Supreme Court New South Wales Medium Neutral Citation: Boulos Holdings Pty Ltd v Edwin Davey Pty Ltd [2021] NSWSC 689 Hearing dates: 16 – 18 November 2020 Date of orders: 16 June 2021 Decision date: 16 June 2021 Jurisdiction: Equity Before: Ward CJ in Eq Decision: 1. Judgment for the plaintiff in the sum of $661,966.86 payable pursuant to special condition 44 of the Contract for Sale of Land between the plaintiff and the defendant, plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW). 2. Dismiss the defendant's cross-claim. 3. Reserve the question of costs of the claim and cross-claim. 4. Direct the parties to file brief written submissions on costs within 14 days, with a view to the question of costs being dealt with on the papers if possible. Catchwords: CONSUMER LAW — Misleading or deceptive conduct - Causation or reliance — Unconscionable conduct CONTRACTS — Breach of contract - Failure to complete on time - Damages ESTOPPEL — Res judicata/Cause of action estoppel – whether merger of cause of action in consent judgment MORTGAGES AND SECURITIES — Charges - Floating - Creation and nature — Mortgages —Assignment - Equitable mortgage of legal interest — Personal Property Securities Act 2009 (Cth) – Enforcement - Disposal of collateral — Security interest - Exceptions PERSONAL PROPERTY — Assignment of choses in action RESTITUTION — Compulsion — Contribution and recoupment — Action for money paid to the defendant's use Legislation Cited: A New Tax System (Goods and Services Tax) Act 1999 (NSW), ss 7-1; 7-15 Chancery Amendment Act 1858, 21 & 22 Vict, C. 27 Civil Procedure Act 2005 (NSW), ss 21, 90, 98, 100 Competition and Consumer Act 2010 (Cth) Sch 2 - Australian Consumer Law, ss 18, 21, 87CD, 137B, 236 Conveyancing Act 1919 (NSW), ss 2, 12, 21, 23, 91 Corporations Act 2001 (Cth), s 420B Environmental Planning and Assessment Act 1979 (NSW), s 94 Environmental Planning and Assessment Regulation 1994, cll, 26(f), 27(1)(g) Personal Property Securities Act 2009 (Cth), ss 8, 10, 12, 19, 115, 116, 117, 123, 128, 130, 133, 141, 142 Real Property Act 1900 (NSW), ss 36, 41, 80A Trade Practices Act 1974 (Cth), s 82 Cases Cited: Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207 Alamdo Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2004] NSWSC 487 Angelopoulos v Sabatino (1995) 65 SASR 1 Anson v Anson [1953] 1 QB 636 Argy v Blunt & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 ASIC v Kobelt (2019) 267 CLR 1 ASIC v National Exchange Pty Ltd (2005) 148 FCR 132 Austino Wentworthville Pty Ltd v Metroland Australia Ltd [2013] NSWCA 59 Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed) [2012] NSWSC 170 Aviation Services of Australia Pty Ltd v Byrt [2009] QSC 387 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 Burrell v Earl of Egremont (1843) 7 Beav 205 Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 C Czarnikow Ltd v Koufos [1969] 1 AC 350 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Canon Finance Australia Ltd v Reliance Medical Practice Pty Ltd (No 7) [2020] NSWSC 554 Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33 Chand v Commonwealth Bank of Australia [2014] NSWSC 708 Chand v Commonwealth Bank of Australia [2015] NSWCA 181 Chubb Insurance Co of Australia Ltd v Moore [2013] NSWCA 212 Clissold v Perry (1904) 1 CLR 363 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (2017) 251 FCR 404 Commissioner of the Australian Federal Police v Hart [2018] HCA 1; 262 CLR 76 Commonwealth Bank of Australia v Invest Pty Ltd (in liq) (No 9) [2018] NSWSC 1276 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 Consolidated Trust Company Limited v Naylor [1936] HCA 33; 55 CLR 423 Coshott v Lenin [2007] NSWCA 153 Cummins Generator Technologies Germany GmbH v Johnson Controls Australia Pty Ltd [2015] NSWCA 264 Daniel v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 21; (2004) 205 ALR 198 Dura (Australia) Constructions Pty Ltd (in liq) (recs and mgrs apptd) v Hue Boutique Living Pty Ltd (formerly SC Land Richmond Pty Ltd) [2014] VSCA 326; (2014) 49 VR 86 English, Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 Falcke v Scottish Imperial Insurance Company (1887) LR 34 Ch D 234 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 George v Cluning (1979) 28 ALR 57 Governments Stock and Other Securities Investment Co Ltd v Manila Railway Ltd (1897) AC 81 Grant v Dawkins [1973] 3 All ER 897 Groongal Pastoral Company Ltd (in liq) v Falkiner [1924] HCA 54; (1924) 35 CLR 157 Habib v 2UE Sydney Pty Ltd [2009] NSWCA 231 Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd [2006] NSW ConvR 56-137 Harvey v Hobday [1896] 1 Ch 137 Henderson v Henderson (1843) 3 Hare 100 Hill v Hill [2005] NSWSC 863 Holroyd v Marshall (1862) 10 HLC 191 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109 Illingworth v Houldsworth [1904] AC 355 In Re A Debtor [1937] 1 Ch 156 In re South American and Mexican Co; Ex parte Bank of England [1895] 1 Ch 37 Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440 Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658 Isaacs v Ocean Accident and Guarantee Corporation Ltd (1958) 58 SR (NSW) 69 Israel v Foreshore Properties Pty Ltd (in liq) (1980) 30 ALR 631 James v Surf Road Nominees Pty Ltd [2004] NSWCA 475 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2012) 241 CLR 1 Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 Johnson v Royal Mail Steam Packet Co (1867) LR 3 CP 38 King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076; (2005) 13 BPR 25,077 King Investment Solutions v Hussain; Sood v Christianos [2008] NSWSC 1018 Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (in liq) (recs and mgrs apptd) (2017) 254 FCR 559; [2017] FCA 866 Koch Marine Inc v D'Amica Societa di Navigazione ARL [1980] 1 Lloyd's Rep 75 La Trobe Capital & Mortgage Corp Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; (2011) 273 ALR 774 Leadenhall Australia Ltd v Peptech Ltd (2001) 39 ACSR 265; [2001] NSWCA 272 Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635 Makhoul v Barnes (1995) 60 FCR 572 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12 Markets Nominees Pty Ltd v Commissioner of Taxation [2012] FCA 262; 88 ATR 107 Marks v GIO Australia Holdings Pty Ltd [1998] HCA 69; (1998) 196 CLR 494 McColl's Wholesale Pty Ltd v State Bank of New South Wales [1984] 3 NSWLR 365 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 Mills v Ruthol Pty Ltd (2004) 61 NSWLR 1; [2004] NSWSC 547 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Norman v Federal Commissioner of Taxation (1963) 109 CLR 1 Oswal v Burrup Fertilisers Pty Ltd (recs and mgrs apptd) [2013] FCAFC 9; (2013) 295 ALR 708 Owen v Tate [1976] QB 402 Paciocco v Australia and New Zealand Banking Group (2015) 236 FCR 199 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 Provident Capital Ltd v Printy (2008) 13 BPR 25,199; [2008] NSWCA 131 PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 R (Rowe) v Vale of White Horse District Council [2003] EWHC 388 (Admin) Re Geneva Finance Ltd v Cook (1992) 7 ACSR 415 Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724; 12 BFRA 224 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 Sherritt Gordon Mines Ltd v Federal Commissioner of Taxation [1977] VR 342 Sisic v Krpo [2008] NSWSC 1086 Sotiros Shipping Inc and Aeco Maritime SA v Sameiet Solholt (The Soholt) [1983] 1 Lloyd's Rep 605 Steinecke v Wayne [2011] NSWSC 428 Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 Tancred v Delgoa Bay and East Africa Railway Co (1889) 23 QBD 239 Thoday v Thoday [1964] P 181; [1964] 1 All ER 341 Thompson & Morgan (United Kingdom) Ltd v Erica Vale Australia Pty Ltd (1995) 31 IPR 335 Thorne v Kennedy (2017) 263 CLR 85 Travel Compensation Fund v Tambree (t/as Tambree & Assocs) (2006) 224 CLR 627; [2006] HCA 69 Trimis v Mina [1999] NSWCA 140 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 Van Der Velde v Ng [2011] FCA 594 Warwick Entertainment Centre Pty Ltd (recs and mgrs apptd) v Silkchime Pty Ltd (recs and mgrs apptd) [No 4] [2018] WASC 120 Watson v Foxman (1995) 49 NSWLR 315 Wollongong Coal Ltd v NRE Resources Pty Ltd (No 2) [2017] NSWSC 1552 Texts Cited: Bull, Amanda-Jayne, Receivership and the Personal Property Securities Act 2009 (Cth): Why distinctions remain relevant' (2013) 21 Insolvency Law Journal 5, Courtney and Phillips, O'Donovan and Phillips, The Modern Contract of Guarantee (3rd English ed, 2016, Sweet & Maxwell) Duggan and Brown, Australian Personal Property Securities Law (2nd ed, 2015, LexisNexis Australia), Everett and McCracken, Banking & Financial Institutions Law (9th ed, 2017, Lawbook Co) Handley J, 'Res Judicata, General Principles and Recent Developments' (1999) 18 Australian Bar Review 214 Harris and Mirzai, The Annotated Personal Property Securities Act 2009 (Cth) (4th ed, 2020, LexisNexis Australia) Mason and Carter, Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths) McGregor, H, McGregor on Damages (20th ed, 2018, Sweet & Maxwell) Mitchell, Mitchell and Watterson, Goff & Jones: The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell) Sykes and Walker, The Law of Securities (5th ed, 1993, Lawbook Co), Tolhurst The Assignment of Contractual Rights (2nd ed, 2016, Hart Publishing) ELG Tyler, PW Young, CE Croft, Fisher and Lightwood's Law of Mortgage (3rd ed, 2014, Lexisnexis Butterworths) Category: Principal judgment Parties: Boulos Holdings Pty Ltd (Plaintiff) Edwin Davey Pty Ltd (Defendant) Representation: Counsel: S Docker (Plaintiff) AJ Macauley (Defendant) Solicitors: HF Lawyers (Plaintiff) Salim Rutherford (Defendant) File Number(s): 2018/223963 Publication restriction: Nil Judgment 1. HER HONOUR: This matter involves a dispute arising out of a contract for the sale of land dated 22 November 2010 between the plaintiff, Boulos Holdings Pty Ltd (Boulos Holdings), as vendor, and the defendant, Edwin Davey Pty Ltd (Edwin Davey) as purchaser (the Contract). 2. The land the subject of the Contract (which, before its transfer to Boulos Holdings, was owned by an entity related to it – Microage Australia Pty Ltd (Microage)) is a property known as the Flour Mill Property, situated on land over two titles respectively in Allen Street and Jones Street, Pyrmont, New South Wales. The Flour Mill Property was the site of the old Edwin Davey & Sons flour mill, which was constructed in 1896. The property was suitable for mixed residential and commercial development. The purchase price was $10.8 million plus GST using the margin scheme with GST of $400,000, the total purchase price being $11.2 million. Originally, the completion date was 11 months from the date of the Contract (i.e., 22 October 2011). Part of the specified deposit of $2.8 million (a sum of $1.3 million) was to be paid and released to Boulos Holdings on exchange of contracts; with the balance ($1.5 million) to be paid and released to Boulos Holdings by 31 December 2010. 3. On 6 January 2011, by agreement between the parties, the completion date was varied to 23 August 2012 (Variation); and Edwin Davey released a further $1 million of the purchase price to Boulos Holdings. The sale ultimately completed on 18 September 2012 (after receivers had been appointed to Boulos Holdings). 4. Boulos Holdings' claims in the proceeding (set out in the statement of claim filed on 20 July 2018) arise from special condition 44 of the Contract (set out below). That special condition stipulated that, if Edwin Davey lodged a new development application in respect of the Flour Mill Property and received (as part of any development consent) a credit or allowance in respect of any contribution otherwise payable under s 94 of the Environmental Planning and Assessment Act 1979 (EPA Act) by reason of a prior s 94 contribution made by Microage to the Council of the City of Sydney (Council) (in respect of an earlier development application made by Microage), then Edwin Davey was obliged to pay to Boulos Holdings an amount equal to any such allowance or credit. 5. Edwin Davey indeed made such a new development application (being D/2011/1798), with Boulos Holdings' consent, prior to completion of the Contract. That application was conditionally approved on 25 October 2012, with the condition being removed on 5 August 2013. The amount that Boulos Holdings claims is payable to it pursuant to special condition 44 of the Contract is $661,966.86. It says this amount became payable no later than 6 August 2013. Boulos Holdings no longer presses a claim that it had originally included in its pleading for payment pursuant to special condition 44 of an additional sum of $226,828.30 in respect of a credit for an affordable housing contribution. 6. Edwin Davey denies liability for the amount claimed under special condition 44 on a number of grounds (see below) and has in turn brought various cross-claims against Boulos Holdings (see its amended statement of cross-claim filed on 2 November 2020). Those cross-claims largely arise from the circumstances in which the Contract was entered into and in which it was completed but also include a claim for unconscionable conduct in relation to another dealing involving the Boulos family affecting the Flour Mill Property (see below). 7. As to the principal claims in the cross-claim, these relate to a payment made by (or more precisely, it seems, on behalf of) Edwin Davey of the sum of $500,000 to Boulos Holdings' mortgagee, Perpetual Nominees Ltd (Perpetual), in order to obtain Perpetual's consent to a discharge of the registered mortgage held by Perpetual over the Flour Mill Property (Perpetual Mortgage) so as to enable completion of the Contract at a time after receivers had been appointed to Boulos Holdings. I will refer in due course to the circumstances in which a Payment Deed was entered into on 17 September 2012 between Edwin Davey and Perpetual (the Payment Deed), pursuant to which Edwin Davey agreed to pay Perpetual the lesser of $500,000 and the outstanding moneys owing under Boulos Holdings' loan facility with Perpetual after the sale of a second Pyrmont property owned by Boulos Holdings and over which Perpetual held a registered mortgage (the Second Pyrmont Property) and Edwin Davey agreed to give Perpetual a bank guarantee for $500,000 as security for this obligation. Perpetual in due course called on the bank guarantee after the sale of the Second Pyrmont Property failed to discharge its loan facility. Edwin Davey now claims the amount of that payment (plus interest) as against Boulos Holdings on a variety of bases: as damages for breach of contract; pursuant to an implied right of indemnity (in its capacity as a surety); and in restitution. Edwin Davey also claims damages for contravention of s 18 of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (Australian Consumer Law), contending, in effect, that Boulos Holdings misrepresented, prior to Edwin Davey's entry into the Contract, the amount secured over the Flour Mill Property. 8. As to the unconscionable conduct claim, Edwin Davey claims damages for the alleged contravention of s 21 of the Australian Consumer Law, which prohibits unconscionable conduct in trade or commerce. The unconscionable conduct is said to have occurred in respect of a purported transaction between Boulos Holdings and Roshdi and Nabiha Boulos (the parents of Mike Boulos, a former director of Boulos Holdings to whom I will refer shortly) under which it was contended (in another proceeding in this Court) that Boulos Holdings gave Roshdi and Nabiha Boulos an unregistered mortgage over the Flour Mill Property. The loss claimed comprises Edwin Davey's legal expenses in that earlier proceeding (proceeding no 2012/240709) (the 2012 Proceeding) commenced by Roshdi and Nabiha Boulos against Boulos Holdings, to which proceeding Edwin Davey was joined (at its request) to protect its interest in the Flour Mill Property. 9. As will be seen from the chronology of events set out below, the present proceeding is but one of a series of proceedings in which Boulos Holdings, and/or members of the Boulos family, and Edwin Davey have been involved. It raises not uncomplicated issues in relation to the assignment of the chose in action comprised by the right under special condition 44 of the Contract to payment of the credit for the s 94 contribution (which led to a late further amendment to Edwin Davey's defence to plead matters relating to the Personal Property Securities Act 2009 (Cth) (PPSA) and supplementary submissions by both parties after judgment was reserved). Background Relevant entities Boulos Holdings 1. The plaintiff, Boulos Holdings, was incorporated on 17 August 1984. Its issued shareholding (two ordinary shares) has always been held by various members of the Boulos family. The directors of Boulos Holdings on its incorporation were Magdi (known as Mike) Boulos and his wife, Bernadette Boulos. Roshdi and Nabiha Boulos are the parents of Mike and the grandparents of Mike's sons, Benjamin and Brendon Boulos. I refer to the Boulos family members, without intending any disrespect, by their first names. 2. Bernadette ceased to be a director of Boulos Holdings on 29 October 1996. On 8 May 2007, Mike was replaced as a director of Boulos Holdings by his sons, Benjamin and Brendon. 3. Both at the time the Contract was entered into (on 22 November 2010) and when the sale of the Flour Mill Property completed (on 18 September 2012), Benjamin and Brendon were the directors of Boulos Holdings but Mike was the principal person who dealt with the principal of Edwin Davey (Mr Edward Doueihi). 4. On 22 June 2012, Gregory Hall and Ian England were appointed as the receivers of Boulos Holdings (Receivers). Mr Hall retired on 26 February 2020 and Mr England retired on 27 April 2020. Accordingly, the Receivers were in office when the Contract completed on 18 September 2012 but not when it was entered into on 22 November 2010; and they were in office when the present proceeding commenced on 20 July 2018 but had retired by the time of the hearing in 2020. 5. On 1 October 2017, Brendon ceased to be a director of Boulos Holdings, leaving Benjamin as its only current director. Edwin Davey 1. The defendant, Edwin Davey, was incorporated on 16 November 2010. Its sole director and secretary has at all material times been Edward Doueihi. For consistency, I will also refer to Edward Doueihi by his first name, again with no disrespect intended. 2. Ceerose Pty Ltd (Ceerose), another entity which features in the proceeding, is a related company to Edwin Davey. Edward has been the sole director and secretary of Ceerose since 30 July 1999. Since 2005, Mr Jason Cameron, a solicitor, has been the in-house counsel for Ceerose. Chronology of events Microage 1. The Flour Mill Property was formerly owned by Microage, which acquired the property on 16 May 1996 for $3.38 million. 2. On or about 4 August 2000, Microage paid the Council the sum of $1,078,773.04 as a contribution pursuant to s 94 of the EPA Act (the Microage s 94 Contribution) that being a condition (condition 20) of a development approval Z97-00279 that had been issued by the Council to Microage on 27 August 1997 (the Microage DA) in respect of the Flour Mill Property. Perpetual Mortgage – 2006 1. The Perpetual Mortgage was granted by Microage on 2 November 2006, being registered mortgage AC810023. It incorporated the terms of Memorandum AB698854R lodged with the Registrar General pursuant to s 80A of the Real Property Act 1900 (NSW). From the OSR stamp on the Perpetual Mortgage, it appears that the mortgage secured, originally, a loan of $5.85 million. On 27 March 2007, the Perpetual Mortgage was registered on the title of the Flour Mill Property. 2. The Perpetual Mortgage, which defined Microage as the Mortgagor, relevantly contained the following terms. 3. By cl 2.1, the Mortgagor thereby charged the "Secured Assets" to the Mortgagee to secure payment of the "Secured Money". 4. Under the definitions clause, cl 14.1, the term "Secured Assets" was defined to mean: a. the Mortgaged Land; b. any contract or agreement in relation to the Mortgaged Land including any agreement or option for sale, leasing, or use of the Mortgaged Land and any contract in relation to Works on the Mortgaged Land; c. all income derived from the Mortgaged Land; d. the Mortgagor's right to receive any money in respect of the Mortgaged Land; and e. any business conducted by the mortgagor on the Mortgaged Land. 1. "Mortgaged Land" was defined as follows: Mortgaged Land means the whole of the land subject to the Mortgage and includes [buildings fixtures and fittings] of any nature at any time on the Mortgaged Land, any water rights, permissive occupancies, leases, or licences adjoining or relating to that land, and includes any part of them 1. "Secured Money" was defined as follows: Secured Money means all money (and any part of that money) which directly, indirectly, contingently, or otherwise at any time is or becomes due by the Mortgagor (whether alone or not) to the Mortgagee for any reason and includes any money due: a. pursuant to the Mortgage or a Collateral Document; … 1. "Collateral Document" was defined to mean, relevantly: … (c) any document which is agreed to be collateral to the Mortgage … 1. Clause 2.5 provided that the Mortgagor was obliged, inter alia, to pay to the Mortgagee any deposit or any money released under any agreement for the sale of the Mortgaged Land. 2. Clause 2.5 provided that: The Mortgagor must cause all money which becomes payable as purchase money, compensation, or otherwise in respect of the Mortgaged Land to be paid direct to the Mortgagee. … At the request of the Mortgagee, the Mortgagor must join with the Mortgagee in claiming that money but the Mortgagee alone will have the power to make, enforce, settle, and compromise any claim. … 1. Clause 2.13 provided that: Dealings with the secured assets The Mortgagor must not, without the Mortgagee's prior written consent: (a) dispose of, deal with or part with possession of: (i) any estate or interest in the Secured Assets; … 1. By cl 2.16, the Mortgagor was required to execute a mortgage in favour of the Mortgagee over any land acquired by the Mortgagor at any time to be used or held in conjunction with the Mortgaged Land. 2. By cl 2.21, the Mortgagor was obliged to: … sign anything and do anything the Mortgagee requires to further or more effectively secure the Mortgagee's rights over the Secured Assets or under the Mortgage … 1. Clause 10.1 dealt with events of defaults and cl 10.2 with rights on default. The events of default included the happening of an "Insolvency Event", as defined. On the happening of an event of default the Mortgagee had various rights to "sign anything and do anything the Mortgagee considers appropriate to recover the Secured Money and deal with the Secured Assets", including under cl 10.2(d) to "[s]ell, assign, transfer, dispose, exchange, barter, and grant options in respect of the Secured Assets" and under cl 10.2(u) to "[p]erform, observe, carry out, enforce, vary, or rescind any contracts, obligations, or rights of the Mortgagor in respect of the Secured Assets". March 2010 Perpetual Loan Agreement 1. On 1 March 2010, Boulos Holdings entered into a loan agreement with Perpetual (the Perpetual Loan Agreement) for a loan of $13.2 million repayable on 13 August 2012. The Perpetual Loan Agreement replaced two existing loan agreements – one, dated 14 December 2009, between Perpetual and Boulos Holdings and the other, dated 30 June 2009, between Perpetual, Boulos Investments Pty Ltd (Boulos Investments) and Microage. The loan facility was to be secured by both the existing Perpetual Mortgage over the Flour Mill Property and a registered mortgage in favour of Perpetual over the Second Pyrmont Property (located on Pyrmont Bridge Road, Pyrmont). 2. The letter of offer contained an acknowledgement that the loan was to be secured by certain specified transaction documents and expressly provided that settlement of the loan was conditional upon the provision of "this security" in the form and substance satisfactory to Perpetual. Relevantly, the letter of offer (which was accepted by Boulos Holdings) contained the following: Your request for a variation of your existing mortgage loan whereby the borrowing companies and Mortgagors have been changed from Boulos Investments Pty Ltd and MicroAge Pty Ltd to Boulos Holdings Pty Ltd has been approved. … You acknowledge that the loan will be secured by the following transaction documents. Settlement of the loan is conditional upon this security being provided in the form and substance satisfactory to the Lender.  First registered mortgage no. AC810023 by Microage Australia Pty Limited as transferred to Boulos Holdings Pty Limited…[my emphasis]  First registered mortgage no. 7780878 by Boulos Investments Pty Limited as transferred to Boulos Holdings Pty Limited… 1. The letter also contained the following: Insurance The security property must be insured against all contingencies for the full replacement value during the Loan Term. Satisfactory evidence is to be provided showing that security properties are now insured by Boulos Holdings Pty Limited (New Mortgagor) [Emphasis in original] … Ongoing Conditions The following ongoing conditions must be satisfied throughout the term of the loan. The Lender may waive any one or more of these conditions in its absolute discretion. 1. General Mortgage Conditions Advances will only be made when the Lender is prepared to do so and all matters relating to the Facility are to the Lender's satisfaction. Your obligation in respect of the Facility and the security will be specified in further detail in the security documents. The following is a short and incomplete summary of the principal obligations and is provided to assist your understanding of the nature of those obligations. If you are not the mortgagor in relation to any securities, you agree to comply with all terms and conditions contained in the securities insofar as they can apply to you. (a) All rates, taxes and assessments must be paid in relation to any security property. (b) All the security properties must be insured for their full insurable value. (c) You must pay any government duties in relation to the loan and any expenses arising from any default. (d) The security documents will list events of default. If an event of default as defined in those documents occurs, the Lender may demand repayment in full of the loan and may exercise the powers under all or any of the security, including a power of sale. (e) If there is more than one borrower, their liability is joint and several. 1. Pausing here, it is relevant to note that the Perpetual Mortgage was not in fact ever transferred to Boulos Holdings as had been contemplated by the Perpetual Loan Agreement, which has given rise to argument as to whether Boulos Holdings' rights under the Contract (and, specifically, its rights under special condition 44) were ever charged in favour of Perpetual (which I consider in due course). Transfer of Flour Mill Property to Boulos Holdings 1. On 29 June 2010, Microage executed and dated a transfer in respect of the Flour Mill Property to Boulos Holdings. The transfer was for nil consideration and no stamp duty was payable (or paid). 2. On 1 July 2010, Boulos Holdings became the registered proprietor of the Flour Mill Property pursuant to the 29 June 2010 transfer. The Perpetual Mortgage remained on the title of the Flour Mill Property following this transfer and it is not disputed that Boulos Holdings took its interest as registered proprietor subject to that mortgage. (I interpose to note that subsequently, on 16 June 2013, Microage was deregistered.) July 2010 loan agreement with GP Mortgage Corporation and AET 1. In 2010, United Broadcast International Pty Ltd (UBI), a company in the Boulos Group, was seeking to acquire the Greek subscriber base of a pay television company, SelecTV, as well as programming rights from a Lebanese broadcasting company (see T 129.3-13, T 140.1-4, and Mike's affidavit sworn 4 March 2020 at [5]). Between 20 October and 10 November 2010, Mike was in discussions with various banks to finance these acquisitions using the Flour Mill Property and the Second Pyrmont Property as security. 2. On 14 July 2010, Boulos Holdings entered into a loan agreement with GP Mortgage Corporation Limited (GP Mortgage Corporation) and Australian Executor Trustees (SA) Limited (AET) to borrow the sum of $2.5 million, which amount was to be repayable over two years and secured by: unlimited guarantees by each of Mike, Benjamin, and Brendon; an unlimited guarantee in her capacity as trustee by Maria Boulos (Maria being another Boulos family member and the director of UBI); guarantees limited to the value of a security property in Dural owned by Roshdi and Nabiha (as noted above, Mike's parents), and a first registered mortgage over Roshdi and Nabiha's Dural property (stamped for $2.5 million). 3. The $2.5 million loan was for working capital for UBI and was advanced on 20 July 2010. 4. Meanwhile, on 19 July 2010, Boulos Holdings purportedly entered into a loan agreement with Roshdi and Nabiha for $2.5 million, which included (in cl 4) that Boulos Holdings would provide Roshdi and Nabiha with a second mortgage (the R&N Mortgage) over the Flour Mill Property as security for the drawings. (I say "purportedly" entered into because there is a live dispute in this proceeding as to whether the R&N Mortgage was a fictitious document purposely backdated by Boulos Holdings – and this is the subject of the unconscionable conduct claim in Edwin Davey's cross-claim.) 5. On the same day (19 July 2010), an addendum to that (19 July) loan agreement was signed, to the effect that the loan described in the loan agreement was the loan from AET for which Roshdi and Nabiha had mortgaged their property at Dural, so that the security granted over the Flour Mill Property was for them and the loan provider. (In other words, the addendum made clear that no funds had been advanced by Roshdi and Nabiha; rather, as I understand the effect of the addendum, it was to acknowledge the provision of financial accommodation by Roshdi and Nabiha in that they had mortgaged their property in Dural and provided guarantees to secure the loan from GP Mortgage Corporation and AET.) 6. No caveat was lodged at that stage by Roshdi and Nabiha in respect of their claimed interest as equitable mortgagees in the Flour Mill Property; nor was there any evidence that the existence of this claimed mortgage interest had been disclosed to Perpetual at the time. Proposed sale of the Flour Mill Property 1. In 2010, Mike was also investigating a potential sale of the Flour Mill Property to raise funds. Boulos Holdings received various expressions of interest and offers to purchase the Flour Mill Property between 28 October 2010 and 5 November 2010, with the highest offer of $12 million. As Mike accepted in cross-examination, a number of those offers or expressions of interest were conditional and some involved the grant of options in relation to the Flour Mill Property (see T 127.25-6). The relevance of this is that, as at the time of entry into the Contract, the Edwin Davey offer was the only offer that would have given Boulos Holdings certainty of sale (subject of course to the usual risks of a purchaser's failure to complete) within what was then a less than 12 month time period and the only one pursuant to which a release of part or all of the deposit was contemplated in advance of completion (matters relevant to the submissions made by the respective parties as to the counterfactual relied upon by Edwin Davey for its claim for damages for misleading or deceptive conduct, namely that Boulos Holdings would have entered into an alternative contract whereby the deposit was not released had Edwin Davey refused to agree to the release of the deposit). Contract for sale of the Flour Mill Property 1. On 22 November 2010, Boulos Holdings (as vendor) entered into the Contract for the sale of the Flour Mill Property to Edwin Davey (as purchaser) and $1.3 million of the deposit of $2.8 million was paid. At the time of entry into the Contract, Boulos Holdings had not obtained the written consent of Perpetual to the sale of the Flour Mill Property (as required pursuant to cl 2.13(a) of the Perpetual Mortgage), this being an event of default under cl 10.1(a) of the Perpetual Mortgage. 2. Prior to this, there had been negotiations between Mike and Edward, although there is a dispute as to how many times they spoke and when the negotiations commenced (and it appears some of the communications were conducted through the real estate agent acting on the proposed sale (see T 158)). In the course of those negotiations, Edwin Davey sought (and Boulos Holdings refused) an exclusive due diligence period (whether of 28 or 14 days). 3. I interpose to note that, on both sides, there appears to have been perceived to be some urgency in relation to the entry into the Contract – for Boulos Holdings' part, a concern to obtain not just a concluded contract but a release of funds; for Edwin Davey's part, a desire on the part of Edward to secure the Flour Mill Property (to which he accepted he had an emotional attachment) because he perceived that the then applicable development consent regime would be favourable to his proposed development of the property and he was concerned that there might soon be changes that would affect his proposed development (T 160.25-42; T 161.45-8). 4. This may explain not only Boulos Holdings' refusal to allow an exclusive due diligence period but also Edwin Davey's preparedness to proceed without any such due diligence. It also appeared, from the evidence Edward gave in cross-examination, that the request by Edwin Davey for an exclusive due diligence period (the purpose of which he said was "[j]ust trying to get, get in to have a meeting with council and just talk and discuss it with them and prepare a couple of butter paper sketches and see what, how, the appetite about this approval like to go forward on this property to go see council" – see at T 162.40-3), may also have been part of a standard negotiation practice on Edwin Davey's part (to show "good faith" and that Edwin Davey was serious about the offer), Edward adding that "[w]e always try to buy time" (see at T 163.5-15; and also see Edward's earlier evidence that "[e]very time I buy a property I always try to buy time. Just to save on the interest we always do that"). 5. The Contract was signed and exchanged on 22 November 2010 in the boardroom of Boulos Holdings' office at 55 Pyrmont Bridge Road. There was a discussion at this meeting but again there is a dispute about what was said (relevantly, as to what was said regarding the amount secured over the Flour Mill Property – see below) and whether that conversation occurred before or after the exchange of the Contract. 6. In Edward's affidavit sworn 30 October 2019, he deposed (at [9]) that before contracts were exchanged there was a discussion in which he said he would release a $2.8 million deposit if Mike could provide him with a letter "confirming that the current balance of the loan over the property is not more than 5.8 million" and that he would not increase it before settlement; and that Mike said " Yes we can arrange this". In his affidavit of 31 July 2020, Edward reiterates that the discussion was before exchange (at [9]). 7. Edward's evidence in cross-examination was that when there was discussion about the release of the deposit he asked "how much money was debt on that property"; that Mike said "he had 5.8 on the property and that's all the money that was on that property" and that Mr Cameron asked whether this "crossed" [i.e., was cross-collateralised] with anything else, to which Mike said, no (see T 169.21-4; T 174.18-23). 8. Benjamin, on the other hand, refers in his affidavit sworn 3 March 2020 to a discussion after the sale contract was exchanged, as to how much equity there was in the property and what would be required to get Perpetual to release the Property. He denies that the conversation to which Edward deposed (at [9]) occurred in that way. Benjamin's evidence in cross-examination is to the same effect (see T 55.34 – T 56.2). 9. Mike similarly places the relevant conversation as occurring after the sale contract was exchanged (see at [15] of his affidavit sworn 4 March 2020) in the context of a query by Edward as to how much the mortgage will want to release the mortgage on settlement (see also his evidence in cross-examination at T 133.13-27): Q. You agree that at some point on that day, you told the amount owing to Perpetual was 5.85. Is that right? A. I wasn't asked about the amount that was owing, owed to Perpetual or on the property. Q. So you're saying he never asked how much money is secured over the property? A. He did ask, but it was well after the contract, but I can't recall whether it was on the same day or days thereafter, or during a subsequent conversation about additional money, release of additional monies. Q. So just close that folder with you, if you wouldn't mind? Is it your position that after the contract was signed, you told him, that is Mr Doueihi, the amount secured over the property and owing to Perpetual was $5.85 million? A. Correct. 1. Jason Cameron deposed (at [14] of his affidavit sworn 23 July 2020) that, prior to any sale contract being executed or exchanged, Edward raised a concern as to the release of the deposit and asked how much equity there was in the property and "[w]hat is the secured amount your bank has over the Property", to which he says Mike replied $5.8 million. His affidavit (at [16]; [19]) clearly places this conversation as prior to execution and exchange (see also his evidence in cross-examination at T 202.16-30). Contract provisions 1. The coversheet of the Contract noted that the purchaser, Edwin Davey, was acting for itself (with Mr Cameron, Ceerose's in-house solicitor, noted as the purchaser's contact). On release of the deposit to Boulos Holdings, that amount was to be charged against the Flour Mill Property until completion, pursuant to cl 2.8. 2. Pursuant to special condition 33 of the Contract: (a) … the Purchaser [Edwin Davey] expressly acknowledges that the Purchaser has not been induced to enter into this Contract by any representation verbal or otherwise made by or on behalf of the Vendor [Boulos Holdings] which is not set out in the body of this Contract or the Schedules or Annexures hereto. … (c) The Purchaser acknowledges and agrees that in entering into this Contract, the Purchaser has not relied upon any warranty or representation made by or any other conduct engaged in by the Vendor or any person or body corporate on behalf of the Vendor except such as are expressly provided herein but has relied entirely upon the Purchaser's own enquiries and inspection relating to and of the property… … (e) If there have been any prior or collateral agreements or other agreements not set out in this Contract concerning the property between the parties then such agreements are hereby rescinded. 1. The period for any notice to complete was specified as 28 days (special condition 34). 2. Boulos Holdings agreed to assign to Edwin Davey its intellectual property rights in all documents relating to the Microage DA and to provide Edwin Davey access to such documents from the date of exchange (special condition 46). 3. Special condition 44 of the Contract (on which the present claim by Boulos Holdings is based) provided as follows: 44 Section 94 Environment Planning and Assessment Act On about 4 August 2000 the City of Sydney Council received from Microage Pty Ltd an amount of $1,078,773.04 as a section 94 contribution (the previous contribution). The Purchaser acknowledges that by reason of such payment the City of Sydney may agree to allow a credit or allowance of the whole or part of this amount against a section 94 contribution otherwise payable upon the issue of a construction certificate in respect of a new development application or applications. It is the intention of the Purchaser to lodge a new development application or applications. The Purchaser agrees to ensure that at the time of the lodgement of any new development application relating to the property the applicant will seek to have an allowance or credit made for the previous contribution. If the City of Sydney makes an allowance or credit such that the applicant does not have to pay a section 94 contribution or has to pay a lesser contribution than would have been payable but for the previous contribution then the Purchaser shall pay to the Vendor an amount equivalent to such credit or allowance (the "Payment"). The payment shall be made to the Vendor if a section 94 contribution is assessed at the time the applicant has to pay the assessed section 94 contribution or if no section 94 contribution is required by reason of the allowance or credit then at the time a section 94 contribution would otherwise have become payable. This condition and obligation applies in respect of any credit or allowance received by an applicant in respect of any new or further development application relating to the property until the credit or allowance is exhausted. The obligation is a charge on the land as from the time the amount of the allowance or credit is ascertained and is a charge on the land subject to any subsisting rights at that time. The Vendor covenants to provide the purchaser with a letter from Microage Pty Ltd acknowledging that Microage Pty Ltd will not make any claim against the purchaser for the Payment in the event the Payment is made to the Vendor. 25 November 2010 Letter 1. On 25 November 2010, i.e., three days after the Contract was signed and exchanged, Benjamin (as director of Boulos Holdings) signed a letter to Edwin Davey, referring to the Contract and stating that: We note that Perpetual Nominees Limited has provided financial accommodation to Boulos Holdings Pty Ltd (the "Facility") in the amount of approximately $5.8 million (the "Facility Amount"). The Facility is secured by a mortgage over the Property. As requested, Boulos Holdings Pty Ltd hereby undertakes not to increase the Facility Amount until such time the Contract is completed, or earlier terminated or rescinded. 1. Pausing here, the statement contained in the first paragraph of the 25 November 2010 letter, as extracted above, was undoubtedly factually incorrect because Perpetual by that stage had provided financial accommodation in total of some $13.2 million (see the Perpetual Loan Agreement in March 2010), the whole of that facility being secured by mortgage over the Flour Mill Property (together, of course, with the security held over the Second Pyrmont Property). The suggestion in cross-examination of Mike and Benjamin that the respective properties secured only the loans that had been advanced in respect of those particular properties or that Perpetual could (or would) only enforce its security over each property to the extent of the loan advanced in relation to that property (see T 61.12-7, T 122.36-40) is untenable (whether or not this was their understanding at the time). Edwin Davey – Caveat 1. On 25 November 2010, Edwin Davey lodged a caveat on the title of the Flour Mill Property, claiming an interest as purchaser. Release of Deposit 1. As noted above, the deposit payable under the Contract was $2.8 million. Pursuant to special condition 40, the deposit was to be paid in two tranches: $1.3 million upon exchange; and a further $1.5 million by 31 December 2010, with such moneys to be released to Boulos Holdings upon payment. In accordance with those provisions, those amounts were paid (and released to Boulos Holdings) on the dates specified. Variation of completion date and release of further amount of purchase price 1. On 6 January 2011, agreement was reached to vary the completion date to 23 August 2012 (Variation) and Edwin Davey released a further $1 million of the purchase price to Boulos Holdings. The Variation was negotiated between Edward and Mike at a meeting at Boulos Holdings' office. The completion date on the front page of the Contract was amended by hand to 23 August 2012. 2. Edward's evidence is that he asked for a letter from Perpetual saying that $5.8 million was owing on the Flour Mill Property and sought a personal guarantee from Benjamin and Brendon, who gave a guarantee limited to $1 million for the amount of the purchase price advanced by Edwin Davey to Boulos Holdings that day (see Edward's affidavit sworn 30 October 2019 at [16]). (Edward, of course, already had the 25 November 2010 letter from Boulos Holdings, so presumably the request for a letter from Perpetual was to obtain further assurance as to what he had already been told as to the Perpetual facility. In any event, no such letter from Perpetual was provided.) 3. On 7 January 2011, Edwin Davey caused the amount of $1 million to be released to Boulos Holdings. (A claim based on alleged misleading or deceptive conduct is no longer pressed in respect of the additional $1 million of the purchase price that was paid and released on 7 January 2011.) 4. In the period from March to May 2011, Mike sought Edward's agreement to release further amounts of the purchase price but no agreement was reached and no further money was released. Request for credit for Microage s 94 Contribution 1. On 20 October 2011, Mr Cameron sent Boulos Holdings' then solicitor, Mr Marc Saadie, an email seeking consent to a letter Edwin Davey proposed to send to the Council requesting that the Microage s 94 Contribution be credited to the Edwin Davey DA. On 25 October 2011, Mike approved the letter. Settlement of sale of Flour Mill Property 1. Between 29 September and 26 October 2011, Mike and Balmain Commercial (finance brokers) were negotiating with Mr Jamie Gilchrist (on behalf of Perpetual) to release the Perpetual Mortgage for $5.85 million on settlement of the Contract. It appears that, at one stage, Perpetual may have been prepared to consider this (and an early settlement date, although that did not transpire) because, on 26 October 2011, Mr Gilchrist sent an email stating that: Whilst it would be our preference to receive full sale proceeds, we will accept a principal reduction of $5,850,000 from the sale of the above property which will reduce the loan balance to $7,350,000. Can you please have the borrowers['] lawyers contact our lawyers being Gadens Sydney, Jennifer Holman, who is handling the discharge for us with the view to setting the settlement date. Once the date is set I will provide our lawyers with discharge instructions. 1. Between 25 and 28 October 2011, there were emails between Mike and Edward in which Mike asked for confirmation of an early settlement date of 28 November 2011. Edward said that an early settlement was something he had in mind but that he had not committed to any dates and reserved Edwin Davey's rights under the Contract. Mike advised that Perpetual (in the emails described as ING) would release the Perpetual Mortgage for $5.85 million. Edward said he could not commit to an early settlement on 29 November 2011. Lodgement of Edwin Davey DA on 7 November 2011 1. On 7 November 2011, with Boulos Holdings' consent, Edwin Davey lodged a development application D/2011/1798 (Edwin Davey DA) with the Council. NAB facility 1. In March 2012, NAB provided a short term $87 million facility to Boulos Holdings. In connection with this, a Priority Deed dated 19 March 2012 was entered into which provided that, notwithstanding anything else (for example, the dates on which financial accommodation was furnished, or registration of security interests), Perpetual's registered mortgage over the Flour Mill Property would rank in priority to NAB's security interests up to the amount of $13.2 million plus interest, costs and expenses (see cl 3.1). Appointment of Receivers to Boulos Holdings – June 2012 1. On 5 June 2012, Mr Hall and Mr England were appointed by National Australia Bank (NAB) to investigate the affairs of Boulos Holdings. 2. Shortly after, Mr Hall and Mr England were appointed by NAB as the Receivers of Boulos Holdings on 22 June 2012. The appointment of the Receivers was an Insolvency Event under the terms of the Perpetual Mortgage. Lodgement of caveat by Roshdi and Nabiha 1. Shortly after the appointment of the Receivers, a caveat was lodged on 26 June 2012 on behalf of Roshdi and Nabiha over the Flour Mill Property. That caveat (AH73255) claimed an "equitable interest as unregistered mortgagee", referring to the (then unstamped) mortgage dated 25 July 2010. Commencement of 2012 Proceeding by Roshdi and Nabiha 1. After a lapsing notice was issued in respect of the caveat that had been lodged on behalf of Roshdi and Nabiha, the 2012 Proceeding was commenced by Roshdi and Nabiha against Boulos Holdings (by then under the control of the Receivers) seeking to extend the caveat and to assert their equitable mortgage. Edwin Davey was joined as a party to the 2012 Proceeding (at its request) to protect its equitable interest in the Flour Mill Property arising under the Contract, as well as its lien over the Flour Mill Property arising from the release of $3.8 million of the purchase price to Boulos Holdings. Edwin Davey engaged solicitors and Senior Counsel for the 2012 Proceeding. Council's determination of s 94 Contributions 1. On 23 July 2012, the Council prepared a document entitled "Major Development Assessment Sub-Committee" in which approval of the Edwin Davey DA was recommended (Development Assessment Report). The Development Assessment Report stated (at [97]-[99]) in effect that the Edwin Davey DA would require a total contribution of $715,003.41 to be paid in accordance with the Ultimo Pyrmont Section 94 Contribution Plan but that none was payable because of the Microage s 94 Contribution. 2. On 2 August 2012, Daniel McNamara of Daniel McNamara Planning Solutions, sent a letter to the Council on behalf of Edwin Davey seeking a reduction in the assessed s 94 credit of $715,003.41 (Section 94 Credit), based on a credit for the existing use of the site. The letter stated that this might appear to be a "moot point", as the total contributions "will inevitably be zero", but that it was important for "our financial reconciliations associated with the purchase of this site". (Presumably, this was a reference to the obligation to seek credit for, and make a payment in respect of any such credit allowed for, the Microage s 94 Contribution.) Edward's evidence in cross-examination was that, as a developer, he would always seek a reduction in the s 94 contributions (see at T 187.20-T 188.8). 3. Negotiations concerning the Section 94 Credit continued between 2 August and 18 December 2012, culminating (see below) in the reduction by Council of the Section 94 Credit to $661,966.86. The Council confirmed that the required contribution remained $0 consistent with the approval for the Edwin Davey DA. Default under Perpetual loan facility – 13 August 2012 1. Meanwhile, on 13 August 2012, the repayment date of Boulos Holdings' loan facility with Perpetual fell due. Boulos Holdings failed to repay the $13.2 million loan facility on that date and therefore went into default under the loan facility and the Perpetual Mortgage. (By this stage, therefore, there were a number of events of default under the Perpetual Mortgage and there can be little doubt that those events of default enlivened Perpetual's powers as mortgagee.) Negotiations as to discharge of Perpetual Mortgage to permit sale to complete 1. As noted above, there had already by this time been discussion as to whether Perpetual, whose first registered mortgage over the Flour Mill Property secured some $13.2 million in debt (see above), would agree to a discharge of its mortgage over the Flour Mill Property in order to allow the sale to Edwin Davey to complete. Edward's evidence in cross-examination indicates that his concern at the time was that the Receivers would be able to frustrate the completion of the sale (see T 180.30-41; T 183.13-9). 2. Edward's evidence is that, on or about 21 August 2012, Mike and Edward had a discussion in which Edward said that NAB would probably let the sale go through but that Perpetual was worried about a potential shortfall if it allowed the Contract to settle and did not get enough from the (subsequent) sale of the Second Pyrmont Property to repay Boulos Holdings' loan; and that Perpetual was asking Edwin Davey to cover the potential shortfall by putting up $500,000 as security (see Edward's affidavit sworn 30 October 2019 at [57]-[58]). 3. Edward deposes that he was told by Mike (on behalf of Boulos Holdings) that, while Mike did not share Perpetual's view that there would be insufficient funds from the mortgaged properties to discharge Boulos Holdings' indebtedness, Edward should "do whatever you need to make the sale happen" and that he (Mike) "will do what I can from this end" (see Edward's affidavit sworn 30 October 2019 at [57]-[58]). (It is said by Edwin Davey that such a statement was an acquiescence by Boulos Holdings to Edwin Davey entering into the Payment Deed and providing a $500,000 guarantee to Perpetual. There is no suggestion, however, that Mike was ever made aware of the terms of the proposed Payment Deed before its execution.) 4. Mike's evidence is that he, Mike, told Edward that Edward should not pay $500,000 and that he was wasting his money (see Mike's affidavit sworn 4 March 2020 at [36]; T 147.1-4). Edward does not recall this but accepts that Mike might have said this (T 198.34-T 199.6). Completion date for Flour Mill Property – 23 August 2012 1. Completion of the Contract did not occur on 23 August 2012. Perpetual's consent to completion had not been forthcoming. Edwin Davey notes (and there is no dispute as to this) that the failure to complete the Contract on 23 August 2012 constituted a breach of contract by Boulos Holdings (see cll 16.1 and 16.3 of the Contract). (The dispute is as to the consequences of that breach in terms of the damages here claimed by Edwin Davey – as to which, see below.) Payment Deed with Perpetual – 17 September 2012 1. Between late August and early September 2012, Edwin Davey negotiated with Perpetual the terms on which Perpetual would agree to discharge the Perpetual Mortgage over the Flour Mill Property (necessary in order to enable the sale to Edwin Davey to complete). 2. On 17 September 2012, Edwin Davey entered into the Payment Deed with Perpetual. Boulos Holdings, which was then under the control of receivers, was not a party to the Payment Deed (and the evidence of both Mike and Benjamin is that they did not know about it at the time – Mike says that he did not speak to Edward after about 21 August 2012 and that he only found out about the Payment Deed afterwards; Benjamin's evidence is that he did not know about the Payment Deed until long after settlement of the Contract). 3. The Payment Deed recited that, in February 2010, Perpetual made a facility available to Boulos Holdings in the amount of $13.2 million (defined as the Loan) secured by a first registered mortgage over the Flour Mill Property and the Second Pyrmont Property; that the sale proceeds at settlement were insufficient to pay the Loan; and that Edwin Davey had agreed to pay Perpetual up to $500,000 in the event that the proceeds from the sale of the Second Pyrmont Property (defined as the Pyrmont Sale Proceeds) did not fully repay the Loan. 4. The operative provisions of the Payment Deed included the following. 5. Under cl 1.1 of the Payment Deed, Edwin Davey promised to pay Perpetual the lesser of the difference between the Loan balance and the Pyrmont Sale Proceeds (on the one hand) and $500,000 (on the other hand) (defined as the Payment) in the event that the Pyrmont Sale Proceeds were insufficient to repay the Loan and subject to cl 1.3. Clause 1.2 provided that Perpetual must apply the Payment towards the outstanding Loan balance. 6. Clause 1.3 provided that Edwin Davey would only be obliged to make the Payment should the sale of the Flour Mill Property settle and, at settlement, Perpetual receive no more than $7 million. 7. Pursuant to cl 2.1, Edwin Davey was required to provide Perpetual with an unconditional bank guarantee issued by an Australian bank for $500,000 as security for the Payment obligation. 8. Clause 4.2 provided that the Payment Deed conferred rights only on Perpetual and Edwin Davey; and not on any other person. 9. On 17 September 2012, Edwin Davey procured related companies to provide guarantees totalling $500,000 in favour of Perpetual: PSA Star Investments Pty Ltd (as trustee for PSA Star Investments Unit Trust) procured St George Bank Ltd to provide a guarantee in the sum of $87,834; and Prisand Pty Ltd and Mullumbay Pty Ltd (those entities apparently operating as a partnership) together procured St George Bank Ltd to provide a guarantee in the sum of $412,166. 10. I interpose to note that, while the bank guarantees provided to Perpetual pursuant to the Payment Deed were provided not by it but by entities related to Edwin Davey, Edwin Davey says that it became indebted to Cityview Gardens Pty Ltd (Cityview) (apparently another related company) for the same sum, with that debt recorded in its 30 June 2014 financial statement (i.e., as part of the $8,531,773 debt to Cityview recorded in that statement). Completion of sale – 18 September 2012 1. The Contract completed on 18 September 2012. 2. On completion, the amount of $7,475,681.21 was due on settlement; Sydney Water was paid $24.54; the Council was paid $56,740.08; the Office of State Revenue was paid $335,897.50; the Receivers were paid $406,948.63; Perpetual was paid $6,676,070.46; and Perpetual provided a discharge of the Perpetual Mortgage. 3. Edwin Davey points out (as is arithmetically obvious) that the cheque Perpetual received on settlement (in the sum of $6,676,070.46) was less than the $7 million threshold stipulated in cl 1.3 of the Payment Deed. (Boulos Holdings argues, among other things, that in effect Perpetual did receive the sum of $7 million on settlement in circumstances where a payment of around $400,000 was directed by it to be paid on settlement to the Receivers – see below. Edwin Davey cavils with this contention.) Deferred commencement approval for Edwin Davey DA – October 2012 1. On 25 October 2012, deferred commencement approval was given by the Council for the Edwin Davey DA. The approved development was for a 10 storey mixed use development comprising 136 residential apartments, retail at ground level, three levels of basement car parking for 167 vehicles and 160 bicycles and public domain works. 2. The approval of the Edwin Davey DA dated 25 October 2012 did not contain any condition for a s 94 contribution (Boulos Holdings says this was because $0 was payable) and stated that, before any building work was carried out, a construction certificate had to be obtained. 2012 Deed of Settlement and Release regarding 2012 Proceeding 1. In December 2012, a Deed of Settlement and Release was entered to resolve the 2012 Proceeding and a notice of discontinuance was filed on 21 December 2012, pursuant to which consent orders were made on that date for the discontinuance of the 2012 Proceeding with no order as to costs. Clause 9.5 in the Deed of Settlement and Release dated 18 December 2012 between Roshdi (for himself and as representative of the estate of the late Nabiha), Boulos Holdings, NAB, Perpetual and Edwin Davey, provided: 9.5 Bar to Proceedings This document may be pleaded as a full and complete defence to any proceedings or claims commenced by or on behalf of the parties arising out of the facts, matters and circumstances referred to in this deed. 1. In the course of defending the 2012 Proceeding, Edwin Davey had incurred legal costs of $68,745.70, comprising: $56,745.70 in solicitor's fees to Blackstone Waterhouse; and $12,000 in Senior Counsel's fees. Ceerose paid Edwin Davey's costs of its solicitor and Senior Counsel. Edwin Davey claims the amounts were subsequently accounted for by it through its bookkeeping process. (Those costs are here claimed by Edwin Davey as damages for the alleged unconscionable conduct in relation to the R&N Mortgage.) Reduction in Section 94 Credit 1. As noted above, on 18 December 2012, the Council revised the Section 94 Credit to $661,966.86 (this being the sum now claimed by Boulos Holdings pursuant to special condition 44 of the Contract). Sale of Second Payment Property 1. On 14 May 2013, contracts were exchanged for the sale of the Second Pyrmont Property for $5.625 million. 2. On 25 June 2013, the sale of the Second Pyrmont Property completed, leaving Perpetual with a shortfall of $1,536,630.79. Demand under Payment Deed 1. By letter dated 28 June 2013, Gadens Lawyers (acting on behalf of Perpetual) notified Edwin Davey that Perpetual had received $5,500,000.02 at settlement of the sale of the Second Pyrmont Property, with the balance of Boulos Holdings' debt under the loan being the sum of $1,536,630.79; and Perpetual demanded $500,000 from Edwin Davey under the Payment Deed. 2. Edwin Davey says that, by reason of this, on 25 June 2013, it became liable to pay the sum of $500,000 to Perpetual under the Payment Deed (that being a figure smaller than the $1 million difference between Boulos Holdings' loan balance, capped at $6,500,000, and the proceeds received from the sale of the Second Pyrmont Property, being $5,500,000.02) because Perpetual had failed to receive more than $7 million from the sale of the Flour Mill Property and had failed to receive sufficient funds from the sale of the Second Pyrmont Property to discharge Boulos Holdings' loan. 3. On 10 July 2013, Perpetual redeemed the $500,000 guarantees provided pursuant to the Payment Deed. (Edwin Davey says that afterwards the bank guarantees were converted into loans to Edwin Davey.) Construction Certificate issued August 2013 1. On 2 August 2013, the deferred condition of the consent to the Edwin Davey DA was satisfied. A construction certificate was first issued on 7 August 2013. Assignment Deed – 5 May 2014 1. By an Assignment Deed dated 5 May 2014, entered into between Perpetual, as assignor, and Benjamin and Brendon, as assignees (the Deed of Assignment), Perpetual assigned to Benjamin and Brendon "any and all rights" it had as the former mortgagee of the Flour Mill Property pursuant to the Perpetual Mortgage including any right to make a demand on Edwin Davey (and otherwise to recover from Edwin Davey) all contributions referred to in special condition 44 of the Contract (see cl 1.1). 2. The recitals to the Deed of Assignment record, inter alia, the provision of the $13.2 million loan by Perpetual to Boulos Holdings and that that facility was guaranteed by Brendon and Benjamin (Recitals A-C); the entry into the Contract and the fact that "Perpetual did not consent to the Sale Contract" (Recitals D-E); and that: on 22 June 2012, NAB appointed receivers and managers to Boulos Holdings, being Gregory Winfield Hall and Ian Robert England of PwC (Recital G); on 18 September 2012, the Contract completed, with $6,676,070.46 received by Perpetual from the sale proceeds (Recital H); on 14 January 2013, Perpetual appointed agents to sell the Second Pyrmont Property (Recital I); on 26 March 2013, Perpetual obtained judgment against Brendon and Benjamin in this Court in the sum of $6,887,593.71 (Recital K); in April and May 2013, Perpetual served bankruptcy notices on Brendon and Benjamin (Recitals L and M); and, on 19 August 2013, Perpetual served a creditors petition against Brendon and Benjamin, claiming the outstanding sum of $887,593.71 (Recital O). 3. Edwin Davey points out that the sum referred to in Recital O reflected the reduced balance of the Boulos Holdings' loan (which Brendon and Benjamin had guaranteed) after the sale of the Flour Mill Property, the Second Pyrmont Property and the receipt of $500,000 from Edwin Davey under the Payment Deed. 4. Recital Q recorded that, on 31 March 2014, Brendon and Benjamin and Perpetual entered into an agreement to resolve the debt owed to Perpetual. Pursuant to that agreement, on 14 April 2014, Brendon and Benjamin made the "First Payment" to Perpetual. 5. Clause 1 of the Deed of Assignment provided: 1.1 Perpetual refers to special condition 44 of the Sale Contract and hereby assigns to Benjamin Boulos and Brendon Boulos any and all rights it has as the former mortgagee of the Flour Mill Property pursuant to the Flour Mill Mortgage including the right to make demand on Edwin Davey (and otherwise recover from Edwin Davey) all contributions referred to in special condition 44 of the Sale Contract (Recovery Action) 1.2 For the avoidance of doubt, Benjamin Boulos and Brendon Boulos acknowledge that: (a) Perpetual is under no obligation to provide to Benjamin Boulos and / or Brendon Boulos or any party on their behalf with any assistance in relation to the Recovery Action; (b) they have not relied on any representation by Perpetual as to whether or not any other party may claim an entitlement to any proceeds from the Recovery Action; and (c) Perpetual makes no representation in terms of the nature of the rights it has to the Recovery Action as the former mortgagee of the Flour Mill Property and whether these rights, if any, are capable of assignment. 1. Clause 2.1 of the Deed of Assignment provided for Brendon and Benjamin to pay $50,000 to Perpetual by way of bank cheque on or before 30 June 2014 (referred to as the "Second Payment"). If the Second Payment was not made timeously, Brendon and Benjamin were obliged to file debtor's petitions by 7 July 2014 (cl 2.1). Upon payment of the sum of $50,000, Perpetual released Brendon and Benjamin from, inter alia, all claims relating to the loan facility and the guarantees thereunder (cl 4). 2. In the Deed of Assignment, Benjamin and Brendon acknowledged that: Perpetual was under no obligation to provide to Benjamin or Brendon or any party on their behalf any assistance in relation to the recovery of contributions under special condition 44 of the Contract (cl 1.2(a)); they had not relied on any representation by Perpetual as to whether or not any other party may claim an entitlement to any proceeds of the claim under special condition 44 of the Contract (cl 1.2(b)); and Perpetual made no representation as to the nature of the rights it had to contributions referred to in special condition 44 of the Contract as the former mortgagee of the Flour Mill Property and whether these rights, if any, are capable of assignment (cl 1.2(c)). 3. The Deed of Assignment also contained mutual releases (see cll 3 and 4). Commencement of 2016 Proceeding by Benjamin and Brendon 1. On 20 January 2016, Benjamin and Brendon commenced proceedings (the 2016 Proceeding) in this Court against Edwin Davey. 2. In their amended statement of claim filed on 1 August 2016, Benjamin and Brendon claimed the amount of $941,837.71 from Edwin Davey. They sought by way of relief, inter alia, a declaration that Perpetual had assigned to them the right to make demand and recover from Edwin Davey the moneys payable pursuant to special condition 44 of the Contract. Relevantly, Benjamin and Brendon pleaded: the Perpetual Mortgage (at [2.2]-[2.3]); the Contract and special condition 44 (at [6]-[8]); and the Deed of Assignment (at [19]). 3. At [19.1] of the amended statement of claim, Benjamin and Brendon alleged that Perpetual was entitled to enforce recovery of Boulos Holdings' rights under s 94 of the EPA Act pursuant to the Perpetual Mortgage. At [20.1]; [26] and [31]-[32]; [35]-[36], Benjamin and Brendon alleged that "as the assignee of the relevant chose in action" they were entitled to recover the s 94 contributions by way of assignment from Perpetual under the Deed of Assignment and subrogation to Perpetual's rights under the Perpetual Mortgage, respectively. 4. In its defence in the 2016 Proceeding filed on 26 September 2016, Edwin Davey pleaded: at [33], that Perpetual had no rights against Edwin Davey in respect of special condition 44 capable of assignment and that Edwin Davey had no liability to Perpetual other than the $500,000 in the Payment Deed; at [34], in answer to [19.1] of the amended statement of claim, that Perpetual had no rights to enforce recovery of Boulos Holdings' rights under s 94 of the EPA Act pursuant to the Perpetual Mortgage at the time of the Deed of Assignment and that any such rights were not capable of being enforced while Boulos Holdings was in external administration; at [44], that Benjamin and Brendon had no standing to enforce any right of Boulos Holdings; and, at [45] and [46], Edwin Davey denied that Benjamin and Brendon were entitled to be subrogated to any rights of Perpetual and asserted that any right of subrogation would be to Perpetual's rights against Boulos Holdings, not Boulos Holdings' rights. 5. On 14 November 2016, Edwin Davey filed a cross-claim in the 2016 Proceeding against each of Boulos Holdings, Brendon and Benjamin (raising issues similar to the cross-claim raised in the present proceeding). On 16 December 2016, Brendon and Benjamin filed a defence to the cross-claim (Boulos Holdings did not). Discontinuance of 2016 Proceeding 1. On 10 November 2017, the solicitor acting for Benjamin and Brendon in the 2016 Proceeding, sent to Edwin Davey's solicitor, by email, an offer to "resolve the litigation" on the basis that the statement of claim and cross-claim were to be dismissed with no order as to costs. On the same day, that offer was accepted by Edwin Davey via its solicitor at the time (Mr Cameron). Subsequent to this, a dispute arose as to whether the solicitor acting for Benjamin and Brendon had the authority to make the above offer. 2. On 16 April 2018, the 2016 Proceeding came before Fagan J on a notice of motion by Edwin Davey for a declaration that the proceeding, as between it and Benjamin and Brendon, had been settled by the exchange of correspondence on 10 November 2017, such that the claim and cross-claim would be dismissed with no order as to costs and for orders to that effect. Fagan J made such orders by consent, noting that "[i]t is now agreed that the proceedings were settled in accordance with the communications of that date [10 November 2017]". His Honour on that occasion delivered a short ex tempore judgment, including, relevantly, that: Boulos Holdings Pty Limited wishes to file a second cross-claim against Edwin Davey Pty Limited. Boulos Holdings Pty Limited filed a notice of motion on 8 March 2018 seeking leave to file that second cross-claim. … it has been accepted by counsel on both sides of the record that rather than a second cross-claim being filed by Boulos Holdings Pty Limited against Edwin Davey Pty Limited in these proceedings, it would be preferable for a fresh proceeding to be commenced. … Counsel for Boulos Holdings Pty Limited has accepted that leave may be granted to Edwin Davey Pty Limited to discontinue its existing cross-claim and that its notice of motion for leave to seek to issue the second cross-claim may be dismissed upon terms. The terms are, firstly, that Edwin Davey Pty Limited would undertake that if Boulos Holdings Pty Limited commences a fresh proceeding in which it pleads the causes of action which appear in the draft of its second cross-claim, then Edwin Davey Pty Limited will not contend that the causes of action alleged by Boulos Holdings Pty Limited arose at any date earlier than 23 July 2012. That is, it is to be accepted by Edwin Davey Pty Limited that time for the commencement of this fresh claim by Boulos Holdings Pty Limited on the causes of action in the draft second cross-claim (which has been placed before the Court on the hearing of these notices of motion) will not expire until 23 July 2018. Secondly, it is a term of Boulos Holding Pty Limited acquiescing in the dismissal of its notice of motion that if it should commence a fresh proceeding pleading the causes of action set out in the draft of the second cross-claim, Edwin Davey Pty Limited will not contend that there is any estoppel or impediment against Boulos Holdings Pty Limited advancing those causes of action upon the principles stated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45. Mr Macauley, who appears for Edwin Davey Pty Limited, has accepted these terms and on behalf of his client has given undertakings to Boulos Holdings Pty Limited to the effect that the running of the limitation period will be as I have referred to and that no point with respect to Port of Melbourne Authority v Anshun Pty Ltd will be taken. 1. Boulos Holdings' draft second cross-claim, referred to by Fagan J in the judgment extracted above, was in substantially similar terms to the cause of action pleaded in the present proceeding. Presumably, the undertaking given at the time (that no point would be taken with respect to Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 (Anshun)) is the explanation for there being no complaint by Edwin Davey in the present proceeding as to abuse of process nor any invocation of the principles of Anshun estoppel even though Edwin Davey is here faced again with effectively the same claim as that which was sought to be brought against it in the 2016 Proceeding in relation to the Section 94 Credit (albeit by a different plaintiff). Rather, what Edwin Davey argues is that the consent judgment gives rise to an estoppel per rem judicatam (see its submissions at [60]). Commencement of present proceeding on 20 July 2018 1. The present proceeding was commenced on 20 July 2018 by statement of claim (at which stage Boulos Holdings was still in receivership). On 27 April 2020, the last of the Receivers appointed to Boulos Holdings retired. 2. An amended statement of cross-claim was filed on 2 November 2020 and, as adverted to above, a further amended defence was filed during the course of the hearing. Evidence 1. Relevantly, in the present proceeding, Boulos Holdings relies upon: affidavits sworn by Benjamin on 10 September 2019 and 3 March 2020; an affidavit sworn by Mike on sworn 4 March 2020; and an affidavit sworn by an expert valuer, Mr Brett Davis, on 27 July 2020 (who was not ultimately required for cross-examination). Edwin Davey relies upon: affidavits sworn by Edward, on 30 October 2019 and 31 July 2020; and an affidavit sworn by Mr Cameron on 23 July 2020. 2. In submissions filed after judgment was reserved, Boulos Holdings tendered: a copy of the General Security Deed (General Security Deed) between Boulos Holdings and NAB executed by Boulos Holdings (see Ex E); a PPSR (Personal Property Securities Register) Registration search for the General Security Deed as of 4 May 2014 (see Ex F); and Annexure A to the Deed of Assignment being the Agreement Letter dated 31 March 2014 (see Ex G). There was no objection to the tender of those documents and I will treat the hearing as having been reopened for that purpose and the documents admitted as part of the Court Book tender. 3. Boulos Holdings also issued a subpoena to its former receivers, returnable on 9 December 2020, for any notice of disposal from Perpetual under s 130 of the PPSA between 1 January and 30 June 2014. By letter dated 8 December 2020 from PwC to the Registrar of this Court, PwC stated that it had not identified any documents that responded to the subpoena (see Ex D). The only objection to the tender of the subpoena to PwC and its response was as to relevance. Pleaded claims Boulos Holdings' claim 1. As adverted to above, by its statement of claim filed on 20 July 2018, Boulos Holdings seeks judgment for the amount payable under special condition 44 of the Contract calculated at $661,966.86 (this is referred to as the Section 94 Credit) or, alternatively, damages for the failure of Edwin Davey to pay the amount claimed to be owing under special condition 44 of the Contract. (As noted above, Boulos Holdings did not press the further claim contained in its pleadings for the affordable housing credit of $226,828.30 under special condition 44.) 2. The Section 94 Credit is the amount of the credit said to have been given to Edwin Davey by the Council towards its contribution under s 94 of the EPA Act in respect of the Edwin Davey DA. 3. Edwin Davey, by its amended defence filed 25 February 2019 (defence), pleaded that Boulos Holdings was under the control of receivers and managers (which it then was) and that it brought the proceeding without their consent and that the proceeding should be dismissed ([1]) (the latter contention not here being pressed); did not admit that the Section 94 Credit of $661,966.86 was payable under special condition 44 of the Contract ([8]); relied on the claims in its cross-claim by way of equitable set-off and pursuant to s 21 of the Civil Procedure Act 2005 (NSW) [15]); and said that Perpetual had assigned all its rights under special condition 44 of the Contract to Benjamin and Brendon by way of the Deed of Assignment and that Boulos Holdings' causes of action are barred by judgment estoppel because claims by Benjamin and Brendon in the 2016 Proceeding were dismissed by consent on 18 April 2018 ([16]). 4. Pausing here, the pleading by Edwin Davey that Perpetual had assigned all its rights under special condition 44 to Benjamin and Brendon is, on its face, inconsistent with the verified pleading in its defence to the 2016 Proceeding that Perpetual had no rights against Edwin Davey in respect of special condition 44 that were capable of assignment (see above) but no issue was taken as to this when the matter was before me and nothing here turns on this. 5. Paragraphs 16(a)-(ac) of the further amended defence filed during the course of the hearing, now also plead that: 16(a) By way of deed dated 5 May 2014 (the Deed), Perpetual Nominees Limited (Perpetual) seized as mortgagee of, and assigned, and disposed of, to Brendon Boulos and Benjamin Boulos all rights in relation to special condition 44 of the sale of land contract between the plaintiff and the defendant, including the right to make demand on the defendant (and otherwise recover from the defendant) all monies payable by the defendant under special condition 44 of the Contract. (b) The effect of the Deed was to vest in Brendon Boulos and Benjamin Boulos, to the exclusion of the plaintiff, the right to make demand on the defendant (and otherwise recover from the defendant) all monies payable by the defendant under special condition 44 of the Contract. Particulars Sections 128, 133 and 141 of the Personal Property Securities Act 2009 (Cth) (ac) By reason thereof, the plaintiff is no longer the holder of, or able to enforce, any right to recover monies from the defendant pursuant to special condition 44 of the Contract. Edwin Davey's cross-claim 1. By its amended cross-claim filed 2 November 2020, Edwin Davey claims: damages for breach of the Contract in the amount of $500,000 (the amount paid to Perpetual pursuant to the Payment Deed plus associated fees and expenses) ([17](a)); an indemnity on the basis that it entered into the Payment Deed and provided the bank guarantees at the request of and with the knowledge, consent and acquiescence of Boulos Holdings ([17](a)); restitution in the amount of $500,000 ([17](b)) on the basis that Boulos Holdings received a benefit from the $500,000 payment at Edwin Davey's expense because the payment by Edwin Davey reduced Boulos Holdings' debt to Perpetual; damages for misleading or deceptive conduct for $500,000 plus associated expenses of $47,629 arising from its release of $3.8 million of the purchase price between 22 November 2010 and 7 January 2011 ([24]); and damages for unconscionable conduct in the amount $68,745.70, being legal expenses it incurred in the 2012 Proceeding commenced by Roshdi and Nabiha ([33]). 2. By its defence to amended cross-claim, Boulos Holdings: denies that Edwin Davey's alleged damage was caused by its breach of the Contract and says it is too remote ([17](aa)); says there is no cause of action pleaded for an indemnity ([17](a)); denies that Edwin Davey is entitled to restitution ([17](b)); denies causation and loss on the misleading or deceptive conduct claim and raises defences of contributory negligence and proportionate liability ([21]-[25B]); and denies engaging in unconscionable conduct in respect of the 2012 Proceedings and denies that Edwin Davey suffered loss by such conduct ([33]-[35]). 3. As to the misleading or deceptive conduct claim, in [18] of its amended cross-claim, Edwin Davey alleges that, on 22 November 2010 and 25 November 2010, Boulos Holdings made representations to the effect that the loan secured by the Perpetual Mortgage over the Flour Mill Property was approximately $5.8 million (the Representation). In [18] of its defence to the amended cross-claim, Boulos Holdings pleads that there was a conversation concerning the amount of the mortgage after exchange of the Contract. 4. In [21] of the amended cross-claim, Edwin Davey pleads that it relied on the Representation when it paid to Boulos Holdings "no less than $3,800,000, being money paid towards the deposit and purchase price under the Contract". The particulars assert that the $3.8 million was paid in instalments of $1.3 million on 22 November 2010, $1.5 million on 23 December 2010 and $1 million on 7 January 2011. (The claim in respect of the $1 million released in January 2011 is no longer pressed – see T 155.21.) 5. In [21] of the defence to amended cross-claim, Boulos Holdings, inter alia, pleads in [21](c) that Edwin Davey agreed and represented in special condition 33 of the Contract that it did not rely on any representation by or agreement with Boulos Holdings and otherwise denies the allegations in [21] of the amended cross-claim. 6. In [22]-[24] of the amended cross-claim, Edwin Davey pleads that, if it had known the true state of affairs, being that the balance of the loan facility was in excess of $11 million (at [19](b)): it would not have released the amounts of $1.3 million, $1.5 million and $1 million; at completion of the Contract, there would have been sufficient funds to discharge, or reduce sufficiently, the loan facility (being a loan from Perpetual) to Boulos Holdings secured by the Perpetual Mortgage and a mortgage over the Second Pyrmont Property (see [6]-[7]); it would not have needed or been required to enter into the Payment Deed in order to procure and facilitate completion of the Contract; and it would not have become liable under the Payment Deed for $500,000 and the bank guarantee would not have been called upon by Perpetual. 7. In [25A] of its defence to amended cross-claim, Boulos Holdings pleads contributory negligence and in [25B] it pleads that Perpetual and Blackstone Waterhouse (Edwin Davey's solicitors on the conveyance) are concurrent wrongdoers. 8. The unconscionable conduct claim is based on what is said to be the unconscionable conduct of Boulos Holdings entering into the equitable mortgage and falsely representing it was entered into on 25 July 2010. The alleged damage is Edwin Davey's costs in the 2012 Proceeding. Credibility of witnesses 1. Before turning to the respective parties' submissions, it is relevant to consider the credibility of the witnesses – since reliance is placed on this by Edwin Davey in relation to the assessment of the claims of misleading or deceptive conduct and unconscionability. Benjamin 1. In relation to Benjamin, Edwin Davey submits that Benjamin's evidence would not be accepted unless against his own interests or corroborated by objective or independently reliable evidence or witnesses. It makes that submission by reference to the following matters. 2. First, it says that the statement contained in the 25 November 2010 letter (that "[w]e note that Perpetual Nominees Limited has provided financial accommodation to Boulos Holdings Pty Ltd ("the Facility") in the amount of approximately $5.8 million (the "Facility Amount")") was false. It is said that it was also knowingly false in circumstances where Benjamin knew that Perpetual had advanced $13.2 million to Boulos Holdings (indeed, he had signed the loan offer for that amount only on 1 March 2010). Nor, it is said, was it correct to imply that only $5.8 million of debt was secured over the Flour Mill Property. The whole $13.2 million amount was secured over the Flour Mill Property (something of which Edwin Davey says Benjamin was aware). Edwin Davey says the statements to the contrary were a deliberate falsehood. 3. As to this, I accept that the statement in the 25 November 2010 letter was incorrect. I do not accept that it was knowingly false. I considered Benjamin's explanation in the witness box as to his understanding of the position to be plausible (though clearly wrong). Benjamin is not a lawyer and I accept that he could mistakenly have held the views that were expressed in the letter. It is also relevant to note that in circumstances where the request for the letter was made in seemingly general terms (and was not elevated to the importance of a requirement that it be provided before exchange of the contracts), it is not implausible that he understood the query only to be as to the amount of the loan that had been made in relation to the Flour Mill Property. A finding of deliberate dishonesty is a serious one to make (and not necessary for the purposes of the misleading or deceptive conduct claim – since the incorrectness of the letter suffices for that purpose). 4. Second, it is said that Benjamin was clearly mistaken in his recollection that it was only after the execution and exchange of the Contract that Edward enquired about how much money was owed to Perpetual under its mortgage over the Flour Mill Property. In that regard, Edwin Davey argues that, having initially sought and not been granted a 21 or 14-day period for due diligence, it defies rational belief that Edwin Davey would not have enquired, until after agreeing to release a $2.8 million deposit (being 25.9% of the purchase price of $10.8 million), as to the quantum of debt secured in favour of Perpetual over the Flour Mill Property. Further, it is noted that Benjamin's evidence is contrary to that of Mr Cameron, who it is said (and I accept) gave cogent evidence as to the circumstances in which he and Edward enquired, prior to the exchange of the Contract, as to the debt owed to Perpetual and secured over the Flour Mill Property. 5. I accept that Benjamin may have been mistaken as to the timing of the conversation (and, as I make clear in due course, I would accept Mr Cameron's evidence as being the most reliable on this issue – he being the most independent of the witnesses to the conversation and he being there in his capacity as in-house solicitor, from which I would assume that he would be careful to ensure that such an enquiry was made). However, again, that does not bespeak dishonesty on Benjamin's part. 6. Third, it is said that Benjamin's acquiescence to the Flour Mill Property being sold without Perpetual's consent, or approval to the release of the deposit, impairs his credibility. It is said that this is particularly so in circumstances where Benjamin was experienced in property development and sales, and that this was reinforced by Benjamin's initial evidence in cross-examination to the effect that he was aware that the standard terms of a mortgage forbade the sale of the mortgaged property absent the consent of the mortgagee. (The same is noted about Mike.) 7. As to this, I do not accept that it follows, from the fact that Benjamin acquiesced in the sale without Perpetual's prior written consent (even accepting that he understood as a general matter that such consent was, as a standard term, ordinarily required) affects his credibility on other matters. It is conceivable that there was simply no attention paid to this issue – or that Benjamin or others at Boulos Holdings anticipated that such consent would readily be granted. The fact that there was a breach of the Perpetual Mortgage in this regard does not make Benjamin a not credible witness in general. 8. Further, it is said that Benjamin was mistaken in asserting that the amendment to the completion date arose because Edwin Davey asked for it at the first instance. It is said that the contemporaneous emails from Mike indicate that it was Mike who approached Edward seeking the release of further money, with Edward stating that he would only be prepared to do so if the completion date was extended. It is noted that Benjamin refused to concede this, notwithstanding this evidence. 9. As to this, I accept that the contemporaneous evidence should be preferred but I do not accept that the mistake (or refusal to concede this) speaks against his credibility in general. 10. Finally, it is said that Benjamin backdated the R&N Mortgage and associated loan documents. As to this final issue, I note that, for Boulos Holdings, the argument is that the loan transaction occurred in July 2010 and that the R&N Mortgage (if retrospectively dated) was nevertheless simply recording the earlier transaction. I consider that there is force to the submission that in those circumstances, the "backdating" of the mortgage document would not necessarily bear a sinister connotation. In any event, I consider the issues in relation to the mortgage in the context of the unconscionable conduct claim in due course. 11. My impression of Benjamin in the witness box was that he was endeavouring to answer questions truthfully and to the best of his recollection; that he was not focussed on the details of the transaction and that it is most likely that he deferred to his father, Mike, in relation to business matters. That said, as with all witnesses who have an interest in the outcome of the proceeding, as always, I place more weight on objective contemporaneous evidence than what may be self-serving (unconscious or not) recollections of oral conversations and events. Mike 1. In relation to Mike, Edwin Davey makes similar credit submissions (although I do not understand there to be an accusation of deliberate falsehood). 2. It is said, first, that Mike was (as was Benjamin) incorrect in recalling that it was not until after the execution and exchange of the Contract that there was any enquiry by Edward as to the quantum of Perpetual's debt secured over the Flour Mill Property. As with Benjamin, that goes to the reliability of his memory of events many years ago – and the fallibility of human memory is well known (see Watson v Foxman (1995) 49 NSWLR 315 at 319 per McLelland CJ in Eq). 3. Second, it is said that Mike had no proper or rational basis to state that the debt to Perpetual secured over the Flour Mill Property was only $5.8 million; nor any basis to state that Perpetual would, as of November 2010, accept the sum of $5.8 million in discharge of its mortgage over the Flour Mill Property. It is said that, as of December 2010, Perpetual was clearly still unaware of the Contract or the release of the deposit; and had not agreed to accept anything but the full proceeds of sale less usual selling costs, GST and the like. I agree that the understanding Mike professed (and his explanation in the witness box) is incorrect. I am unable to conclude that this was not his genuine belief or understanding at the time. 4. Third, it is said that Mike's evidence that he informed Balmain Commercial about the Contract prior to its entry and the release of the deposit was clearly incorrect. That may or may not be the case. I cannot make a finding on this in the absence of evidence from others who were involved in the transaction. Some significance might attach to the absence of complaint by Perpetual as to this issue – but in the absence of all the communications in that regard I cannot make a confident finding one way or the other. 5. Mike struck me in the witness box as an astute businessman, experienced in negotiation with others. He was not drawn into confrontation with the cross-examiner and he gave his evidence in a matter of fact way without embellishment. While his memory may well have been unreliable on certain matters (and I would place weight, as noted, on the contemporaneous documents where they exist), I considered him on the whole to be a credible witness. Certain of his responses certainly rang true – such as the disavowal of any support for the payment of a sum of $500,000 to Perpetual. I considered Mike to be genuine in his view that this was wasting Edwin Davey's money. Edward Doueihi 1. In relation to Edward, Edwin Davey submits that he was an honest and reliable witness who attempted to assist the Court to understand the circumstances existing at the relevant time. It is said that Edward gave candid responses to questions concerning his thinking at the time he entered into the Contract and why he did certain things (such as that he did not wait to receive written confirmation of the debt owed to Perpetual before executing the Contract and paying the first portion of the deposit under the Contract). It is said that his evidence has not been shown to be either false or reconstructed, nor that he acted dishonestly at the time. No submissions adverse to his credit as a witness were made by Boulos Holdings. 2. Edward was a loquacious witness, who gave frank responses (in colloquial and sometimes colourful language) to the questions put to him and who was willing to accept that he had taken certain matters on faith and that in hindsight he perhaps should not have been so trusting. I considered him to be genuine (indeed heartfelt) in his evidence that this would be the last time that he would agree to release a deposit ("I will never release ever again in my life" (T 167.39)) and in his statement that the appointment of the Receivers was his "biggest nightmare" (T 180.24). 3. Edward struck me as an experienced and confident property developer (for whom he made very clear that time is money), with a keen eye on opportunity costs and losses, whose main focus was on getting the deal done (and then leaving it to others, such as Mr Cameron, to focus on the details of the transaction). I accept that his interest in the Flour Mill Property was genuine and that he was keen to do the deal – his frustration as to the Receivers was apparent (as was his disparagement of their conduct); and it was abundantly clear that he was concerned at the time the Receivers were appointed that he might be deprived of what he considered to be a profitable opportunity to develop the Flour Mill Property. I have little doubt that, at the time of the Contract, Edward adopted a pragmatic approach to getting the deal done (and left it to later to worry about the consequences of that). His evidence as to matters such as negotiation for completion times and due diligence periods (such as his evidence that he would always buy time to save on interest – in effect, having an eye to his holding costs – see for example T 162.5-T 163.15; T 167) and the evidence that he would always seek to reduce the amount of Council contributions (T 186.44-5; T 215.20-2), rang true. 4. I exercise due caution in relation to Edward's recollection of conversations and events because my impression (not least from the manner in which he answered volubly in the witness box) is that he is not someone focussed on details of that kind (as opposed to details as to development ratios or drainage diagrams and the like – see his evidence at T 169-T 171) and that it is unlikely that he listens carefully to what is said in the context of negotiations in general (other than as to the matters that are within his area of interest). 5. In summary, I considered Edward to be a candid and genuine witness, albeit one whose recollection of conversations and the like is unlikely to be wholly accurate; and a person who is willing to take risks on property deals. However, I accept that his evidence as to the need to know how much was secured on the Flour Mill Property rang true and is inherently plausible. See for example the following exchanges (T 169.21-4; T 174.18-T 175.23): Q. Is it correct to say that when the 2.8 - when he came up with the 2.8 million figure that's when you started asking for more time, is that right? A. No. When I started talking about releases I needed to know how much money was debt on that property. That was my major concern. … Q. You made your own assessment, did you, of what you thought the loan amount would be? A. No, I didn't say that. Mike said to us he had 5.8 on the property, and that's all the money that was on that property, yeah, and, and Jason asked him clearly "Is this crossed with anything else?" And he said "No." Q. I suggest to you that you could have refused to sign the contract until you got the letter setting out the position in relation to the loans secured by the property, is that true? A. Whatever happened, I signed a contract, released the deposit, and whatever's in the contract is what I did. When that-- Q. But is that right, or not? A. --when - whenever that letter came through, exact dates, I can't tell you exactly. Q. Is that right or not, you could've refused to sign the contract until you got the letter? A. Of course I could. Q. You didn't refuse to sign the contract before you got the letter, did you? A. I can't - I can't remember when we got the letter. I think it was like a week later we got the letter, you mean. Q. You got the letter after-- A. So, I, I was made-- Q. --the contract? A. --sure, yeah but you get a letter and you think that some people, you know, when they speak to you some honesty comes out of there too, you know what I mean? So, I'm a relationship guy I, I, I trust people, yep. Sometimes it might get me in trouble, but the end of the day I wanted this deal and I had to do what I had to do to secure it, because I was desperate for this deal. Q. You wanted the letter because you didn't want to trust what people said, you wanted something in writing, that's right isn't it? A. I know Jason was demanding it, and I probably overruled Jason on it, so yeah. Q. You didn't insist on the letter I suggest to you before the contract was signed, because you actually asked for it after the contract was signed? A. Well as you said, it's in my affidavit, exactly what Mike said. Yes, I arranged that, you know what I mean? Q. I'm suggesting to you that's wrong what's said in your affidavit, and in fact you asked for it afterwards? A. Probably did. Q. The reason why you asked for it afterwards was because you didn't want to rock the boat, you wanted to get the deal done, is that right? A. Correct. Mike's pretty firm, he wanted it done, and when I first did the deal I thought I lost it, so I thought I lost the property and - but it, it, it was a good asset at the time. Mike had a lot of good assets in Pyrmont. I had my eye on this property I'd - like I said. I wanted to do something unique there, which we have, and we've delivered. And sometimes it's a commercial decision. Is it smart? Probably not. 1. I accept that insofar as the timing of the conversation was put by reference to discussion about the release of the deposit (which logically would surely have happened before the contract clauses were put into the document) but it seems that the meeting on that day took some time (and in the vendor's offices, no doubt with the facility to amend the documents in the course of the negotiation if necessary). I understood the thrust of Edward's evidence in this respect to be that: he had asked at the time the Contract was entered into how much was secured on the Flour Mill Property (and it is significant that, in lay language, he said that Mr Cameron had asked if it was "crossed" – i.e., cross-collateralised – with anything else); that he was prepared to rely on Mike's answer as to the $5.85 million being the amount secured on the property because it was consistent with the amount that he thought lenders would be prepared to lend on the value of the property; and that he probably asked for a letter confirming this after the Contract was signed. Mike accepted that he could have insisted on a letter confirming this at the time before he entered into the Contract and that he did not want to "rock the boat" – being "desperate" to secure the deal. In other words, I consider his evidence to be to the effect that he was relying on (in the sense of placing trust in) Mike's oral response to the question as to the amount secured on the property. Jason Cameron 1. Mr Cameron's recollection of events was in some respects inaccurate (insofar as he had thought a letter had been received from the bank confirming the amount secured over the Flour Mill Property rather than from Boulos Holdings) but he was clear in his recollection that Mike had been asked at the time the Contract was entered into how much was secured over the Flour Mill Property and as to Mike's response to that question. I considered his evidence to be genuine in this regard and that it is likely that he did indeed seek confirmation as to the security over the property prior to entry into the Contract (albeit that he accepted that he probably did not ask for a letter confirming this until after the Contract was entered into). I accept his evidence in this regard. The respective claims 1. With the above comments, I turn to consider the respective claims. I will deal first with the respective submissions and findings in relation to Boulos Holdings' claim and then with the cross-claims. At the outset, I note that Boulos Holdings' position was that there does not need to be a determination as to whether there is an equitable set-off or a set-off under s 21 of the Civil Procedure Act because judgment may be given for the balance of the sums of money awarded (if any) on the claim and the cross-claim under s 90(2)(a) of the Civil Procedure Act. Boulos Holdings' claim under special condition 44 of the Contract 1. As to its claim for the Section 94 Credit, Boulos Holdings claims the sum of $661,966.86 plus interest under s 100 of the Civil Procedure Act; and makes the following submissions. 2. First, it says that the amount of $661,966.86 became payable (under special condition 44 of the Contract) on 6 August 2013, that being the date before the date of issue of the construction certificate. It is noted that special condition 44 provides that "if no section 94 contribution is required by reason of the allowance or credit" then the Section 94 Credit is payable "at the time a section 94 contribution would otherwise have become payable". 3. Boulos Holdings points to cl 16 of the Ultimo Pyrmont Section 94 Contribution Plan, which makes provision as to when s 94 contributions are payable; and refers to cl 26(f) of the Environmental Planning and Assessment Regulation 1994, which provided that a contributions plan must include particulars of the Council's policy concerning the timing of the payment of monetary s 94 contributions. It is noted that cl 27(1)(g) of the Environmental Planning and Assessment Regulation 2000 (as in force at 25 October 2012) was in the same terms. 4. Boulos Holdings says that cl 16(a) of the Ultimo Section 94 Contribution Plan did not apply (because the Edwin Davey DA did not involve a subdivision) but that either cll 16(b) or 16(c) did apply. 5. It is not necessary here to go into the detail of these regulations or the content of the Contribution Plan provisions, since Edwin Davey accepts that the relevant date as to when any sum became payable under special condition 44 of the Contract is 6 August 2013. Indeed, Edwin Davey does not deny that a credit was allowed for the claimed amount. Rather, it denies that it has any obligation to pay to Boulos Holdings the sum of $661,966.86 (for the reasons that I explore below). Edwin Davey's submissions 1. Edwin Davey says that the right to recover moneys pursuant to special condition 44 of the Contract constituted property the subject of the Perpetual Mortgage (falling within the definition of "Secured Assets") and that, by registration of the transfer on 1 July 2010 of the Flour Mill Property from Microage to Boulos Holdings subject to the Perpetual Mortgage, Boulos Holdings became bound to the terms of the Perpetual Mortgage (which security extended to the Contract for the sale of the Flour Mill Property). Accordingly, it says that the Contract (and the right to receive any payment under special condition 44 of the Contract) fell within the term "Secured Assets" because the consideration payable by Edwin Davey for the conveyance of the Flour Mill Property included not only the promise to pay the purchase price but also the promise to pay any moneys arising by reason of the operation of special condition 44 of the Contract. 2. As such, it is submitted that, upon an event of default occurring (which had happened by 13 August 2012 at the latest – being the repayment date of Boulos Holdings' loan facility with Perpetual, which it failed to repay), Perpetual's powers as mortgagee were enlivened and it was empowered, inter alia, to seize, sell, assign or otherwise deal with any part of the "Secured Assets", including the right to receive any money under special condition 44 of the Contract; or alternatively, to enforce any right of Boulos Holdings in respect of the "Secured Assets" (which included enforcing any right under the Contract). Edwin Davey says that, pursuant to cl 13.8 of the registered Memorandum of mortgage, Perpetual could equally assign that right to another party. 3. Edwin Davey maintains that by the Deed of Assignment dated 5 May 2014, Perpetual, as mortgagee, assigned and sold the right to recover any moneys under special condition 44 of the Contract to Benjamin and Brendon under the Deed of Assignment; and that any right to recover the said sum was therefore not one held, or enforceable, by Boulos Holdings. 4. Insofar as Boulos Holdings says that, by reason of the discharge of mortgage executed on 18 September 2012 by Perpetual (at the time of completion of the sale) (Discharge of Mortgage), any rights of security arising under the Perpetual Mortgage ceased to exist, Edwin Davey points to the terms of the Discharge of Mortgage, namely: The mortgagee discharges the above mortgage so far as it affects the land/dealing specified above [i.e. Torrens Title 1/848441 and 2/848441]. This discharge does not affect the mortgagee's right under any mortgage or security in respect of any property other than the land above and does not affect the mortgagee's rights to recover any money due from the mortgagor or anyone else. 1. Edwin Davey contends that the effect of the discharge was to release the Flour Mill Property as security, but nothing else; and that it did not terminate (or prevent from arising) any security interest that Perpetual might otherwise have had over the rights arising under the Contract (and in particular the rights under special condition 44). Edwin Davey says that Perpetual retained all of its other rights arising under its former mortgage over the Flour Mill Property (save that it no longer had recourse to the Flour Mill Property in order to recover the outstanding moneys owed by Boulos Holdings). It is noted that a mortgage can be discharged without affecting, for instance, the personal covenant to repay within the mortgage (reference here being made to Groongal Pastoral Company Ltd (in liq) v Falkiner [1924] HCA 54; (1924) 35 CLR 157 at 164; Provident Capital Ltd v Printy (2008) 13 BPR 25,199; [2008] NSWCA 131 (Provident Capital v Printy) at [27] per Basten JA). 2. Thus, Edwin Davey contends that the security Perpetual held over the right to recover moneys due under special condition 44 subsisted after the Discharge of Mortgage in September 2012; and Perpetual was therefore able to assign that right to Benjamin and Brendon in 2014 (as, Edwin Davey says, it did by the Deed of Assignment). 3. In addition (see further below), Edwin Davey says that the effect of the consent dismissal of the claims made by Benjamin and Brendon in the 2016 Proceeding (seeking to enforce against Edwin Davey the same right under special condition 44 of the Contract now sought to be enforced by Boulos Holdings in the present proceeding) operated to extinguish any right that had vested in Brendon and Benjamin to recover moneys under special condition 44 of the Contract (that right being extinguished by, and merged with, the agreement to compromise the proceedings and the orders made on 16 April 2018). 4. Going back to the assignment to Benjamin and Brendon, in its written submissions at the hearing, Edwin Davey addressed in some detail the provisions of the PPSA by way of explanation as to how the assignment to Benjamin and Brendon had been effected (which led to debate about the relevance or otherwise of the PPSA to the issues in the proceeding and the ultimate further amendment to the defence – and yet more written submissions). In summary, what Edwin Davey says as to the operation of the PPSA in the context of the present facts is that this explains that the assignment did not take effect by way of Perpetual exercising its right (or any power of attorney) to cause Boulos Holdings to assign its rights under special condition 44 of the Contract to Benjamin and Brendon. 5. Edwin Davey says that Perpetual's mortgage over Boulos Holdings' right to recover moneys under special condition 44 of the Contract (that right being a chose in action falling within the expansive definition of "personal property" within the meaning of that term in s 10 of the PPSA) constituted a "security interest" within the meaning of s 12 of the PPSA (being "an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation"); that that security interest attached to Boulos Holdings' personal property (its chose in action) within the meaning of s 19 of the PPSA and that that chose in action constituted "collateral" under the PPSA (see s 10 and definition of "collateral"); and that that security interest was enforceable by Perpetual by reason of it attaching to the collateral (Edwin Davey citing Dura (Australia) Constructions Pty Ltd (in liq) (recs and mgrs apptd) v Hue Boutique Living Pty Ltd (formerly SC Land Richmond Pty Ltd) [2014] VSCA 326; (2014) 49 VR 86 (Dura (Australia) Constructions v Hue Boutique Living) at [17] per Santamaria JA (Maxwell P and Whelan JA agreeing)). 6. Edwin Davey contends that, by reason of the operation of the provisions of the PPSA, Perpetual effectively assigned to Benjamin and Brendon the right formerly held by Boulos Holdings to recover from (and to make demand against) Edwin Davey for any money payable pursuant to special condition 44 of the Contract (referring to ss 123,133 and 141 of the PPSA). 7. This led to lengthy debate in the respective parties' submissions as to the operation of the PPSA. Ultimately, for the reasons I set out in due course, I have concluded that there was never a valid assignment of Boulos Holdings' contractual chose in action and hence the PPSA issues do not arise. Therefore, I have included a summary of the parties' PPSA submissions in a schedule to these reasons. 8. Edwin Davey further says that not only does Boulos Holdings not possess any right to enforce special condition 44 of the Contract (that right, it says, having been assigned to Benjamin and Brendon), but that the right to recover moneys under that clause in respect of the moneys sued for in these proceedings has been extinguished, that right merging with the consent orders made on 16 April 2018. 9. Reference is made by Edwin Davey to what was said by Vaughan Williams J in In re South American and Mexican Co; Ex parte Bank of England [1895] 1 Ch 37 (South American and Mexican Co) at 45 as to a judgment by consent or by default raising an estoppel "just in the same way as a judgment after the Court has exercised a judicial discretion in the matter" and that if the parties "agree upon a result, or upon a verdict, or upon a judgment, or upon a verdict and judgment, as the case may be, an estoppel is raised as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been fought out to the bitter end". 10. Reference is also made in this regard to Isaacs v Ocean Accident and Guarantee Corporation Ltd (1958) 58 SR (NSW) 69 at 75 per Street CJ and Roper CJ in Eq; Makhoul v Barnes (1995) 60 FCR 572 at 582; Daniel v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 21; (2004) 205 ALR 198 at [18] per Goldberg J; Habib v 2UE Sydney Pty Ltd [2009] NSWCA 231 at [183], [186] per McColl JA (Giles and Campbell JJA agreeing). 11. Edwin Davey accepts that, as noted by the plurality in Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 (Chamberlain) at 508, entry of judgment by consent "may on occasion make it hard to say what was necessarily decided by the judgment, especially where it is the defendant who wishes to bring action at a later date" but noting that in Chamberlain, it was said that the principle of res judicata "holds good in such a case". Edwin Davey says that in the present case the rights that merged with the consent orders were the same rights and claims that Boulos Holdings seeks to vindicate in these proceedings; it says that those rights no longer exist and that an estoppel per rem judicatam has arisen from the consent orders. Response by Boulos Holdings 1. The response by Boulos Holdings to the submissions by Edwin Davey as to the assignment to Benjamin and Brendon of the right under special condition 44 of the Contract is as follows. 2. Boulos Holdings maintains that its right under special condition 44 was not charged to Perpetual under the Perpetual Mortgage (and – see below – it says that, if anything was charged under the Perpetual Mortgage, this occurred on 1 March 2010 before the Contract existed; and it contends that the Perpetual Mortgage does not secure after-acquired property). 3. Boulos Holdings emphasises that, when the Perpetual Mortgage was granted and registered, there was no Contract. It argues that, therefore, the right under special condition 44 of the Contract could not have been charged by cl 2.1 of the Perpetual Mortgage. It is noted that the charging clause uses the term "hereby", which it is said imports the present tense (i.e., it means "now"), and that there is no clause which states that after-acquired property is charged by the mortgage. 4. Accordingly, it is said that the right under special condition 44 was not charged on registration of the Perpetual Mortgage. Furthermore, Boulos Holdings points out that the Mortgagor (Microage) never owned the right under special condition 44 (that right being owned by Boulos Holdings). 5. Boulos Holdings says that the Perpetual Loan Agreement (entered into on 1 March 2010), which was to be secured by the existing Perpetual Mortgage, did not create a charge by Boulos Holdings over its property (and, even if it did, this did not include the right under special condition 44, which had not yet come into existence). 6. As to this, Boulos Holdings notes that there are no express words of charge in the Perpetual Loan Agreement. It accepts that no particular words are required to create a charge; it being sufficient if the court can fairly gather from the instrument an intention by the parties that the property therein referred to would constitute security (Boulos Holdings here citing King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076; (2005) 13 BPR 25,077 (King Investment Solutions v Hussain) at [50] per Campbell J, as his Honour then was). However, it submits that, for the following reasons, no intention to create an equitable charge (and one which extends to property that did not then exist, i.e., the right under special condition 44 of the Contract) should be inferred from the Perpetual Loan Agreement. 7. First, the formal nature of the transaction and the amount of the loan. Boulos Holdings says that those are matters that weigh against such an inference being drawn (it being noted that Perpetual was an institutional lender, who it might be expected would document its intentions clearly in its loan and security documents). 8. Second, the fact that Perpetual already had a registered mortgage over the Flour Mill Property, so the principal asset was still secured. 9. Third, that the agreement that Perpetual could exercise any and all of its powers as mortgagee in the event of default under the Perpetual Mortgage did not expand Perpetual's rights (it being said that it simply referred to the rights Perpetual had – and particularly, to sell the land). 10. Fourth, that in the Perpetual Loan Agreement there was an expectation that the Flour Mill Property and the Perpetual Mortgage would be transferred to Boulos Holdings (see the condition precedent that the security for which it provided, which included the mortgage given by Microage "as transferred to Boulos Holdings", would be provided in form and substance satisfactory to Perpetual) and that it was left open to Perpetual's solicitor to decide whether any other reasonable security was required. 11. Fifth, it is argued that Boulos Holdings' agreement to comply with the terms and conditions of the Perpetual Mortgage more naturally fits with compliance with the various expressly stated obligations in the Perpetual Mortgage (c.f., cl 2.1, which is not a term or condition requiring any compliance by the mortgagor but, rather, an effect of the mortgagor giving the mortgage), and, as noted, that Boulos Holdings was not the mortgagor of the Perpetual Mortgage (rather, that being Microage). It is submitted that the part of the Perpetual Loan Agreement in which Boulos Holdings agreed to comply with the terms and conditions in the mortgage was predicated on Boulos Holdings not being the mortgagor under the mortgage; and it is noted that Boulos Holdings never became the mortgagor under the Perpetual Mortgage because there was no transfer of the Mortgage. 12. Boulos Holdings notes that, by its registration, the Perpetual Mortgage secured debts against the Flour Mill Property (referring to s 41 of the Real Property Act and Provident Capital v Printy at [23]), and that, on registration, the Perpetual Mortgage operated as a deed between Microage and Perpetual, being the parties who signed it (referring to s 36(11) of the Real Property Act) but Boulos Holdings says that the transfer of the land from Microage to Boulos Holdings did not transfer or assign to Boulos Holdings any obligations that Microage owed to Perpetual under the mortgage; and that s 51 of the Real Property Act did not have this effect when the transfer was registered because the second part of s 51 (which refers to requirements and liabilities) applies only to mortgagees, charges and lessees. 13. Boulos Holdings points out that, if the Perpetual Mortgage had been transferred, that would have had the effect of transferring all rights and obligations between Microage and Perpetual to rights and obligations between Boulos Holdings and Perpetual (referring to Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423 at 434); and that this could also have been achieved by the procedure provided for under s 91 of the Conveyancing Act 1919 (NSW) by way of a memorandum indorsed on or annexed to the mortgage and duly signed and witnessed (which it accepts was in contemplation in the loan agreement, but it says that there is no evidence this occurred in the present case). 14. Boulos Holdings accepts that, as the mortgage remained registered on the title after the registration of the transfer from Microage to Boulos Holdings, the land was sold subject to a mortgage (referring to ELG Tyler, PW Young, CE Croft, Fisher and Lightwood's Law of Mortgage (3rd ed, 2014, Lexisnexis Butterworths) at [4.30], [10.8]; King Investment Solutions v Hussain; Sood v Christianos [2008] NSWSC 1018); but it points out that it is possible to have a mortgage without a covenant to pay (citing English, Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 308). 15. It is noted that the effect of a transfer subject to a mortgage is that the mortgagee's rights in respect of personal covenants not running with the land would be reduced to an in personam interest against the mortgagor; and to that extent, the exercise by the mortgagee of its secured rights under the mortgage would be constrained, prevented or impeded (citing Van Der Velde v Ng [2011] FCA 594 at [60] per Greenwood J). 16. Boulos Holdings therefore says that the registration of the transfer from Microage to Boulos Holdings did not make the Perpetual Mortgage a deed between Perpetual and Boulos Holdings under s 36(11) of the Real Property Act (because it was not signed by Boulos Holdings). It maintains that the effect of the Perpetual Loan Agreement was that the debt was secured by the charge created by the Real Property Act against the Flour Mill Property by the Perpetual Mortgage but that no further property was charged. It is said that the Perpetual Loan Agreement imposed personal obligations on Boulos Holdings, with which it was obliged to comply, but that this did not include a charge. 17. Further, it is said that even if the Perpetual Loan Agreement did create a charge over Boulos Holdings' property in favour of Perpetual, this did not include the right under special condition 44 for two reasons: first, because cl (d) of the definition of "Secured Assets" could not apply to special condition 44 (as it was not Microage's right to receive money and it refers specifically to the "Mortgagor"); and, second, because at this stage there was no such right in existence, the charging clause being expressed in the present tense and there being no subsequent agreement by Boulos Holdings to charge property to Perpetual. 18. As to the submissions made by Edwin Davey in relation to the provisions of the PPSA (the subject of Boulos Holdings' later submissions), I have included these in the schedule to these reasons. 19. As to the effect of the discharge of the Perpetual Mortgage on 18 September 2012, Boulos Holdings says that, as a matter of construction (and also referring to Provident Capital v Printy at [27]), the discharge of mortgage operated so as to discharge any charge over the right under special condition 44 that was created by the Perpetual Mortgage. It is said that the terms of the discharge (i.e., that the discharge did not affect Perpetual's "rights under any mortgage or security in respect of any property other than the land above") referred to rights under a mortgage or security other than the Perpetual Mortgage. It is noted that the last part of the discharge preserves Perpetual's "rights to recover any money due from the mortgagor or anyone else". Boulos Holdings again notes that it is not named as the "mortgagor" on the discharge. In any event, it says that this part of the discharge refers to rights to recover money, not securities. 20. As to the allegation by Edwin Davey that Boulos Holdings' right under special condition 44 of the Contract was assigned by Perpetual to Benjamin and Brendon by the Deed of Assignment, Boulos Holdings says that what Perpetual assigned to Benjamin and Brendon (i.e., "any and all rights it has as the former mortgagee of the Flour Mill Property pursuant to the Flour Mill Mortgage including the right to make demand on Edwin Davey (and otherwise recover from Edwin Davey) all contributions referred to in special condition 44 of the Sale Contract") was not a purported assignment of any rights of Boulos Holdings (only of Perpetual's own rights). 21. Boulos Holdings says that the only "right" that is pleaded by Edwin Davey is a right of subrogation (i.e., a right of Perpetual to step into the shoes of Boulos Holdings); and that the right to the payment under special condition 44 of the Contract was one that belonged to Boulos Holdings. 22. It is noted that by cl 1.2(c), Benjamin and Brendon acknowledged that Perpetual made no representation as to the nature of the rights it had to contributions referred to in special condition 44 of the Contract as the former mortgagee of the Flour Mill Property and whether those rights, if any, were capable of assignment. Boulos Holdings says that it should not be assumed that there were any such rights (or that they were assignable). 23. As to the allegation by Edwin Davey that Boulos Holdings' claim under special condition 44 merged in the judgment of the 2016 Proceeding or is barred by res judicata or issue estoppel, Boulos Holdings says that there was no such merger in respect of the claim by Benjamin and Brendon in the 2016 Proceeding because there was no judgment (the claim was simply dismissed by consent); and it is noted that Boulos Holdings was not an unsuccessful plaintiff in the 2016 Proceeding. 24. Insofar as Edwin Davey invokes the principles of res judicata or issue estoppel, Boulos Holdings says that it does not claim "under or through" Benjamin and Brendon in the present proceeding; rather, that it claims pursuant to its own rights under the Contract between it and Edwin Davey. Thus, it is said that there is not the requisite privity of interest (noting that for the purpose of these principles, the notion of privity is limited to legal interests and does not extend to economic or financial interests). 25. Boulos Holdings next says that, as a matter of construction of the Deed of Assignment, Perpetual did not dispose of any property of Boulos Holdings under special condition 44. It is said that the Deed of Assignment is a contract wholly in writing, so the rights and liabilities under its provisions "are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose" (see Mount Bruce Mining v Wright Prospecting (2015) 256 CLR 104; [2015] HCA 37 at [46] per French CJ, Nettle and Gordon JJ). The Agreement Letter dated 31 March 2014 referred to in recital Q is Annexure A to the Assignment Deed (see Ex G). 26. Clause 1.1 is the assignment clause in the Deed of Assignment. Edwin Davey submits that it provides for a sale of Boulos Holdings' property, being a disposal under s 128 of the PPSA. Boulos Holdings submits that it assigns Perpetual's property. 27. Boulos Holdings says that the primary question of construction is whether cl 1.1 (the text of which has been set out earlier) assigns Perpetual's property or Boulos Holdings' property; and that this question is answered by the text, which refers to "any and all rights it has as the former mortgagee", being Perpetual's rights. It is said that as a matter of law, Perpetual's rights did not include Boulos Holdings' property; and that even the PPSA does not convert the property of the grantor into the property of the secured party. 28. Boulos Holdings points to the balance of cl 1.1 in considering whether the clause can be construed as disposing of Boulos Holdings' right to payment under special condition 44 pursuant to s 128 of the PPSA. The subject of the assignment from Perpetual to Benjamin and Brendon is defined as "Recovery Action". It is noted that the word "including" signifies a non-exhaustive definition (see Alamdo Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2004] NSWSC 487 at [36] per Barrett J, as his Honour then was (affirmed on appeal). The word may add to and amplify the natural meaning of the preceding words (see Sherritt Gordon Mines Ltd v Federal Commissioner of Taxation [1977] VR 342 at 353 per McInerney J). Boulos Holdings says that, absent any reference to the PPSA or to "disposal" of "collateral" under s 128, there is no reason for the definition of "Recovery Action" to extend to the right to payment owned by Boulos Holdings under special condition 44 of the Contract. It is said that the absence of such references is significant as the PPSA commenced operation on 30 January 2012 and the Deed of Assignment was prepared by solicitors more than two years later. It is noted that, under the general law, a party cannot assign another's property so, absent some textual or contextual basis, there is no basis to infer that the different result provided for by ss 128 and 133 of the PPSA in that respect occurred. It is said that there is no textual or contextual basis for such an inference. 29. Boulos Holdings says that, although it is not necessary to find that anything at all was assigned by cl 1.1 (because the possibility nothing was assigned is left open by cl 1.2(c)), there are available and preferable constructions of cl 1.1 which do assign Perpetual's rights but do not require the clause to effect a disposal of Boulos Holdings' property under s 128 of the PPSA, one of which being that "Recovery Action" consists of not just Perpetual's right to make demand on, and recover from, Edwin Davey under special condition 44 but also any and all rights of Perpetual as former mortgagee. It is noted that those rights normally consist of the right to claim the shortfall after the sale of the mortgaged land under a personal covenant as well as to enforce any rights over personal property. 30. Boulos Holdings says that the context and surrounding circumstances support this construction. It is noted that the recitals in the Deed of Assignment refer to: the loan to, and registered mortgages given by, Boulos Holdings; the sale of the two security properties; the appointment of receivers to Boulos Holdings; the guarantees given by Benjamin and Brendon for Boulos Holdings' obligations; and the judgment debts and bankruptcy proceedings against Benjamin and Brendon pursuant to those guarantees. Pursuant to cll 2, 3 and 4, Benjamin and Brendon discharged their debts to Perpetual by a payment of $150,000, were released by Perpetual and released Perpetual, including in respect of the Recovery Action. 31. It is said that an important purpose of the Deed of Assignment was that Benjamin and Brendon were released from the judgments against them on their guarantees and Perpetual was not pursuing the bankruptcy proceedings against them. It is said that the assignment of Perpetual's rights by the Deed of Assignment must be considered in the context of this purpose; and that the Deed of Assignment was not just a contract to assign rights. 32. It is said that, after the sale of the security properties and its release of Benjamin and Brendon, in a practical sense, Perpetual exhausted its avenues to recover Boulos Holdings' debt, except for whatever rights it had over Boulos Holdings' right under special condition 44, because there was no other potential source of funds available to Boulos Holdings to repay its debt. In these circumstances, as well as the uncertainty as to Perpetual's entitlement to proceeds as can be seen in cl 1.2(b), it is said to be unsurprising that Perpetual would make a commercial decision to assign all its rights against Boulos Holdings, including any right on a personal covenant, in return for some money. 33. Boulos Holdings says that the second preferable construction of cl 1.1 to a disposal under s 128 of the PPSA, is that "Recovery Action" only included Perpetual's rights in respect of special condition 44; that is, Perpetual "was selling [its interest in] Boulos Holdings' right to payment under special condition 44 in cl 1.1 of the Deed of Assignment as the ordinary meaning of the heading "Assignment" (see George v Cluning (1979) 28 ALR 57 at 61-62 per Mason J (as his Honour then was)) and the words "assigns … rights it has as former mortgagee" refer to a former secured creditor's rights, not the security property itself which is owned by a debtor or surety". 34. Boulos Holdings says that there is nothing in the PPSA which prevented Perpetual from assigning any personal covenant or equitable charge in equity. The express reference in cl 1.2(a) to Perpetual being under no obligation to assist in relation to recovery action suggests an equitable assignment, under which the assignee cannot sue in its own name (Norman v Federal Commissioner of Taxation (1963) 109 CLR 1 (Norman v Federal Commissioner of Taxation) at 27-28 per Windeyer J). 35. It is said that even if "Recovery Action" did not include a former mortgagee's personal covenant, there was an obligation on the part of Boulos Holdings owed to Benjamin and Brendon to which resort to a security interest could be made. Boulos Holdings says that, by Benjamin and Brendon as guarantors partially paying the debt of Boulos Holdings to Perpetual, they had a right of indemnity against Boulos Holdings (referring to the cases cited in the defendant's submissions: see, for example, Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 (Friend v Brooker) at [55]). It is said that the assignment of Perpetual's equitable charge over Boulos Holdings' right to payment under special condition 44 (as opposed to Boulos Holdings' right itself) to Benjamin and Brendon would give them security for that right of indemnity; and that the position is a fortiori if "Recovery Action" includes an action on the former mortgagee's personal covenant. 36. Boulos Holdings says that the reference in cl 1.1 to "the right to make demand on Edwin Davey (and otherwise recover from Edwin Davey)" does not suggest that Perpetual had such a right; and that cl 1.2(c) rebuts such a suggestion. In any event, it is said that if Perpetual had an equitable charge, those words describe a right of Perpetual to cause Boulos Holdings to demand and recover under special condition 44, even though it was not a right of Perpetual to demand and recover from Edwin Davey in its own name. It is said that even a power of attorney clause such as cl 13.18 of the Memorandum to mortgage does not authorise this, as the attorney must sue in the name of the principal (citing Steinecke v Wayne [2011] NSWSC 428 at [5]-[6] per Brereton J, as his Honour then was). 37. Finally, it is said that should the word "assigns" in cl 1.1 be considered to be ambiguous such that it may refer to an equitable assignment of Perpetual's rights or a disposal of Boulos Holdings' rights under s 128 of the PPSA, then resort may be had to extrinsic material (see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 per Mason J, as his Honour then was). It is said that if the Deed of Assignment was a disposal of Boulos Holdings' right to payment under special condition 44, then under s 128 of the PPSA, Perpetual, being represented by solicitors, would have attempted to comply with its provisions, including by seizing the collateral under s 123, giving notice to Boulos Holdings under s 130 and exercising all reasonable care to obtain the market value or the best price available for Boulos Holdings' right to payment under special condition 44 under s 131. It is said that the absence of such evidence supports the argument that Perpetual was not disposing of the collateral but was simply assigning its rights. 38. Accordingly, it is said that Perpetual did not dispose of any collateral under s 128 of the PPSA, being Boulos Holdings' right to payment under special condition 44, by the Deed of Assignment. Rather, Perpetual purported to assign a charge over Boulos Holdings' right to payment under special condition 44, with or without its other rights as former mortgagee including the right to sue on a personal covenant. Edwin Davey's attempts to argue otherwise are said to be a strain on the language of cl 1.1 of the Deed of Assignment and inconsistent with the context and surrounding circumstances referred to above. It is said that they also do not explain the uncertainty in cl 1.2(b) as to whether any other party can claim an entitlement to the proceeds of recovery under special condition 44 from Edwin Davey, as any such entitlement would be decisively destroyed by s 133(1) if s 128 of the PPSA was being invoked. 39. Accordingly, it is submitted that the Deed of Assignment did not have the effect of destroying Boulos Holdings' rights in special condition 44, so [16] of the further amended defence fails. Reply by Edwin Davey 1. In supplementary submissions on the PPSA point (see attached schedule), Edwin Davey says that the argument by Boulos Holdings as to why the right to sue upon special condition 44 did not merge into the consent judgment made on 16 April 2018 in the 2016 Proceeding presumes that Benjamin and Brendon were effectively assigned or transferred the right to sue upon special condition 44. Edwin Davey accepts that if the efficacy of that assignment is not made out, then the issue does not arise. 2. It is said that, in light of the fact that Boulos Holdings has not sought to cure any defect in standing (i.e., to overcome the contention that it does not hold the right to sue upon special condition 44, by joining Benjamin and Brendon to this proceeding), this issue need not be considered even if Edwin Davey makes good its contention that Perpetual transferred that right to Benjamin and Brendon pursuant to the Deed of Assignment. Edwin Davey says that that latter contention is sufficient because it means that Boulos Holdings does not hold the right to sue upon special condition 44, being what it seeks to enforce in these proceedings. It is said that, in light of this, the plaintiffs' submissions on this issue do not arise for consideration. Whether there has been a merger or not is irrelevant if the Court holds that the right to sue upon special condition 44 is no longer vested in Boulos Holdings (although Edwin Davey does not accept that no merger occurred and relies upon its closing written submissions at [56]-[60]). 3. As to the proposition that the Deed of Assignment did not dispose of Boulos Holdings' rights under special condition 44, Edwin Davey points to the wording of cl 1.1 of the Deed of Assignment (which stated that the rights Perpetual assigned to Benjamin and Brendon included "the right to make demand on Edwin Davey (and otherwise recover from Edwin Davey) all contributions referred to in special condition 44 of the Sale Contract (Recovery Action)"). 4. Edwin Davey contends that if the Perpetual Mortgage covered the right to recover under special condition 44 (as it says it did), then Perpetual could seize that right and dispose of it under the PPSA; and that, having such a right, it could therefore, in a single action (as permitted under the Perpetual Mortgage – see cl 10.2) seize and dispose of that right. It is said that this explains the reference in cl 1.1 to the rights held by Perpetual. Edwin Davey says that the clause does not proceed on the basis that the PPSA or the Perpetual Mortgage converted property of Boulos Holdings into property of Perpetual. 5. As to the contention by Boulos Holdings that the term "Recovery Action" does not encompass the right to sue upon special condition 44, Edwin Davey says that there is no need for there to be any reference to the PPSA, or to "disposal of collateral", in order for the definition of "Recovery Action" to extend to the right held by Boulos Holdings under special condition 44. It is noted that cl 1.1 specifically refers to special condition 44 and says that the right to make demand on (and recover contributions from) Edwin Davey under that clause is specifically assigned (i.e., transferred) to Benjamin and Brendon. Edwin Davey says that the disposal takes effect by reason of the ordinary language of cl 1.1 of the Deed of Assignment. 6. As to the submission that what Perpetual, in fact, assigned was its interests as mortgagee (presumably over special condition 44 and any other subsisting charged property) or the right to sue Boulos Holdings on the personal covenants owed to Perpetual, Edwin Davey says that those rights may well have been assigned pursuant to cl 1.1, but that they were in addition to "the right to make demand on Edwin Davey (and otherwise recover from Edwin Davey) all contributions referred to in special condition 44 of the Sale Contract (Recovery Action)". 7. As to the wording of cl 1.2(c) of the Deed of Assignment, Edwin Davey says that this merely limits liability in the event that the contemplated assignment does not take effect as intended. 8. Finally, Edwin Davey says that conduct occurring around or subsequent to the execution of the Deed of Assignment (specifically whether notice was given of the disposal or whether Perpetual sought to comply with its obligations under s 130 to exercise reasonable care in disposing of the collateral) is inadmissible to construe the word "assigns" in cl 1.1 of the Deed of Assignment (citing Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [26] per Heydon JA). Determination of Boulos Holdings' claim 1. At the outset, I note that, in opening submissions, Boulos Holdings addressed the question whether the appointment of Receivers defeated its claim (without reference to the issue subsequently raised in relation to the import of the appointment of Receivers in respect of the PPSA issues) and referred to Oswal v Burrup Fertilisers Pty Ltd (recs and mgrs apptd) [2013] FCAFC 9; (2013) 295 ALR 708 at [54], [76] and to Re Geneva Finance Ltd v Cook (1992) 7 ACSR 415 at 429 per Owen J. Boulos Holdings said that there was no evidence here of interference with the functions of the Receivers and noted that the Receivers had confirmed on 16 April 2019 that they had no objection to Boulos Holdings prosecuting the claim in the proceedings on the instructions of its director, Benjamin (Boulos Holdings contending that the effect of this correspondence is that the legitimate interests of the Receivers and their appointor were not prejudiced by these proceedings and that the Receivers did not wish to pursue the present claim themselves). In any event, the Receivers have now retired and the issue did not appear to be pressed as to the power of Benjamin (as the sole director of Boulos Holdings) now to pursue the claim for Boulos Holdings. 2. There is no dispute as to the amount that would be payable if the rights under special condition 44 of the Contract can be enforced now by Boulos Holdings ($661,966.86), nor as to the time at which the Section 94 Credit was payable (6 August 2013). 3. Turning then to the various issues raised by Edwin Davey as to whether Boulos Holdings is now in a position to enforce a claim for payment under special condition 44 of the Contract, it is convenient to deal with the issues sequentially. 4. It is accepted by both sides that the contractual right to payment under special condition 44 is a chose in action capable of assignment. Logically, the first question that arises is as to whether Boulos Holdings' personal property was charged in favour of Perpetual in the absence of a signed transfer of mortgage (which turns on whether the Perpetual Loan Agreement gave rise to an equitable charge upon the existence of executed consideration). 5. The second question is whether Boulos Holdings' right to recover moneys pursuant to special condition 44 of the Contract constituted property which fell within the definition of "Secured Assets" under the Perpetual Mortgage (which turns on whether Perpetual's charge over the "Secured Assets" is, properly construed, a floating charge which extends to after-acquired property and which crystallised after the right under special condition 44 came into existence). 6. There is then a third question as to whether the Discharge of Mortgage at the time of completion of the Contract had the effect that Perpetual no longer had an interest in Boulos Holdings' right to payment under special condition 44 which it could assign. It is noted that if Boulos Holdings is successful on any of these three issues, then Edwin Davey's further amended defence at [16] fails. 7. Next, are what I will refer to as the PPSA issues: whether Perpetual's charge over Boulos Holdings' right to recover moneys under special condition 44 is an interest to which the PPSA does not apply pursuant to s 8(1)(f) of the PPSA; whether s 116 of the PPSA applies to exclude the operation of Chapter 4 of the PPSA because Receivers have been appointed; whether Perpetual complied with the requirements under Chapter 4 of the PPSA to seize collateral (i.e., whether it duly gave notice to Boulos Holdings, or whether there was another "agreed method" of seizure between the parties); whether s 133(2) of the PPSA has the effect that the collateral can be taken free of the grantor's interests even if there has been no compliance with the requirements of Chapter 4 (which turns on whether s 133(2) excuses non-compliance with the Chapter 4 requirements which form preconditions to the existence of a 'disposal'); and whether Perpetual disposed of the collateral pursuant to s 128 of the PPSA by way of assignment to Benjamin and Brendon (which turns on whether what the Deed of Assignment purports to assign is Perpetual's security interest or the underlying chose in action). 8. There then arises the question whether (assuming the chose in action was not effectively assigned to Benjamin and Brendon) Boulos Holdings' right under special condition 44 has been extinguished and merged with the orders of the Court (noting, in this regard, that the consent judgment of Fagan J specifically contemplates that Boulos Holdings can commence a fresh proceeding pleading the very cause of action which is ultimately pleaded in these proceedings). 9. On the assumption that the PPSA does not apply, there is an additional question as to the effect of the purported assignment of the chose in action by Perpetual to Benjamin and Brendon. If Perpetual did not have any rights to assign, then Boulos Holdings would retain rights upon which it can sue. If there was, however, a valid assignment of the security interest, the question arises as to the effect of the settlement of the 2016 Proceeding, and whether that settlement constitutes a payment under special condition 44 such that Boulos Holdings no longer has a chose in action upon which to bring a claim. 10. I address those issues in turn. Was Boulos Holdings' personal property charged in favour of Perpetual in the absence of a signed transfer of mortgage? 1. As noted above, Boulos Holdings submits that because there was no signed transfer of the Perpetual Mortgage to it, while it took the land subject to the Perpetual Mortgage, this did not create a charge in favour of Perpetual over Boulos Holdings' personal property; in other words, Boulos Holdings took the Flour Mill Property subject to the charge over the land securing the moneys advanced by Perpetual but not subject to a charge in respect of the chose in action comprised by the right to recover moneys under special condition 44 of the Contract. 2. This raises the question whether the Perpetual Loan Agreement between Boulos Holdings and Perpetual gives rise to an equitable charge over Boulos Holdings' personal property in favour of Perpetual (in the absence of a signed transfer of mortgage), which is a distinct issue from that considered below as to whether, assuming it does, that charge extends to the after-acquired property of Boulos Holdings. 3. There is no dispute that the Perpetual Mortgage (between Perpetual and Microage) was a registered mortgage attracting indefeasibility of title pursuant to ss 41-42 of the Real Property Act (see Provident Capital v Printy at [22] per Basten JA (Tobias and McColl JJA agreeing)). 4. In the present case, it is accepted that the Perpetual Mortgage remained registered on the title after the registration of the transfer of the land from Microage to Boulos Holdings. This has the effect that Boulos Holdings took the land subject to Perpetual's security interest in that land. It does not necessarily follow that Boulos Holdings' interest in various choses in action (assuming they fall within the definition of "Secured Assets" under the mortgage) is also subject to a security interest in favour of Perpetual because the concept of indefeasibility under the Real Property Act relates to land, not to choses in action. Accordingly, the existence of the registered mortgage in favour of Perpetual might not be sufficient to create a charge over Boulos Holdings' personal property in favour of Perpetual (see the observations by Dixon and Evatt JJ in Consolidated Trust Company Limited v Naylor [1936] HCA 33; 55 CLR 423 at 434). 5. The definition of "Secured Assets" in the mortgage extends to various choses in action, each of which is connected to the land itself (such as the "Mortgagor's right to receive any money in respect of the Mortgaged Land"). Hence it might be said that those choses in action should be treated in the same way as the interest in land. However, this is inconsistent with the clear words and intent of the Real Property Act, which legislation relates to interests in land. 6. The next question is whether any dealing between Boulos Holdings and Perpetual gave rise to a security interest in Boulos Holdings' personal property which falls under the definition of "Secured Assets". The key document in issue is the Perpetual Loan Agreement between Perpetual and Boulos Holdings. The relevant terms of that loan agreement which concern a potential security interest have been set out above, as has the definition of "Secured Assets" in cl 14.1 of the Perpetual Mortgage which relevantly includes (b)-(d). 7. Thus, the definition of "Secured Assets" comprises the right to receive money in respect of the land (a legal chose in action). It is clear that the Perpetual Loan Agreement does not constitute a legal assignment of a legal chose in action pursuant to s 12 of the Conveyancing Act because there is no absolute assignment. While the form of mortgage by transfer of debt with a proviso for reassignment has been held to be an absolute assignment (see Tancred v Delgoa Bay and East Africa Railway Co (1889) 23 QBD 239; Austino Wentworthville Pty Ltd v Metroland Australia Ltd [2013] NSWCA 59 at [62] per Barrett JA (Beazley P, as Her Excellency then was, and Meagher JA agreeing)), that form of mortgage does not exist here. 8. Where an assignment fails under s 12, there may still have been a valid equitable assignment of the legal chose in action. In particular, as Windeyer J held in Norman v Federal Commissioner of Taxation at 33, "[a]n agreement to assign will be effective as an equitable assignment if it be for value; for then equity looks on that as done which out to be done". 9. In the present case, the question is whether the signed Perpetual Loan Agreement constituted an "agreement to assign" an existing legal interest. This involves a present intention to assign an interest at some time in the future (see Tolhurst, The Assignment of Contractual Rights (2nd ed, 2016, Hart Publishing) at 343) (The Assignment of Contractual Rights). The terms of the loan offer make clear that the parties have agreed to a variation of an existing mortgage for value, and reference has been made to the particular mortgages which are to secure the loan and in respect of which the mortgagor (Microage) is to assign its interest (see the statement "[y]ou acknowledge that the loan will be secured by the following transaction documents" followed by reference (relevantly) to "[f]irst registered mortgage no. AC810023 by Microage Australia Pty Limited as transferred to Boulos Holdings in favour of the Lender"). While the loan document does not refer to the memorandum which contains the definition of "Secured Assets" (which extends over personal property), this is incorporated through reference to the particular mortgage itself. 10. The Perpetual Loan Agreement also contains the statement that "[s]ettlement of the loan is conditional upon this security being provided in form and substance satisfactory to the Lender". It is a question of contractual construction as to whether that statement gives rise to a condition precedent that must be satisfied for an equitable assignment of the mortgages to arise. In the absence of that sentence, there appears to be a clear intention to vary the terms of the existing mortgages in order to replace the existing mortgagors with Boulos Holdings, which would constitute an "agreement to assign" in the sense of a present intention to assign an interest in Boulos Holdings' property some time in the future to Perpetual, such that, upon the existence of executed consideration, the agreement to assign becomes effective as an equitable assignment. Does the statement extracted above change that conclusion? 11. In The Assignment of Contractual Rights, Professor Tolhurst explains at 345: … because the law generally respects the ability of the obligor and assignor as well as the assignor and assignee to agree to any condition precedent for an assignment, it is necessary to draw the following distinctions as regards equity's treatment of agreements to assign legal interests; each distinction assumes that the more general formal requirements of an assignment are made out. … Secondly, if the agreement to assign is merely conditional upon the assignee executing its consideration, then an equitable assignment will arise when the consideration is executed if, at that time, the assignor has not taken all the steps necessary for a legal assignment. Thirdly, where the parties have made the assignment subject to the fulfilment of some further condition precedent, such as the execution of a memorandum of assignment or other act by the intended assignee, then no immediate equitable assignment will arise unless the condition is simply of a type that does not prevent an equitable interest arising such as the running of time, or if the fulfilment of the condition lies in the power of the assignor and may be then only if the assignor can be obliged, in equity, to fulfil that condition. Here, specific performance would be relevant. Fourthly, where the assignment is subject to a contingency, that is an event not certain to occur, such as the approval by some third party, and if it is the clear intention of the parties that no transfer is to take place unless that contingency occurs, then equity will not recognise any interest in the assignee that equates to the equitable ownership of the legal right until that contingency occurs. … 1. The decision of Martin J in Aviation Services of Australia Pty Ltd v Byrt [2009] QSC 387 provides some assistance in this context. The case concerned whether an equitable assignment arose in circumstances where the deed of assignment provided that it was not to take effect until the deed was executed (language that I accept is different from that here being considered); and in that case, the deed was not in fact executed. At [16]-[20], Martin J concluded that it did not. 2. In the present case, the question of interpretation is whether the statement extracted above has the effect that the clear intention of the parties was that no assignment would take place until a transfer of mortgage was signed. The clause is arguably capable of two meanings. 3. On one view, the words "conditional on this security being provided" indicate that certain steps were necessary, namely the execution of a signed transfer, before an equitable assignment could arise. If so, then the failure to sign a transfer of mortgage means that there was no equitable assignment such that Perpetual has no rights in Boulos Holdings' personal property. 4. On another view, (which I consider to be the correct construction), the clause operates entirely for the lender's benefit – its purpose is to protect the lender's right to change the existing terms of the mortgage agreements before settlement of the loan transaction occurs. In this respect, it is relevant that pursuant to both registered mortgages, the precise terms and conditions giving rise to rights and obligations of the respective mortgagor and mortgagee have already been set out in the registered Memorandum to the mortgage. Accordingly, there exists already a "form and substance" that may be satisfactory to the lender; this is not a case where the terms need to be formalised and specified in more detail. In turn, the act of advancing funds pursuant to the loan agreement was conduct by Perpetual indicating that the existing "form and substance" was indeed satisfactory. Whether this is a "waiver" of a right not to settle unless satisfied with the terms, or a positive indication that Perpetual was indeed satisfied, is perhaps immaterial. The result of this interpretation is that the clause is not a condition precedent which must be satisfied before an equitable assignment can arise. Rather, it simply provides further protection to Perpetual; the key clause being the preceding sentence which explicitly states that "[y]ou [Boulos Holdings] acknowledge that the loan will be secured by the following transaction documents". 5. I have concluded that the Perpetual Loan Agreement gave rise to an equitable charge on the existence of executed consideration. While the settlement of the loan was stated to be subject to a condition precedent, it is not disputed that the loan facility was advanced (and hence that Perpetual must have treated that condition as having been satisfied). Alternatively, it could be said that the advance of funds by Perpetual to Boulos Holdings pursuant to the loan agreement was conduct amounting to a waiver of the condition by Perpetual, thereby giving rise to a valid equitable assignment. (The significance of this is that, if I had concluded that there was no valid equitable assignment, then the Perpetual Mortgage did not extend over Boulos Holdings' personal property, and thus Edwin Davey's defence on this issue fails at this stage of the analysis.) 6. Thus the answer to the first question is that Boulos Holdings' personal property was charged in favour of Perpetual notwithstanding the absence of a signed transfer of mortgage. Does the right to recover moneys pursuant to special condition 44 of the Contract constitute property which falls within the definition of "Secured Assets" under the Perpetual Mortgage? 1. Boulos Holdings submits that the mortgage does not charge after-acquired property but, rather, it only charges property in existence at the time of the mortgage. Accordingly, it is argued that even if Boulos Holdings' personal property was charged in favour of Perpetual, at the time that occurred, the right under special condition 44 was not in existence and thus was not a "Secured Asset" which Perpetual could later assign to Benjamin and Brendon. Edwin Davey's response (see T 235.20-T 236.40) is that there is no reason why cl 2.1 should be read down and that the parties intended the charge to be broad, all-encompassing, and "not fixed by the temporary point at which the mortgage is registered". 2. The question here is whether the equitable charge over Boulos Holdings' personal property in favour of Perpetual (that I have found arose from the Perpetual Loan Agreement) extends to after-acquired property of Boulos Holdings. 3. I have referred above to cl 2.1 of the Perpetual Mortgage and to the definition of "Secured Assets". Whether Boulos Holdings' right to payment constitutes property the subject of the mortgage depends on whether Perpetual's charge over the "Secured Assets" extends to after-acquired property. This depends on whether the security is construed as a fixed or floating charge. 4. A floating charge "does not specifically affect any asset subject to it until it crystallises into a fixed security" (Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 (Luckins v Highway Motel) at 174). Accordingly, a floating charge necessarily extends to after-acquired property as it "attaches to the subject charged in the varying condition in which it happens to be from time to time" (Luckins v Highway Motel at 173, quoting Lord Macnaghten in Governments Stock and Other Securities Investment Co Ltd v Manila Railway Ltd (1897) AC 81 at 86). 5. Whether the charge is a fixed or floating charge depends on the contractual intention of the parties. In Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd [2006] NSW ConvR 56-137 at [22], Campbell J observed: 22. The fundamental exercise which the Court is engaged in in deciding whether a charge is a fixed charge or a floating charge is a matter of the ascertainment of the intention of the parties. That intention can be ascertained both from the words which they used, and from surrounding circumstances known to both parties. In substance, what Mahoney JA decided in Boambee Bay Pty Ltd v Equus Financial Services Ltd … was that, even though the words creating the charge were ones which were well able to refer to a fixed charge, so far as concerned property already owned by the chargor at the date of grant, the surrounding circumstances were such that that could not have been what the parties intended. [citations omitted] 1. The authors of Everett and McCracken's Banking & Financial Institutions Law (9th ed, 2017, Lawbook Co) explain the nature of a fixed charge and floating charge as follows (at [13.170]-[13.180]): A fixed charge recognised by equity is a charge which attaches to the property over which it is expressed to extend from the moment of its creation, thus enabling the chargee, on a traditional analysis, to claim an interest in that property. Although the rights of the chargee to seize the property cannot arise until default under the agreement, the chargee is able to restrain the chargor from disposing of the property. … As the name suggests, the floating charge is an interest which floats over the assets that it is intended to secure. It was described by the House of Lords in Illingsworth v Houldsworth [1904] AC 355 (at 358) in the following terms: [It is] ambulatory and shifting in its nature, hovering over and so to speak floating with the property which it is intended to affect until some event occurs or some act is done which causes it to settle and fasten on the subject of the charge within its reach and grasp. This has been echoed by the House of Lords in National Westminster Bank plc v Spectrum Plus Ltd [2005] 2 AC 680; [2005] 4 All ER 209 (at 247), where Lord Scott described its essential characteristic in the following terms: the essential characteristic of a floating charge, the characteristic that distinguishes it from a fixed charge, is that the asset subject to the charge is not finally appropriated as a security for the payment of the debt until the occurrence of some future event. In the meantime, the chargor is left free to use the charged asset and to remove it from the security. 1. In Holroyd v Marshall (1862) 10 HLC 191, the House of Lords explained that equity would be prepared to recognise the right of a mortgagee in after-acquired property without the need for the mortgagee to take possession or do some other act equivalent to the taking of possession. Lord Westbury said (at 211): [I]f a vendor or mortgagor agrees to sell or mortgage property, real or personal, of which he is not possessed at the time, and he receives consideration for the contract, and afterwards becomes possessed of property answering the description in the contract, there is no doubt that a Court of Equity would compel him to perform the contract, and that the contract would, in equity, transfer the beneficial interest to the mortgagee or purchaser immediately on the property being acquired. 1. In Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284 (affirmed on appeal in Illingworth v Houldsworth [1904] AC 355 (Illingworth v Houldsworth)), Romer LJ, although not laying down an exhaustive definition, identified three characteristics which his Lordship thought would result in a security interest being classified as a floating charge (at 295): (1) If it is a charge on a class of assets of a company present and future; (2) if that class is one which in the ordinary course of the business of the company, would be changing from time to time; and (3) if you find that by the charge it is contemplated that, until some future step is taken by or on behalf of those interested in the charge, the company may carry on its business in the ordinary way as far as concerns the particular class of assets I am dealing with. 1. The approach taken by Romer LJ has been supported in a number of authorities (including Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed) [2012] NSWSC 170 at [112]; Commissioner of the Australian Federal Police v Hart [2018] HCA 1; 262 CLR 76 at [267] per Kiefel CJ, Bell, Gageler, Gordon and Edelman JJ (citing Illingworth v Houldsworth with approval); Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724; 12 BFRA 224 at [273] per Black J; Markets Nominees Pty Ltd v Commissioner of Taxation [2012] FCA 262; 88 ATR 107 at [50] per Tracey J). 2. In the present case, the definition of "Secured Assets" extends to "any contract in relation to Works on the Mortgaged Land", "all income derived from the Mortgaged Land" as well as "any business conducted by the Mortgagor on the Mortgaged Land". These are very broad classes of assets which would typically fluctuate in the ordinary course of business and might continue to gain value in the future. There is nothing in the words of the definition which limits the scope of the charge to existing contracts, existing income or existing business. The fluidity of these assets suggests that the parties intended for the security to extend over every item falling within the term "Secured Assets", but not specifically affecting any item until an event occurs which causes it to crystallise into a fixed security. 3. Further, in relation to the third of Romer LJ's indicia, there is nothing which indicates that the parties intended for the mortgagor's rights to deal with its business and income streams to be constrained by the imposition of a fixed charge. 4. I have concluded that the charge over Boulos Holdings' personal property is a floating one because the "Secured Assets" include "income derived from the Mortgaged Land" or "business conducted by the Mortgagor on the Mortgaged Land". Boulos Holdings remains free to deal with its income and business for its own benefit, in the ordinary course of business. If the charge were to be fixed, it would mean that Boulos Holdings would require Perpetual's prior written consent under cl 2.13 before it could deal with its income and business connected to the Mortgaged Land. There is nothing in the language of the mortgage which indicates that the parties intended for such an outcome. 5. Indeed, characterising the charge as a floating one works in favour of both parties – for Boulos Holdings, it allows the company to deal with its income and business without seeking consent under cl 2.13; for Perpetual, it allows its security to extend over after-acquired property (and that can be seen to be of commercial importance for Perpetual given that Boulos Holdings, as a recent purchaser of the land and incoming mortgagor, would presumably not yet have any "income derived from the Mortgaged Land" or "business conducted by the Mortgagor on the Mortgaged Land" over which it could offer security). 6. As to the right of payment arising under special condition 44 of the Contract, that agreement was dated 22 November 2010. Boulos Holdings' right to payment, which falls within sub-category (d) of the definition of "Secured Assets", arose on that date. On 22 June 2012, receivers were appointed to Boulos Holdings by NAB. As this was an event of default, any floating charge would have crystallised at least at this date, by which point the right to payment under special condition 44 was in existence. 7. Accordingly, I have concluded that the right to recover moneys pursuant to special condition 44 of the Contract did constitute property which fell within the definition of "Secured Assets" under the Perpetual Mortgage. Did the Discharge of Mortgage have the effect that Perpetual no longer had an interest in Boulos Holdings' right to payment under special condition 44 which it could assign? 1. Boulos Holdings submits that the Discharge of Mortgage discharged any charge held by Perpetual over Boulos Holdings' right to payment under special condition 44. This point was addressed only briefly by Boulos Holdings in closing submissions (see T 223.40-T 225.25). If the Discharge of Mortgage discharged Perpetual's entire security interest, then it would follow that there was no interest which Perpetual could assign to Benjamin and Brendon. 2. Clause (G) of the Discharge of Mortgage provides as follows: The mortgagee discharges the above mortgage so far as it affects the land/dealing specified above [i.e. Torrens Title 1/848441 and 2/848441]. This discharge does not affect the mortgagee's rights under any mortgage or security in respect of any property other than the land above and does not affect the mortgagee's rights to recover any money due from the mortgagor or anyone else. 1. Clause (F) also has relevance – it contains a box for the parties to identify the 'Mortgagor'. It states that "[l]eave blank in the case of a total discharge of the mortgage: otherwise see Instructions for Completion" (emphasis added). The clause has been left blank. 2. The question whether Clause (G) has the effect that Perpetual, as mortgagee, continues to retain a security interest under the terms of the mortgage which extends to a security interest in Boulos Holdings' right to payment under special condition 44 is a question of construction (see Provident Capital v Printy at [27] per Basten JA (Tobias and McColl JJA agreeing)). The relevant passage of Provident Capital v Printy, cited by both parties (at [27]) is: 27. Because a mortgage is a form of security, conferring powers against land, it can be discharged without affecting that which it secures, namely a personal covenant to pay: see Groongal Pastoral Company Ltd (In liq) v Falkiner [1924] HCA 54; 35 CLR 157 at 164. Whether a discharge of mortgage has the effect of discharging personal covenants contained in a separate contract or deed is a matter of construction of the instrument of discharge: see also Grundy v Ley [1984] 2 NSWLR 467 (Kearney J). It may be that a mortgagee will retain a personal right of action against the mortgagor, but it will no longer be a right enforceable against the land: see Queensland Premier Mines Ltd v French [2007] HCA 53; 82 ALJR 115. 1. In relation to the second sentence of cl (G), the critical words are that "this discharge…does not affect the mortgagee's rights to recover any money due from the mortgagor or anyone else". Counsel for Boulos Holdings submits that the second sentence in this clause is to preserve the mortgagee's rights under any other mortgage or security (T 224.50-T 225.1). 2. In my view, the purpose of the words quoted above is to preserve the mortgagor's personal covenant to pay which arises under the loan agreement, and which is separate from the mortgagee's secured interest in the land. Indeed, on a plain reading of the words "mortgagee's rights to recover any money due from the mortgagor or anyone else" (emphasis added), this appears to refer to the personal covenant to pay existing debts. Of course, a mortgagee can still sue on a personal covenant to pay, except that such rights would be unsecured following discharge of the mortgage. 3. In relation to the words "[t]his discharge does not affect the mortgagee's rights under any mortgage or security in respect of any property other than the land above", in my view, the purpose of this part of the clause is to ensure that a single mortgage which secures interests in relation to several parcels of land is only extinguished in relation to the parcel that is identified in the document effecting the discharge of mortgage. 4. The contrary construction of the words above, for which Edwin Davey contends, is that they operate so that the mortgagee continues to have a security interest in the assets secured by the mortgage except for the land itself. This depends on a construction of the word "rights" (in the phrase: "[t]his discharge does not affect…the mortgagee's rights to recover any money") to mean the mortgagee's security interests. Further, it depends on an interpretation of "[t]he mortgage discharges the above mortgage so far as it affects the land/dealing specified above" as a literal reference to the security over only the land itself, rather than as reference to the entire mortgage (regardless of how "secured assets" are defined) which exists in respect of that identified parcel of land. 5. Accordingly, Edwin Davey argues that the mortgagee's security interest survives in respect of the sub-categories of "Secured Assets" (as defined in the mortgage) except sub-category (a), which refers to "the Mortgaged Land". 6. However, on a plain reading of cl (G), there is nothing which causes the mortgagee to retain its security interest in any respect. Indeed, cl (G) refers generally to the discharge of "the above mortgage so far as it affects the land…specified above", which is identified as "Torrens Title 1/848441 and 2/848441". It follows that the entire security interest referable to that land is extinguished; the Discharge of Mortgage does not operate to carve off part of the definition of "Secured Assets" such that Perpetual still has a security interest in some sub-categories of "Secured Assets" including the mortgagor's right to receive any money in connection with the land. Such a construction would require clear words expressly referring to the definition of "Secured Assets" and indicating an intention for the mortgagee to retain a security interest in assets except the land itself. 7. I consider that Boulos Holdings is correct in its submission that the Discharge of Mortgage extinguished any interest of Perpetual in the right to payment under special condition 44. On that basis, there was no valid assignment of that interest. Accordingly, on the basis of the nemo dat quod non habet rule ('no one gives what he, or she, does not have'), Benjamin and Brendon could not acquire an interest from Perpetual, and in turn, Boulos Holdings could validly make a claim under special condition 44. Hence, the defence by Edwin Davey fails at this point because there was never a valid assignment of Boulos Holdings' contractual chose in action and it remains capable of enforcement by Boulos Holdings. PPSA issues Is Perpetual's charge over Boulos Holdings' right to recover moneys under special condition 44 an interest to which the PPSA does not apply pursuant to s 8(1)(f)? 1. The parties agree that if Perpetual had a charge over Boulos Holdings' right to payment under special condition 44, that would be an "interest" under ss 8(1) and 8(1)(f) of the PPSA. The parties diverge as to the identification of the "transaction" which "provided for" that "interest". Edwin Davey submits that the relevant transaction was the Perpetual Mortgage granted by Microage on 2 November 2006 which created a security interest over the land and the assets falling within the definition of "Secured Assets", which includes "the Mortgagor's right to receive any money in respect of the Mortgaged Land". 2. Edwin Davey then argues that s 8(1)(f)(i) does not apply to exclude the application of the PPSA because s 8(2) applies. The relevant part of s 8(2) is item 3, which provides that despite s 8(1), ss 117 and 118 of the PPSA apply in relation to an interest provided for under s 8(1)(f)(i). Edwin Davey contends that pursuant to s 117, Perpetual's charge over the right to payment under special condition 44 has the highest priority, and Perpetual made a "decision" under s 117(2)(a) to enforce the security interest in the charge under the PPSA instead of under the land law. 3. Boulos Holdings submits that the relevant transaction is the Perpetual Loan Agreement dated 1 March 2010 because the relevant transaction must be a consensual one involving Boulos Holdings. In turn, it is submitted that the mortgage in favour of Perpetual is an "existing security" under that loan agreement and thus that transaction did not "create" an interest in land within the meaning of s 8(1)(f)(i) (as it is not possible to create something that already exists). Accordingly, it is submitted that s 8(1)(f)(i) does not apply. 4. It is not ultimately necessary to decide whether s 8(1)(f)(i) applies because Edwin Davey accepts that the same security interest may also have arisen pursuant to a transaction falling within s 8(1)(f)(ii) of the PPSA (but says that the two are not mutually exclusive). This argument is difficult to reconcile with the language of s 8, which states that "[t]his Act does not apply to any of the following interests" (emphasis added). Accordingly, the PPSA does not apply if the relevant interest is captured in either s 8(1)(f)(i) or s 8(1)(f)(ii), and there is no reason why both subsections cannot apply. While Edwin Davey may have established that s 8(1)(f)(i) does not apply due to the operation of s 8(2), it has not established that s 8(1)(f)(ii) does not also apply. Accordingly, the fact that s 8(1)(f)(i) may not apply to exclude the operation of the PPSA has no bearing on whether s 8(1)(f)(ii) applies. In turn, it is necessary to consider whether s 8(1)(f)(ii) applies. 5. It should be noted that Boulos Holdings also appears to take the view that only one of s 8(1)(f)(i) and s 8(1)(f)(ii) can apply. This seems to explain the submission that s 8(1)(f)(i) does not apply and that s 8(1)(f)(ii) does apply (a position which has been adopted despite the possible argument, which in my view is correct, that both sections can apply and that the PPSA does not apply if either applies). 6. In any event, in my view, s 8(1)(f)(ii) clearly applies. At [3.60] of Australian Personal Property Securities Law (2nd ed, 2015, LexisNexis Australia), Duggan and Brown note: PPSA para 8(1)(f) provides that the statute does not apply to the creation or transfer of an interest in land or to the creation of a right to payment in connection with an interest in land if the contract specifically identifies the land. So, for example, the statute does not apply to a land mortgage, nor does it apply to: (1) an assignment of a land mortgage; (2) an assignment of the mortgagee's right to payment under a land mortgage; or (3) a security interest in rents from specifically identified properties. 1. At [8.5.6] of The Annotated Personal Property Securities Act 2009 (Cth) (4th ed, 2020, LexisNexis Australia), Harris and Mirzai note: There is of course a distinction between land (as real property) and personal property, but there are items of property which can fall between these two categories. For example, the right to payment under a mortgage covering real property would fit within the definition of an account in s 10…but this would fall within s 8(1)(f)(ii). 1. In the present case, the Perpetual Loan Agreement is the relevant transaction which "provides for" Perpetual's interest and satisfies the requirements of s 8(1)(f)(ii). First, the loan agreement "provides for" Perpetual's interest in Boulos Holdings' right to payment under special condition 44 because it creates an equitable charge over the personal property of Boulos Holdings which falls within the definition of "Secured Assets" under the mortgage (which includes the right to payment under special condition 44). 2. Second, the loan agreement between Perpetual and Boulos Holdings creates an "interest in a right to payment" which is "in connection with an interest in land" because it creates Perpetual's interest in Boulos Holdings' rights to receive money in connection with the Mortgaged Land (sub-category (d) of "Secured Assets"), whereas the earlier mortgage transaction between Perpetual and Microage created those rights in respect of Microage only. In addition, the loan agreement "specifically identifies that land" pursuant to the requirements of s 8(1)(f)(ii). 3. It should be noted that if s 8(1)(f)(ii) applies, it may not be strictly necessary to decide whether, in relation to s 8(1)(f)(i), Perpetual validly made a "decision" under s 117 of the PPSA to enforce its security interest under the PPSA. This would require consideration of whether any such "decision" needs to be communicated to any party, and whether there needs to be any evidence of an intention to proceed under the PPSA. There is a paucity of case law on this issue. My view is that if a secured party's security interest has the highest priority, compliance with the requirements of Chapter 4 of the PPSA would be sufficient to reflect a "decision" under s 117 – particularly given the purpose of the section is to "reduce costs and to ensure expeditious resolution of enforcement" (see the Replacement Explanatory Memorandum to the Personal Property Securities Bill 2009 (Explanatory Memorandum) at [4.20]). However, a party making a decision under s 117 must act reasonably and only take into account the matters listed in s 117(3), which gives rise to the question of what consequences follow where there is no evidence for the basis of a decision under the section. 4. For present purposes, however, it is sufficient to say that in my opinion Perpetual's charge over Boulos Holdings' right to recover moneys under special condition 44 is an interest to which the PPSA does not apply because of the operation of s 8(1)(f)(ii). Does s 116 of the PPSA apply to exclude the operation of Chapter 4 of the PPSA? 1. Boulos Holdings submits that, as a result of s 116(1) of the PPSA, Ch 4 of the PPSA does not apply because receivers were appointed by NAB over all of the property of Boulos Holdings. 2. Edwin Davey contends that s 116 does not prevent a secured party from relying on Ch 4 of the PPSA in respect of property if it is a security holder with lesser priority that has appointed receivers to the property. Accordingly, in the present case, it is said that priority was conferred on Perpetual for all items falling within the Perpetual Mortgage, and thus NAB's appointment of receivers over property, which includes the right to payment under special condition 44, does not prevent Perpetual from relying on Ch 4 of the PPSA to enforce its security interest. 3. The Explanatory Memorandum to the Personal Property Securities Bill 2009 provides at [4.18]: The Bill would not apply to property of a business that is subject to a receiver or a controller appointed under Part 5.2 of the Corporations Act 2001 (clause 116). These provisions provide comprehensive rules for receivers and other controllers when exercising functions in relation to property. 1. At [116.5] of their very helpful text on the PPSA, Harris and Mirzai note in relation to s 116: This provision is based on the view that the law of corporate receiverships works reasonably well and the enforcement provisions in the PPSA are not necessary where a corporate receiver is in place: Agnew v Pardington [2006] 2 NZLR 520. 1. There is nothing in the wording of s 116 which suggests that a secured party can rely on Ch 4 of the PPSA because a receiver has been appointed by a lesser ranking security holder. On a plain reading of s 116, Edwin Davey's construction should not be adopted. 2. Further, there is nothing in the Explanatory Memorandum, or in the Explanatory Memorandum to the Personal Property Securities (Corporations and Other Amendments) Bill 2011 (which amended s 116 of the PPSA), which refers to any requirement that the appointment must be by a higher-ranking security holder. Indeed, the commentary at [4.18] above indicates a legislative intention that the provisions of the Corporations Act 2001 (Cth) (Corporations Act) are comprehensive and ought to be applied where a receiver is appointed. 3. Section 420B of the Corporations Act is noteworthy. It provides a process for a court to authorise a managing controller to sell or dispose of property even though it is subject to a higher-ranking security interest. In effect, then, the Corporations Act contains procedures which operate where a lower ranking security holder appoints a receiver. This points against the interpretation proffered by Edwin Davey. Indeed, if Parliament's intention is to allow the "comprehensive" procedures of the Corporations Act to operate as they have done, it would appear to be contrary to that intention to adopt a construction of the PPSA which precludes the operation of the Corporations Act in circumstances which it specifically contemplates and makes provision for (by way of s 420B). 4. Further, in cases where there is uncertainty as to which security holder has a higher-ranking priority, Edwin Davey's construction would give rise to complexity and uncertainty in determining whether the provisions of the PPSA or the Corporations Act apply if a receiver has been appointed. 5. I note that in 'Receivership and the Personal Property Securities Act 2009 (Cth): Why distinctions remain relevant' (2013) 21 Insolvency Law Journal 5, Amanda-Jayne Bull makes the following observations as to whether the PPSA prevents a secured party with a lower-ranking security interest from appointing a receiver: Appointment priority A receiver must ascertain that it is appointed under a perfected security interest and that security interest has priority in relation to the collateral to which the receiver is appointed. While the PPSA does not prevent any SP [secured party] from appointing a receiver to its security interest provided it has the ability to do so in its security agreement, a receiver appointed under a junior SP's security interest runs the risk of being appointed "over the top" of by a more senior SP [citing Corporations Act s 441A] and must also discharge any prior ranking security interests on the sale of the collateral [citing PPSA s 54]. [footnotes omitted]. 1. I have concluded that, pursuant to s 116, the PPSA does not apply (and that Edwin Davey's submission that Perpetual's assignment "disposed of" the collateral fails). Did Perpetual comply with the requirements under Chapter 4 of the PPSA to seize collateral? 1. This issue only arises if (which is not what I have concluded) Edwin Davey has succeeded in establishing that the operation of the PPSA is not excluded either under ss 8(1)(f) or 116. 2. Boulos Holdings submits that Perpetual did not comply with the requirements to "seize" collateral (namely, Boulos Holdings' right to payment under special condition 44) under s 123 of the PPSA, as required by s 128 of the PPSA in order to dispose of that collateral. 3. Edwin Davey accepts that notice was not provided pursuant to s 123(2), but submits that seizure of Boulos Holdings' right to payment under special condition 44, which is intangible property, occurred "by another method, if so agreed", namely pursuant to cl 10.2 of the mortgage which permitted Perpetual to "do anything the Mortgagee considers appropriate to...deal with the Secured Assets". 4. Ultimately, the issue is one of statutory interpretation as to the meaning of s 123(3), which provides that "[i]ntangible property may be seized by another method, if so agreed between the parties to the security agreement". In particular, the question is whether cl 10.2 constitutes an agreed "method" for seizure of intangible property, such that there was no need for Perpetual to comply with the notice requirements under s 123(2). 5. The Explanatory Memorandum states at [4.43]-[4.44]: Seizing collateral 4.43 On default by a grantor, when the secured party wishes to initiate an enforcement action, it would need to seize the collateral. The Bill would provide for this right to seize the collateral, in the event that a contract failed to do so. A secured party would be able to seize the collateral by any method permitted by law where the debtor is in default under the security agreement (clause 123(1)). This would enable secured parties to determine the method of seizure that is most appropriate for the collateral and their circumstances. 4.44 Where the collateral is an intangible, the secured party cannot physically possess the collateral but the Bill would deem seizure to have occurred if a secured party takes steps to gain control. If the collateral is a licence, the secured party could effect seizure by giving notice of possession to the licensor and either the grantor or the grantor's successor. If the collateral is any other type of intangible (for example, an investment instrument) a secured party could seize the collateral after giving notice to the grantor (clause 123(2)). 1. The terms "seize" or "seizure" are not defined in the PPSA (Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (in liq) (recs and mgrs apptd) (2017) 254 FCR 559; [2017] FCA 866 at [170] per Markovic J). In their text, Harris and Mirzai note at [123.4] that "[i]n the general sense, the term means to take possession of the underlying collateral or to remove control of the collateral from the hands of the grantor (or a party acting on behalf of the grantor, such as a licensee or sub-licensee)". 2. In my view, cl 10.2 of the mortgage does not constitute "another method, if so agreed" for the seizure of intangible property. There is force, in my opinion, in Boulos Holdings' submissions that "the conferral by s 128 of the PPSA on a secured party of a right to dispose of the collateral allows interference with the grantor's vested proprietary rights and therefore should be narrowly construed (see Clissold v Perry (1904) 1 CLR 363 at 373 per Griffith CJ; R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 at [43]-[44] per French CJ). 3. Further, as Boulos Holdings submits, "[s]eizure is essential so that the grantor knows that the collateral may be disposed of under s 128 of the PPSA, which enables the grantor to take action to pay the debt or recover the collateral before it is disposed of" (such action can be taken pursuant to s 142 of the PPSA, which provides that a grantor has the highest priority to redeem the collateral at any time before disposal by paying the amounts required to discharge obligations secured by security interests in the collateral). 4. Given the importance of seizure for disposal pursuant to s 128(1), that would indicate that s 123 ought to be construed narrowly. In the present case, cl 10.2 is a general clause providing a broad set of rights to the mortgagee if a defined event of default occurs, including a right to do anything the mortgagee considers appropriate to deal with the secured assets. The clause, however, says nothing about the method or process for the enforcement of those rights, particularly in relation to the seizure of intangible goods. In my view, s 123(3) should be construed narrowly so that an actual method must be agreed which constitutes seizure of intangible property. 5. One aspect of cl 10.2 which suggests that it does not constitute a "method" for seizure is that it does not identify any steps or process or "method" by which the grantor would become aware that the mortgagee has chosen to seize collateral. While cl 10.2 specifies what rights exist, it does not specify how those rights are to be enforced by way of seizure of collateral. 6. Further, while s 128(1) of the PPSA provides that a secured party "may dispose of collateral if the secured party has seized the collateral in the exercise of a right to seize the collateral on default by the debtor (whether under section 123 or otherwise)" (emphasis added), the words "or otherwise" do not indicate that s 123 need not be complied with, in circumstances where those words have utility in light of s 115, which allows parties to a security agreement to contract out of s 123 (which has not occurred here).I have concluded that, had this issue arisen, the answer would be that Perpetual did not give notice to Boulos Holdings as required and that there was not another "agreed method" of seizure between the parties. Does s 133(2) of the PPSA have the effect that the collateral can be taken free of the grantor's interests even if the requirements of Chapter 4 have not been complied with? 1. Section 133 of the PPSA provides as follows: 133 Disposing of collateral free of interests (1) If collateral has been disposed of under section 128 (including by a secured party purchasing the collateral), a person takes the collateral as a result of the disposal free of all of the following interests in the collateral: (a) the interest of the grantor; (b) the security interest of the secured party who disposed of the collateral; (c) all security interests in the collateral that have a lower priority than the security interest of that secured party. Note: If a person has a perfected security interest in the collateral that ranks higher than that of the secured party, the person retains a security interest in the collateral. (2) Subsection (1) applies in relation to a disposal of collateral (other than a disposal by a secured party purchasing the collateral) even if the requirements of this Chapter have not been complied with. 1. Edwin Davey contends that the effect of s 133(2) is that the purchaser of the collateral (being Benjamin and Brendon) took free of the interest of the grantor (being Boulos Holdings) even if the requirements of seizure were not complied with; whereas Boulos Holdings submits that s 133(2) "does not apply where there has been no disposal due to no seizure occurring" (rather, it says that the section affects requirements contained in ss 130 and 131). 2. The Explanatory Memorandum states at [4.77]: Collateral acquired after disposal would be acquired free of the interests of the grantor of the security interest, the security interest of the enforcing secured party and all security interests lower in priority to the interest of the enforcing secured party (clause 133), but subject to the security interests of higher ranked parties. The higher ranking security interests would be able to be discharged in accordance with the security agreement if sufficient funds were available. 1. There is a paucity of case law and commentary which deals with the meaning of "requirements of this Chapter" in s 133(2). The Final Report on the Review of the Personal Property Securities Act 2009 dated 18 March 2015 (Whittaker Report) made no reference to any difficulties associated with s 133(2). 2. In my view, as a matter of statutory interpretation, s 133(2) should be construed narrowly. If it were construed broadly to refer to all the provisions of Ch 4, including requirements of seizure, then a grantor could lose its proprietary interest in collateral without receiving any notice if a secured party sold the collateral to a third party. There appears to be force in the argument that such an intention should not be imputed to the legislature in the absence of clear words. 3. Accordingly, the wording of s 133(1), which provides that "[i]f collateral has been disposed of under section 128", and s 133(2), which provides that "[s]ubsection (1) applies in relation to a disposal of collateral", indicate that the "requirements" referenced in s 133(2) (which do not need to be complied with) do not extend to requirements which are preconditions to a disposal of collateral (namely, seizure). Put another way, the "requirements", which a secured party need not comply with, concern the act of disposal itself, rather than whether a right exists for a secured party to dispose of collateral. As a result, the provisions to which s 133 is directed could include ss 131 and 132, which relate to the act of disposal itself, rather than the preconditions to disposal. 4. Finally, it may be noted that the parties have not addressed s 130 in any great detail. Section 130(1) provides that: 130 Notice of disposal of collateral (1) Unless subsection (5) of this section or section 144 applies, a secured party who proposes to dispose of collateral on default by the debtor (whether or not under section 128) must give a notice, in accordance with this section, to: (a) the grantor; and (b) any other secured party with a security interest in the collateral that has a higher priority. 1. Sections 130(2)-(3) set out the notice requirements. The notice may be given in the approved form (sub-s (4)). Section 130(5) provides that: (5) The secured party is not required to give a notice to any person under subsection (1) if: (a) the secured party believes on reasonable grounds that the secured party was induced to enter into the relevant security agreement by fraud on the part of the debtor or the grantor; or (b) the secured party believes on reasonable grounds that the collateral might perish before the end of 10 business days after the day the collateral is seized; or (c) the secured party believes on reasonable grounds that there will be a material decline in the value of the collateral if it is not disposed of immediately after the day the collateral is seized; or (d) the secured party believes on reasonable grounds that the expense of preserving the collateral is disproportionately large in relation to its value; or (e) the collateral is foreign currency; or (f) the collateral is to be disposed of in accordance with the operating rules of a clearing and settlement facility. 1. At [12.44] of their also very helpful text on personal property securities law, Duggan and Brown note: The s 130 notice requirement serves several purposes. First, PPSA ss 142 and 143 give the grantor a right to redeem seized collateral or to reinstate the security agreement at any time before disposal, and the s 130 notice of disposal alerts them to these rights and the date by which they must be exercised. Second, PPSA s 137 provides that the grantor may object if the secured party proposes to purchase the collateral itself, and the s 130 notice alerts the grantor to the secured party's intentions and to their right of objection. Third, s 127 gives a competing secured party with a higher ranking security interest the right to take over the collateral sale process, and the s 130 notice requirement alerts it to the fact that the notice-giving secured party has seized the collateral and is planning to sell it: see 12.39–12.40 above. Fourth, the notice enables the recipient to monitor the sale to make sure that it is conducted in a commercially reasonable manner and that the secured party obtains the best price. The s 142 right of redemption may be exercised by the grantor or any other person with a security interest in the collateral, while the s 143 right of reinstatement may be exercised by 'any person' (which would include another secured party). However, the enforcing secured party is not required to serve a s 130 notice on lower ranking secured parties. 1. Boulos Holdings acknowledges that s 133(2) may apply such that Benjamin and Brendon take free of the grantor's interest despite non-compliance with s 130 (see the supplementary submissions at [36(f)]). Nevertheless, if s 133(2) does not extend to s 130, this is another basis for a finding that there was no disposal of collateral. 2. I have concluded that, had this issue arisen, the answer would be that s 133(2) of the PPSA does not have the effect that collateral could be taken by Benjamin and Brendon (as purchasers), free of the interest of the grantor (Boulos Holdings), even if there had been no compliance with the requirements of seizure under Ch 4 of the PPSA. Did Perpetual dispose of the collateral pursuant to s 128 of the PPSA by way of assignment to Benjamin and Brendon? 1. If Edwin Davey had succeeded on all prior issues, the next question posed by the respective submissions is whether the Deed of Assignment constituted a disposal of the collateral pursuant to s 128 of the PPSA, such that Brendon and Benjamin (as assignees) took free of the interest of Boulos Holdings. 2. As noted above, Edwin Davey submitted that s 128 of the PPSA operates such that the collateral was disposed of by way of private sale. In that regard, reference should be made to cl 1 of the Deed of Assignment (extracted earlier). 3. The primary question is whether Perpetual assigned its rights as former mortgagee, namely its right to enforce the security interest in the chose in action (being the right to payment under special condition 44) in the event of default, which is a bundle of rights that can be assigned subject to the interest of Boulos Holdings in the chose in action, or whether Perpetual disposed of the chose in action by way of sale, pursuant to the provisions of Chapter 4 of the PPSA, which transfers title to the chose in action, free of Boulos Holdings' interest. 4. In the present case, in circumstances where Boulos Holdings was in default, the practical difference between the two interpretations above may appear to be insignificant – under the former, the assignee can exercise the right to demand payment because Boulos Holdings is in default; under the latter, the assignee has title to the chose in action and can demand payment regardless of the position of Boulos Holdings. However, the differing legal consequences of the two interpretations are significant – under the former, Boulos Holdings' rights are extinguished upon the sale of the chose in action; under the latter, Boulos Holdings may still have a claim against Edwin Davey depending on whether Benjamin and Brendon (as assignees) enforced the security interest against Edwin Davey (as to which, see below). 5. Further, even if Perpetual complied with the seizure requirements under s 123 of the PPSA, it is not a foregone conclusion that there has been an actual disposal by way of private sale of the interest. Even after any purported seizure, Perpetual retained the right to assign its security interest, rather than enforce the sale of the underlying chose in action (such a course of action would avoid the need to comply with the various requirements of a mortgagee exercising a power of sale). 6. As to whether there was in fact a disposal, as Boulos Holdings submits, "the Assignment Deed is a contract wholly in writing, so the rights and liabilities under its provisions 'are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose'" (citing Mount Bruce Mining v Wright Prospecting at [46] per French CJ, Nettle and Gordon JJ). 7. As a matter of contractual interpretation, the plain words of cl 1.1, which state that Perpetual "assigns…any and all rights it has as the former mortgagee" (emphasis added), suggest that the parties intended the assignment of Perpetual's security interest in the chose in action, namely the right to demand payment in the event of default. It is significant that there is no reference in the Deed of Assignment to the PPSA, any compliance with its provisions, or any reference to the sale or transfer of the underlying chose in action itself. The "Background" provisions also do not make reference to any steps taken by Perpetual to enforce its interest in the secured property by exercising a right or power of sale or otherwise disposing of the interest free from Boulos Holdings' rights. 8. The reference to "rights [Perpetual] has as the former mortgagee" is, in this context, a reference to the mortgagee's rights to enforce the mortgagee's interest in the event of default. The fact that the chose in action is itself a right to payment may lead to confusion because it may appear that the assignment constitutes a transfer or sale of the actual right to payment. In my opinion, however, on a plain reading of the clause, what is being assigned is the mortgagee's rights to enforce the interest in the event of default; it is not a sale of the right to payment itself. 9. Further, it is noted that Edwin Davey's case that Perpetual has disposed of the chose in action relies on the operation of the PPSA. Edwin Davey does not allege that Perpetual enforced its security interest and exercised a power of sale in the absence of compliance with the PPSA. Accordingly, the lack of compliance with the PPSA is relevant in construing the Deed of Assignment and determining whether the parties intended for a disposal pursuant to s 128. 10. Specifically, no notice of disposal was given by Perpetual to Boulos Holdings pursuant to s 130 of the PPSA. Further, there might be some doubt as to whether Perpetual has complied with the requirement in s 131 of the PPSA to "obtain the best price that is reasonably obtainable at the time of disposal" or the "market value" of the collateral given the assignment was referable to two payments which totalled $150,000. This points towards the conclusion that the Deed of Assignment gave effect to an assignment of Perpetual's security interest rather than a sale of the right itself. 11. Had it arisen, I would have concluded that the Deed of Assignment purported to assign Perpetual's security interest and was not a sale of the underlying chose in action. Has Boulos Holdings' right under special condition 44 been extinguished and merged with the orders of the Court? 1. In closing submissions (and the further amended defence at [16](b)-(g)), Edwin Davey has made the alternative argument that Boulos Holdings' rights under special condition 44 have been extinguished as a result of the consent orders made by the Court in 2016. Edwin Davey has contended that the rights that merged with the consent orders were the same rights and claims that Boulos Holdings seeks to vindicate in these proceedings. Edwin Davey says that an estoppel per rem judicatam arose from the consent orders (see closing submissions at [60]). In its supplementary submissions, Edwin Davey accepted that if (as I have found) there was not an effective assignment of the chose in action to Benjamin and Brendon, then this issue would not arise. Nevertheless, I will briefly address it as follows. 2. The consent judgment specifically contemplated that Boulos Holdings could commence a fresh proceeding pleading the very cause of action that it pleads in this proceeding. Pursuant to the undertaking proffered at the time of the consent judgment, Edwin Davey undertook not to contend that there is "any estoppel or impediment against Boulos Holding Pty Limited advancing those causes of action upon the principles stated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45". 3. There is, however, a relevant distinction between an Anshun estoppel and estoppel per rem judicatam. 4. As to the latter, in Thoday v Thoday [1964] P 181 at 197-198; [1964] 1 All ER 341, Diplock LJ explained the estoppel per rem judicatam as a generic term encompassing in modern law two species of estoppel ("cause of action estoppel" and "issue estoppel", the second being an extension of the same rule of public policy) and drawing a distinction between "issue estoppel" and estoppel in pais or "fact estoppel". Diplock LJ noted that cause of action estoppel "is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties". 5. By contrast, the former (Anshun estoppel), protects against abuse of the Court's process and derives from the principle articulated by Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 115 that: [W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. See also Anshun at 602-3 per Gibbs CJ, Mason and Aickin JJ. 1. The distinction is relevant in the present case because what Edwin Davey agreed not to contend, in any later proceeding brought by Boulos Holdings in relation to the causes of action the subject of the consent judgment, was an Anshun estoppel (but made no such undertaking as to any estoppel res judicatam). 2. The question as to whether such an estoppel would have arisen by reference to the consent judgment is determined by asking whether the cause of action in the later proceeding (i.e., the present proceeding "is in substance the same as that litigated to judgment in the former" (i.e., the 2016 Proceeding) (see Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33 at [106] per Handley AJA). Writing extra-judicially in 'Res Judicata, General Principles and Recent Developments' (1999) 18 Australian Bar Review 214, Handley J contrasted issue estoppel with cause of action estoppel, when his Honour said: A decision on an issue against the party who succeeded does not give rise to an issue estoppel because it was not fundamental to the decision in his favour. Where several grounds for succeeding on a cause of action are upheld, there is no estoppel on the separate findings because none are fundamental. Examples include a number of particulars of negligence, or different breaches of the same contract occurring at the same time. There will be cause of action estoppels but no issue estoppel as to any particular of negligence or particular breach. 1. Relevantly, therefore, the position is that (pursuant to the undertaking recorded by Fagan J), Edwin Davey could not here have contended that the claim by Boulos Holdings gives rise to an Anshun estoppel; nor could it raise an issue estoppel in circumstances where there was a consent judgment and no issues, as such, were determined. However, there was certainly judgment on the cause of action itself (as opposed, say, to a discontinuance of the claim without judgment). That would in my opinion have given rise to a cause of action estoppel in respect of the cause of action on which the consent judgment was entered (i.e., as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been "fought out to the bitter end" as per Vaughan Williams J in the South American and Mexican Co decision referred to above. However, that is not the same cause of action as that which is now brought, because the cause of action there in question was by Benjamin and Brendon as assignees of the chose in action. Here, I have found that there was no effective assignment and hence no cause of action that was there litigated would give rise to an estoppel res judicata against Boulos Holdings in the present proceeding. Assuming the PPSA does not apply, what is the effect of the purported assignment of the chose in action by Perpetual to Benjamin and Brendon? 1. Finally, Edwin Davey's defence relies on the operation of the PPSA, and in the alternative, the submission (dealt with above) to the effect that the consent judgment extinguished Boulos Holdings' present claim on the basis of an estoppel. It does not make any alternative submission to the effect that Perpetual assigned its security interest in the right to payment under special condition 44, and Benjamin and Brendon, as assignees, enforced that interest and recovered payment by way of the consent judgment, thereby confining the plaintiff to seek the proceeds from that payment. Such a submission is different from whether the existence of a consent judgment creates an estoppel against Boulos Holdings advancing the cause of action in this case. 2. Nevertheless, the validity of the assignment by Perpetual to Benjamin and Brendon is considered briefly here. This proceeds on the assumption (c.f., the conclusion reached above) that Perpetual does have rights which it can assign. 3. Perpetual's charge over the choses in action which fall within the definition of "Secured Assets" is an equitable interest. Accordingly, the Deed of Assignment between Perpetual and Benjamin and Brendon gives rise to an equitable assignment of an equitable interest that is for value. There is a clear intention to assign, the subject matter is identified, and it is in writing pursuant to s 23C(1)(c) of the Conveyancing Act: see The Assignment of Contractual Rights at 358. 4. In The Law of Securities (5th ed, 1993, Lawbook Co), Sykes and Walker explain the powers of the mortgagee of a legal chose as follows (at 767): The main power of the mortgagee of a chose in action is to take legal proceedings against the debtor for recovery. This is analogous to the act of entry into possession in the case of a mortgage of land, but in the case of a chose in action it has a destructive effect in that, if effective in the sense that it leads to payment, it destroys the character of the subject matter as a chose in action. In the case of a statutory transfer under the Judicature Act, the assignee obtains the legal title and is enabled to sue the debtor without joining the assignor; in the case of a non-statutory assignment, the assignee has to join the latter. 1. This passage raises two points. First, given that the assignment of Perpetual's equitable charge was a non-statutory assignment, Benjamin and Brendon (as assignees) were required to join the assignor (Perpetual) to proceedings for recovery against the debtor (Edwin Davey) and failed to do so. 2. Second, the consent judgment dismissed the claim by Benjamin and Brendon. Accordingly, this gives rise to the question as to whether the claim against Edwin Davey did in fact "destroy the character of the subject matter as a chose in action". A settlement between Benjamin and Brendon and Edwin Davey, whereby the former's claim was dismissed, does not constitute a payment under special condition 44 and thus the chose in action still exists (such that Boulos Holdings can bring a claim). 3. In any event, I have concluded that Perpetual did not have rights to assign and therefore Boulos Holdings at all relevant times retained the rights upon which it now sues. Conclusion 1. For the above reasons, Boulos Holdings' claim to the moneys payable under special condition 44 of the Contract is made good. Edwin Davey's cross-claims 1. Turning then to the cross-claims made by Edwin Davey against Boulos Holdings, I deal with each in turn. Claim for $500,000 paid to Perpetual under Payment Deed 1. As noted in the chronology of events, completion of the Contract was to occur on 23 August 2012 and settlement did not occur on that date. It is alleged by Edwin Davey that, in breach of the Contract, Boulos Holdings failed to comply with the obligation to complete on that date. Boulos Holdings does not dispute this breach (though it does cavil with the proposition that it had a contractual obligation to procure Perpetual's consent (as first mortgagee) to the completion of the Contract; and hence Boulos Holdings says that the relevant breach of contract is simply the failure to complete on time). It is not necessary to delve into this issue, since (as I read the pleaded cross-claim) the reference to a failure to procure Perpetual's consent to the settlement goes no further than to explain why it is that the sale did not complete on the specified date and, in any event, it is conceded that there was a breach of the Contract by reference to the failure to complete on time. 2. Edwin Davey says that, as a result, in order to achieve completion of the Contract, on 17 September 2012, it entered into the Payment Deed with Perpetual (to obtain Perpetual's consent to completion of the Contract) and therefore it is entitled to recover the amount of $500,000 plus interest. It puts this claim on the following bases: first, as damages for breach of the Contract; second, pursuant to an implied right of a surety to be indemnified by a principal debtor for moneys paid to that debtor's use (on the basis that the effect of the Payment Deed was to cause Edwin Davey to be a guarantor of Boulos Holdings' liability to Perpetual up to a sum of $500,000); and, third, as restitution for moneys paid to the use of Boulos Holdings. 3. The restitutionary claim is said to arise on a number of grounds: (i) that the moneys were paid by Edwin Davey under legal compulsion to secure the completion of the Contract and its right to the title deeds of the Flour Mill Property; and (ii) that the moneys were provided in circumstances where the benefit of payment of those moneys in partial discharge of Boulos Holdings' debt to Perpetual was "freely accepted" and where it was apparent to Boulos Holdings that the payment was not being provided gratuitously. 4. As to the first basis for this claim, i.e., as damages for breach of contract, Edwin Davey relies on the proposition that a party, faced with a counter-party's breach of contract, can take reasonable steps to mitigate the consequences of the breach of contract; and that if, in undertaking those reasonable mitigatory steps, the innocent party incurs loss or damage, that loss is recoverable as damages for breach of contract (even if it has increased the loss arising from the breach) (citing Thompson & Morgan (United Kingdom) Ltd v Erica Vale Australia Pty Ltd (1995) 31 IPR 335 at 349 per Lockhart, Gummow and Hill JJ; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 at [134] per Hayne J; Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452 at 506 per Lord Macmillan). 5. Edwin Davey says that it is not open to Boulos Holdings to suggest that Edwin Davey should have pre-paid some of the amounts possibly (or likely later to be) payable under special condition 44 of the Contract (i.e. after the development consent had been issued). It is said that, had Edwin Davey paid such amounts at the time of settlement of the Contract (in September 2012) in order to avoid a prospective contingent liability under the Payment Deed, it would have been met with the argument from Boulos Holdings that it was acting officiously in making a payment that it was not legally obliged to make in order to avoid a liability that it might never have needed to meet (and was not required to meet at the time). 6. As to the claim for damages, reliance is placed by Edwin Davey on the statement by Goff J in Grant v Dawkins [1973] 3 All ER 897 (Grant v Dawkins) at 901J (where there was a failure to complete a contract and the purchaser obtained an order for specific performance), as to the possibility that the vendor may fail to discharge the mortgages, that "where there is a contract to sell free from mortgages and the vendor fails to pay them off, the plaintiff may, on discharging them himself, recoup his position by compensation out of the purchase price so far as it will extend and, over and above that, by damages limited to the excess at the relevant time of the value of the property over the purchase price". Edwin Davey says that although Grant v Dawkins was concerned with compensation payable pursuant to the Lord Cairns' Act (the Chancery Amendment Act 1858, 21 & 22 Vict, C. 27), the principle applies equally to an action for damages at common law (citing H McGregor, McGregor on Damages (20th ed, 2018, Sweet & Maxwell)) at [27-013], which deals with consequential loss arising from a delay in completion). 7. Edwin Davey maintains that there is no issue here concerning remoteness because the loss claimed arises as a consequence of the need to secure Perpetual's consent to the settlement of the Contract (Perpetual imposing as a requirement of its consent that Edwin Davey enter into the Payment Deed). Edwin Davey notes that there is no assertion by Boulos Holdings that Perpetual was not entitled either to withhold its consent to the settlement of the Contract or to require further moneys to be paid to it in order to agree to settlement; and Edwin Davey says that in circumstances where Boulos Holdings did not volunteer to do so, Edwin Davey was compelled to do so in order to obtain that to which it was entitled under the Contract (i.e., clear title to the Flour Mill Property). It is submitted that its conduct in this regard was reasonable and that this consequential loss (arising from Boulos Holdings' breach of contract) is recoverable. 8. As to the second basis for the claim, Edwin Davey invokes the implied right of a surety to be indemnified by a principal debtor for sums paid by the surety (at the debtor's request and for no consideration) in discharge of the principal's indebtedness (Edwin Davey citing In Re A Debtor [1937] 1 Ch 156 at 160-161 per Slesser LJ, 163-164, 166 per Greene LJ (Romer LJ agreeing) (In Re a Debtor); Anson v Anson [1953] 1 QB 636 at 641-642 per Pearson J (Anson v Anson); Israel v Foreshore Properties Pty Ltd (in liq) (1980) 30 ALR 631 at 634-636 per Aickin J (Gibbs, Stephen, Murphy and Wilson JJ concurring); McColl's Wholesale Pty Ltd v State Bank of New South Wales [1984] 3 NSWLR 365 at 367 per Powell J; Friend v Brooker at [55]; Warwick Entertainment Centre Pty Ltd (recs and mgrs apptd) v Silkchime Pty Ltd (recs and mgrs apptd) [No 4] [2018] WASC 120 at [112(i)] per Tottle J). 9. As adverted to above, Edwin Davey says that the effect of the Payment Deed was to make Edwin Davey a surety of Boulos Holdings' debt to Perpetual, up to the sum of $500,000, in circumstances where sufficient proceeds were not received from the sale of the Flour Mill Property and the Second Pyrmont Property to discharge that loan. 10. It is accepted by Edwin Davey that there cannot be any implied (or express) contractual right to indemnity where "the guarantee is furnished without the request or knowledge of the principal debtor" (Edwin Davey there referring to Courtney and Phillips, O'Donovan and Phillips, The Modern Contract of Guarantee (3rd English ed, 2016, Sweet & Maxwell) at [12-001]) (The Modern Contract of Guarantee). However, it notes that in an appropriate case such a request can be inferred from the circumstances. While it is accepted that no sufficient inference will arise from the mere "asserted improbability of a businessman giving a guarantee without a request to do so" (citing Sisic v Krpo [2008] NSWSC 1086 at [38]), Edwin Davey says that, in all the circumstances of the present case, Boulos Holdings should be taken to have requested the provision of the guarantee effected by the Payment Deed. It is said that Boulos Holdings knew that it was being proffered, acquiesced to it being proffered, and that, by Mike stating "do whatever you need to make the sale happen", he implicitly requested the provision of the guarantee. 11. Edwin Davey points out that the $500,000 paid pursuant to the Payment Deed was applied in reduction of Boulos Holdings' loan facility from Perpetual, for which Boulos Holdings was principally liable. In those circumstances, it is said that Edwin Davey is entitled to be indemnified by Boulos Holdings for $500,000, based on the right of a surety to be indemnified by the principal debtor for money paid to that debtor's use in reduction of its liability to its creditor. 12. In addition to an implied right of indemnity, Edwin Davey submits that a surety has a claim for restitution for moneys paid to the use/benefit of the principal debtor (an action for money had and received, or money paid to the use of the principal debtor, reference being made to Mason and Carter's Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths) at [115] (Restitution Law in Australia) and to Hill v Hill [2005] NSWSC 863 at [47] per Campbell J, as his Honour then was). Reference is also made to the decision of Stevenson J in Wollongong Coal Ltd v NRE Resources Pty Ltd (No 2) [2017] NSWSC 1552 (Wollongong Coal v NRE Resources) at [53] in this context. 13. Edwin Davey says that the passage from Hill v Hill at [47] reflects the coterminous restitutionary right where the principal debtor has requested the surety to provide a guarantee but that a restitutionary right can arise even absent a request (Edwin Davey citing The Modern Contract of Guarantee at [12-002]; In Re A Debtor at 166 per Greene LJ; Anson v Anson at 642-643 per Pearson J; Owen v Tate [1976] QB 402 (Owen v Tate) at 412 per Stephenson LJ). It is noted that restitution for unjust enrichment is recoverable where (inter alia): a payment has been made to another under legal compulsion, which payment was reasonably necessary and enriched the principal debtor, who was ultimately and primarily liable for the debt; or a defendant has been enriched where the benefits conferred were freely accepted and in circumstances where it was apparent to the defendant that the benefits were not being provided gratuitously. 14. As to the third (restitutionary) basis of this claim for damages, Edwin Davey refers, first, to the line of authority commencing with Exall v Partridge (1799) 8 Term Rep 308; 101 ER 1405 (Exall v Partridge); Johnson v Royal Mail Steam Packet Co (1867) LR 3 CP 38 (Johnson v Royal Mail Steam Packet Co); Armstrong v Commissioner of Stamp Duties (1967) 69 SR (NSW) 38 (Armstrong v Commissioner of Stamp Duties) at 44 per Wallace P (with whom Holmes JA agreed); and also to cases where it has been held that a tenant for life, who has paid off a debt charged over the settled property, is entitled to the charge over the property to secure payment from the remainderman of the money paid (there citing Countess Shrewsbury v Earl of Shewsbury (1790) 1 Ves 227; 30 ER 314; Burrell v Earl of Egremont (1843) 7 Beav 205; Harvey v Hobday [1896] 1 Ch 137). 15. In light of the above authorities, Edwin Davey says that it is entitled to restitution from Boulos Holdings for $500,000 (plus pre-judgment interest). It re-iterates that, under the Contract, it was entitled to have Boulos Holdings convey to it, free from encumbrance, the Flour Mill Property upon payment of the totality of the purchase price; that Boulos Holdings was unable to perform this obligation as Perpetual, exercising its lawful rights as mortgagee, refused to consent to the settlement absent some further assurance (i.e., the Payment Deed); and that, in order to obtain that to which it was entitled (i.e., the Flour Mill Property free from encumbrance), Edwin Davey was compelled to pay $500,000 to Perpetual. 16. Edwin Davey says that the fact that it had no legal obligation to enter into the Payment Deed is irrelevant; rather, that what is relevant is that it was compelled to do so in order to obtain that to which it was entitled to receive. It is submitted that facts of this case fall within Scarman LJ's dictum in Owen v Tate at 411-412 (with whom Stephenson and Ormrod LJJ agreed) namely, that in the particular circumstances of the case, there was a "necessity" for Edwin Davey to enter into the Payment Deed (and to assume the obligation to pay $500,000 to Perpetual) and that it is just and reasonable that Boulos Holdings reimburse Edwin Davey for those moneys. 17. In addition to the above, Edwin Davey invokes the "free acceptance" basis on which restitutionary relief may be available (reference being made to Mitchell, Mitchell and Watterson, Goff & Jones: The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell) at [17-03]); i.e., that where, outside of circumstances where the defendant has requested the benefit or enrichment received, the recipient of the benefit, as a reasonable person, is in the position where that person should have realised that the provider of the services or benefit would have expected to be paid for them and did not take a reasonable opportunity to reject those services (or that benefit, noting that it is not confined merely to the provision of services, but that the principle extends to the conferral of any benefit). Reference is made by way of example to: R (Rowe) v Vale of White Horse District Council [2003] EWHC 388 (Admin) at [13]-[14] per Lightman J; Damberg v Damberg (2002) 52 NSWLR 492 at [192] per Heydon JA, as his Honour then was (Spigelman CJ and Sheller JA agreeing); Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 at 260 per Byrne J (Brenner v First Artists' Management); Angelopoulos v Sabatino (1995) 65 SASR 1 at 11; and Restitution Law in Australia at [157]. Boulos Holdings' submissions as to Edwin Davey's cross-claim for $500,000 paid to Perpetual under Payment Deed 1. First, as to Edwin Davey's claim for damages for breach of the Contract on the basis that Boulos Holdings failed to complete on 23 August 2012 and failed to procure Perpetual's consent to completion, as adverted to above, Boulos Holdings says that there is no term in the Contract requiring Boulos Holdings to procure Perpetual's consent to completion and that, as the Contract in fact completed on 18 September 2012, the only relevant breach is a failure to complete on time. 2. It is noted that the loss claimed by Edwin Davey is $500,000 plus fees and expenses in relation to the bank guarantee given to Perpetual pursuant to the Payment Deed (entered into at a time when Boulos Holdings was under the control of Receivers) to which Boulos Holdings was not a party. 3. While Boulos Holdings now accepts that Edwin Davey was ready, willing and able to complete on 23 August 2012, it says that the damages claimed by Edwin Davey (for the consequences of a contingent liability incurred to Perpetual under the Payment Deed without reference to Boulos Holdings) do not flow from the breach (noting that causation involves not just the "but for" test but also common sense – as per March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12 (March v Stramare); and that damages are assessed at the date of breach). 4. Boulos Holdings says that the economic value to Edwin Davey of Boulos Holdings' performance of the Contract was being able to use and exploit the Flour Mill Property from 23 August 2012, which it would have been able to do had the Contract completed on that date (and that this situation persisted until 18 September 2012, when the Contract completed) but (as is clearly the case) the losses here claimed are not losses of that kind. 5. Boulos Holdings says that the contingent liability to Perpetual was not in existence at the date of breach and that the breach did not cause the contingency to occur; rather, that, under the Payment Deed, Edwin Davey obtained rights against a third party outside the Contract and for its own commercial interests. It is said that the amount of the liability was not referrable to Edwin Davey being without the title and possession of the Flour Mill Property. 6. Insofar as Edwin Davey relies on Grant v Dawkins, Boulos Holdings says that case is distinguishable in circumstances where, here, the Contract was not terminated. Boulos Holdings says that Edwin Davey was not entitled to terminate the Contract as it served no notice to complete, such a notice being required to give 28 days to completion (special condition 34); and that damages cannot be assessed on the basis of a lost bargain because the bargain was not "lost"; nor did Edwin Davey seek specific performance. 7. Further, Boulos Holdings says that this is not a mitigation case of the kind where a plaintiff has a liability to a third party from the breach that it reduces by agreement with the party to whom it is liable. It is said that Edwin Davey's entry into the Payment Deed was unilateral (without reference to Boulos Holdings); and that Edwin Davey cannot rely on acquiescence from Mike (even if Mike's conduct amounted to that) because Receivers were in control of Boulos Holdings by that time. 8. Boulos Holdings refers to Mills v Ruthol Pty Ltd (2004) 61 NSWLR 1; [2004] NSWSC 547 (Mills v Ruthol) at [87], which it says demonstrates that the damages which flow from a breach by the vendor from a failure to complete, other than when the bargain is lost, are the loss of revenue from the property. Further, Boulos Holdings asserts (by reference to its submissions in answer to the misleading or deceptive conduct claim – see below) that Perpetual did receive around $7 million on settlement because it was entitled to the amount that the Receivers were paid. 9. Boulos Holdings also contends that the loss claimed is too remote (pointing to the test articulated in C Czarnikow Ltd v Koufos [1969] 1 AC 350 (Czarnikow v Koufos) at 385 per Lord Reid. Boulos Holdings says that Edwin Davey must do more than prove that what occurred was merely one of the foreseeable outcomes; rather, that it must prove that it was in Boulos Holdings' reasonable contemplation at the date of the Contract (as, otherwise, Boulos Holdings did not have the opportunity to make an informed decision to accept the risk of such a loss or seek an exclusion of liability). 10. Boulos Holdings says that it cannot be said that Edwin Davey entering into an agreement with Perpetual to incur a liability to Perpetual was something naturally arising in the usual course of things if Boulos Holdings were to be unable to complete on time. It is said that, on 22 November 2010, the prospect that Edwin Davey would incur liability to Perpetual (without reference to the Contract or Boulos Holdings) was not in the reasonable or actual contemplation of Boulos Holdings in the sense of being a serious possibility; and that it could not be said to be reasonably expected that, if Boulos Holdings could not complete, Edwin Davey would cause itself to be liable to Perpetual (rather than, say, to terminate and sue for breach or to sue for specific performance). 11. Insofar as Edwin Davey makes a restitutionary claim (see [15] and [17](b) of the amended cross-claim (seeking indemnity from Boulos Holdings for its payment of $500,000 to Perpetual)) on the basis that Edwin Davey entered into the Payment Deed and provided the bank guarantee at the request of, and with the knowledge, consent and acquiescence of Boulos Holdings (and that Boulos Holdings received a benefit from the payment at Edwin Davey's expense because it partially discharged Boulos Holdings' debt to Perpetual), Boulos Holdings makes the following submissions. 12. First, Boulos Holdings says that the Contract governed the rights between Edwin Davey and Boulos Holdings and that the restitution claim here made seeks (impermissibly) to "alter by a sidewind" the bargain struck between them and to redistribute the risks each took in relation to the Contract and should fail (adopting the language in Chubb Insurance Co of Australia Ltd v Moore [2013] NSWCA 212 (Chubb Insurance v Moore) at [127] per Emmett JA and Ball J). 13. Second, it is said that the payment to Perpetual was made pursuant to an agreement between Edwin Davey and Perpetual without the involvement of Boulos Holdings (which was under the control of the Receivers at the time); and that the bank guarantee was not given at Boulos Holdings' request. Boulos Holdings says that Edwin Davey voluntarily entered into the Payment Deed. Accordingly, Boulos Holdings maintains that it is not liable to indemnify Edwin Davey for the payment of $500,000. 14. Further, Boulos Holdings cavils with the proposition that the payment partially discharged Boulos Holdings' debt to Perpetual. Boulos Holdings says that the payment was without Boulos Holdings' authorisation or ratification, so that it was not effective partially to discharge its debt to Perpetual; and that there is no evidence that Boulos Holdings freely accepted the payment (noting that Perpetual did not pursue Boulos Holdings, only the guarantors). Reference is made by Boulos Holdings to the statement by Bowen LJ in Falcke v Scottish Imperial Insurance Company (1887) LR 34 Ch D 234 (Falcke) at 248 as to the general principle that, with well recognised exceptions and in the absence of other circumstances, one person cannot force a liability on another, or confer a benefit on that other, against his or her will. It is noted in this regard that the Payment Deed specifically stated that it only conferred rights on the parties to it (which, it is noted, did not include Boulos Holdings). 15. Boulos Holdings also cavils with the proposition that the payment was based on an implied request (through Mike). Boulos Holdings says that, in contrast to Wollongong Coal v NRE Resources at [57], where Stevenson J found that there was authority to make the relevant request, here there is nothing to say Mike had such authority from the Receivers to authorise Boulos Holdings to take on any such liabilities. It is said that any discussion between Edward and Mike should be disregarded on the question of whether Boulos Holdings made a request but that, in any event, Mike did not request Edwin Davey to enter into the Payment Deed or to pay anything. Accordingly, Boulos Holdings says that the argument that it is liable to indemnify Edwin Davey for the payment of $500,000 because Boulos Holdings requested this payment fails on the facts. 16. Further, Boulos Holdings says that it was not a necessity that Edwin Davey enter into the Payment Deed because Edwin Davey had other options (such as to serve a notice to complete and terminate or sue for specific performance). It is said that the authorities relied on by Edwin Davey in its opening submissions at [73]-[75] (namely, Exall v Partridge; Johnson v Royal Mail Steam Packet Co; and Armstrong v Commissioner of Stamp Duties) involved obtaining possession of property and the compulsion of law was to obtain the right to possession of property already owned with no other rights. Reference is made to the distinction drawn in Owen v Tate at 411 between necessity and officiousness; and Boulos Holdings submits that, here, the conduct of Edwin Davey was officious in this sense. 17. As to the concept of free acceptance, it is noted that this requires that there be a reasonable opportunity to reject the services offered. Insofar as Edwin Davey relies on Mike's knowledge to establish Boulos Holdings' knowledge in this regard, Boulos Holdings again maintains that this ignores the fact that the Receivers were in control of the company at the time. 18. Finally, as to the issue of loss, as noted above, Boulos Holdings says that Perpetual did receive more than $7 million on settlement because it was entitled to the amount that the Receivers were paid. 19. It is noted that, on settlement, Perpetual received the sum of $6,676,070.46 and the Receivers received the sum of $406,948.63; and that, as first registered mortgagee, Perpetual was entitled to first priority over the proceeds of sale (and could have refused to provide a discharge of its mortgage if it did not receive that to which it was entitled). Boulos Holdings points to the fact that Perpetual directed that $406,948.63 be paid to the Receivers. Boulos Holdings says that the payment of this amount at the direction of Perpetual is equivalent to payment to Perpetual, so that Perpetual in fact received over $7 million on settlement. In that event, it is said that cl 1.3 of the Payment Deed was satisfied and Edwin Davey had no liability under cl 1.1. 20. Insofar as Edwin Davey says that the sum of $406,948.63 is referable to GST (such that the mortgagee was not entitled to it), Boulos Holdings notes that the GST was added to the purchase price and payable on completion (special condition 42.3 of the Contract). It says that it was an unsecured debt owing to the Commissioner by Boulos Holdings in respect of the relevant tax period after setting off input tax credits (referring to ss 7-1 to 7-15 of the A New Tax System (Goods and Services Tax) Act 1999 (NSW)). Boulos Holdings argues that Perpetual was entitled to refuse to discharge the mortgage unless its debt was paid in full, such that it could have demanded and received the $406,948.63 on settlement (referring to Commonwealth Bank of Australia v Invest Pty Ltd (in liq) (No 9) [2018] NSWSC 1276 at [165]-[168]). Moreover, it is noted that cl 2.5 of the Perpetual Mortgage required Boulos Holdings to pay all purchase money to Perpetual. 21. In the alternative, it is submitted that the chain of causation was severed by Edwin Davey's negligence, for the reasons to which reference is made in the submissions raised in answer to the misleading or deceptive conduct claim (see below). (I interpose to note that these matters are raised in the defence at [25A], which is specifically in response to the misleading or deceptive conduct claim.) Edwin Davey's response to the defences raised by Boulos Holdings to its cross-claim for $500,000 paid to Perpetual under Payment Deed 1. Edwin Davey's response to the defences raised by Boulos Holdings to its cross-claim in respect of the payment made to Perpetual is as follows. 2. First, insofar as it is submitted that no obligation in fact arose under the Payment Deed, Edwin Davey says that the sum of $406,948.63 paid to Boulos Holdings on settlement represented GST on both the purchase price ($400,000) and adjustments ($6,948.63). It is said that these were required to be remitted from the sale of the Flour Mill Property (and were, in fact, remitted by Boulos Holdings, via its Receivers, to the Australian Tax Office (ATO)). It is said that this is evident from the settlement sheet itself. Accordingly, Edwin Davey says that that sum was not money otherwise payable to Perpetual; rather, it represented transaction costs arising from the sale of the Flour Mill Property. 3. Second, insofar as it is submitted that Edwin Davey was responsible for Perpetual's failure to receive at least $7 million from the sale of the Flour Mill Property (it being contended that Edwin Davey's obligations under special condition 44 of the Contract arose in August 2012 prior to settlement, with the result that it was Edwin Davey's own breach of contract that caused Perpetual to receive less than $7 million at settlement of the Contract), Edwin Davey says that this assertion is wrong (and inconsistent with the case propounded by Boulos Holdings on its statement of claim, where it says that the obligation to pay money under special condition 44 of the Contract arose on the day prior to the issuance of a construction certificate, namely, 6 August 2013). Edwin Davey says that no obligation under special condition 44 of the Contract could have arisen until Edwin Davey received the development consent, which occurred on 25 October 2012, being after settlement of the Contract (which occurred on 18 September 2012). 4. Third, insofar as Boulos Holdings says that restitution is not recoverable as such a claim "seeks to alter by a sidewind the bargain struck in the Contract between them and therefore seeks to redistribute the risks they each took in the Contract" (at [78] of opening submissions), Edwin Davey says that the reasoning of the High Court decision in Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635 at [45], [49] per Gleeson CJ and in other similar cases (such as Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256 per Deane J; Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 at 275 per Priestley JA; Brenner v First Artists' Management at 257 per Byrne J; Trimis v Mina [1999] NSWCA 140 at [54] per Mason P; Coshott v Lenin [2007] NSWCA 153 at [10] per Mason P (Spigelman CJ and Campbell JA agreeing)) is that the recipient (having contracted with a different entity), had to look to that entity for payment for the services rendered; since to hold otherwise would be to overturn the assumed allocation of risk between the parties and the express rights for which they had bargained. 5. Edwin Davey says that, in the present case, there is no inconsistent contractual right precluding a right of restitution (and it is said that none has been pointed to by the plaintiff in its opening submissions). It accepts that full compensation by way of damages for breach of contract and full restitution cannot be given concurrently (Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 359 per Mason CJ (with whom Toohey J agreed), 379-380 per Deane and Dawson JJ) but says that there is nothing to say that a claim for restitution for unjust enrichment and a claim for damages for breach of contract cannot exist side by side (referring in the context to what Mason CJ said at 354ff). 6. Further, it is said that this is not a case where restitution is precluded because, although otherwise available, the claimant received precisely that for which it bargained (c.f., Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207 at [84]-[86] per Leeming JA (with whom Macfarlan JA and I agreed). Here, it is said that Edwin Davey did not receive that to which it was entitled (i.e., free title to the Flour Mill Property for the sum of $10.8 million plus GST), rather it had to pay an additional $500,000 to secure that title. It is also noted that there is no defence pleaded of "good consideration". Determination of cross-claim for $500,000 paid to Perpetual under Payment Deed 1. As to the claim for this amount as damages for breach of the Contract, there is no doubt (and as noted there is no dispute) that there was a breach of the Contract when Boulos Holdings failed to complete on 23 August 2012 (that being the date specified in the Contract for completion). However, the contract was ultimately completed (albeit late) and the damages claimed for breach of contract are not for loss suffered by the failure to complete on time. Rather, the loss claimed is referable to the amount that was in effect paid by Edwin Davey (through the provision of the bank guarantees on which Perpetual ultimately called) to Perpetual to secure Perpetual's promise to discharge the mortgage (in order to enable clear title to the Flour Mill Property to be provided to Edwin Davey). 2. Edwin Davey was not legally obliged to enter into the Payment Deed nor does it suggest that it was – rather, it couches this as being, in effect, a situation where there was a practical necessity that it do so. In my opinion, it was an obligation voluntarily undertaken by Edwin Davey which does not flow naturally from the breach of Boulos Holdings' obligation to complete on 23 August 2012. 3. I consider that Boulos Holdings' failure to complete on time was not so connected with Edwin Davey's loss (namely, the payment of $500,000 to Perpetual to discharge its mortgage) that "as a matter of ordinary common sense and experience it should be regarded as a cause of it" (in the words of the High Court in March v Stramare at 522). Further, as to the issue of remoteness, Edwin Davey's payment of an additional amount to secure Perpetual's consent to the discharge of the mortgage was not in my opinion a loss of the kind which a reasonable person in the position of the parties would consider, at the time of entry into the contract, as arising naturally, according to the usual course of things, from Boulos Holdings' failure to complete the Contract on time (see Czarnikow Ltd v Koufos and Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 in relation to the first limb). 4. As to the issue of mitigation, strictly speaking Edwin Davey does not plead in its amended statement of cross-claim that the payment to Perpetual under the Payment Deed was incurred in mitigation of its loss, though I accept that mitigation can be seen as an aspect of a general causation defence (see Chand v Commonwealth Bank of Australia [2015] NSWCA 181 (Chand); and no pleading point was here taken. 5. The overlap between causation and a failure to mitigate arises because a defendant is liable only for the portion of the plaintiff's loss caused by the defendant's breach (see Chand at [181]; Sotiros Shipping Inc and Aeco Maritime SA v Sameiet Solholt (The Soholt) [1983] 1 Lloyd's Rep 605). At first instance in Chand, Robb J noted (in obiter) that the standard of conduct required by the plaintiff following the defendant's breach was the same whether it was approached as a question of causation (novus actus interveniens) or mitigation, being a standard of reasonableness (Chand v Commonwealth Bank of Australia [2014] NSWSC 708 at [389]; see also Chand at [58]). However, whether the issue is dealt with as a novus actus interveniens or as a failure to mitigate may impact how damages are assessed. A novus actus interveniens limits the plaintiff to a recovery of nominal damages; whereas a failure to mitigate results in a reduction of damages. 6. As I noted in Chand, in Koch Marine Inc v D'Amica Societa di Navigazione ARL [1980] 1 Lloyd's Rep 75, Goff J characterised three aspects of mitigation (non-recovery for avoidable loss; recovery for loss incurred in reasonable attempts to avoid loss; and non-recovery for avoided loss), all as ultimately aspects of the principle of causation. In Chand, without addressing that proposition, it was concluded that the defendant's liability for prospective loss was correctly analysed by, first, considering whether a breach caused a particular loss and, second, addressing whether there had been a failure to mitigate (see Chand at [184]). If, as a matter of legal rather than factual causation, no loss has been caused by the relevant breach (such as where the sole effective cause was found to be some other act or event) then the question of mitigation would not arise. 7. In the present case, I have concluded that the loss occasioned by the failure to complete the Contract on the specified date (in circumstances where there was no loss of bargain because the Contract was soon after completed, albeit late) would have been loss referable to the delay in completion. In those circumstances, it seems to me that incurring a contingent liability to Perpetual in the amount provided for under the Payment Deed was not reasonable conduct in mitigation of the potential damages that might be suffered as a result of the breach of contract that had occurred. At the time of entry into the Payment Deed on 17 September 2012, Perpetual had not exhausted its avenues of recovery of the debt owed under the loan facility with Boulos Holdings (including by way of claim against the guarantors of the Perpetual Mortgage). That said, the alternative would seem to have been for Edwin Davey to have been forced, from a practical perspective, if it wished (as it did) to secure the property, to take title subject to the Perpetual Mortgage, or for completion to have been delayed until after the sale of the Second Pyrmont Property (with the risk that the sale might have fallen through); in which case there is an argument that payment to Perpetual of some amount to secure the sale might be said to have been in reasonable mitigation of that potential loss. On balance, I have concluded that the payment to Perpetual was not in reasonable mitigation of the potential future loss; but, as it is, that issue does not here arise. 8. For the reasons set out above, I am not persuaded that this was loss that was caused by the breach of Contract and was not too remote. Therefore, in my opinion, there was a breach of contract but this only gives rise to nominal damages in the circumstances. 9. As to the claim for indemnity as a surety, Edwin Davey submits that by stating "do whatever you need to make the sale happen", Mike implicitly requested the provision of a guarantee if Edwin Davey was content to do so. In my opinion, there was no request for Edwin Davey to step in as a surety. I do not regard the statement, "do whatever you need to make the sale happen", in relation to settlement of the contract, as an implied or express request so as to give rise to the implied right to restitution as a surety. I have referred above to the evidence given on this issue. I accept Mike's evidence that he told Edward that the payment of a sum of $500,000 to Perpetual was wasting Edwin Davey's money and that he did not support that payment being made. Accordingly, leaving aside the issue as to how any acquiescence by Mike could bind Boulos Holdings at a time when it was controlled by Receivers, I find that the conversation in question did not amount to acquiescence by Boulos Holdings to the proffering of the guarantee effected by the Payment Deed. 10. Nor am I satisfied that the restitutionary basis for the claim is made out. There was no implied request for the payment to be made (nor, on the principles outlined in Falcke would an officious payment operate to discharge or partially discharge the debt without acceptance or ratification thereof); nor do I consider that the principles of restitution by way of the "free acceptance" of a benefit (the retention of which would unjustly enrich the party benefited) assist Edwin Davey in this case. Leaving aside whether there was even a reasonable opportunity for Boulos Holdings to reject the services in question (being the proffering of the guarantee to Perpetual by Edwin Davey to discharge the mortgage over the Flour Mill Property), given that Receivers were appointed over the Flour Mill Property at that time and given that Mike was not on notice of the terms of the Payment Deed, any such opportunity that may have arisen from the conversation of Mike and Edward on or about 21 August 2012 suffers from the difficulty that Mike there rejected the suggestion that such a payment be made (and hence any benefit in relation to the payment was one that seems squarely to have been rejected by Mike). 11. For completeness I do not see this as a case of the kind where restitution is unavailable on the basis that it is seeking to alter by a sidewind the contractual allocation of risk between the parties. Rather, the difficulty I have is that I am not persuaded that there was any implied request for the payment to be made (a statement that Edward should do whatever he needed to do is more akin to Mike washing his hands of the problem) nor that there was any "free acceptance" of the benefit from the making of the payment insofar as the discharge of Boulos Holdings' debt is concerned. 12. As to the restitutionary claim that moneys were paid by Edwin Davey under legal compulsion to secure the completion of the Contract and its right to the title deeds of the Flour Mill Property, in my opinion, the payment was made in circumstances where there was no necessity for the obligation to be assumed. Edwin Davey chose to incur the liability in order to avoid the risk of losing the Flour Mill Property. That was a commercial decision for it, which involved the voluntary assumption of the risk that it would not be recoverable at the end of the day. 13. Therefore, while there is no doubt that there was a breach of the Contract in the failure to complete on time, I have concluded that only nominal damages flowed therefrom and the claim to recovery of the sum paid to Perpetual has not been made good. Misleading or Deceptive Conduct Claim 1. The misleading or deceptive conduct claim turns on the representation allegedly made to Edwin Davey, prior to it entering into the Contract (and, therein, agreeing to special condition 40 of the Contract by which part of the deposit was released), by Boulos Holdings (on Edwin Davey's enquiry) that the outstanding moneys owed to Perpetual under its mortgage over the Flour Mill Property was not more than $5.8 million. Edwin Davey says that the representation was made orally at the meeting on 22 November 2010 and confirmed in writing by the letter dated 25 November 2010; and that the representation was false. In that regard, as noted above, the mortgage over the Flour Mill Property secured a $13.2 million loan facility extended by Perpetual to Boulos Holdings pursuant to a letter of offer dated 25 February 2010 and accepted by Boulos Holdings on 1 March 2010. It is contended by Edwin Davey that, but for the misleading or deceptive representation, it would not have agreed to release the $2.8 million deposit prior to completion of the Contract. 2. Edwin Davey says that, had it not agreed to the release of the $2.8 million, it would have avoided liability under the Payment Deed (i.e., the $500,000 paid to Perpetual) because, at settlement, an additional $2.8 million would have been available to Perpetual (which would have meant that cl 1.3 of the Payment Deed would not have been engaged since an additional $2.8 million available at the settlement of the Contract would, in conjunction with the proceeds received by Perpetual from the sale of the Second Pyrmont Property, have discharged entirely the moneys owed by Boulos Holdings to Perpetual); and Edwin Davey would have received, and have become entitled to receive, at settlement of the Contract, 50% of the interest that would have accrued on the $2.8 million deposit (see cl 2.9 of the Contract). 3. Adopting commercial rates of interest on deposits from the time (such as those subpoenaed from the Commonwealth Bank of Australia), it is said that interest of $175,112.23 could have been earned on the $2.8 million deposit (see Annexure A to Edwin Davey's opening submissions – that figure of $175,112.23 represents interest of $85,554.29 on the sum of $1.3 million paid on 23 November 2010 and $89,557.94 on the sum of $1.5 million paid on 23 December 2010). Half of that figure is $87,556.12 (with pre-judgment interest to be added to that sum from 18 September 2012). Boulos Holdings' response to misleading or deceptive conduct claim 1. As noted above, there is a dispute as to what was said during the negotiations for the sale of the Flour Mill Property and at the time the Contract was signed and exchanged. 2. Insofar as Edwin Davey alleges that it relied on the Representation said to have been made on 22 November 2010 orally to enter into the Contract on terms that a deposit of $2.8 million would be released to Boulos Holdings on exchange and by 31 December 2010; and says if it had known the balance of the loan was $11 million it would have entered into the same contract but with a 10% deposit to be invested with a stakeholder, Boulos Holdings says that this counterfactual is important to Edwin Davey's case because it is a step in the chain of causation to the claimed loss of $500,000 paid on 10 July 2013 under the Payment Deed entered into on 17 September 2012 (neither of which occurred when Edwin Davey was unaware that that the Perpetual Loan Agreement secured by the Perpetual Mortgage was much larger than $5.8 million). 3. Boulos Holdings has three responses to the misleading or deceptive conduct claim: first, it contests making the Representation orally before the Contract was made and Edward's reliance on the Representation to make the Contract, including on the basis of special condition 40 of the Contract, which required a $2.8 million deposit be released to Boulos Holdings; second, it says that it would not have entered into a different contract on the same terms with a 10% deposit to be invested because it had other options for the sale and it was seeking money for the UBI project so it would not have agreed to no money being released at the same price as the Contract; and third, it says that, if such an alternative contract had been entered into, the completion date would have been 22 October 2011 and Edwin Davey would have incurred land tax, rates and interest costs between 22 October 2011 and 18 September 2012 that it did not incur. 4. Boulos Holdings says that no such alleged Representation was made prior to Edwin Davey entering into the Contract. It says that such a representation was only made after the Contract had been executed and exchanged, at which time Edwin Davey had already committed itself to special condition 40 of the Contract, which required a deposit of $2.8 million to be paid and released to Boulos Holdings prior to completion. 5. As to whether Boulos Holdings made the alleged Representation before the Contract was entered into on 22 November 2010, Boulos Holdings says that Edward conceded this, pointing to his evidence at T 175.12-23: Q. I'm suggesting to you that's wrong what's said in your affidavit, and in fact you asked for it afterwards? A. Probably did. Q. The reason why you asked for it afterwards was because you didn't want to rock the boat, you wanted to get the deal done, is that right? A. Correct. Mike's pretty firm, he wanted it done, and when I first did the deal I thought I lost it, so I thought I lost the property and - but it, it, it was a good asset at the time. Mike had a lot of good assets in Pyrmont. I had my eye on this property I'd - like I said. I wanted to do something unique there, which we have, and we've delivered. And sometimes it's a commercial decision. Is it smart? Probably not. 1. As to the issue of reliance on the Representation to enter into the Contract, Boulos Holdings contends for a finding that Edward would have entered into the Contract regardless of what Mike told him and that any such Representation made no material contribution to his decision to sign the Contract, referring to the evidence at T 176.10-42: Q. But you agree with me, do you, that that first sentence in paragraph 10 is wrong because you did, in fact, release the 1.3 of the deposit before you got any confirmation about the loan? A. I released it because of what Mike said. Q. You released it because you wanted to do the deal no matter what? A. Correct, yeah, hundred per cent. Q. It had nothing to do with what Mike said; it was because you wanted the deal? A. We had nothing on the day from Perpetual or anyone at the back. It was getting late in the afternoon when we were doing it. It was done pretty late. I wanted it done. I wanted to go home. I wanted to put it to bed that night. That's what I did. Was it a commercial decision and I was willing to lose - you know, I didn't want to lose the deal on the time, at the time. Q. But if you really wanted to find out you could have waited and required them to give you something from Perpetual before you signed, true? A. I knew there was someone else bumping around trying to buy the property under me too so I didn't want to lose it to - was it scare tactics from Scott? I don't know. Was I gullible about it? I probably took the bait. That's what we do. We, we take risks. Development's not easy. You're not guaranteed a, a, you know, a DA. You take risks. That's what you do as a developer. Q. That's right, and I suggest to you that your decision to enter into the property was not influenced by Eddie(as said) telling you-- A. You keep on asking me the same question. I don't know how much more you want me to answer it. Like I'm not trying to be rude or anything but I've answered it as much, best I can. I had to, you know, exchange the contract and the letter and I kept on pursuing for it and I probably, Jason and, Jason would have sent him that trying to get that letter out of him. There's got to be a level of trust too. I know it's hard to believe that but I've ran my whole business on the back of trust, still do. 1. It is submitted by Boulos Holdings that special condition 33(a) of the Contract also weighs against reliance (and that, although Edward said he did not know about the clause, he acted in accordance with it and had legal advisers who did). 2. Boulos Holdings says that Edwin Davey has not established the relevant counterfactual (i.e., that the Contract would have been entered into with a deposit invested by a stakeholder) and says that Edward admitted this when he said the release of the $2.8 million was non-negotiable, referring to his evidence at T 169.3-19: Q. I suggest to you that it was in this first meeting that he said to you that he wanted 2.8 released and that was non-negotiable? A. That's in the, in the contract, it's written there so yeah. But, yeah, he wanted money released or it wasn't a deal. Q. So when you say he wanted money released and that was the deal, it's correct, isn't it, that his position was whenever, whether this happened at the first or the second meeting-- A. Correct. Q. --that he wanted 2.8 million and it was non-negotiable, that's what he told you, wasn't it? A. Basically, yeah. Q. You understood, didn't you, that if you weren't going to release 2.8, you weren't going to get it? A. Well, I put it in a contract and I signed it. 1. As to the question whether Edwin Davey has established any loss by the Representation, Boulos Holdings says that it has not because Edwin Davey has not established the alternative contract, nor any loss by entering into the Contract (referring to the report of the valuer, Brett Davis, Ex A). 2. It is noted that damage is the gist of the statutory cause of action created by s 236 of the Australian Consumer Law (and s 82 of the former Trade Practices Act 1974 (Cth)) (reference being made to Canon Finance Australia Ltd v Reliance Medical Practice Pty Ltd (No 7) [2020] NSWSC 554 at [279] per Campbell J; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 (Butcher v Lachlan Elder Realty) at [37]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 (ACCC v TPG Internet) at [39] per French CJ, Crennan, Bell and Keane JJ at [39]). 3. Boulos Holdings says that it is necessary to identify the conduct or error which contributed to the $500,000 being paid under the Payment Deed. It is noted that Edwin Davey does not say its decision to enter into the Payment Deed was made in error in reliance on any misleading conduct of Boulos Holdings; and that, at that stage, Edwin Davey knew of the allegedly misleading conduct, so that it could not reasonably have relied on such conduct to enter into the Payment Deed. It is noted that Edward (in his affidavit sworn 30 October 2019 at [46]) says that he became aware that the secured amount over the Flour Mill Property was $13.2 million not $5.8 million on or about the time of the appointment of the Receivers. 4. Boulos Holdings says that, in assessing causation, it is necessary to identify how Edwin Davey changed its position in reliance on the misleading conduct such that it suffered loss (referring to Marks v GIO Australia Holdings Pty Ltd [1998] HCA 69; (1998) 196 CLR 494 (Marks v GIO) at [42] per McHugh, Hayne and Callinan JJ); and that the advantage the plaintiff thought it would obtain by the transaction is not to the point (see Marks v GIO at [47]-[48], [52]-[53]; see also Cummins Generator Technologies Germany GmbH v Johnson Controls Australia Pty Ltd [2015] NSWCA 264 (Cummins Generator Technologies) at [128]-[129] citing Marks v GIO at [42]). 5. Insofar as Edwin Davey says it entered into the Contract in reliance on Boulos Holdings' Representation, Boulos Holdings says that Edwin Davey suffered no loss from entering into the Contract because the value of the Flour Mill Property, which Edwin Davey acquired by completing the Contract, exceeded what Edwin Davey paid for it (including the $500,000 under the Payment Deed) (referring to Brett Davis' 27 July 2020 affidavit). It is said that this was not a financially disadvantageous transaction for Edwin Davey even with an extra payment of $500,000. 6. Insofar as Edwin Davey asserts that it would have entered into a different contract in November 2010 if it had known the true position, Boulos Holdings refers to Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373; [2019] FCAFC 167 (Wyzenbeek v Australasian Marine Imports) at [89] (a "no transaction" case); and says that in a "different transaction" case, the plaintiff must establish what different transaction it would have been entered into (referring to Leadenhall Australia Ltd v Peptech Ltd (2001) 39 ACSR 265; [2001] NSWCA 272 (Leadenhall v Peptech) at [56], [59] per Giles JA (with whom Handley JA agreed); and that this is different to a loss of opportunity to enter into a different transaction (Leadenhall v Peptech at [70]; and see amended cross-claim at [24(d)]). 7. Insofar as Edwin Davey says that Boulos Holdings and Edwin Davey would have entered into another contract on the same terms as the Contract except that the deposit would have been invested and not released, Boulos Holdings says that this is not established because Boulos Holdings had other buyers interested at higher prices with shorter completion periods and Edward admitted that it would not have happened. 8. Alternatively, it is said that Edwin Davey needs to establish that it lost a commercial opportunity of some value (referring to Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355; [1994] HCA 4; La Trobe Capital & Mortgage Corp Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; (2011) 273 ALR 774) and that this value must be discounted by the likelihood that the opportunity would not have been taken. It is said that this suffers the same problems as the "different transaction" case and would be discounted by the high possibility that it may not occur. 9. In any event, it is said by Boulos Holdings that Edwin Davey also has to establish that its entry into the Contract was a necessary condition of its payment of $500,000. It is accepted that the Representation does not need to be the sole cause of the loss, just a cause (referring to I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109 (I & L Securities v HTW Valuers) at [57], [62], [69]). Boulos Holdings points to the statement of Gleeson CJ in Travel Compensation Fund v Tambree (t/as Tambree & Assocs) (2006) 224 CLR 627; [2006] HCA 69 (Travel Compensation Fund v Tambree) at [32] in this regard. 10. Boulos Holdings says that the present case is different from that considered in Travel Compensation Fund v Tambree in that, after becoming aware of the Representation and entering into a Payment Deed which quantified the risk, Edwin Davey could have prevented (but failed to prevent) the risk materialising in accordance with the terms of the Payment Deed; in two ways. First, it failed to ensure that Perpetual received $7 million on completion (which Boulos Holdings says was in its power to do pursuant to the Payment Deed, pointing to cl 4.4 of the Payment Deed and the duty of co-operation – it is said that Perpetual did not exercise those rights and Edwin Davey did not insist on it). Second, it is said that Edwin Davey could have ensured that Perpetual received $7 million on completion by paying some of the amount that it knew would be payable under special condition 44 (it is said that if it had done this, it would have saved itself $500,000 under the Payment Deed). 11. Boulos Holdings says that because these options were open to Edwin Davey, at a time when it was no longer operating under the error in the Representation, the Representation did not materially contribute to its loss (citing I & L Securities v HTW Valuers at [62]). It is said that this is not a case where, at settlement, there were two options both of which would lead to loss (c.f., Cummins Generator Technologies at [136]). 12. It is accepted that, if Edwin Davey fails to establish the alternative contract but it is found that Edwin Davey relied on the Representation to enter into the Contract, then it will be open to the Court to determine whether entering into the Contract caused loss (citing Wyzenbeek v Australasian Marine Imports). Boulos Holdings says that in considering Edwin Davey's loss, one must take into account the benefits it received by completion on 18 September 2012 instead of 22 October 2011 (a difference of 339 days). It says that, on the counterfactual, there would have been savings in the order of $150,000 for land tax and rates, which can be seen from the settlement statement on completion, as well as savings in interest and bank charges which can be seen from Edwin Davey's own records. 13. Boulos Holdings further says in this context that Edwin Davey was under no obligation under the Payment Deed to pay $500,000 to Perpetual because, pursuant to cl 1.3 of the Payment Deed, Perpetual did receive $7 million on completion because it was entitled to the amount that the Receivers were paid ($406,948.63). 14. Special condition 42.3 of the Contract provides as follows: The price is exclusive of GST. GST determined using the margin scheme is to be added to the price and to any adjustments or payments payable by the purchaser. Accordingly, the purchaser must pay the vendor on completion in addition to the price an amount of 10% of the amount by which the price exceeds the valuation and must also pay GST at the GST rate in respect of any adjustment or other payment to be made under the contract. Any such adjustment or payment is to be worked out by deducting any input tax credit to which the party receiving the adjustments is or was entitled and adding the GST rate. 1. The Settlement Adjustment Sheet (Tax Invoice) indicates that Edwin Davey, as purchaser, provided $406,948.63 on settlement in respect of GST, in addition to the balance of the purchase price. 2. As noted above, cl 1.3 of the Payment Deed provided that "Edwin Davey will only be obligated to make the Payment should the sale of the Flour Mill Site settle and at settlement Perpetual receives no more than $7 million". 3. Accordingly, the question would then arise as to whether Perpetual was entitled to $7 million or more at the settlement (noting that Perpetual had indicated through its lawyers by email dated 18 September 2012 that the total amount of $6,676,070.46 would be sufficient for the security to be released over the Flour Mill Property). 4. Perpetual's security interest extended over "any agreement or option for sale…of the Mortgaged Land" and under cl 2.14, the mortgagor must pay to the mortgagee "any deposit or other money" released under any agreement for the sale of the Mortgaged Land. 5. As first registered mortgagee, Perpetual was entitled to first priority over the proceeds of sale. If it did not receive that to which it was entitled it would have been able to refuse to provide a discharge of its mortgage. Boulos Holdings says that payment at the direction of Perpetual (i.e., the direction to make payment to the Receivers of the amount required to pay the GST) is equivalent to payment to Perpetual, so that in effect Perpetual received over $7 million on settlement. In that event, it is said that cl 1.3 of the Payment Deed was satisfied and Edwin Davey had no liability under cl 1.1. Contributory negligence 1. Boulos Holdings seeks a reduction in any damages it is ordered to pay under s 236 of the Australian Consumer Law pursuant to s 137B of the Competition and Consumer Act 2010 (Cth) on the basis that Edwin Davey contributed to its loss by its failure to take reasonable care. 2. Boulos Holdings notes that the basic principle of contributory negligence is that where the damage to the plaintiff results partly from the plaintiff's own failure to take reasonable care and partly from the conduct of the defendant, the damages awarded to the plaintiff are to be reduced having regard to the plaintiff's share in the responsibility for the damage. The apportionment of responsibility is based on an assessment of the respective culpability of the parties, being the degree to which their conduct departed from the standard of the reasonable person and the relative importance of their respective acts in causing the damage. The apportionment of responsibility is a question of fact and is to be determined by the exercise of a broad, evaluative judgment. 3. Boulos Holdings says that Edwin Davey contributed to its own loss for various reasons. First (and seemingly on the assumption that its earlier submission that Perpetual in fact received $7 million on settlement is not accepted), that it should have ensured that Perpetual received $7 million on settlement of the Contract by insisting that the $406,948.63 that was paid to the Receivers went to Perpetual. Second (and again presumably on the same assumption), that it should have ensured that Perpetual received $7 million on settlement of the Contract by Edwin Davey itself paying some of the Section 94 Credit on settlement. Third, that it should have worded the Payment Deed to ensure that Perpetual was obliged to do everything reasonable to ensure it received $7 million on settlement. 4. Similarly, it is said that Edwin Davey failed to take reasonable care of its own interests by reason of the same kind of matters. First, that it entered into the Contract to release $2.8 million on exchange in the first place. Second, that it released $1 million on 7 January 2011 without knowing from Perpetual the amount secured against the Flour Mill Property before it paid the amount (in this regard it is said that Edwin Davey knew the risk of Perpetual not discharging on settlement would increase if Edwin Davey paid an extra $1 million, which is why it asked for the letter from Perpetual; and that if it was prepared to take this risk in circumstances where Mike was asking for extra money to be released, this was negligent). It is noted that if Edwin Davey had not paid the $1 million there would have been no Payment Deed or $500,000 to pay under it because Perpetual would have received $7 million on settlement; and that if there had been no extra time then the Contract would have settled in October for a payment to Perpetual of $5.85 million. Proportionate liability 1. Boulos Holdings also invokes the proportionate liability regime, noting that apportionment among concurrent wrongdoers is available under s 87CD of the Competition and Consumer Act 2010 (Cth); and that the applicable principles are similar to contributory negligence. 2. Boulos Holdings asserts that Perpetual is a concurrent wrongdoer because it breached the Payment Deed by failing to insist on receiving $7 million on settlement of the Contract. (Pausing here, I can see no basis for an argument that Perpetual was under some form of contractual obligation under the Payment Deed to insist upon $7 million on settlement of the Contract. If it is suggested that there was some implied term of good faith owed to Edwin Davey in respect of the exercise of rights under the Payment Deed, that is not pleaded and the basis for any asserted breach thereof is unclear.) Boulos Holdings also asserts that Blackstone Waterhouse, the firm of solicitors who acted for Edwin Davey on the settlement of the Contract and the Payment Deed, is a concurrent wrongdoer because it failed to advise Edwin Davey to ensure the $406,948.63 paid to the Receivers went to Perpetual or to pay some of the Section 94 Credit on settlement. (In the absence of any evidence as to the advice received by Edwin Davey, it is impossible to reach the conclusion that there would be any such liability.) Response by Edwin Davey to defences raised by Boulos Holdings 1. Edwin Davey maintains that Edward enquired as to the amount of debt owed to Perpetual and secured over the Flour Mill Property and Mike stated that the debt owed to Perpetual by Boulos Holdings and secured over the Flour Mill Property was approximately $5.8 million. It is noted that Perpetual's financial accommodation to Boulos Holdings at the time was $13.2 million; the Flour Property standing as security for the entirety of that sum. It is noted that, prior to the Contract, Perpetual had not agreed to limit itself to $5.8 million from the sale proceeds of any contract to sell the Flour Mill Property. 2. Reference is made to authorities that have held that conduct is misleading or deceptive if it is "capable of inducing error" or "likely to lead into error" or has a "tendency to lead a person into error" (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198 per Gibbs CJ; Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at [63] per French J (Beaumont and Finkelstein JJ agreeing); Butcher v Lachlan Elder Realty at [111] per McHugh J; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [15] per French CJ and Kiefel J; Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 at [158]; ACCC v TPG Internet at [39], [49]). It is said that this threshold is readily met in the present case. 3. In respect of reliance, Edwin Davey says that while, in cross-examination, Edward accepted that he only asked for written confirmation of the size of the debt owed to Perpetual by Boulos Holdings after the Contract was signed and exchanged; and that he was prepared to enter into the Contract without this letter, not wanting to "rock the boat", the decision being a "commercial" one; Edwin Davey points out that Edward affirmed and did not depart from the proposition that he relied on the truth of what Mike had told him orally prior to entering into the Contract, namely, that the outstanding debt to Perpetual over the Flour Mill Property was only $5.8 million. 4. It is submitted that although Edward was undoubtedly eager to obtain the Flour Mill Property (professing to have an "emotional" attachment to it), it would not be accepted that he would sacrifice commercial reason solely to obtain the Flour Mill Property. It is said that there is a significant difference between the Flour Mill Property standing as security for a $5.8 million debt as opposed to a $13.2 million debt, particularly when Edward had no knowledge, or understanding, of the Second Pyrmont Property or its ownership by Boulos Holdings. 5. Further, it is submitted that, had Edwin Davey raised objection to the release of the $2.8 million deposit, and insisted it be paid to the stakeholder to be invested, Boulos Holdings would still have entered into that contract to sell the Flour Mill Property; for the following reasons. First, it is said that Boulos Holdings wanted to sell the Flour Mill Property so as to realise its value and to permit the equity therein to be used in respect of UBI's proposed acquisition of TV rights, pointing to Edward's evidence that Mike told him that he "needed the money"; and to the request for further money in January 2011, as well as Mike's further emails requesting money in March and May 2011. It is noted that the only other offers Boulos Holdings had at the time were offers to enter into 18-month call options, and not immediately binding contracts for the sale of the Flour Mill Property and those offers did not provide for any substantial deposit (or payment) to be made or released to Boulos Holdings prior to completion (rather, they proffered an option fee of $100,000). It is said that those offers were otherwise in the same vicinity (as to price) as the Contract ($10.8 million), particularly after factoring in GST ($400,000) and the rights arising under special condition 44 (around $661,966.86); i.e., a total consideration of around $11.8 million payable under the Contract within about 11 months (as opposed to after an 18-month call option, with some of the offers proposing rights of extension). 6. Edwin Davey says that even if the deposit under the Contract was not released, Boulos Holdings could have achieved the same outcome it wished to achieve (i.e., to realise, immediately, money from the Flour Mill Property) by borrowing against it, with settlement of the Contract to close out any bridging loan (c.f., the position if it otherwise could only sell a call option over the Flour Mill Property, which it is said would have resulted in a substantial delay in realising any equity in the Flour Mill Property). Edwin Davey says that Boulos Holdings could, therefore, possibly have borrowed more from Perpetual or from AET. (That seems to me to be no more than speculation.) 7. In these circumstances, and notwithstanding that Mike's stated position was that the release of a $2.8 million deposit was purportedly non-negotiable, Edwin Davey contends that, had Edwin Davey raised objection to the release of the $2.8 million deposit (and insisted that it be paid to the stakeholder to be invested), Boulos Holdings would still have entered into that contract to sell the Flour Mill Property (on those "slightly modified" terms). 8. Insofar as special condition 33 of the Contract is relied upon as negativing any reliance upon Boulos Holdings' misrepresentation as to the size of Boulos Holdings' debt secured over the Flour Mill Property (and leaving aside whether that clause pertains to the type of representation made by Boulos Holdings (c.f., a representation concerning a characteristic or quality of the Flour Mill Property), Edwin Davey says that such a clause does not simply oust the operation of the Trade Practices Act. Rather, it is said that the effect of any such contemporaneous disclaimer needs to be considered in construing and characterising the nature of what was represented and whether it was misleading and deceptive (referring to Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658 at [13]-[14] per Bell ACJ and [67] per Macfarlan JA (Barrett AJA agreeing); or alternatively, a declaration of non-reliance upon any representation will go to questions of causation (referring to Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [29]; [31] per French CJ). 9. Edwin Davey submits that, in the present circumstances, given the immediacy and proximity between the misrepresentation made by Boulos Holdings and the agreement in respect of special condition 40 of the Contract, reliance upon special condition 33 of the Contract is misplaced and does not negative the operative effect of the misleading conduct. It is said that that special condition was not specifically drawn to Edward's attention in order to negative the effect of the prior misrepresentation made by Boulos Holdings (c.f., Culligan v Aco Pty Ltd [2009] NSWCA 290 at [91]). Edwin Davey submits that special condition 33 has not broken (nor is it evidence of a break in) the chain of causation. It is said that it did not negative Edward's reliance upon the misrepresentation or suspend its effect upon procuring his entry into the Contract and agreement in respect of special condition 40 of the Contract (and the release of the $2.8 million deposit thereunder). 10. On the question of causation, insofar as Boulos Holdings also asserts (see its submissions at [117]) that Edwin Davey severed the chain of causation by its own negligence (citing Argy v Blunt & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 (Argy v Blunt) at 138), in that Edwin Davey should have ensured that Perpetual received at least $7 million from the settlement of the Contract; and that Edwin Davey could have, and should have, pre-paid part of its anticipated (but not yet due) liability under special condition 44 of the Contract, Edwin Davey says that, as at September 2012, it was not apparent that the payment obligation in cl 1.1 of the Payment Deed would necessarily arise (i.e., it was not clear that the sale of the Second Pyrmont Property would not repay the remainder of the $6.387 million owing under the Perpetual facility). Edwin Davey says that Boulos Holdings' contentions are not established factually; and that they do not constitute a gross failure to protect one's own interests so as to allow for a conclusion that the representation complained of was not, in the circumstances, a real inducement to agreeing to the release of the $2.8 million deposit (referring to Argy v Blunt at 138). 11. Insofar as Boulos Holdings asserts that any liability to pay damages should be reduced on account of contributory negligence pursuant to s 82(1B) of the Trade Practices Act, Edwin Davey says that the matters here relied upon by Boulos Holdings do not make out a failure to take reasonable care. 12. Edwin Davey maintains that Boulos Holdings cannot say that Edwin Davey should have distrusted the express representations made by it as to the size of the debt owed to Perpetual; nor was there any lack of prudence in entering into the Payment Deed or surrounding the $406,948.63. Edwin Davey submits that this conduct was reasonable to ensure Edwin Davey secured the unique property it had contracted to purchase. It is said that the suggestion that Edwin Davey should have accepted Boulos Holdings' repudiation of the Contract would have resulted in a loss likely greater than $500,000. Further, it is said that Edwin Davey was under no obligation to make any payment under special condition 44 of the Contract prior to settlement of the Contract. 13. As to the proposition that Edwin Davey voluntarily assumed a risk greater than that in a normal conveyancing transaction by agreeing to the release of a substantially larger deposit ($2.8 million) and a longer completion period, Edwin Davey says that (while this may be true) Edwin Davey did enquire into and obtain information as to the debt owed to Perpetual and protected itself by timeously lodging a caveat over the Flour Mill Property to notify and protect its interest arising under the Contract. 14. Insofar as Boulos Holdings says Edwin Davey failed to obtain verification from Perpetual about the size of the debt owing by Boulos Holdings under the loan facility or to obtain verification that Perpetual had consented to entry into the Contract, Edwin Davey says that this is, in essence, an allegation that Edwin Davey should automatically have distrusted any representation made by Boulos Holdings (i.e., that it should have assumed that Boulos Holdings was telling it falsehoods or making representations that could not be trusted or relied upon). 15. As to the proposition that Edwin Davey failed to take steps to complete the Contract at an earlier date, namely in October 2011, Edwin Davey points out that the agreed completion date was 23 August 2012 and that Edwin Davey was not obliged to seek to complete at an earlier time. As to the submission by Boulos Holdings that Edwin Davey entered into the Payment Deed when it had no obligation to do so and could have terminated the Contract, Edwin Davey cavils with this as a factual proposition (pointing to its submissions referred to above). 16. Insofar as Boulos Holdings says that Edwin Davey failed to raise with Perpetual that the sum of $406,948.63 was being paid to Boulos Holdings rather than to it, and that this direction caused cl 1.3 of the Payment Deed to be invoked, and that Edwin Davey failed to assert or exercise its rights under cl 4.4 of the Payment Deed, being duties to cooperate and to act in good faith between it and Perpetual, as they pertained to the sum of $406,948.63, Edwin Davey makes reference to its above submissions. 17. As to the identification by Boulos Holdings of concurrent wrongdoers (Perpetual, for failing to insist upon receiving the $406,948.63 payable as GST upon the sale; and Blackstone Waterhouse for failing to advise Edwin Davey not to enter into the Payment Deed, its rights under that deed, or to pay a lesser sum under special condition 44 of the Contract to ensure the $7 million threshold was met), Edwin Davey maintains that these matters are factually untenable. Determination of misleading or deceptive conduct claim 1. On the balance of probabilities, I accept it to be more likely that Mr Cameron's recollection is correct. I find that the Representation was made orally, before entry into the contract, and was incorrect. It is not necessary that it be knowingly incorrect, nor do I make any finding to that effect. I accept the evidence of Mike as to his mistaken belief as to the position. Nevertheless, there is no doubt that the Representation was objectively misleading. 2. As to reliance, I accept that Edward relied on the making of the Representation when entering into the Contract. I appreciate that his evidence is that he was "desperate" to secure the property and I certainly formed the impression that he was a commercial risk-taker at least insofar as he was prepared to proceed to exchange of contracts without a formal acknowledgement as to the amount secured over the property but he did so on the basis of a response from Mike that he considered, in effect, to be in the ball-park, to use a colloquial expression. I find that he did so relying in good faith on the truth of what was represented to him even though he accepted that he could have insisted on a formal acknowledgement in writing before entering into the Contract. I do not accept that special condition 33 of the Contract relevantly detracts from such reliance. Misrepresentation that is causative of entry into a commercial agreement can sound in relief even in the face of a "no representations" clause. 3. I accept that it is commercially improbable that a businessman of Edward's experience would have entered into the Contract without at least some assurance as to the amount secured over the Flour Mill Property, which supports the conclusion that there was reliance on the representation that has been made; and it is only necessary that the representation be a material cause of the detrimental reliance or a contributing factor, not that it be the sole cause. 4. Therefore, I consider that misleading or deceptive conduct has been established. 5. However, I am not satisfied that the damages claimed have been suffered as a result thereof. This is not a "no transaction" case (indeed it is clear that Edwin Davey does not wish to have the transaction set aside nor would that now be possible). Edward recognised the acquisition of the Flour Mill Property (even at the price of an additional payment to Perpetual) to be a good opportunity and he is no doubt rightly proud of the development. The real difficulty is that I am not persuaded that Edwin Davey has established, on the balance of probabilities, the counterfactual for which it contends, namely that had Edwin Davey been aware of the true position and refused to enter into the Contract with provision for release of the deposit then Boulos Holdings would still have entered into the Contract on different terms (i.e., without release to it of the deposit). 6. Further, even if it were found that Edward relied on the misleading conduct to agree to terms including payment of the early deposit, it would seem that that reliance did not actually cause the ultimate loss, being the $500,000 payment under the Payment Deed. Edwin Davey at all times could have sought to terminate or sue for specific performance; the upfront payment of $2.8 million did not "cause" Edwin Davey to later enter into a payment deed on those particular terms; given it entered into the payment deed at a time when it was aware of the truth of the misrepresentation. There is a difference between the early deposit payment having the effect that the Payment Deed became one avenue of discharging the mortgage and "but for" the early deposit, this would not have been required; and saying that the early deposit caused that loss. The cause of the loss under the Payment Deed was ultimately an independent commercial decision made by Edwin Davey. 7. Therefore, while the misleading or deceptive conduct claim is made good, no damages have been suffered by reason of that conduct and hence none are recoverable as a result. 8. It is not therefore necessary to consider in any detail the contributory negligence claim. Had it been necessary I would have concluded that there was no failure by Edwin Davey to take reasonable care of its own business interests. The suggestion that the commercial arrangements whereby the deposit was released in the first place amounted to a failure to take reasonable care seems to me to trespass into the area of what may be reasonable commercial judgment. Further, I consider that Edwin Davey was represented by its solicitor who made enquiry as to the security over the property. I think it unpalatable that Boulos Holdings in effect argues that Mike should not have been trusted at his word. As to the suggestion that Edwin Davey failed to take reasonable care or contributed to its loss by reference to the circumstances in which $7 million was not received by Perpetual at settlement, that seems to me to be problematic for the reasons given by Edwin Davey. 9. Similarly, the proportionate liability claim does not here need to be addressed but as indicated above I have some difficulty in seeing how it could be established. Unconscionable Conduct Claim 1. Edwin Davey claims damages for unconscionable conduct arising from the lodgment by Roshdi on 26 June 2012 of the caveat over the Flour Mill Property asserting his and Nabiha's claim as equitable mortgagees pursuant to the R&N Mortgage. 2. Edwin Davey's claim in essence is that Boulos Holdings purposely created a fictitious (and backdated) mortgage over the Flour Mill Property in favour of Roshdi and Nabiha, such that, on its face, Edwin Davey's equitable interest in the Flour Mill Property under the Contract was subordinate to an earlier in time equitable mortgage in favour of Roshdi and Nabiha. It is noted that this is in circumstances where Boulos Holdings had already procured the release (prior to completion) of $2.8 million of the purchase price (it is said by Edwin Davey that it did so by misrepresentation). 3. Edwin Davey says that, apart from the date on the document, there is no reliable or objective evidence to indicate that the R&N Mortgage was granted at that time. It points to the fact that the first page of the R&N Mortgage consists of a registrable mortgage cover sheet issued by the Registrar General of NSW; and that documents subpoenaed from NSW Land Registry Services confirm that this version of the document (Form 0.5M release 4.0) was not issued until some time in 2011 (i.e., after 25 July 2010). There were two versions of the document in evidence. Exhibit 2 is said to be the original mortgage (signed 25 July 2010); the copy in the Court book (at 181) (which Edwin Davey contends is a type of form not in existence in 2010) is said to be one that was downloaded later because the original was purportedly lost; but that the original has now been found (see T 83; T 87). That explanation was not undermined by Edwin Davey once Exhibit 2 was proffered on the second day of the hearing and therefore I treat Exhibit 2 to be the correct version of the document. 4. The stamped version of the R&N Mortgage was not stamped until 26 June 2012, i.e., four days after NAB's appointment of the Receivers to Boulos Holdings (with no explanation for the delay). No caveat in respect of the R&N Mortgage was lodged until 26 June 2012. 5. Edwin Davey says that no independent witness was called to corroborate the proposition that the R&N Mortgage was granted in July 2010 (Mike stated that he had no knowledge of when the R&N Mortgage was granted as he did not witness the execution of that document or the associated loan agreement); that the R&N Mortgage was not disclosed to Perpetual (nor was its consent obtained to grant it); and that there is no evidence to indicate that it was disclosed to NAB (notwithstanding that a call for the loan application submitted to NAB was made). 6. Further, Edwin Davey says that the structure of the purported loan from Roshdi and Nabiha to Boulos Holdings (proffered to justify the existence of the R&N Mortgage) does not make sense. It is noted that it required Boulos Holdings to repay the $2.5 million loan to those individuals on 19 July 2012, although Boulos Holdings was not due to receive from UBI repayment of the same moneys until 20 July 2012. It is also said that the proposition that Roshdi and Nabiha advanced any moneys to Boulos Holdings was entirely a fiction (which, I interpose to note, seems to be acknowledged in effect by the addendum to the loan agreement which on its face appears to treat the contribution of Roshdi and Nabiha as some form of financial accommodation). It is said that the purported intermediation of Roshdi and Nabiha between AET (lender) and Boulos Holdings (borrower) is not referred to in any reliable objective evidence and was created later in order to justify the grant of the R&N Mortgage. 7. Edwin Davey emphasises (as seems not to be disputed) that Mike's parents did not make available a $2.5 million loan facility; rather, what occurred was that Roshdi and Nabiha mortgaged property they owned (the Dural property) in support of a $2.5 million borrowing by Boulos Holdings from AET. It is said that there was no loan facility between Roshdi and Nabiha and Boulos Holdings. 8. Edwin Davey says that, as at June 2012, there was a clear impetus for the grant of the R&N Mortgage, namely, an attempt to salvage Roshdi and Nabiha's position in circumstances where they were likely to lose their mortgaged family home and be left as an unsecured creditor against Boulos Holdings (which at that time was in default under its $13.2 million Perpetual Loan Agreement and its $87 million NAB facility and was "imminently" due to default under its $2.5 million facility with AET). 9. It is said that this is particularly so in circumstances where, by 1 June 2012, Receivers had already been appointed to UBI and, therefore, Boulos Holdings faced little prospect of recovering its unsecured $2.5 million loan to that entity, being the same moneys needed to repay AET in order to prevent them from enforcing against Roshdi and Nabiha's family home in Dural (pointing to Recital (U) of the Deed of Settlement and Release in the 2012 Proceeding which recorded that, as at December 2012, Roshdi and Nabiha were taking steps to sell their family home in order to repay moneys owed to AET). 10. Further, it is said that the terms of the Deed of Settlement and Release dated 18 December 2012, pursuant to which the 2012 Proceeding was settled, reveal a "complete capitulation" in respect of any assertion concerning the R&N Mortgage (referring to Recital (V), cll 2.1 and 2.2). It is said that this supports the argument that the R&N Mortgage was a confected document created well after the date it bore, in the hope of improving Roshdi and Nabiha's financial position. 11. Accordingly, Edwin Davey seeks a finding that the R&N Mortgage was not created in July 2010 but, rather, in June 2012; and deliberately backdated in an attempt to provide some security to Roshdi and Nabiha. 12. It is said that the execution of the R&N Mortgage occurred in trade and commerce and must also have occurred in relation to the supply of goods or services to a person (thus being conduct falling within s 21 of the Australian Consumer Law), noting that s 2 of that legislation defines "services" as including "any rights (including rights in relation to, and interests in, real or personal property)". 13. Edwin Davey's contention is that Boulos Holdings (after the date of exchange, but prior to completion) engaged in conduct that was unconscionable by deliberately creating and backdating a fictitious mortgage to Roshdi and Nabiha that, on its face, prevailed over Edwin Davey's interest in the Flour Mill Property arising under the Contract (and, therefore, potentially imperilling that right); and that, by reason of this conduct, Edwin Davey was obliged to join the 2012 Proceeding so as to protect its equitable interest in the Flour Mill Property arising pursuant to the Contract dated 22 November 2010 against this purported prior mortgage. It is noted that the 2012 Proceeding was ultimately discontinued with no order as to costs; and Edwin Davey here claims, as damages, the legal fees it incurred in that proceeding. 14. Edwin Davey notes that the scope of s 21 of the Australian Consumer Law is wider than that of s 20 (i.e., the concept of unconscionability in equity) (citing ASIC v National Exchange Pty Ltd (2005) 148 FCR 132 at [29]-[30] where the Full Court of the Federal Court of Australia considered the analogue provisions in the ASIC Act); reference also being made in this context to s 21(4)(a) of the Australian Consumer Law and to the observations of Gageler J at [83] and of Nettle and Gordon JJ at [144] in ASIC v Kobelt (2019) 267 CLR 1 (ASIC v Kobelt). 15. As to the term "unconscionable", reference is made to what was said in Paciocco v Australia and New Zealand Banking Group (2015) 236 FCR 199 (Paciocco v ANZ) at [262]; [304] per Allsop CJ (Besanko and Middleton JJ agreeing); Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90 at [23]; and Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440 (Ipstar Australia) at [195]-[196] per Bathurst CJ (Beazley P, as Her Excellency then was, and Leeming JA agreeing). Reference is also made to what was said by Gageler J in ASIC v Kobelt at [87] to the effect that the Court's task is to recognise and administer the normative standard of conduct which provisions such as s 22 of the Australian Consumer Law prescribe (see also ASIC v Kobelt at [122] per Keane J). 16. As to the three matters which Bathurst CJ identified in Ipstar Australia (at [197]) as being of assistance in identifying whether conduct falls below acceptable norms, standards and values such as to warrant it being determined to be unconscionable (namely, the terms of the statute; the approach taken by the courts in dealing with cases under the unwritten law (whilst recognising these cases do not limit the scope of the provision); and judgments in related areas including cases involving want of good faith), Edwin Davey submits as follows. 17. First, that the term "unconscionable" has been purposively used (citing ASIC v Kobelt at [88] per Gageler J, [119] per Keane J); the conduct being required to be perceived as "offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society" (see ASIC v Kobelt at [90], [93] per Gageler J, [118]-[120] per Keane J agreeing in similar terms). Reference is also made to Paciocco v ANZ at [262], [305] per Allsop CJ (Besanko and Middleton JJ agreeing); Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 at [55] per Allsop CJ (Besanko and Edelman JJ agreeing); Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (2017) 251 FCR 404 at [52]-[55]; Ipstar Australia at [195] per Bathurst CJ). It is noted that conscious impropriety or dishonesty is not required (PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 at [104], [107], [110] per Sackville AJA (McColl and Leeming JJA agreeing); Paciocco v ANZ at [262] per Allsop CJ; ASIC v Kobelt at [59] per Kiefel CJ and Bell J, [149] per Nettle and Gordon JJ). It is submitted that the values and norms that inform the equitable notion of conscience include "honesty, fraud, surprise, mistake and hardship" (citing Paciocco v ANZ at [281], [285], [296]) and that the judgment required to be made cannot be arrived at through a mere balancing of the applicable considerations identified in s 22 (see ASIC v Kobelt at [101] per Gageler J). 18. As to the second matter identified by Bathurst CJ in Ipstar Australia, reference is made to the requirement in equity (for a finding of unconscionability) that there be the identification of a "special disadvantage" that "seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests"; and an unconscientious taking advantage of that special disadvantage involving, for instance, "victimisation" or "exploitation" (referring to Thorne v Kennedy (2017) 263 CLR 85 at [38] per Kiefel CJ, Bell, Gageler, Keane and Edelman JJ, [110]-[114] per Gordon J). 19. As to the third matter identified by Bathurst CJ in Ipstar Australia, reference is again made to Paciocco v ANZ at [288]-[289] per Allsop CJ, including that the "the notion [of good faith] is rooted in the bargain and requires behaviour to support it, not undermine it, and not to take advantage of oversight, slips and the like in it". 20. Edwin Davey says that each of the following norms and values, embodied within the statutory notion of unconscionability, have been violated in the present case: the requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the requirement of good faith, requiring behaviour to support and not to undermine the bargain struck. 21. It is said that Boulos Holdings entered into the Contract, promising to convey free title to the Flour Mill Property for the sum of $10.8 million plus GST; that in the course of supplying the Flour Mill Property to Edwin Davey, but prior to its actual conveyance, Boulos Holdings purposely created and backdated a fictitious mortgage to Roshdi and Nabiha (which of itself is said to have involved an element of dishonesty and a lack of good faith), in order to improve the financial position of Roshdi and Nabiha, notwithstanding that, by doing so, it potentially imperilled or impaired Edwin Davey's right in the Flour Mill Property pursuant to the Contract (because the interest arising under the R&N Mortgage was then first in time). It is said that these actions were in clear deviation of Boulos Holdings' obligations under the Contract and its fidelity to the bargain. Accordingly, it is submitted that this is unconscionable conduct and particularly so in circumstances where Edwin Davey's commercial vulnerability had already been increased by reason of its assent to the release of the $2.8 million deposit (which assent had been procured by the alleged misrepresentation by Boulos Holdings). Boulos Holdings' submissions regarding unconscionable conduct claim 1. In response to the unconscionable conduct claim, Boulos Holdings submits, first, that the 19 July 2010 loan agreement between Roshdi and Nabiha and Boulos Holdings at cl 4 contained a promise by Boulos Holdings to give Roshdi and Nabiha an equitable mortgage over the Flour Mill Property, which creates an equitable mortgage if valuable consideration is given. It is said that the consideration was the guarantee of a debt and a mortgage of their property in Dural. Accordingly, it is said that it makes no difference if the mortgage document was backdated. 2. Second, Boulos Holdings says that Edwin Davey chose to join the proceedings and defend them. 3. Third, it is noted that Boulos Holdings was a party to the 2012 Proceeding. It is said that if Edwin Davey wanted its costs paid by Boulos Holdings, it had to seek a costs order in the proceedings under s 98(2) of the Civil Procedure Act. Edwin Davey's response to defences raised by Boulos Holdings 1. Edwin Davey accepts that the 2012 Proceeding was discontinued on the basis that each party would bear their own costs of the proceedings. However, it notes that those proceedings were between Roshdi and Nabiha, as plaintiffs, and various other parties as defendants. It is said that it was not incumbent upon Edwin Davey to ventilate in that proceeding (in the course of agreeing to Roshdi and Nabiha discontinuing their action) the proposition that Boulos Holdings should pay its costs of the proceeding. 2. Second, insofar as Boulos Holdings asserts that legal costs incurred in the 2012 Proceeding cannot be recovered otherwise than pursuant to a costs order by reason of s 98(2) of the Civil Procedure Act, Edwin Davey says that the incurrence of legal costs can constitute a form of damage recoverable as such. (Pausing here, this is not how I read Boulos Holdings' submission on this point). 3. Third, insofar as Boulos Holdings asserts that no action is maintainable by reason of the terms of the Deed of Settlement and Release executed by the parties to the 2012 Proceeding, Edwin Davey says that no term of that agreement provided for Edwin Davey to release Boulos Holdings in respect of any claim arising out of the 2012 Proceeding. Determination of unconscionable conduct claim 1. I find on the balance of probabilities that the R&N Mortgage was brought into existence some time after 19 July 2010 (having regard to the fact that it was not disclosed to the attention of anyone at an earlier time and it is perhaps unlikely (and commercially implausible) that it would not have been stamped at or about that time had it been entered into in July 2010). Moreover, it is clear that what was provided by Roshdi and Nabiha was financial accommodation in terms of their agreement to grant a mortgage over their Dural property, not the provision of any funds as such (which the addendum to the loan agreement makes clear). The coincidence of timing in respect of the emergence for the first time of the mortgage (namely that it was soon after Receivers had been appointed and Roshdi and Nabiha's family home was under threat) is strongly suggestive of a document that was brought into existence only at that time in order to strengthen the position of Mike's parents. 2. I accept that (on this hypothesis) the back-dating of the document is not in itself overly suspicious in that it may have simply been recording retrospectively an arrangement that had been reached at the time. However, there is nothing to corroborate that there was such an agreement and the mere grant of the security over the Dural property does not establish that there was an agreement by Boulos Holdings to grant security over its property at the time to support that (indeed to do so would itself have been a breach of the Perpetual Mortgage and an insolvency event under that document). 3. I have therefore concluded that it was unconscionable conduct, in the requisite sense, for Boulos Holdings to seek to rely at a later stage upon a document that on the balance of probabilities did not exist at the time of the Contract, in circumstances where it appears that this was an attempt for Roshdi and Nabiha to gain priority over the interests of Edwin Davey under the Contract (including in respect of the charge held by Edwin Davey in respect of the deposit that had been released under the Contract). 4. I consider that Edwin Davey acted reasonably to protect its interests in joining the 2012 Proceeding. It was clearly a necessary party to be joined (see John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2012) 241 CLR 1). 5. The question is whether the damages claimed for the unconscionable conduct (in terms of the legal costs incurred in relation to the 2012 Proceeding) are recoverable. The fact that Boulos Holdings did not itself bring the 2012 Proceedings is not material, if its conduct in executing or seeking to rely upon the (on this hypothesis) backdated mortgage was a cause of the need for Edwin Davey to join the proceeding in order to protect its interests. I accept that the fact that Edwin Davey did not ventilate the claim for damages in that proceeding does not necessarily preclude it now bringing such a claim in a separate context (i.e., as a claim for damages for unconscionable conduct); and I consider that the jurisdiction here being invoked is different from that under s 98 of the Civil Procedure Act. 6. However, the real issue is as to whether any such claim is barred as a result of the Deed of Settlement and Release entered into in 2012. The relevant clause, cl 9.5, has been set out earlier. 7. It is uncontroversial that whether a covenant operates as a release or a covenant not to sue is a question of construction (see James v Surf Road Nominees Pty Ltd [2004] NSWCA 475 at [41]). So, too, is it a question of construction as to what is meant by a provision of the above kind which operates as a bar to suit by providing that the deed may be relied upon as a complete defence. 8. The Deed of Settlement and Release did not contain any provision whereby Edwin Davey provided a release to other parties under the deed. In light of the clear words giving effect to releases under cl 2, this adds force to the view (already evident from the plain words of cl 9.5) that the clause operates not as a release but as a bar to suit. 9. One of the material "facts" or "circumstances" referred to in the deed is Recital I: On or about 28 June 2012, the Plaintiff [Roshdi] lodged a caveat registered number AH73255 over the Flour Mill Property (Caveat) claiming an equitable interest in the Flour Mill Property pursuant to an unregistered mortgage dated 25 July 2012. 1. Recital M provided that: On or about 25 July 2010, the First Defendant [Boulos Holdings] granted the Plaintiffs an unregistered mortgage over the Flour Mill Property (Plaintiff's Mortgage). 1. Recital Q provided that: In the Proceedings the Plaintiffs allege that as the Plaintiff's Mortgage was executed prior to 14 March 2012, they are entitled to be paid from any net proceeds of the sale of the Flour Mill Property in priority to the Second Defendant [NAB]. 1. The question is whether Edwin Davey's claim constitutes a "proceedings or claim" under cl 9.5 which "arises out of the facts, matters and circumstances referred to in this deed". Here, Edwin Davey's claim is for damages for unconscionable conduct arising from Boulos Holdings (allegedly) purposely backdating the mortgage referred to in Recital I, which mortgage was the basis for the 2012 Proceeding (as per Recital Q). Accordingly, the unconscionable conduct claim clearly appears to be one that "arises out of" the facts, matters and circumstances referred to in the deed – indeed, the unconscionable conduct claim brought in the present proceeding is the very type of claim which Edwin Davey could have asserted in a defence to the 2012 Proceeding. Accordingly, I find that cl 9.5 of the Deed of Settlement and Release is applicable in the present proceeding and that it can be relied upon (as a matter of contract as between Boulos Holdings and Edwin Davey) as a complete defence to the claim for damages for unconscionable conduct in this proceeding. Conclusion 1. For the reasons set out above, I have concluded as follows. First, that the claim made by Boulos Holdings against Edwin Davey for payment under special condition 44 of the Contract has been made good. Second, that none of the cross-claims made by Edwin Davey against Boulos Holdings has been made good. 2. As to costs, the parties sought to make submissions after judgment was handed down. Accordingly, I will make directions for this to occur with a view to dealing with this if possible on the papers. Orders 1. I make the following orders: 2. Judgment for the plaintiff in the sum of $661,966.86 payable pursuant to special condition 44 of the Contract for Sale of Land between the plaintiff and the defendant, plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW). 3. Dismiss the defendant's cross-claim. 4. Reserve the question of costs of the claim and cross-claim. 5. Direct the parties to file brief written submissions on costs within 14 days, with a view to the question of costs being dealt with on the papers if possible. ******* Schedule Edwin Davey's submissions as to PPSA issues 1. Edwin Davey accepts that one potential obstacle to the conclusion for which it contends as to the applicability of the PPSA (as set out in the reasons for judgment) is the operation of s 8(1)(f)(i) of the PPSA, which provides that (except as provided by ss 8(2) or 8(3)) the PPSA does not apply to an interest provided for by a transaction within s 8(1)(f)(i), namely "the creation or transfer of an interest in land". 2. In that regard, Edwin Davey accepts that Perpetual's security interest over the right to enforce special condition 44 of the Contract arose pursuant to its registered mortgage over the Flour Mill Property, being an interest provided for by a transaction involving the creation of an interest in land. However, Edwin Davey points to s 8(2) of the PPSA, which provides that s 117 of the PPSA still applies to any interest falling within s 8(1)(f)(i) of the PPSA. 3. Section 117 allows a secured creditor to whom an obligation was secured by both a security interest in personal property and an interest in land to make a decision either to enforce the security interest in the personal property under Chapter 4 of the PPSA (which includes ss 123, 128 and 141) or to enforce the security interest in the personal property in the same way as the interest in the land may be enforced under land law. In this case, Edwin Davey points to the decision evidenced by the Deed of Assignment to enforce the security interest in the personal property under Chapter 4 of the PPSA. 4. It is noted that s 117 applies only where, inter alia, the "secured party's security interest in the personal property has the highest priority" (see s 117(1)(b)(i) of the PPSA). However, Edwin Davey points in this regard to the Priority Deed of 19 March 2012, which it says was effective according to its terms in setting the priorities between Perpetual and NAB (see s 61 of the PPSA). Edwin Davey says that the only other parties that conceivably had a security interest were Roshdi and Nabiha (pursuant to the R&N Mortgage) and it notes that priority between unperfected interests is determined according to the order of attachment of the security interests (referring to s 55(2) of the PPSA). It is said that (leaving aside the dispute as to the R&N Mortgage, which Edwin Davey contends is a sham) Perpetual's (first in time) mortgage attached first since Perpetual had already advanced money prior to July 2010. (Further, it is noted that Roshdi and Nabiha released the R&N Mortgage pursuant to the deed dated 18 December 2012 – see Recital V, and cll 2.1 and 2.2; and hence it was no longer in existence at the date of the Deed of Assignment.) 5. It is noted that no enforcement action was taken against the Flour Mill Property (rather, that was sold by Boulos Holdings with the concurrence of Perpetual); and that, instead, the personal property (i.e., the chose in action under special condition 44) was individually enforced, with Perpetual able to adopt the mechanisms and provisions provided for by Chapter 4 of the PPSA. 6. Edwin Davey contends that notice was given of the assignment under the Deed of Assignment (noting that Edwin Davey is in possession of the Deed of Assignment). Accordingly, it is said that, by reason of s 12 of the Conveyancing Act 1919 (NSW), the right to recover any moneys pursuant to cl 44 of the Contract has vested, at law, in Benjamin and Brendon, with Boulos Holdings retaining no power or privilege to exercise that right. Reference is made in that context to what was said by Lord Esher MR in Read v Brown (1888) 22 QBD 128 at 132 (Fry and Lopes LJJ agreeing) about the analogue provision in s 136 of the Law of Property Act 1925 (UK); and to Carob Industries Pty Ltd (in liq) v Simto Pty Ltd (2000) 23 WAR 515 at [27], Malcolm CJ (with whom Kennedy and Pidgeon JJ agreed), in respect of s 20 of the Property Law Act 1969 (WA) (equivalent to s 12 of the Conveyancing Act 1919 (NSW)); and to Y K Liew, Guest on the Law of Assignment (3rd ed, 2018) p 49 [2.03]). Boulos Holdings' submissions 1. As to the question whether the effect of the assignment was to destroy the rights of Boulos Holdings to any payment under special condition 44, and the arguments raised by Edwin Davey in relation to the PPSA, Boulos Holdings submits, in summary, as follows. 1. Insofar as Edwin Davey contends that the right to sue upon special condition 44 is no longer vested in Boulos Holdings because of the operation of the PPSA, Boulos Holdings says, first, that s 8(1)(f)(i) of the PPSA does not apply because s 8(1)(f)(ii) is the applicable section and accordingly, s 117 of the PPSA is not capable of invocation because s 8(2) does not pick up s 8(1)(f)(ii) (see supplementary submissions at [12]-[27]). If s 8(1)(f)(i) does apply, then it is said that Chapter 4 of the PPSA does not apply, because Boulos Holdings disputes that Perpetual made any "decision" pursuant to s 117(2) of the PPSA (see [28]-[34]). Further, Boulos Holdings says that the disposal mechanisms in Chapter 4 of the PPSA were incapable of invocation by reason of s 116 of the PPSA and the appointment of managers and receivers to Boulos Holdings by NAB (see at [35]). Finally, it is said that even if those arguments are not accepted, there has been no disposal because the right to sue under special condition 44 was not seized under s 123 of the PPSA, as no notice was given by Perpetual of that seizure (see at [36]). Accordingly, it is said that the Deed of Assignment did not dispose of any right of Boulos Holdings to sue upon special condition 44 of the Contract (see at [37]-[50]). 2. Turning to those arguments in more detail, as to the first, it is submitted that the PPSA does not apply because s 8(1)(f)(ii) applies, not s 8(1)(f)(i). 3. Boulos Holdings says that if Perpetual had a charge over Boulos Holdings' right to payment under special condition 44, the charge was provided for by a transaction that falls within s 8(1)(f)(ii) of the PPSA, being a transaction that created an interest in a right to payment in connection with an interest in land and the writing evidencing the creation of the interest specifically identified the land. It is said that if the transaction falls within s 8(1)(f)(ii) of the PPSA, then there is no relevant exception to s 8(1) in ss 8(2) or 8(3), and so the PPSA (other than ss 73 and 74) does not apply, such that Benjamin and Brendon did not take the right to payment under special condition 44 free of Boulos Holdings pursuant to the combined effect of the Deed of Assignment and s 133(1) of the PPSA. 4. It is noted that s 8(1) of the PPSA sets out various kinds of "interests" to which the PPSA does not apply (except as provided for by ss 8(2) and 8(3)); and that although s 8(1)(f) of the PPSA also refers to "an interest", its subparagraphs do not list types of interest; rather, they list types of "transactions" which "provided for" an "interest". The term "interest" is defined, non-exhaustively, in respect of personal property to include a right or interest in personal property. Boulos Holdings says that there is no question that if Perpetual had a charge over Boulos Holdings' right to payment under special condition 44 that would be an "interest" under ss 8(1) and 8(1)(f) of the PPSA. 5. It is noted that s 8(1)(f) requires identification of the "transaction" which "provided for" Perpetual's alleged charge over Boulos Holdings' right to payment under special condition 44; and that the term "provided for by a transaction" is used in s 12(1) of the PPSA, which defines "security interest". Reference is made to Dura (Australia) Constructions v Hue Boutique Living at [107]); and to the ordinary definition of "transaction", a term not defined in the PPSA, which is of considerable generality and covers a broad range of activities (Dura (Australia) Constructions v Hue Boutique Living at [110]-[111]). 6. It is said that in s 12 of the PPSA, "transaction" means a consensual transaction (citing Dura (Australia) Constructions v Hue Boutique Living at [115]-[126]). Boulos Holdings says that when "transaction" is used in a statute that identifies a purpose of a transaction or an event occurring as a result of a transaction, it applies specifically to acts that have the relevant purpose or cause the relevant event, not to the course of dealing in a broad sense (citing Gaye (No 1) Pty Ltd v Allan Rowlands Holdings Pty Ltd [1993] HCA 26; (1993) 114 ALR 349 at 352; Halloran v Minister Administering National Parks and Wildlife Act 1974 (2006) 229 CLR 545 at [81] per Gleeson CJ, Gummow, Kirby and Hayne JJ, at [94]-[96] per Heydon J). Boulos Holdings says that there is no reason for "transaction" to have a different meaning in s 8(1)(f) of the PPSA to the meaning it bears in s 12 (citing Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J (as his Honour then was). 7. Accordingly, it is said that the "transaction" that provided for Perpetual's alleged charge must be a consensual transaction between Perpetual and Boulos Holdings; and that that transaction can only be the Perpetual Loan Agreement (between Perpetual and Boulos Holdings on 1 March 2010) because there was no other consensual transaction between Perpetual and Boulos Holdings. 8. It is said that for Edwin Davey's argument to succeed, the Perpetual Loan Agreement must have been a "security agreement" to provide for a "security interest" in "after-acquired property" within the meaning of s 18(2) of the PPSA. "After-acquired property" is included in future property and can be charged for value (referring to Hughes v Pluton Resources Ltd (recs and mgrs apptd) (in liq) [2017] WASCA 213; (2017) 123 ACSR 417 at [78]; Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 at 446 per McHugh and Gummow JJ; Shepherd v Federal Commissioner of Taxation (1965) 113 CLR 385; Chubb Insurance v Moore at [61] per Emmett JA and Ball J). 9. It is said that this conclusion is supported by the Perpetual Loan Agreement also creating Boulos Holdings' obligation to pay Perpetual, being the obligation that was secured by the alleged charge; by the definition of "security agreement" in s 10 of the PPSA; and by the role of security agreements in creating a "security interest". 10. Boulos Holdings says that the giving of the Perpetual Mortgage on or about 2 November 2006 by Microage and its registration on 27 March 2007 could not have created any charge or security interest in favour of Perpetual over Boulos Holdings' future right to payment under special condition 44. It is noted that a right to sue for a sum of money is a chose in action, which is a proprietary right (Loxton v Moir (1914) 18 CLR 360 at 379 per Rich J); and that it is personal property (not being land), so registration of the Perpetual Mortgage did not create any right over it. It is said that Microage did not purport to, and could not, charge future personal property of Boulos Holdings in favour of Perpetual. Moreover, it is said that the giving of the Perpetual Mortgage was not a consensual transaction of Boulos Holdings and Perpetual. 11. Nor, it is said, could the registration of the transfer of the Flour Mill Property from Microage to Boulos Holdings have created any charge or security interest in favour of Perpetual over Boulos Holdings' future right to payment under special condition 44. It is noted that Perpetual was not a party to this transaction and it only concerned land, not personal property. 12. Even if the Loan Agreement was a "transaction" which "provided for" Perpetual's "interest" in Boulos Holdings' future right to payment under special condition 44 in that it secured Boulos Holdings' obligation to pay Perpetual, it is said that it did not create an interest in land within the meaning of s 8(1)(f)(i) of the PPSA. The first registered mortgages in favour of Perpetual over the Flour Mill Property and the Second Pyrmont Property already existed and were referred to as "Existing Security" in the Perpetual Loan Agreement. It is said that it is not possible to create something that already exists. 13. Boulos Holdings says that its agreement "to comply with all terms and conditions contained in the securities insofar as they can apply to you" does not make the Perpetual Loan Agreement a mortgage over land. It is a contractual promise that, if it creates any interest in property (which Boulos Holdings denies), only does so to the extent that such interests do not already exist. Perpetual was already the first registered mortgagee over the Flour Mill Property and the Second Pyrmont Property, so there were no rights in land that the Perpetual Loan Agreement could create. It is said that the same argument applies in respect of cl 1(d) of the "Ongoing Conditions" which provides that Perpetual could exercise its powers under the securities if an event of default occurs. Moreover, the Perpetual Loan Agreement did not even purport to be a mortgage of land. It is noted that cl 9 of the Perpetual Loan Agreement provides that it will become a "loan contract" if it is signed and returned. 14. Accordingly, Boulos Holdings says that any charge in favour of Perpetual over Boulos Holdings' right to payment under special condition 44 was not provided for by a transaction that created an interest in land. It follows that s 8(1)(f)(i) of the PPSA does not apply. 15. However, it is said that s 8(1)(f)(ii) of the PPSA does apply to the Perpetual Loan Agreement if it created a charge over Boulos Holdings' future right to payment under special condition 44 because: the Perpetual Loan Agreement must have created "an interest in a right to payment", being Boulos Holdings' right to payment under special condition 44; Perpetual's interest in Boulos Holdings' right to payment under special condition 44 was "in connection with an interest in land" because it was in connection with Boulos Holdings' interest in the Flour Mill Property as its owner selling the land under the Contract and it was also in connection with Perpetual's interest in the land as mortgagee because the existing Perpetual Mortgage was also security for the loan and each of the subparagraphs in the definition of "Secured Assets" in the Memorandum (which other than the land itself are said to be charged to Perpetual by the Loan Agreement) refer to the "Mortgaged Land". 16. It is noted that in Marac Finance Ltd v Greer [2012] NZCA 45 at [38], the New Zealand Court of Appeal said that a similar provision should not be construed narrowly. Boulos Holdings says that this result is not inconsistent with s 8(1)(f)(i) of the PPSA not applying because s 8(1)(f)(i) applies if the interest provided for by the transaction is "the creation or transfer of an interest in land" whereas s 8(1)(f)(ii) applies if the interest provided for by the transaction is "the creation of an interest in a right to payment … in connection with an interest in land". It is further noted that the writing "evidencing the creation" of Perpetual's interest in Boulos Holdings' right to payment under special condition 44, being the Perpetual Loan Agreement, specifically identified the Flour Mill Property. 17. Boulos Holdings notes that, pursuant to s 8(2), s 73 of the PPSA, which deals with priorities between security interests and declared statutory interests, applies to an interest provided for by a transaction described in s 8(1)(f)(ii). Pursuant to s 8(2) item 6 and s 1.4(5)(c) of the Personal Property Securities Regulations 2010 (Cth), s 74 of the PPSA, which also deals with priorities, also applies to such an interest. The only interests to which the PPSA applies by reason of s 8(3) of the PPSA are mortgage-backed securities and real property mortgage loans transferred in connection with the issue of a mortgage-backed security (see s 1.5 of the Personal Property Securities Regulations). Boulos Holdings says that none of these provisions leads to the result that Chapter 4 of the PPSA applies to a security interest provided for by a transaction within s 8(1)(f)(ii) of the PPSA. 18. Accordingly, it says that the PPSA (except ss 73 and 74) does not apply to any interest Perpetual had in Boulos Holdings' right to payment under special condition 44, so s 133(1) does not have the effect that the Deed of Assignment destroyed Boulos Holdings' interest in that right. 19. Boulos Holdings says that, even if (contrary to its submissions) s 8(1)(f)(i) of the PPSA applies to Perpetual's security interest, Chapter 4 does not. 20. It is noted that Edwin Davey relies on s 117 of the PPSA for its argument that Perpetual enforced its charge over Boulos Holdings' right to payment under special condition 44 by selling that right to Benjamin and Brendon pursuant to the Deed of Assignment and Chapter 4 of the PPSA had the effect of destroying Boulos Holdings' interest in that right by force of s 133(1). It is said that s 117 is essential for Edwin Davey's argument because, if s 8(1)(f)(i) applies, it is the only way that Chapter 4 applies (via s 8(2)). 21. Boulos Holdings says that s 117 of the PPSA gives a "secured party" a choice in circumstances where it has a "security interest" in personal property that secures an obligation that is also secured by an interest in land (see s 117(1)(a); that the choice is whether or not to enforce the security interest under Chapter 4 of the PPSA; and that the choice is made by a decision under s 117(2) for the enforcement provisions in Chapter 4 of the PPSA to apply. It is said that this requires the secured party "actually" to make the decision because a decision is a deliberate act and s 117(3) of the PPSA contains matters the secured party must take into account in making the decision. Moreover, as a secured party is not obliged to use the enforcement provisions in the PPSA even when they are available, it is said that it must be necessary for the secured party actually to decide to use them before they apply. 22. Boulos Holdings submits that the mischief the PPSA was intended to address was the uncertainty and complexity of the various statutory and common law regimes applicable to security interests in personal property (see Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) [2017] NSWCA 8; (2017) 93 NSWLR 765 at [83]) but that the PPSA did not take away existing methods of enforcement of security interests or the ability to assign such interests to a third party (which does not destroy the rights of the owner of the security). 23. Boulos Holdings notes that the PPSA does not derogate from the rights and remedies a secured party has apart from the PPSA in relation to a default under a security agreement (s 110). The rights and remedies provided by Chapter 4 are cumulative of other available rights and remedies (s 114 and see the commentary in [114.5] of N Mirzai & J Harris, The Annotated Personal Property Securities Act 2009 (Cth) (3rd ed, 2018, CCH Australia Ltd). The PPSA is not intended to exclude or limit the operation of other laws that are capable of operating concurrently with the PPSA, including the general law (s 254 of the PPSA). The effect of s 254 is that the PPSA is not a code and operates concurrently with other laws (Warehouse Sales Pty Ltd (in liq) v LG Electronics Australia Pty Ltd (2014) 291 FLR 407; [2014] VSC 644 at [35] per Sifris J). 24. Boulos Holdings says that there is no evidence that Perpetual actually made a decision under s 117(2) of the PPSA to enforce a "security interest" in Boulos Holdings' right to payment under special condition 44, let alone pursuant to Chapter 4 of the PPSA. It is noted that no evidence has been led of any such decision being made and an inference is sought to the effect that such a decision was made because Perpetual entered into the Deed of Assignment. However, it is noted that the Deed of Assignment does not mention enforcement by Perpetual of its rights against Boulos Holdings (as opposed to its assignment of its rights to Benjamin and Brendon), the PPSA or any decision under s 117(2). 25. It is accepted that Perpetual was entitled to assign its charge over Boulos Holdings' right to payment under special condition 44 in equity and to complete the assignment at law if it wished to do that; and that it was not obliged to dispose of Boulos Holdings' right to payment under Chapter 4 of the PPSA. In the Deed of Assignment, Perpetual assigned the rights "it has" in cl 1.1 and expressly made no representation as to the nature of its rights in cl 1.2(c). Boulos Holdings says that these are not words of enforcement, nor are they consistent with Perpetual making a decision to enforce its rights by disposing of Boulos Holdings' right to payment under special condition 44 pursuant to s 128 of the PPSA with the result that, pursuant to s 133(1), Benjamin and Brendon would take that right to payment under special condition 44 free of Boulos Holdings. 26. Further, it is said that Chapter 4 of the PPSA does not apply because when the Deed of Assignment was executed, Boulos Holdings still had receivers and managers appointed to it. 27. Boulos Holdings points to s 116(1) of the PPSA which provides that Chapter 4 of the PPSA does not apply in relation to property while a person is a controller of the property as receiver or receiver and manager. The Receivers were appointed as receivers and managers over all of Boulos Holdings' property by a Deed of Appointment of Receivers dated 22 June 2012 pursuant to the General Security Deed which was registered on the PPSR. The Priority Deed does not affect the enforcement of the General Security Deed by NAB (Ex 1, cl 4). It is said that it follows that Chapter 4 of the PPSA, including ss 128 and 133, does not apply to Boulos Holdings' right to payment under special condition 44. 28. Finally, if contrary to the above, Chapter 4 of the PPSA applies to Perpetual's security interest in Boulos Holdings' right to payment under special condition 44, then it is said that there was no disposal of Boulos Holdings' interest. It is noted that s 133(1) of the PPSA deals with a situation where the collateral has been disposed of under s 128 and s 128(1) of the PPSA provides that " [a] secured party may dispose of collateral if the secured party has seized the collateral in the exercise of a right to seize the collateral on default by the debtor (whether under section 123 or otherwise)". Boulos Holdings says that unless Perpetual "seized" Boulos Holdings' right to payment under special condition 44 pursuant to s 123 of the PPSA or otherwise, it was not empowered to dispose of the right by s 128 and therefore it did not dispose of the right under that section. It is said that as it did not dispose of the right under s 128, s 133(1) has no application and nor does s 133(2). 29. Boulos Holdings says that the conferral by s 128 of the PPSA on a secured party of a right to dispose of the collateral allows interference with the grantor's vested proprietary rights and therefore should be narrowly construed (citing Clissold v Perry (1904) 1 CLR 363 at 373 per Griffith CJ; R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 at [43]-[44] per French CJ). It is said that, given that the PPSA is not a code and the destructive consequences of disposal on the interest of the grantor in the collateral, as a matter of statutory construction, seizure is an essential preliminary step to disposal under s 128 such that a purported disposal of collateral without seizure is no disposal at all (referring to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [92]-[93] per McHugh, Gummow, Kirby and Hayne JJ). Boulos Holdings says that seizure is essential so that the grantor knows that the collateral may be disposed of under s 128 of the PPSA, which enables the grantor to take action to pay the debt or recover the collateral before it is disposed of. 30. It is said that s 123 of the PPSA also supports the argument that seizure is an essential preliminary step to disposal. Section 123(1) refers to seizure of collateral "by any method permitted by law", which refers to the process by which a secured party takes possession or control of a chattel before disposing of it. Section 123(2) was included because a secured party cannot physically possess collateral that is intangible property (being personal property that is not financial property, goods or an intermediated security: s 10, PPSA), so the PPSA deems seizure to have occurred if a secured party takes steps to gain control (see cl 4.51, Explanatory to the Personal Property Securities Bill 2009 (2008-2009)). Notice under s 123(2) is the "only" method of seizure of intangible property unless s 123(3) applies, which refers to "another method, if so agreed". The inclusion of identifiable "methods" of seizure of intangible property in ss 123(2)-(3) is said to reinforce that seizure is essential to disposal. 31. Boulos Holdings says that s 133(2) of the PPSA, which refers to "the requirements of this Chapter", is not inconsistent with this analysis as it applies to a disposal of collateral and does not apply where there has been no disposal due to no seizure occurring. It is said that there are many requirements of Chapter 4 that s 133(2) refers to such as ss 130 and 131, so the section has other work to do than to rescue a purported disposal of collateral that has not been seized. 32. It is noted that Edwin Davey admits Perpetual did not seize Boulos Holdings' right to payment under special condition 44 by notice under s 123(2), and that it does not suggest Perpetual seized the right by any recognised method permitted by law under s 123(1) or otherwise. Edwin Davey says that Perpetual seized Boulos Holdings' right pursuant to s 123(3). However, it is noted that Edwin Davey does not point to any agreed method of seizure (simply relying on cl 10.2 of the Memorandum of mortgage which allowed Perpetual to "do anything the Mortgagee consider[ed] appropriate to … deal with the Secured Assets". Boulos Holdings says that this does not identify any method of seizure, let alone any agreed method of seizure, so Edwin Davey did not seize the collateral. 33. Boulos Holdings submits that the only way Perpetual could have seized Boulos Holdings' right to payment under special condition 44 was by notice under s 123(2) of the PPSA and that it gave no such notice. It is said that the Deed of Assignment could not itself constitute notice because it would not be a preliminary step to disposal (as it is said to have effected the disposal). Moreover, it is said that notice would have to have been given to Boulos Holdings and there is no evidence this occurred (noting that its registered office was that of the Receivers at the time). Last, it is said that the Deed of Assignment did not constitute notice of seizure under s 123(2) of the PPSA because it did not state it constituted seizure. Edwin Davey's supplementary submissions in reply 1. As to the proposition that s 8(1)(f)(ii) of the PPSA applies and not s 8(1)(f)(i), Edwin Davey says that Boulos Holdings' supposition, namely that the transaction which provided for Perpetual's alleged charge must be a consensual transaction between Perpetual and Boulos Holdings and can only be the Perpetual Loan Agreement because there was no other consensual transaction between Perpetual and Boulos Holdings, is incorrect. 2. Reference is made to the following in the chronology of events. 3. First, the Perpetual Mortgage was granted by Microage on 2 November 2006 and incorporated a set of terms lodged with the Registrar General (the Memorandum to the mortgage). It is said that at the time the Perpetual Mortgage was granted, Microage successfully granted a security interest not only over the Flour Mill Property, but also the assets falling within the definition of "Secured Assets" (specifically sub-paragraphs (b) and (d)). Edwin Davey says that those "Secured Assets" comprised rights deriving from and concerning the Flour Mill Property (such as the right to receive money in respect of the Flour Mill Property). 4. Second, on 1 July 2010, a transfer in respect of the Flour Mill Property was registered, recording that the Flour Mill Property had been transferred from Microage to Boulos Holdings. Again, it is said that there is no dispute that at the time this occurred, Boulos Holdings took the Flour Mill Property (and the rights deriving from the Flour Mill Property such as the right to receive income or money in respect of the Property) subject to the Perpetual Mortgage (i.e., Boulos Holdings took its interests in the Flour Mill Property subject to the indefeasible mortgage in favour of Perpetual). (Pausing here, while it is not in dispute that the Perpetual Mortgage was registered over the Flour Mill Property even after Boulos Holdings took the Flour Mill Property, it is not agreed between the parties that Boulos Holdings' right to receive money in respect of the Flour Mill Property was subject to the Perpetual Mortgage.) 5. Edwin Davey says that the mortgage encompassed not only the freehold estate, but the following other interests associated with the Flour Mill Property, namely: (i) "any contract or agreement in relation to the Mortgaged Land, including any agreement or option for sale"; and (ii) "the Mortgagor's right to receive any money in respect of the Mortgaged Land". Accordingly, it is said that what Boulos Holdings received from Microage, even absent any consideration of the terms of the Perpetual Loan Agreement, were various rights associated with the Flour Mill Property that were already subject to a mortgage interest in favour of Perpetual. Boulos Holdings did not take free of this encumbrance. It did not take or obtain the right to receive any money in respect of the Property unfettered by the mortgage that Microage had already granted in favour of Perpetual over that right (referring to ELG Tyler, PW Young, CE Croft, Fisher and Lightwood's Law of Mortgage (3rd ed, 2014, Lexisnexis Butterworths) at [14.16]). 6. Edwin Davey says that the position is fortified by the terms of the Perpetual Loan Agreement which indicates that the $13.2 million loan was subject to a first registered mortgage over the Flour Mill Property by Microage "as transferred to Boulos Holdings". It is said that this is precisely what occurred, with the commercial intent of the parties obvious. Boulos Holdings was to take over as mortgagor of the Flour Mill Property and stand in the shoes of Microage. On this point, it is noted that Boulos Holdings insists upon some additional memorandum to the Perpetual Loan Agreement because it "refuses to concede (notwithstanding the terms and evident commercial purpose) that those documents were sufficient to constitute an acknowledgement by Boulos Holdings to be bound by the Perpetual Mortgage upon the [Flour Mill] Property being transferred to it" (see supplementary submissions at [8]). 7. It is said that Boulos Holdings' position leaves unexplained why, in respect of any contract to sell the Flour Mill Property entered into by Boulos Holdings, the right of Boulos Holdings to receive the headline price of $10.8 million was subject to Perpetual's mortgage, but the additional consideration for the conveyance arising under special condition 44 was not. Edwin Davey says that pursuant to the terms of the Perpetual Loan Agreement, it is clear that the parties agreed that Boulos Holdings was to take over as mortgagor from Microage, with the Memorandum of mortgage defining "mortgagor" as including its "permitted assigns" (i.e. Boulos Holdings, being the permitted assignee of the Property). 8. Edwin Davey says that the transaction that gave rise to Perpetual's charge over special condition 44 was the Perpetual Mortgage; that to the extent the Perpetual Loan Agreement is relevant, it fortifies the position that Boulos Holdings was bound by the Perpetual Mortgage; and that there is nothing in the PPSA that indicates that the relevant transaction giving rise to the security interest must be one between Perpetual and Boulos Holdings. Edwin Davey maintains that Perpetual's security interest over the right arising pursuant to special condition 44 arose pursuant to the Perpetual Mortgage, being an interest provided for by the creation of an interest in land. It says that the same security interest may also have arisen pursuant to a transaction falling within s 8(1)(f)(ii) of the PPSA but that the two subsections are not mutually exclusive (i.e., that the security interest may also fall within s 8(1)(f)(i) of the PPSA (with the result that s 8(2) of the PPSA (and therein s 117) is applicable). 9. As to the proposition that Chapter 4 of the PPSA does not apply, there being no evidence that any "decision" was made pursuant to s 117(2) of the PPSA, Edwin Davey says that: the PPSA does not stipulate that any such decision must be made in writing, nor notified to any party (c.f., s 118(1)(b) of the PPSA); and it is clear from the express terms of the Deed of Assignment, pursuant to which Perpetual sold to Benjamin and Brendon the right of Boulos Holdings to make demand under special condition 44, that Perpetual made a decision under this section. Edwin Davey says that the fact that Perpetual proceeded to sell the intangible property is explicable only as a decision to dispose of that personal property via its rights as security holder, which could only have occurred pursuant to the terms of the PPSA. Edwin Davey points out that it is clear from the Priority Deed (Ex 1) that Perpetual was the highest-ranking secured party (on the assumption, as Edwin Davey contends, that the Perpetual Mortgage covered the right accruing to Boulos Holdings under special condition 44). 10. As to the proposition that Chapter 4 of the PPSA does not apply in circumstances where a person is a controller of the property in either the capacity of a receiver or receiver and manager, Edwin Davey says that s 116 is clearly directed towards preventing a party holding a PPSA security interest over personal property from taking steps to enforce against that personal property in circumstances where that security holder (or a higher-ranking security holder) has appointed receivers (or receivers and managers) to the same property. It is said that that flows from the language that a person be "a controller of the property" in a capacity of receiver or receiver and manager. 11. Edwin Davey submits that such a person (i.e., a receiver, or receiver and manager) does not ordinarily assume such a position in respect of property that is subject to a security interest that is higher ranking than that which is held by the security holder that appointed the receiver. It is noted that absent an order being made under s 420B of the Corporations Act 2001 (Cth), a receiver appointed by a subordinate security-holder (here NAB) could not sell property subject to a superior security interest (here Perpetual) (citing Ramsay and Austin, Ford, Austin & Ramsay's Principles of Corporations Law (17th ed, 2018, LexisNexis (online)) at [25.120.6]; Citadel Financial Corp Pty Ltd v Elite Highrise Services Pty Ltd (No 3) (2014) 17 BPR 34,045; [2014] NSWSC 1926 at [23]-[26] per Brereton J, as his Honour then was) (there being no evidence that any such order was ever made in the present case). 12. Edwin Davey says that priority was conferred on Perpetual for all items falling within the Perpetual Mortgage (which included the rights arising under special condition 44), up to the amount of $13.2 million plus interest and costs (see Priority Deed, cl 3.1 (Ex 1)). This was said to be "despite" the "appointment of any receiver, receiver and manager…to the Mortgagor or to the whole or any part of its assets" (cl 3.1(h)). 13. As to the submission that there was no disposal because no effective seizure occurred, Edwin Davey says that s 123(3) of the PPSA permitted seizure "by another method, if so agreed between the parties to the security agreement". It is said that the terms of the Perpetual Mortgage were broad and unambiguous, permitting Perpetual to "do anything the Mortgagee consider[ed] appropriate to...deal with the Secured Assets" immediately upon default (which included seizing and dealing with the "Secured Assets" without further notice) (see cl 10.2) and that there is no reason to construe that provision narrowly as not encompassing seizure by reason of Perpetual dealing with the property, including by disposing of it, without further notice to Boulos Holdings. 14. In the present case, it is said that such seizure was manifested by the Deed of Assignment, pursuant to cl 1.1 of which Perpetual sold and assigned the right to sue upon special condition 44 to Benjamin and Brendon. Edwin Davey argues that, in so doing, that intangible property was seized and disposed of in a single act. Edwin Davey says there is nothing to preclude agreement by parties (for the purposes of s 123(3) of the PPSA) that seizure could take place in the absence of notice and via the simultaneous act of the security holder dealing with the intangible property by way of disposal. 15. Edwin Davey argues that if intangible property can be seized under the PPSA via mere provision of a notice, there is no reason why it cannot also be seized (if so agreed) by the secured party dealing with the property, absent prior notice to the grantor of the interest, pointing out that there is no established process, at common law, of seizure of an intangible property (c.f. possession of land or chattels). 16. Further, and in any event, Edwin Davey argues that the operation of s 133(2) of the PPSA is not confined to the circumstances where an effective seizure has taken place. It is said that Benjamin and Brendon took free of Boulos Holdings' interest in special condition 44 even if Perpetual failed to comply with the requirements of s 123 of the PPSA, and that this is apparent given that the power of disposal in s 128 of the PPSA is conferred "if the secured party has seized the collateral in the exercise of a right to seize the collateral on default by the debtor (whether under section 123 or otherwise)". Edwin Davey says that it is clear that the purposes of s 133 of the PPSA are to protect the position of purchasers of collateral (at least, relevantly, from claims from the grantor and lower ranking security holders) from defects in the process adopted by the enforcing secured party, of which the purchaser could have no knowledge (which it is said would include any non-compliance with provisions or requirements of the PPSA in terms of seizure). 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: 16 June 2021