defendant submits that Zorina acknowledged receiving the car and the typewriter and she did not mind having to pay for the benefits; her objection was to them being added to the mortgage (T.29/31, CB.233). The defendant submits Zorina was initially unhappy that her father was telling her that it had been added to the mortgage (T.29/31), but after correspondence involving solicitors, she accepted the position (T.30/16 and T.38/20). 2. The defendant also submits that Zorina acknowledged receiving the amounts for the loan to Antun's father and the TV and sound system (CB.175) but her case was that they were repaid by Antun working for Universal. The defendant submits there was never any calculation or account from the plaintiffs that would support that. 3. The defendant provided a detailed table which cross referenced each additional sum she says was advanced to the available evidence. All monies clause 1. The defendant submits that, despite the plaintiffs' reliance upon the deceased's will to demonstrate a subjective intention on the part of the deceased that the mortgage was not intended to secure all monies advanced, the deceased's subjective intention in relation to the mortgage is irrelevant (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165) and contrary to the express words of the mortgage. Construction of the mortgage and uncertainty 1. The defendant submits the plaintiffs misunderstand the obligation in respect of the principal which is that once a demand was made, the principal became payable in full and not by instalments. Interest was then payable, calculated at 15% on so much of the principal as in fact remained outstanding from time to time. She says interest was payable monthly, but by equal instalments rather than with any adjustment to take into account the differing number of days in the months. Therefore she submits there is no uncertainty in the operation of that clause. 2. In their supplementary submissions the plaintiffs assert that "the construction advanced by the Defendant that the Second Covenant only relates to the payment of interest and not principal and interest should be rejected as contrary to the clear intent of the parties and the express words of the Second Covenant". They submit that as the First Covenant contains no provision for the principal to be paid by instalments, unless the words in the Second Covenant ("By equal monthly payments… until the principal is repaid") are construed to include equal monthly instalments of "principal and interest", then the principal will never get paid as the monthly instalments will be payment of interest only. Repayable on demand 1. The defendant submits the mortgage is drafted in terms of a "demand for repayment" and there is no justification for the court requiring that the demand be in writing. She submits the authorities cited by the plaintiffs on this point do not support their position. Whether a demand was made 1. The defendant submits that whatever view may be held of the defendant the court should accept the evidence of Mr Markos, Mr Stojanovski and Mr Koganov. 2. She submits the fact that the basis of the cross examination of those witnesses was that those conversations may have occurred with the deceased, but not with Zorina, lends support to the proposition that the deceased was unhappy and wanted to be repaid, which in turn supports the case that demands of her were in fact made by him. The defendant submits although it may be suggested that they are not wholly independent, those witnesses do not have a "vested interest" in the outcome of the proceedings. 3. The defendant also provided a detailed table that cross referenced the demands she says were made to the available evidence. No monies established due under the mortgage as and from January 1988 1. In response to this argument by the plaintiffs (see above), the defendant submits there is no pleading for a claim for a proper account or some sort of offsetting for benefits that were given to Universal (T.20/10-20). Response to the plaintiffs' other challenges 1. The defendant submits the plaintiffs' position that the claim for interest under the mortgage is unconscionable, unjust and unfair is "surprising and unsupportable" given the potential length of the loan and that plaintiffs also contend they are entitled to receive the capital gain made over the course of more than 35 years. She submits there is no allegation (and no evidence) that the interest rate of 15% per annum was excessive and Zorina accepted that it was reasonable for a provision to be included in the mortgage, given that she was only 26 years old at the time and so could be staying in the property without repaying the principal for many years (T.127/3-18). Further, the defendant submits that Zorina does not suggest it was not explained that there was a provision for interest, nor that she did not understand that a provision for interest had been included; her evidence was that she knew there was something in the mortgage about the payment of interest and she had no recollection of the circumstances in which the mortgage was signed (CB 2 at p 16; T.26/45-T.27/1; CB45.8-33). 2. In relation to the plaintiffs' waiver and estoppel argument, the defendant submits that no conduct inconsistent with the deceased's representations that the plaintiffs could remain in the property for as long as they wished and would not have to repay the capital until the property was sold is alleged. The defendant says the plaintiffs have themselves chosen to sell, and therefore leave the property and in the meantime the deceased did not seek to remove the plaintiffs from the property or to enforce the repayment of the capital sum. 3. The defendant submits that no representation as to interest not being payable is alleged or suggested in the evidence; representations about occupying the property and the payment of principal she says provide no basis for the plaintiffs to resist the payment of interest in accordance with the terms of the mortgage. 4. The defendant submits the same analysis applies to the plaintiffs' claims of misleading and deceptive conduct. In addition the defendant submits that the fact that the representations may not have been borne out and the deceased may have acted inconsistently with those representations does not make those representations false or misleading at the time they were made (Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82). The defendant also says the basis on which it is said the representations were false, misleading and deceptive is not identified and it is not pleaded for example that the deceased stated an opinion or intention that he did not hold or made a representation for which he did not have a reasonable basis. 5. It should be noted that in response to this submission, in their supplementary written submissions, the plaintiffs contend the representations as pleaded are those set out in paragraph [25] of their closing written submissions (as summarised above at [24]), and included that they would not have to pay back the principal until sale or divorce etc. The plaintiffs submit that based upon those representations no money could be claimed prior to the property at no 476 being sold in June 2019 and no interest could be claimed until that event had taken place as no principal was due. They submit that to construe the Second Covenant as permitting interest to accrue without sale and/or the issue of a formal written demand is contrary not only to the representations made but also the express terms of the Second Covenant (see plaintiff's submissions on construction above). Credit 1. The defendant submits that in determining the factual issues in this case consideration will have to be given to differing accounts of oral conversations, including with the deceased, and this raises difficulties of the kind discussed by McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 and Hallen J in Papas v Co [2018] NSWSC 1404 at [54]-[61]. 2. In addition the defendant submits it is dangerous to make global credit findings, that disbelieving a witness on one matter does not mean the opposite is proven, and the evidence must be looked at as a whole (Saravinovska v Saravinovksa (No 6) [2016] NSWSC 964 at [470]-[471]; Cook v Sirius International Insurance Corporation Australia Branch [2020] NSWSC 1631 at [155]). 3. Submissions were made in relation to the credibility of the defendant and the plaintiffs' witnesses, as well as where the defendant's evidence is said to be supported by contemporaneous documentation. The defendant also submits that her case does not depend upon her being the source of the funds she says were advanced to Zorina (nor those that were advanced to Peter). The Evidence 1. The plaintiffs relied upon numerous affidavits. There were three from the second plaintiff, Zorina, one from her husband, the first plaintiff, Antun, and two from her brother, Peter. In addition there were two affidavits from her sister, Irene, and one from her sister-in-law, Nicole. The plaintiffs also called Mr Kevin Rodgers, solicitor. 2. The defendant filed three affidavits. Further affidavits were relied upon from Mr Zoran Stojanovski, Ms Lilya Koganov, and a Mr Yeoryios Markos. Zorina Pirovic 1. Zorina's first affidavit was dated 24 September 2019. It is in part responsive to the affidavits of the defendant of 8 July 2019 and 5 September 2019. 2. She set out her family history, [6]-[9]. 3. She attended school at Rose Bay Convent until 1962. Having completed a secretarial course she obtained employment with the Commonwealth Bank of Australia at Rose Bay, [10]. 4. She met her husband, the first plaintiff, in 1970. They married in 1975. Her husband was a cement renderer, [11]. In time they had two children, Vince and Antonia. Vince works as a labourer and Antonia is autistic and is thereby disabled, [13]. 5. She described her father's business as partly including the scouring and cleaning of sheepskins and fox skins for export and sale, [9]. She believed her father did not approve of her husband but he nonetheless employed him as a process worker from about 1976 or early 1977, [11]. 6. For a time after their marriage the plaintiffs resided with the Zorina's parents at 653 New South Head Road, [22]. 7. Zorina said that her father in late 1975 or early 1976 said to her that if she and her husband go to work for him he would help them buy their first home. He would pay them $50 per week as they were living with him and he thought they would only need part of their wage to survive, [23]. 8. As a result she said of her conversations with her father Antun commenced employment at the father's factory and was paid $50 per week for a 40 hour week, [26]. 9. The plaintiffs found two terrace houses for sale in Rose Bay. They had saved $40,000 but the purchase price was $120,000, [27]-[29]. By agreement the plaintiffs gave their $40,000 to the deceased and he supplied the balance of the funds for the purchase. They purchased the property as joint tenants, [30]. 10. They renovated the houses with Antun doing a good deal of the work but with extra funds supplied the deceased, [31] and [34]. 11. Prior to the birth of their son, Vince, Zorina commenced employment with Universal, [35]. She had over the years assisted her father in the business but from 1982 she worked at Universal for about $200, gross per week, [35]. 12. In about the middle of 1982 she and the deceased had a conversation in which he said he wanted to formalise the arrangement and have a mortgage. He said that although he advanced more than $161,500 he would be happy with that amount and they could live in the property for as long as they wanted but if they sold he wanted his money back, [36]. 13. He told her that he had used the $40,000 as part of the purchase price. He was also concerned that if she divorced or died he had his money secured, and he wanted it secured over her interest. He said he had the same relationship with her sister Irene and her husband, [36]. He requested that she and her husband would change their interest so they would be tenants in common, her 75% and Antun 25%, [36]. 14. She and her husband agreed and on 3 September 1982, she and her husband went to the solicitor for Universal at Crows Nest and executed a transfer and a mortgage, [39]-[40]. The deceased said the figure of $161,500 was worked out taking into account the $40,000 put in by the plaintiffs and the salary earned by Antun, [36]. 15. She said she, the deceased and her sister went overseas for Universal in 1984. She denied she received $20,000 for the trip, [44]. 16. She asserted that from the time the deceased started living with the defendant in about 1985 he became very difficult and sought to exercise complete control over her and the rest of the family, [47]. 17. She had a conversation with her sister about her mortgage and the discharge of it, [48]-[49]. 18. She raised with her father the possibility of the discharge of her mortgage. He refused on the basis that she was a bad money manager and he was concerned that if the mortgage was discharged there would nothing left. He said that she would only have to repay the mortgage if she divorced or sold; otherwise she could live there for as long as she liked, [50]. 19. In 1988/1989 she retained Ms Barbara Neill, solicitor, to find out how much was due under the mortgage, [53]. 20. She referred to a letter from Mallesons to her solicitor dated 2 February 1988 which purported to set out the amounts due under the mortgage, based upon a letter from Wong and Mayes, the deceased's accountants, setting out the written down value of a Honda car ($22,502) and the typewriter ($1260), [54]. 21. She asserted she had a conversation with her father to try to understand what the moneys over and above the $161,500 were for, [54]. He said again that he wanted those moneys and he wanted something left for Vince and Antonia, [54]. 22. She took no further steps in relation to the mortgage and continued working for the company until 1992 earning gross $200 per week for forty hours. 23. Each of herself, her sister, and her brother, Peter, were directors of Universal from the early 1980's until it was deregistered in 2015, [58]. She stated that she was never present at any meeting when the company resolved to approve any payments to her or to make a written or oral demand upon her, [59]-[62]. 24. She denied that she had no contact with her father for twenty years prior to his death, [63]. 25. She accepted that the relationship could not be described as close, [66]. 26. She denied the letter from Mallesons dated 1991 demanding repayment, or being in the boardroom when demands were made, [73]-[12]-[29]. She also dealt with other alleged loans and wages and conversations with the defendant and Lilya Koganov, [74]-[75], and Zoran Stojanovski, [77]. 27. In her affidavit of 11 March 2020 she denied additional paragraphs of the defendant's affidavits and in her affidavit of 23 October 2020 she set out the circumstances of her signing of the mortgage and provided information about her education. 28. In cross examination she said she was not sure if she was a director of Universal and she never attended a board meeting, T.24/1-15. 29. When she signed the mortgage she knew it was to Universal and it was for $161,500, but she did not understand her father could claim interest, T.25/5-20. 30. Having been taken to the document she agreed that she was when she signed accepting something about interest, T.26/40-45. 31. She agreed that her understanding was that she would not pay the money back for as long as she stayed in the house. She also agreed that it would be reasonable for her father to want some interest to be running on the money, T.27/5-20. 32. She did not agree she would pay interest to her father because her husband was going to "work for the house on a low wage", T.28/5-10. 33. She agreed that when she worked for Universal she was supplied with a typewriter and a car which she sold, T.28/35-50. She denied her father requested the money for the typewriter and the car, T.29/5-10. She agreed that her father added those items to the mortgage to which she objected, T.29/20-30. 34. She denied she received money for furniture but she did agree that her father paid money to her husband's father, T.30/35-40. She believes it was paid back, T.31/5-7. 35. She denied she ever received the amount of $75,000 from her father as recorded in a note of his, T.33/35-45. She asserted she only ever received her wages. 36. She asserted she never had to pay back the mortgage, T.34/5-10. 37. She agreed she was made a bankrupt in 2017 and that she had money problems over many years, T.34/40-50. She denied she ever asked her father for money, T.35/5-6. She asked her father to discharge the mortgage, T.35/25-35. 38. She knew her father had consulted Mallesons and she consulted a solicitor as well, T.36/5-10. She appeared to accept that she knew she owed $161,500 but her solicitor said she owed nothing, T.36/20-35. 39. She knew her father was saying (via his solicitor) that she owed the $161,500 plus an amount for the car and the typewriter, T.38/10-20. 40. She denied her father asked for the money back, T.38/35-40. She also denied receiving a letter from Mallesons in or about 1991 making a "further demand" on her, T.39/45-50. She described as false a request from her father to start making "mortgage and interest repayments", T.39/4-25. 41. She denied demands for repayment were made in 1993, 1994, 1995, 1996, 1998, 2001, 2003 and 2005, T.39/30-50 and T.40/1-27. 42. She agreed she discussed her bankruptcy and her debts with "Anita" in December 2017, T.40/30-40. 43. She states that her debts were incurred because of her "personal stupidity", T.41/15-25. She denied her father was aware of her gambling and said he would not release her mortgage because she was "uneducated and dumb", T.41/30-35. She could not have repaid the money and her gambling became worse when her father died, T.42/1-10. 44. She denied she had conversations with Anita about the money owing under the mortgage after her father died, T.42/15-25. She denied knowing there was interest on the loan payable, only the loan, but she then said that she knew interest was owing, T.43/20-45. 45. Her understanding at the time of the mortgage was that no interest was to be paid, T.47/15-25. Antun Pirovic 1. Antun Pirovic made one affidavit of 24 September 2019. In that affidavit he responds to the affidavits of the defendant of 8 July and 5 September 2019. 2. He stated that after he married Zorina they resided with the deceased at 653 New South Head Road, [9]. 3. He said he commenced work for Universal in 1977. He said he worked at the plant of Universal for $50 per week for forty hours, [11]. In that time he and Zorina saved about $40,000 [13]. 4. He stated he found two semis in Rose Bay for $120,000 which they purchased with the help of the deceased, [15]-[17]. They then renovated the semis. 5. He relayed a conversation he had with his wife about the deceased requiring a mortgage for $161,500 over the semis, [24]-[25]. 6. After the defendant started living with the deceased there were tensions between the deceased and his children, [31]. 7. He and his wife instructed a solicitor in 1987 or 1988 to find out what was owed under the mortgage, [36]-[37]. 8. He denied being present when any demands were made for repayment, [40]-[43], and the account given by Lilya Koganov, [44]. 9. In cross examination he said he was not happy that "Frank" did not release the mortgage over his home, T.51/48-50. 10. When he went to his solicitor explained that he had been working for $50 per week and he understood his wage was going towards the mortgage, T.51/15-20. 11. He thought that Universal was getting the benefit of his low wages because it had lent him and his wife money, T.51/30-32. 12. He agreed that the deceased loaned him money for his father but he paid it back in full, T.52/10-15. He denied receiving other amounts. 13. He agreed that his wife had money problems over the years as a result of gambling and that the deceased thought Zorina was bad with money, T.53/1-15. He denied for example that the deceased advanced $75,000 in about 1989, T.53/35-40. 14. He never saw a letter from Mallesons in or about 1991 making demand for money under the mortgage, T.54/20-25. 15. He would not agree that the deceased made demand for the repayment of the money, T.54/35-40. 16. He did not know the deceased could charge interest on the loan, T.55/30-35. Irene Borkovic 1. Irene Borkovic made two affidavits of 24 September and 19 November 2019 respectively. 2. In the September affidavit she set out the family history. She worked for the Bank of New Zealand and then unpaid for Universal, [9]-[10]. 3. She stated that the deceased said that if her then husband came to work for Universal, as she did he would help them buy a home, [15]. 4. She stated they found a house on Old South Head Road, Rose Bay, for $100,000. She told her father she and her husband had saved $30,000. They borrowed some money from a family friend in the order of $50,000, [17]-[18]. 5. Whilst she and her husband were employed at Universal she earned $7800 per year whereas her husband earned $80 per week, [22]. 6. Her father during a conversation with her insisted that she and her husband become tenants in common, 80% as to 20%, in case she divorced or died, [25]. 7. She told her father in September 1985 that she and her husband were going to start their own business and they wanted to discharge the mortgage. He agreed and he said that they had through their wages paid off most of the mortgage, [36]. 8. Zorina told Irene that her father had refused to release the mortgage as she was a bad money manager and he wanted something to be there for her son, Vince, [37]. 9. She said demand was never made for a repayment of the money nor did she or her husband pay any money off their mortgage, [41]-[42]. 10. The deceased bought Irene a new Mercedes Benz motor car in order to persuade Irene to continue working for Universal, [45]-[46]. 11. In early 1988 Irene again met with her father and asked him again to release Zorina from the mortgage. He again refused on the basis that she would gamble the money away, [51]. 12. Irene suggested to Zorina in late 1987 or early 1988 that she should try to find out how much was owing on the mortgage. Zorina told Irene that her father had said the amount was $185,000 and not the original amount of $161,500, [52]. 13. She said she was not present at any meeting nor did she as a director resolve to demand Zorina pay any moneys back to Universal, [53]-[57]. 14. In her second affidavit Irene specifically denied a number of assertions of the defendant, [5]. 15. She gave evidence of the purchase of 45 New South Head Road, Rose Bay, and how after the purchase (assisted by her father) her father wanted a mortgage over it, [10]-[13]. They would not agree to the terms and so they sold at a loss, [14]-[17]. 16. In cross examination she agreed that she was aware that she and Zorina had entered into similar arrangements about their homes and splitting the joint tenancies, T.67/25-30. 17. She agreed her father ran Universal as his own personal company, T.67/49-50. 18. She only became aware of Zorina's gambling problem in 2017, T.69/1-5. She had to agree that in her affidavit she said the deceased told her in a conversation that Zorina had a gambling problem, T.71/1-15. She said she did not know about it but the deceased had said he thought Zorina had a gambling problem, T.71/5-10. 19. When the deceased released the mortgage she did not believe that she owed any money, T.73/35-40. Peter Bakaric 1. Dr Peter Bakaric, the second plaintiff's brother, made two affidavits, one of 24 September 2019 and the second of 16 October 2019. 2. In his first affidavit of 24 September he outlined the family history. He attended Scots College and then he did medicine at the University of Sydney, graduating in 1984, [5]-[13]. 3. He discovered that Zorina and Irene's husbands were working for Universal for about $50 per week, [29]. His father said that they were living off the wages of Zorina and Irene, [29]. 4. After the defendant started to live with the deceased issues arose with each of the three children and the deceased and the level of discontent rose significantly, [37]. 5. Zorina complained a number of times to him about their father not releasing the mortgage over Zorina's home. He had a similar conversation with Irene, [40]-[41]. 6. In 1986 he raised with his father buying a house in Kings Road, Vaucluse. His father assisted him with the purchase and told him that he (the father) had arranged to transfer the entire amount for the purchase from his account in Germany and that it would arrive in time for settlement, [45]-[46]. 7. He decided to sell the house approx two years later and he told his father the sale price and that he wanted to know how much to pay back. His father prepared a list but it included amounts he thought he did not need to pay back. As an example amounts paid for his health insurance, [50]. After he sold he paid back, out of a sale price of $1,975,000, $913,000 to the account of the Gloria Elizabeth trust and $187,000 to Universal, [51]. 8. He thereafter returned to live with his father during which he discussed family matters including Zorina's mortgage, [53]. 9. Unlike his sisters he remained close to the deceased and treated him from time to time and at no time did he say he wanted Zorina to repay her mortgage, [55]-[57]. 10. Whilst in hospital in the November/December 2015 period, the deceased showed him his will and asked him not to tell the defendant that he had seen it, [58]. He explained to him that he wanted to make sure that Vince and Antonia received the money that he had advanced to the plaintiff, [58]. 11. He was as a director of Universal never present when any demand was made on Zorina to repay the mortgage, [63]-[66]. 12. In his second affidavit of 12 June 2020 he says he had a conversation with Zorina in 2017. Zorina told him she had a credit card bill of $80,000 and no money. The debt had arisen from living expenses and gambling, [5]. 13. He after speaking with his wife agreed to assist Zorina. He instructed a solicitor to make contact with Brock Partners in an attempt to arrange a discharge of the mortgage, [8]. 14. As a result of the delay in resolving matters, Zorina was made a bankrupt, [9]. 15. The house was readied for sale and sold, [14]-[23]. 16. In cross examination Peter agreed he had become a director of Universal when he was in his twenties, T.58/45-46. 17. He did not investigate the deregistration of Universal because his father was deceased, T.59/10-15. 18. He did not formally participate in any board meetings but he did discuss many business decisions with his father, T.60/20-30. But his father ran the company in a fairly autocratic way, T.61/10-15. 19. He was not aware of Zorina's financial difficulties which were partially caused by gambling and partially tax until 2017, T.62/10-15. His father thought Zorina was bad with money and partially because of her IQ, T.62/25-30. 20. His father originally purchased a house for Zorina with his money but in her name, T.63/1-10. His father only ever mentioned the figure of $161,500 as being the only amount owing on the mortgage, T.65/1-25. 21. He had advanced money to Zorina for her bankruptcy in total about $1.1m of which he has received about $800,000 back. He hopes to recover the balance but he said his evidence has not been affected by that prospect, T.66/20-35. Nicole Bakaric 1. Ms Nicole Bakaric made one affidavit of 24 September2019. She is Zorina's sister-in law, [1]. 2. She had conversations with the deceased from time to time. During the course of those he said that he had helped Zorina buy the house and he kept the mortgage because Zorina is a gambler and hopeless with money and he wanted to make sure that his grandson, Vince, and granddaughter, Antonia, are left with something, [11] and [13]. 3. She has become Antonia's carer, [14]-[19]. 4. She would not agree that Zorina had had financial problems for many years and she only had a gambling problem since her father passed away, T.76/25-35. The deceased embellished stories, T.75/35-40. But she had to agree that she recorded the deceased as having said that Zorina was a bad gambler, T.76/30-35. Kevin Rodgers 1. The plaintiffs also called a Mr Kevin Rodgers a former solicitor of the deceased. He chose not to make a statement or even approve a précis. 2. Mr Rodgers is a partner in the firm of Brock partners. He was referred to a file note dated 15 March 2016. He agreed it was a note of a conference he had with the defendant. She told him her husband had died and she gave him some information for the estate and he thought she may have given him a copy of the will, T.82/10-15. 3. He recalled speaking with her about a mortgage but she did not know the amount of the mortgage at that stage, T.82/25-29. 4. His notes refer to a debt for "Irene and Zorina". She was to come back to him with all the information needed for the probate application. One of the solicitors in the office took detailed instructions from the defendant on what was to be included in the estate, T.83/20-30. 5. Mr Rodgers spoke to the defendant on 23 March, informing her to lodge an advert in the paper. On 12 April she said she had the documents together and she came in to get the estate "moving", T.83/25-45. 6. He said he did not have anything further to do with the defendant about the inventory for the probate. A person called Kendell Fairley dealt with her, T.84/40-50. Mr Rodgers did not have any further discussions with the defendant about the value of the mortgage, T.85/15-20. When his firm received a letter from Boskovitz and Associates of 10 July 2017 he sent a copy to the defendant on 19 July, T.85/35-40. 7. He had a telephone conversation with the defendant who was overseas on 10 July 2017 and he has a note of that conversation. He also prepared a file note on 3 August and another on 26 October. 8. He recalled receiving a letter dated 17 July 2018 from a Mr Ekes, solicitor, and he contacted the defendant, T.91/40-50. He had a number of phone calls with her and then a conference on 13 August, T.92/5-20. He had a conference about the mortgage and what she should do about it. 9. He gave her advice in conference. She did not want to claim anything under the mortgage herself. He told her no interest could be claimed unless there had been a demand. She brought in some correspondence from Mallesons but she did not have any documentation from the mortgagor that they had accepted anything, T.93/10-25. 10. The letter dated 28 September 2018 is in the same form as the draft dated 24 August, T.93/40-50. The third paragraph of the letter reflects the advice given on 13 August. He said he would have told her time had expired and there could be no formal demand for interest, T.94/5-20. He then said he sent an email to the defendant on 4 September at 9.54am. He asserts he received a response by email and the receptionist had a conversation with the defendant to make an appointment to come in to finalise the mortgage and she attended his office on 27 September at 9.30am, T.95/1-15. 11. He sent a letter the next day to Gardner Ekes. He then received a letter from Gardner Ekes dated 17 October 2018. He believed he sent the letter to the defendant, T.95/35-40. He had another meeting with the defendant on 29 October. 12. He had other conversations with her about a deed of settlement. He had a conversation with her on 13 May followed by an email and a further conversation with her on 15 May and she told him the estate had no assets, T.99/20-45. 13. He denied that he told her she could not make a claim for family provision on her late husband's estate, T.101/10-15. 14. He denied that he was not instructed to send the letter of 28 September 2018. He said the letter was prepared on 24 August and only sent after the conference with her on 27 September, T.101/20-30. 15. In cross examination he was asked if he was seeking information from the defendant to see if the mortgage was current and he agreed, T.102/30-40. He agreed he had the six year limitation in mind. He again denied the suggestion that he sent the letter of 28 September without instructions, T.103/29-33. Anita Barbieri 1. Ms Anita Barbieri swore an affidavit dated 8 July 2019. 2. She stated she was born on 19 September 1964 and she married the deceased on 21 October 1995, [1]-[2]. 3. She agreed that she retained Mr Rodgers, solicitor, in or about May 2016, [7]. 4. She set out the letters of 2 February 1988 and 23 July 1991 from Mallesons to the then solicitors for the plaintiffs, [10]-[11]. 5. She said that in or about 1991 she sighted a letter from Mallesons to the plaintiffs that the deceased instructed be sent but she cannot find a copy of that letter, [12]. 6. She stated that in 1992 she and the deceased met with the plaintiffs in the boardroom and demanded payment of monies, both principal and interest. "The account and business advisor for Universal was also present in this meeting", [14]. She also stated that Zorina said they would start making payments. The deceased said that interest should be paid. 7. She said similar meetings took place in 1994 (with the account and business advisor again present) and in 1996, 1998, 2001, 2003, 2005 (this time in the Rose Bay hotel), [17]-[24]. 8. She stated that apart from the mortgage other moneys were loaned, totalling $189,502, [30]. 9. She referred to dealings with Mr Hector Ekes, solicitor, and Mr Rodgers, also a solicitor. 10. In her affidavit of 5 September 2019 she stated she transferred on 17 April 1986 $1 million of "my personal savings" via the Bank of New Zealand (the letter from Bank of New Zealand is dated 2 May 1986), [5]. 11. A discussion took place with the deceased about using some of her funds to lend to the plaintiffs. He said it would "form" at 15% and he also said "we are covered because we have a mortgage", [7]. As a result she says she agreed to a company cheque being drawn in favour of Zorina, [8]. The deceased asked her to lend more money in due course, [9]-[10]. 12. Again in 1989, the deceased asked for more of her funds to be loaned to Zorina [11]-[12]. 13. She annexed a text message between herself and Zorina, purporting to be an admission of a debt by Zorina and said they had a conversation to similar effect, [14]-[15]. She said she verbally demanded payment in a conversation with Zorina on or about 12 January 2018, and again on 14 January 2018, [16]-[18]. 14. In her affidavit of 18 October 2019 she responds to various affidavits filed by the plaintiffs. 15. She set out additional conversations between the deceased and Zorina that she said she was present for and during which Zorina asked for more money for a car and furniture. She also recalled an event when Zorina asked for $75,000 to pay "debts", [16]-[20]. 16. She then dealt with the evidence of Mr Rodgers [21]-[27]. In particular she asserted she did not instruct Mr Rodgers to send the letter dated 28 September 2018. 17. In cross examination she said she finished school when she was 18 and did two years of university without finishing her degree, T.119/35-40. 18. Her parents divorced when she was 15 in about 1979, T.119/45-50. She worked for American Express in Croatia, T.120/5-10. 19. She arrived in Australia when she was about 21, in November 1985, T.121/15-20. 20. She has an aunt and an uncle in Australia. She met the deceased before she arrived in Australia, T.121/45-50. 21. She was asked about the transfer of the $1 million to Australia and agreed she did not have any details about the account the money came from, T.123/5-10. The money was deposited into the Gloria Elizabeth account then into Universal one week later and she has no documents in relation to those transactions, T.123/15-30. 22. She asserted she loaned money to Universal and there was a loan agreement, T.123/45-50. She was asked about a notice to produce and the non-production of documents, T.124/15-35. 23. She asserted she had an account with the Effecten Bank, West Germany, since 1984, T126/1-15. She asserted that her grandmother gave her $USD 820,000 in 1980 before she died, T.126/20-30. She has no papers because the account is not active anymore. She said nothing in her affidavit about this. 24. The money was used for several projects. She said, "we did a few stores in Yugoslavia, so we were going to use it for business purposes and some funds were lent to Zorina", T.127/10-15. 25. She knew for the first time that the deceased had bank accounts in West Germany in 1986, T.127/19-21. 26. It was suggested that the monies came from the deceased's account and she disagreed, T.130/40-50. She was aware the funds provided for the purchase of the house in Vaucluse were from "our" company, T.131/15-20. 27. She said the funds she brought to Australia were totally unrelated. She said, "those are not the same funds", T.132/15-30. 28. She agreed that $1 million was received by the Gloria Elizabeth account on 17 April 1986, the day before the settlement for Vaucluse. But she states they were not the same funds, T.134/1-15. She was moving to Australia on a business visa and she had no bank account so she used the trust to bring in the funds then "we" decided to lend the funds to the company and later she asserted she became a director of Universal, T.134/25-30. 29. She has no records of Effecten Bank. She had a bank account in a Slovenian Bank but she needed to "move it through Germany" because there was unrest in Yugoslavia and Germany was safer. She moved the funds in 1984. There may be some records, T.135/1-20. 30. She seemed to indicate she made notes of various conversations set out in various paragraphs of her affidavit. But she did not appear to have contemporaneous notes. However she had rewritten them because some were destroyed in a flood at a flat in Manly, T.137/5-50. 31. She was asked about instructing Mr Rodgers. She did not recall what details she told Mr Rodgers. She asserted the documents for probate were prepared by Mr Rodgers but she conceded that she must have prepared the documents with Mr Rodgers as she signed the executor's affidavit for probate, T.142/1-5. She denied she supplied to Mr Rodgers the sum of $180,000 for the mortgage and said it was Mr Rodgers' idea to write the mortgage according to the documentation he found from the Mallesons letters and he told her that was how it should be written, T.142/5-20. 32. She asserted she gave explicit instructions to Mr Rodgers that interest had to be included, T.142/30-40. She said she asked Mr Rodgers to do the proper calculations for interest and he said that is the way it has to be written, T.143/20-30. 33. She also stated that Mr Rodgers suggested the figure of $50,000 for the paintings, T.144/35-50. A little later she stated that she did not know about the value until she looked at the documents, T.145/15-20. But she did agree she read the affidavit before she swore it, T.145/34-35. 34. She insisted that she told Mr Rodgers to calculate the interest on the mortgage and said, "I guess he did not know how to do it…", T.145/45-50. 35. She agreed she told Kendell Fairley at Brock Partners that she would supply documents about demands and not one of the documents made demand for interest, T.147/1-5. 36. She denied that the first time she raised interest with Mr Rodgers was on 13 August 2018. She asserted that she had raised it several times before, T.147/27-31. She also denied Mr Rodgers telling her that as she had not made a demand in writing she could not claim interest, T.148/10-20. And she denied she got advice to that effect, T.148/30-35. 37. She again asserted that she did not instruct Mr Rodgers to send the letter the draft of which was dated 24 August 2018, T.148/45-50. 38. She did not recall whether she received a draft letter from Mr Rodgers on 24 August, T.161/30-40. She agreed that her correct email address was on the top of the email from him, but she did not recall receiving that and other emails, T.162/10-30. 39. She was taken to a diary note that indicates she rang the offices of Brock Partners on 24 September 2018 and spoke with a Tia Diola. She denied speaking to her about sending a letter for the estate due 28 September, T.163/40-50. She agrees that she met with Mr Rodgers but could not recall whether it was 27 September, T.163/45-50. She denied the meeting was about finalising the letter of 28 September; rather she said it was about finalising the probate and the family provision claim, T.164/1-15. She agreed she gave Mr Rodgers verbal instructions. But she did not give him instructions to issue the letter of 28 September, T.164/34-37. And in particular she told him not to send the letter, but he did not show her the draft letter. She said she did not agree to release the mortgage and she was not aware of what he was communicating to Mr Ekes, T.165/35-50. 40. She asserted that she was entitled to the storage unit, half the value of the land in Croatia and an interest in the mortgage, T.167/25-45. 41. She thought she was entitled to a family provision claim because the funds that went to the plaintiffs were mainly from her, T.170/45-50. She was however unable to produce a copy of the loan agreement between herself and Universal, T.171/35-40. 42. When asked again about her inheritance she thought it was 1981 and not 1980. She agreed she had no documents to support her evidence. She also asserted that the money from her grandmother came about a year before her death. It was her father's mother, T.172/15-50. 43. She stated that she received some money back, around $350,000, from Universal in 2002 but again has no records, T.173/30-45. She again denied that the funds that came into the Gloria Elizabeth account were the deceased's funds, T.176/33-40. 44. She agreed that she was appointed a director of Universal on 14 August 1989 and remained such until it was deregistered in 2015, T.177/45-50, T.178/1-5. 45. She was never aware that Antun ever worked for Universal and she never knew what his wages were, T.185/20-40. 46. She was not party to discussions in 1988 about the letter from Mallesons but she did discuss the mortgage with the deceased. She first saw the letter of 1988 in 1990, T.187/5-30. 47. She asserted that the deceased told her he had made an oral demand for interest, T.188/30-35. She also said, "we never waived anything", T.192/20-25. She never met Mr Summerton from Mallesons, T.192/30-45. 48. She never understood that the deceased had said to Zorina that she could live in the house for as long as she liked until the plaintiffs "divorced, settled or died", T.194/15-25. Although she asserted that Universal had made a demand, she has been unable to produce any copies, T.198/1-20. 49. She agreed that the letter from Mallesons gave two options in relation to what could be done about the mortgage and she insisted "we repeated the demand, which was the first option", T.200/40-50. She also stated that the letter from Mallesons was not an adoption of option 2, and she rejected the notion that the deceased decided not to issue a demand, T.202/15-25. Equally she would not accept that the deceased maintained that position until his death, T.203/30-35. 50. She insisted that she and the deceased instructed Mallesons to issue a written demand upon the plaintiffs, T203/45-50. She said that the demand was for Zorina to start paying interest, not to get possession, and the deceased would have known the financial circumstances of the plaintiffs at the time, T.205/1-10. 51. She never discussed the transfer of the mortgage to the deceased for $1 but she denied that was a value suggested by the deceased, T.206/25-50. She also denied that one of the reasons the deceased put a value of $1 on the mortgage was because he realised the principal had been repaid, T.207/25-40. 52. She denied supplying the figure of $180,000 for the mortgage to Mr Rodgers and she denied it was her understanding at the time that that was the value of the mortgage, T.208/10-25. She also denied being aware of the filing fees in probate matters if the estate was valued at a particular amount, T.209/30-50. She insisted that Mr Rodgers told her that the probate documents should be done that way without the interest and she recalls discussing that with Mr Rodgers, T.212/5-35. 53. She said that apart from the $1 million she brought into Australia she had another $1 million in savings as she had been in business for many years, T.213/15-20. 54. She asserted that "we" closed all accounts in Europe in 2003. At no time was she ever a signatory of any of the deceased's bank accounts nor did he authorise her to operate any of his accounts, T.277/5-20. She was "pretty sure" that neither the deceased nor any corporate entity he controlled transferred any money from such an account to any account of hers, T.277/20-30. All the money in the European accounts was spent, T.278/35-50. 55. She was overseas on or about 17 April 1986. She had returned overseas in late 1985 because of visa requirements. She did not recall the dates when she returned to Australia. She had no bank accounts of her own at the time and no visa, T.282/20-50. She said she discussed how to bring her funds to Australia with the deceased and Wong & Mayes, T.283/1-15. She again asserted that the money came from her to the family trust and from there she lent the funds to Universal and it was done by Wong & Mayes, T.285/1-18. 56. The deceased sold the Rose Bay property for around $3 million and the money was expended on living expenses, T.288/1-30. Upon the assumption that Universal received about half it likewise expended all of the monies on travel and health, T.289/1-15. 57. She started a business in Yugoslavia but it had to close because of the war. She made some profits in selling her goods there and in the Russian Federation, T.290/20-30. And from her own business she had about $AUD 700,000 in the Bank of New Zealand, T.291/10-20. 58. She also asserted she purchased the unit in Pyrmont for $1.44 million entirely independently of the deceased, T.291/45-50. However, she then agreed that the money with which she purchased the Pyrmont unit was partially advanced by Universal. She contributed $350,000 to the purchase. It was put to her that that was false because she had not earned any money since 1995. She rejected that assertion, T.294/10-40. She agreed that the deceased resided with her at the Pyrmont property, T.294/45-50. 59. She agreed that she had transferred another $800,000 to Australia since 1985 and said it came from commissions earned on the sale of her collection in stores in Yugoslavia, T.295/10-40. She and the deceased operated the business together, T.295/45-50. The sales were throughout 1991, T.296/5-10. She was an employee, but she owned "the brand" and she was paid commission, T.296/20-35. It was run by some Universal companies. She paid tax on the $800,000 but not on the $1 million because she was not an Australian citizen, T.297/10-15. She then said that she did not pay tax on any of the money because she was not an Australian citizen, T.297/30-30. 60. She accepted that she has remarried but saw no relevance in disclosing that because the case is about the past, T.302/1-7. 61. She agreed that from about 1995 she was wholly dependent upon the deceased, T.302/15-20. 62. She stated the $1.8 million referred to in a letter from Wong & Mayes to the Minister for Immigration was about becoming an Australian citizen. The money referred to in the letter was all hers, T.303/30-45. She could not remember how much money she had left in 2002, T.304/15-20. 63. She insisted she purchased the Pyrmont unit with her own money, T.304/35-50. She said she paid $1.44 million for the unit and her husband helped with some funds for stamp duty and legals, to about $250,000, T.305/25-50. 64. It was put to her that Universal provided her with more than that for the purchase but she denied that, T.306/45-50. She denied that the majority of the funds was provided by the deceased, T.307/20-25. And that her denial was false, T.307/45-50. 65. As to her loan agreement with Universal, she cannot remember if it had a date for repayment, T.311/15-20. Upon the sale of the units she made no claim for the repayment of her loan, T.312/30-35. It was put to her that she had no loan agreement which she rejected, T.312/40-45. But she had made no inquiries of Wong & Mayes about company accounts, T.315/10-20. 66. The deceased had stopped exporting hides around 1996/1997. Universal had moved into diverse investment activities, shares and investments in Russia and China, T.317/15-20. 67. She agreed that she made no claim upon Universal up to the time it was de registered in 2015, T.318/10-15. 68. She agreed that she became aware in 1990 or 1991 that Zorina was saying there was no money payable under the mortgage, but she did not ask the deceased for information about the plaintiffs' employment, T.323/35-50. 69. She asserted that when she and the deceased attended upon Mr Rodgers she told him to claim interest, T.326/5-15. Both she and the deceased explicitly told Mr Rodgers to claim $1 million in interest, T.326/40-50, having done a calculation in advance, T.327/5-15. 70. She also discovered the deceased had an account with Credit Suisse in Germany in the late 1980s, T.327/35-40. 71. She was unaware the deceased was paying Antun a very small wage. She had heard that he had been "fully paid", T.331/25-30. 72. She remembered the question of wages coming up at meetings, but she was told the plaintiffs were fully paid, T.333/5-10. 73. She was asked about a statement made in 2011 by the deceased, CB.572. She did discuss it with him at the time, T.337/15-25. She was also asked about the schedule at CB.573. It was put to her that her schedule and the document prepared by the deceased are different and that for example the cost of the car is wrongly included, T.338/30-35, and significantly overstated at $40,000 or $35,000 as its cost was $22,502, T.341/20-25, T.343/5-20. 74. She was never a signatory on the Universal account although she was a director, T.342/25-45. Lilya Koganov 1. Ms Lilya Koganov made one affidavit dated 4 September 2019. 2. Over the period from 1991 she became personal friends with the deceased and the defendant, [3]. She attended their wedding in Fiji in 1995, [4]. 3. She had the impression the deceased had assisted Zorina to purchase a house in Rose Bay, [7]. 4. In about 1992 she asserted she was present when Zorina asked the deceased for a loan, [9]. The deceased explained that "we" had already loaned money to Zorina, [10]. 5. She was also present in 1994 when the deceased again asked Zorina to start paying off the mortgage, [11]. 6. Another conversation occurred at a family barbeque when Zorina said she would start making repayments, [12]-[14]. 7. In cross examination she said that she had both a social and a business relationship with the defendant, T.221/20-25. She described her relationship with the defendant as "very close", T.221/49-50. 8. She had a good relationship with the deceased, T.222/40-50. She understood from discussions with the deceased that Zorina could live in the house as long as they liked, T.223/45-50. 9. She had no knowledge whether Zorina worked for Universal, T.227/5-10. 10. She took no notes of any of the conversations she refers to, T.228/15-20. It was suggested to her that she did not have the conversation set out in paragraph [9] of her affidavit, but she said she recalled the deceased saying he loved his daughter but she was a bit of a gambler, T.229/15-20. She happened to be with the deceased because he wanted to discuss wedding plans and "private" matters, T.229/25-30. 11. She explained she was not in the room when the deceased had the conversation with Zorina but in an open plan kitchen section and she was not speaking with Zorina at the time, T.230/15-20. 12. She was asked to go to the barbeque to witness the deceased asking for the money back, T.233/10-15. It was put to her that no conversation took place and she disagreed, T.234/1-10. She took no note of the conversation, T.234/15-25. Yeoryios Markos 1. Mr Markos made one affidavit dated 5 September 2019. He stated he had a background in law and financial advisory services. 2. Between 1985 and 1990 he became friends with the deceased and in 1986 he met the defendant, [4]-[5]. 3. He visited the deceased regularly over the years and they were friends, [12]. 4. He was privy to the deceased telling Zorina that he needed the money back and that she was not paying interest, [17]. He also sighted personal letters from the deceased to Zorina stating that she had failed to pay interest and principal and stating how much was owing, [23]. 5. In 1991 he said he sighted a Mallesons letter which stated a breakdown of monies owed under the mortgage and making a demand, [25]. 6. In examination in chief he said he overheard the deceased saying to Zorina that he was not a millionaire, he had loaned her money and he needed her to start paying it back, T.244/10-15. 7. The deceased asked him to peruse some letters from Mallesons, T.245/25-30. 8. He was shown a number of letters and agreed they did not have a breakdown of amounts, T.248/5-10. 9. He could be mistaken about such letters, T.249/5-10. He agreed in relation to the conversation he set out at paragraph [17] of his affidavit he did not identify who was speaking, T.250/25-30. 10. He never discussed the terms of the mortgage with the deceased, T.251/35-50. He never discussed any advice the deceased got from Mallesons, T.252/1-15. 11. It was put the conversations in paragraphs [17] and [18] of his affidavit did not take place. He denied that, T.252/40-45. 12. Mr Markos had been introduced to the deceased as a person who might have needed assistance in transferring money or investing in the short term money market, T.253/10-20. 13. The deceased did mention he had an offshore account, he thought, in Switzerland, T.253/40-50. Zoran Stojanovski 1. Mr Stojanovski made one affidavit dated 30 August 2019. His profession was that of "Middle East Advisor". 2. He met the deceased in 1989 or 1990. They would speak about business opportunities, [5]. 3. The deceased said to him at some point in 1993 that Zorina was always asking for money, [14]. He recalled a conversation in 1993, when the deceased was complaining about Zorina, [17]. 4. The deceased had business interests in Dubai and Amman, T.266/15-20. 5. He and the deceased ended up being very close friends, T.267/10-15. 6. He was aware the deceased was involved with commodities and oil, T.267/30-35. 7. The deceased did not discuss the advice he got from Mallesons but he was frustrated, T268/5-10. Mr Stojanovski was not aware that Zorina was working at Universal, T.268/30-50. 8. He was asked to give evidence by the defendant, T.269/35-50. 9. It was put to him that he could not be correct about his version of the conversation between the deceased and Zorina because he did not attribute anything to Zorina in response to what the deceased had to say. He rejected that suggestion and said that the deceased was "a very firm man" and that "she" did not respond much, T.272/20-30. Consideration Agreement to work off the mortgage 1. In closing submissions the plaintiffs contended that there was no money owing under the mortgage due to an agreement between the plaintiffs and the deceased whereby the first plaintiff worked for the deceased's company, Universal, for as little as $50 per week, the balance of his wages being used to repay the mortgage. While it is clear the plaintiffs worked for Universal for a time for very low wages this submission is entirely contrary to the plaintiffs' pleaded case, namely that the amount due under the mortgage is $161,500. It must be therefore rejected. 2. In addition, there is no evidence that the plaintiffs, or the deceased for that matter, kept track of what wages were used to pay off the mortgage and what balance was left owing from time to time. It seems the deceased was in absolute control of what was lent, and what amounts would be set off or forgiven and those which were not. Further, as is discussed further below, the plaintiffs in 1988 did not dispute Mallesons' contention that the amount secured by the mortgage was at that time $185,262. That is at least some evidence against the proposition that there was an agreement between the plaintiffs and the deceased that they were working off the amounts secured by the mortgage. Additional advances secured by the mortgage 1. The next question is what if any additional amounts were advanced to the plaintiffs, in particular Zorina, and whether they are secured by the mortgage. 2. There are several lines of authority relevant to the assessment of the evidence in this case given that many of the relevant events occurred some thirty or more years ago. In Watson v Foxman (1995) 49 NSWLR 315 McClelland J observed (at 319): … human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. 1. In similar vein Hammerschlag J stated in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 (at [94]): Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence... In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences. 1. And as Hallen J pointed out in Papas v Co [2018] NSWSC 1404 particular caution should be taken in relation to conversations said to have been had between one or other of the parties and a deceased person given that they are unable to admit or deny specific allegations (see [54]-[61]). 2. Secondly, as I have said previously, many judges still advert to what might be described as findings on demeanour and the manner and mode of delivery of a witness's testimony, especially during cross-examination, which may have some influence on the Judge's view of the witness's credibility. However, as the High Court stated in Fox v Percy (2003) 214 CLR 118 (at [31]): Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical. 1. There are differing accounts of what amounts were advanced under the mortgage but I consider the most reliable to be that undertaken by Mallesons in conjunction with Wong & Mayes and the deceased in the late 1980s, for which contemporaneous documents are available. 2. Clearly the deceased had not kept accurate or indeed any records. Nor had the defendant in so far as she was privy to the exercise in 1988 or later. I also note that although she was a director from 1989, she was never a signatory to Universal's cheque account (T.342/20-40). Any additional monies that were advanced were never so it seems the subject of any separate documentation. However the letter Wong & Mayes sent to Mallesons on 28 January 1988 (Exhibit P9, p 29A) said, "[u]pon the instructions of Mr. F. Bakaric", certain items "owned by the company", being a Honda car (purchased at a cost of $24,830) and a typewriter (which cost $2,700), had been "charged to the account of Mrs. Zorina Pirovic". Those items were written down to $22,502 and $1,260 respectively. In my view the words "charged to the account" meant "secured by the mortgage". 3. Mallesons then used those figures and informed Zorina that "the mortgage at present secures" an amount of $185,262, made up of the principal advance of $161,500 plus the $22,502 and $1,260 by way of further advances (see the Mallesons letter of 2 February 1988 at Exhibit P9, p 30). The plaintiffs did not it seems write back to dispute those amounts. 4. Those additional amounts were in my view covered by the Fourth Covenant, the "all monies clause". The express words of the clause are wide, providing that the principal sum secured by the mortgage "shall be deemed to include such further or other monies as may be advanced from time to time by the mortgagee to the mortgagor". However as the plaintiff points out all monies clauses should be construed by reference to the context of the relevant transaction and its commercial purpose and often, but with each mortgage being construed according to its own tenor, only debts of a similar character as the original debt are intended to be secured (see, e.g., Estoril Investments Pty Ltd v Westpac Banking Corp (1993) 6 BPR 13,146 at 13,151 and 13,154; see further E.L.G Tyler, Fisher and Lightwood's Law of Mortgage (LexisNexis Butterworths, 3rd ed, 2013) at [3.8]). 5. As I discuss further below the context of this transaction is one in which the deceased required Zorina to execute the mortgage in return for his and his company's further assistance. The deceased/Universal would from time to time advance monies to his children for the purchase of property and renovations but also it seems for other capital expenses. What he/Universal paid and required to be repaid was it seems decided in his absolute discretion and in my view the Fourth Covenant was intended to reflect that. 6. Further the deceased made a statement some time it is thought in 2011 around the date of his will (CB.624). In it he mentions an investigation by Mallesons and Wong & Mayes into the amounts provided to Zorina but without obviously referring back to their letters of January and February 1988 as he refers to many monies allegedly paid but none marry up with those mentioned in the letters. 7. But some of the items referred to in the note are monies allegedly spent on building works at the plaintiffs' house. What is intriguing is that the deceased in his will of 29 March 2011 forgave any monies "loaned" to Zorina including for building works "other than the monies secured by NSW registered mortgage no T542549". However he did not specify the amount secured by the mortgage or the exact sums he was forgiving. 8. What is telling about the 2011 statement is that it makes no reference to a demand ever having been made or interest. Senior counsel for the defendant suggested that it would be inappropriate to rely upon the 2011 statement as evidence of whether any demand was made, or whether interest was intended to be payable, but reject it as reliable evidence proving the amounts advanced to the plaintiffs (T.375/1-10). I disagree. It is one thing to forget the exact amounts advanced and secured by the mortgage, but quite another to forget the making of a demand, which as I explain below is a significant trigger event under the mortgage which would have substantially altered Zorina's obligations. I will also return to the question of interest and the making of demands below. 9. I regard the defendant's schedule at CB.625 which sets out additional amounts she says were claimed wholly unreliable. First the date on which it was prepared is unknown. Secondly all but one of the amounts listed in the schedule date before 1988 and in my view the deceased would have instructed Wong & Mayes and/or Mallesons to include the amounts in their letters if they were advanced under the mortgage. Thirdly the reference to the sum of $75,000 for the payments of "Zorina Pirovic debts" although it is referred to in the deceased's 2011 statement is not the subject of any independent proof and I do not accept it as accurate. It is also not clear whether or not it was one of the amounts the deceased intended to forgive by his will. Further I accept Antun's evidence that the plaintiffs repaid the amounts the deceased/Universal advanced to them to satisfy the debts they owed to his father and would therefore also reject the sum of $15,000 for "Payment of loan to Antun Pirovic father". 10. The defendant's case on this point is also entirely inconsistent with her signing of the probate documents in 2016 and the letter issued by Mr Rodgers on 28 September 2018 which stated the payout figure for the mortgage was $161,500. 11. I should say that in general I am satisfied that the plaintiff and her witnesses told the truth to the best of their recollection. I am not satisfied the defendant did. There are a number of inconsistencies in her narrative such that I would not accept her evidence on any relevant issue without some independent and cogent corroboration. 12. The defendant no doubt in an attempt to bolster her case asserts that she transferred $1 million of "personal savings" to Australia in 1986. A letter dated 2 May 1986 speaks of "by order of Miss Anita" the Bank of New Zealand receiving AUD$ 1 million from the Effecten Bank, Frankfurt (perhaps coincidentally where the deceased also banked). It does not state an account number or in fact a source although it is some evidence in support of the defendant's account. But it being received on 17 April 1986 in time for the real estate transaction for the purchase of the property at Vaucluse for the deceased's son, Peter, and it being deposited into the Gloria Elizabeth Bakaric Trust account raises real doubts in my mind as the truthfulness of the defendant's account without more. 13. At that point she was 21 years of age. When questioned about that she then said the money was an inheritance (T.126/10-30). No evidence has been produced to show it was her money or that she saved it and/or when she inherited it from her grandmother and/or when as she asserts she transferred the funds from Croatia to Frankfurt. Not only was she 21 at the time, she had completed only two years at an unspecified University course and had done some modelling in Milan. 14. It is uncontroversial that the deceased had an account in Germany at the time and his company or he personally received it seems large amounts of foreign currency for the offshore sales of his product. It is also clear that at one point he was concerned about inheritance tax in Germany. I am satisfied the funds transferred were not hers but the deceased's. He seems to have kept them when he received some funds offshore. There is no evidence that tax was ever paid on such amounts here or in Germany. 15. There is also some evidence he or one of his companies also had an account in Switzerland (T.253/40-50) and another account in Germany with Credit Suisse (T.327/25-35). Mr Stojanovski gave evidence that the deceased was involved with commodities and oil (T.267/30-35). 16. When asked why as she was living in Zagreb at the time her money would be held in an account in Germany she swiftly responded that because of the political instability in the "old" Yugoslavia she transferred the money for the security and safety of the German banking system. Again I regard that explanation as untruthful. She was she would have it, the account holder but no documentation was produced to support that. True there are two letters on Bank of New Zealand letterhead that support the money was transferred from Germany to Australia at the direction of the defendant but that does no more than support the proposition she was authorised to operate on the account perhaps for a one off transaction, nor does it say anything about the provenance of the money or its owner. 17. In addition late in the trial a letter was produced from Wong & Mayes, directed to the then Minister of Immigration and dated 7 February 1992, indicating that the defendant had transferred $1.8 million to Australia over time. When questioned about this she said the additional funds (the $800,000) were profits from some business venture of her's in Croatia. Neither her inheritance nor her business in Croatia had prior to questions being asked been the subject of disclosure in her affidavits. She also seems, if they really were her funds, to have forgotten when she prepared her September 2019 affidavit that she transferred the additional $800,000 to Australia. It seems rather odd that she would have forgotten such an event about such a large sum of money. The better view of the facts in my opinion is that by some means and by arrangement with the deceased she was facilitating the deceased to repatriate moneys to Australia not only for tax purposes but to enhance her visa application(s). 18. She also said that the deceased encouraged her to lend some of her funds to the plaintiffs. I do not accept that such a conversation took place and I am of the view that the defendant has again invented this event to bolster her case. There is no reason why the deceased would need in 1986 to borrow money from the defendant. At the time he had his own substantial funds in at least Germany. But what is also implausible is that the deceased is alleged to have said "we have a mortgage" as security. That was plainly not true as neither the deceased nor the defendant were parties to any mortgage. The defendant asserts there was a loan agreement in place between herself and Universal which she no longer has. Again I do not accept her evidence. The money in any event (that is, the $1 million) was it seems loaned to the Gloria Elizabeth Barakic Trust account and not Universal. 19. The defendant asserted that she made diary notes as and when these events occurred but she has lost them in a flood at her unit in Manly but "remade" some of the notes. They are not before the court and I am satisfied they never existed, or if they did, that they did not assist her. 20. On the basis of other documents I am satisfied that the deceased or one of his corporate entities was the source of the money lent to the plaintiffs and not the defendant. Again I regard her attempts to claim the money as her own either as savings or inheritance as false and false to her knowledge. 21. I should note that senior counsel for the defendant questioned some of the submissions made by the plaintiffs in relation to the movement of monies to and from the Effecten Bank and monies used for the acquisition of a property at Pyrmont which the defendant and the deceased lived in prior to his death. Whilst such caution is appropriate, for reasons which otherwise appear I regard the defendant's answers in a number of respects to be implausible and belatedly given. I consider the evidence she gave with respect to the Pyrmont property unsatisfactory (TT.293-294). However, given my other findings and the way in which the case was conducted, I do not propose to make any further findings in relation to these issues. 22. In any event, much more importantly and relevantly, the defendant's disagreement with her former solicitor, Mr Rodgers, does her no credit. I am satisfied that Mr Rodgers would not have acted without instructions and that the defendant told him the truth during her conferences with him. I am satisfied she gave him express instructions to send the letter of 28 September 2018 after she received the suggested draft and had ample opportunity to review it for accuracy. 23. The defendant also asserts that she just followed as it were the direction from Mr Rodgers as to what should be put in her affidavit in support of probate. I do not accept this and the fact that she did not I am satisfied raise any objection as to the value attributed to the mortgage at the time of probate indicates to me that she has not truthfully relayed the conversations she asserts she had in the deceased's presence and with Zorina. If she had truly been privy to the deceased's alleged demands and claims for interest and the 1991 letter I am certain she would have informed Mr Rodgers of those matters at the time but it is clear she did not. Her no doubt thoughtful completion of the documentation for probate disclosing only the outstanding principal as an asset of the estate is in my view significant. The terms of the mortgage and representations made by the deceased 1. In relation to the construction of the First and Second Covenants of the mortgage, I agree with the defendant's submission that the First Covenant deals with the repayment of the principal and the Second Covenant deals with interest only. 2. The principles of contractual construction are well known (see, e.g., Electricity Generation Corporation v Woodside Energy Pty Ltd (2014) 251 CLR 640 at 656-657; Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 at [46]-[52]). As Gibbs J explained in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109: [T]he primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. 1. The First Covenant clearly stipulates that the principal sum ("or so much thereof as shall remain unpaid") becomes payable on the seventh day after a demand for payment is made. 2. The Second Covenant consists of two parts. The first ("The mortgagor will pay interest… at the rate of fifteen (15%) per centum per annum as follows") imposes the obligation on the mortgagor to pay interest on the principal sum ("or so much thereof as for the time being shall remain unpaid") at the rate of 15% per annum. 3. The second is in my view mechanical, stipulating when and how interest is to be calculated and paid. In my view the words "By equal monthly payments on the days of each month in each and every year" provides the method for calculating interest, requiring that it be calculated daily on the principal outstanding ("until the principal sum shall be fully paid and satisfied") but averaged over the course of a year into equal monthly repayments. 4. The next words ("the first of such payments computed from the date of expiry of demand… to be made on the same date") indicate that again the trigger for the mortgagor's liability to pay is the making of a demand such that no interest is payable prior to "the date of expiry of demand for repayment" ("the seventh day after demand is made"). That is despite the fact that liability to pay interest would have accrued on the principal outstanding "on the days of each month in each and every year" from the date of the mortgage, pursuant to the first part of the Second Covenant. Prior to a demand being made interest accrues but is not payable. But once a demand is made and expires interest is calculated and the mortgagor becomes liable to pay the principal outstanding (pursuant to the First Covenant), the interest that has accrued from the date of the mortgage to the expiry of the demand, and also any interest that continues to accrue on any unpaid principal after that expiry date, calculated and payable monthly (pursuant to the Second Covenant). In my view this construction gives all of the words in the Second Covenant work to do and I would not find there is uncertainty in its operation. 5. However the plaintiffs submitted that the deceased required the mortgage to be executed without the payment of any further monies, "i.e. consideration", but that he represented to the plaintiffs at the time that they could reside in the property for as long as they wished and he/Universal would not call upon the mortgage until they sold the property or it was sold by reason of their death or divorce. 6. I am satisfied the deceased told Zorina at the time he required the mortgage to be executed that she and her husband could live in the house he assisted them to buy for as long as they wished and that they would only have to repay the loan when for example they sold the property. I am also satisfied that Zorina relied upon the deceased's representations in entering the mortgage. It was clear that if the deceased/Universal was to make a demand the plaintiffs would not have been able to fulfill it without selling the property. 7. The deceased was it seems fearful of losing control over the asset in the event of a sale. He wanted to secure his investment and have his arrangements with his daughters placed on a more formal footing. 8. In my view the deceased's insistence that the plaintiffs' joint tenancy be converted to a tenancy in common with the percentage of the title slanted heavily in favour of his daughter, and requirement that she execute a mortgage over her interest in favour of his company, was the price he required them to pay for his continued assistance. Relevantly, as I have already discussed, the Fourth Covenant contemplated the provision of further monies which would be secured by the mortgage. Further Zorina accepted in her evidence that at the time the mortgage was executed the deceased had advanced more than $161,500 but said he would be happy with that amount (see Zorina's affidavit of 24 September 2019 at [36]). 9. The deceased sought to teach his children the value of money in a rather exacting way and the splitting of the joint tenancies and the execution of the mortgages over Zorina and Irene's shares gave him another element of control. He expected the family to help him in his business but did not consider it incumbent on him to pay them a reasonable wage. In the case of Antun, I am satisfied it was $50 per week. He would in effect exploit them and their spouses and require them to structure their property interests and loans in a particular way but would assist them to acquire property, advance money to them, and promised they could stay in their properties for life unless they were sold. 10. Accordingly, in my view the representations were part of the consideration provided for the mortgage. They therefore form part of the mortgage contract and any demand made prior to sale, death or divorce would be in breach of its terms. I note the mortgage does not contain any "entire agreement" or like clause. 11. However even if the representations did not form part of the consideration, those representations and Zorina's reliance upon them in executing the mortgage, would it seems give rise to a promissory estoppel (see, e.g., Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429; Sidhu v Van Dyke (2014) 251 CLR 505 at [90]-[91] (per Gageler J as to "reliance")) such that the deceased/Universal would be estopped from exercising his/its right to make a demand inconsistently with his promise that he would not do so prior to sale, death or divorce. This would also bind the executor of his estate. Demands for repayment and liability to pay interest 1. In any event, I am not satisfied there ever was any demand made on Zorina for the payment of principal or interest, not least because it was never intended that she or her husband would have to repay the money except if the property was sold or they divorced or died. 2. I should note that none of the authorities relied upon by the plaintiffs seem to require that a demand must be in writing; rather it seems to me they provide simply that notice of demand is a prerequisite to liability for repayment (Esso Petroleum Co Ltd v Alstonbridge Properties Ltd [1975] 3 All ER 358 at 367; Murphy v Lawrence [1960] NZLR 772 at 775; Gleeson v Gleeson [2002] NSWSC 418 at [49). The mortgage does not define "demand" or specify that it must be in writing. Although where demands are made orally difficulties of proof inevitably arise. 3. Further a notice can be an effective demand even if it does not state explicitly the amount due (Bank of Baroda v Panessar [1987] Ch 335; [1986] 3 All ER 751; Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491). However it must bring home the fact that a demand has been made and be sufficient to allow the mortgagor reasonable time to comply before enforcement action is taken, their knowledge or means of knowledge about the amount due being relevant to the determination of whether a reasonable opportunity has been allowed (Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, 504; see E.L.G Tyler, Fisher and Lightwood's Law of Mortgage (LexisNexis Butterworths, 3rd ed, 2013) at [17.9]). 4. The defendant asserts that numerous demands were made for the principal and interest. In particular, she relies upon the Mallesons letters of 2 February 1988 and 23 July 1991. However, neither of those letters contain a demand for repayment. In the first, Mallesons wrote to Zorina's solicitors setting out the total principal amount which was alleged to be secured by the mortgage. In the second, Universal merely reserved its rights under the mortgage, the deceased having elected to reserve his/Universal's rights rather bringing the matter to a head by issuing a demand, adopting the second option suggested by Mallesons in their 8 July 1991 letter. 5. The defendant also asserts that the deceased instructed Mallesons to make a "further" demand in about 1991 and says she saw that letter of demand. However, no such letter has been produced and it is inconsistent with the other Mallesons letter of that year. Every effort was taken to secure the letter if it did exist, but to no avail. I do not accept the defendant's account as truthful or that the letter ever existed. Similarly, without any supporting contemporaneous documentation or notes, I cannot accept that the numerous meetings the defendant says took place between herself, the deceased and Zorina, where verbal demands are said to have been made, ever occurred. 6. I also do not accept the evidence of the defendant's witnesses, Ms Koganov, Mr Markos and Mr Stojanoski, with respect to the making of demands. Their alleged involvement occurred some thirty years ago, and none made any contemporaneous notes. They each had a friendship with the deceased and/or the defendant, Ms Koganov's friendship with the defendant being it seems particularly close. My impression was that each of these witnesses was overly anxious to assist the defendant and/or the deceased. And in the case of Mr Markos in particular, I am certain he has confused the Mallesons letter he said he sighted in 1991, which he said contained a breakdown of amounts due under the mortgage and a demand for repayment (see his 5 September 2019 affidavit at [25]), with the 2 February 1988 Mallesons letter, which as I have said, included a breakdown of amounts secured by the mortgage but no demand (see T.245/20-50). I would for these reasons not regard the defendant's witnesses as reliable historians. 7. Further, as I have mentioned, the deceased did not make any mention of a demand having been made, or interest being payable, in his 2011 statement. That is the only document which is written and signed by the deceased himself, other than his will. 8. Absent a demand being made interest never became payable on the principal secured by the mortgage. I also accept the deceased allowed Zorina to understand he could not claim interest (see, e.g., T.25/5-20). Given the liability to pay interest under the mortgage is triggered by the making of a demand for repayment, that representation as to interest is consistent with the deceased's promise not to call upon the mortgage until the plaintiffs' property was being sold. His statement in his letter to Mallesons dated 24 November 1989, "…if we have legal rights according to our mortgage on the property, please write and inform the mortgage will not (sic) longer be interest free…" is further corroboration of the fact that at some stage prior to November 1989 he told Zorina the mortgage would be interest free. Further no reference was made to interest in the Mallesons letters that were sent to Zorina's solicitors on 2 February 1988 and 23 July 1991 or the deceased's 2011 statement and will. 9. In terms of further corroboration, one consideration which I am satisfied is entirely against the proposition that the deceased ever made a demand or intended interest be made payable is that he was clearly aware the plaintiffs were not well educated or well paid. He knew Zorina had no skill set to speak of and that her husband was a cement renderer. He knew that Antun only earned $50 per week while employed by Universal and he was informed in 1991 that Zorina only received $71,093.78 over approximately six years. He was perhaps unkind to Zorina as a child. Sadly he thought she was a spendthrift and a gambler and also thought she was "dumb", T.41/30-35. But she was also his daughter and she had children of her own, one of which is disabled. 10. The plaintiffs' likely incapacity to pay back principal absent a sale of the property let alone interest would have been obvious. While I am satisfied the deceased was concerned to secure his investment, perhaps to provide something for his grandchildren, and wanted to teach Zorina the value of money, I am also of the view that he would not have wanted to place her in significant financial peril. I accept Antun's evidence that they would have had to sell the property if a demand had been made (see his affidavit dated 24 September 2019 at [42]-[43]). 11. I should note that the defendant said that she and the deceased sat down together and calculated the amount of interest owing on the mortgage before it was transferred over to the deceased and she told Mr Rodgers in 2002 that there was not only the $161,500 but $1 million in interest. I find that implausible in the extreme. Such an assertion is not to be found in any of her affidavits and it was not put to Mr Rodgers. I regard that as contrived by the defendant whilst in the witness box. 12. The other feature of this case which very much on balance supports the plaintiffs' case are the terms of the deceased's will. He forgave the debt owed by his daughter Irene. In the case of the plaintiff he left the mortgage to his grandchildren, the children of the plaintiff. His position as mortgagee was to be replaced by his grandchildren. They would need to deal with their parents. 13. But by leaving the mortgage to his grandchildren he was in effect forgiving the debt but in a qualified way. In addition he would not have been oblivious to the tension he had partly caused by bringing the defendant into his home. His decision to transfer the mortgage to himself for $1 in 2002 reflected in my view his attempt to ensure that upon death it would part of his estate and not an asset of the company. It also removed the asset from the defendant's control if she were to continue the business. The plaintiffs' other legal challenges 1. Given what I have already said about the representations made by the deceased at the time of the execution of the mortgage, I would not find them to have been false, misleading or deceptive, or that the First and Second Covenants are unfair (ACL s 23) or unjust (Contracts Review Act 1980 (NSW) s 7) terms. These claims were it seems brought alternatively to the plaintiff's primary case in relation to the representations, which I have upheld. 2. I also would not find that the deceased engaged in unconscionable conduct (Blomley v Ryan (1956) 99 CLR 362 at 428-9; Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 at 462, 474-5). Even though the deceased knew Zorina had limited education and was acting without legal advice for example, I am not of the view he took advantage of her in the relevant sense. Zorina knew what was in the mortgage document but understood it was not to be enforced. The deceased was assisting the plaintiffs to purchase a property they otherwise could not afford. As I have said, he wanted to secure his interest but promised he would not call upon the mortgage until the property was to be sold. For these reasons the deceased did not act unconscionably and I would also not find the arrangement unjust (Contracts Review Act 1980 (NSW) ss 7, 9; see Superannuation & Corporate Services Pty Ltd v Turner [2020] NSWCA 246 at [47]-[51]) or unfair (ACL ss 23, 24). Conclusion 1. For the above reasons I would find that the amount as at 12 July 219 required to be paid by Zorina to discharge the registered mortgage number T542549 was $185,262. I would also order that the defendant cause to be paid to the plaintiffs' solicitors the money held in accordance with order 3 made on 10 July 2019, less the sum of $185,262, which is to be paid to the defendant. It follows that I would dismiss the defendant's cross claim. 2. I invite the parties to bring in short minutes of order reflecting these reasons and would hear them further in relation to costs if necessary. ******* Amendments 21 December 2020 - typographical corrections paras [342] and [362] 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: 21 December 2020