Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd [2025] NSWCA 15 Hearing dates: 17 December 2024 Date of orders: 20 February 2025 Decision date: 20 February 2025 Before: Ward P at [1]; Stern JA at [164]; Griffiths AJA at [165] Decision: 1. Allow the appeal. 2. Set aside the declarations and order in (1)-(3) at [155] of the primary judgment. 3. Order the Trustee to redeem the units in certificate 3 in the Aurora Australasia Fund Unit Trust and pay the sum of $1,696,472.17 in accordance with directions to be given to it by its director, Mr Driver. 4. Set aside the costs orders at (2)-(4) of the costs judgment and in lieu therefore order that the second and third respondents pay the appellants' and first respondent's costs of the proceedings at first instance (save for the costs in respect of the appellants' claim for the removal of the first respondent as trustee to the extent that claim was based upon matters other than the non-redemption of the units in certificate 3). 5. Order the second and third respondents to pay the appellants' costs of the appeal. 6. For the avoidance of doubt, note that Order 5 of the costs orders made by the primary judge remains operative. 7. Order that the first respondent bear its own costs of the appeal. Catchwords: EQUITY - equitable charges and liens – where debtor emails creditor offering a pledge of units in trust – where creditor does not accept pledge – whether debtor conferred an equitable charge over units as security for repayment of loans – whether the claim for an equitable charge fails under the requirements for signed writing in s 23C(1)(c) of the Conveyancing Act 1919 (NSW) EQUITY - trusts and trustees - unit trusts - whether trustee obliged to process redemption request in amount claimed by appellants Legislation Cited: Conveyancing Act 1919 (NSW), s 23C(1)(c) Interpretation Act 1987 (NSW), Sch 4 Cases Cited: Aurora Australasia Pty Limited v Hunt Prosperity Pty Limited [2024] NSWSC 195 Aurora Australasia Pty Ltd v Hunt [2024] NSWSC 680 Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust [2024] NSWSC 1054 Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust (No 2) [2024] NSWSC 1210 Boulos Holdings Pty Ltd v Edwin Davey Pty Ltd [2021] NSWSC 689 Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 Hastie Group Ltd (In Liq) v Bourne; Hastie Group Ltd (In Liq) v Moore [2017] NSWSC 709 In the matter of NL Mercantile Group Pty Ltd [2018] NSWSC 1337 Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 Metwally v University of Wollongong (1985) 60 ALR 68 Morris Finance Ltd v Free [2017] NSWSC 1417 Naaman v Jaken Properties Australia Pty Ltd [2025] HCA 1 Porter v Bonarrigo [2009] VSC 500 PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643 [1992] ANZ ConvR 513 Re Roberts; ex parte Australian Telecom Employees Credit Co-Operative Ltd v Taylor (1982) 84 FLR 88 Roberts v Investwell Pty Ltd (in liq) [2012] NSWCA 134 Swiss Bank Corporation v Lloyds Bank Limited [1982] AC 584 Toocooya Investments Pty Ltd (1978) 3 ACLR 252 Young v Matthew Hall Mechanical & Electrical Engineers Pty Ltd (1988) 13 ACLR 399 Texts Cited: Halsbury's Laws of Australia, 295 – Security Interests – General Principles J Flood, K Galloway and M Castan, Fisher and Lightwood's Law of Mortgage 15th ed, 2019, Lexis Nexis P Parkinson, The Principles of Equity (2nd ed, 2003, Lawbook Co) Category: Principal judgment Parties: Aurora Australasia Pty Ltd (First Appellant) David James Driver (Second Appellant) Hunt Prosperity Pty Ltd (First Respondent) AMHP Pty Ltd (Second Respondent) Adam Hartley (Third Respondent) Representation: Counsel: MR Elliott SC (Appellants) S Murray (First Respondent) JM Ireland KC (Second and Third Respondents) Solicitors: McCabes (Appellants) Gilbert + Tobin (First Respondent) DC Balog & Associates Solicitors (Second and Third Respondents) File Number(s): 2024/349259 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2024] NSWSC 1054 Date of Decision: 23 August 2024 Before: Rees J File Number(s): 2023/459309 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] In 2022 Mr David Driver and Mr Adam Hartley set up the Aurora Australasia Investment Fund Unit Trust (the Fund) to invest in foreign exchange trading. Mr Hartley's company, AMHP Pty Ltd, and Mr Driver became equal shareholders in the investment manager, Aurora Australasia Pty Ltd (Aurora). Mr Driver was (and still is) the sole director of Aurora. Hunt Prosperity Pty Ltd (the Trustee) was appointed as trustee of the Fund. Through an undocumented arrangement, Aurora charged the Trustee a performance fee of one-third of the Fund's monthly profits. The fee was split between Mr Driver and Mr Hartley. The fee was 'reinvested' by Aurora in the Fund. The Trustee issued two Unit Certificates to record these investments, being Certificate No 3 (the Units) and Certificate No 4. Both certificates were in the name of Aurora but, for working purposes, the Trustee prepared monthly spreadsheets notionally allocating these units to Mr Driver and Mr Hartley respectively. Mr Driver was lent an amount totaling $7.5 million from Mr Hartley and AMHP, the loans being imperfectly recorded in a written agreement, to be repaid on the settlement of legal proceedings anticipated following a scheduled mediation in June 2023. That did not occur. On 13 July 2023 Mr Hartley requested that Mr Driver transfer his shares in Aurora to AMHP and resign as director given the delay in the mediation of the dispute. On 14 July 2023 Mr Driver offered a pledge over his shares in Aurora and units in the Fund. Mr Driver attempted to redeem the units recorded in Certificate 3. Mr Driver commenced proceedings through Aurora seeking to compel the Trustee to process his redemption request. The primary judge concluded that, through the 14 July 2023 email, Mr Driver had conferred an equitable charge over the Units in favour of Mr Hartley and AMHP and restrained the Trustee from processing any redemption request. Aurora and Mr Driver challenged the primary judgment on various grounds, including that the primary judge erred in: (i) finding that there was an agreement that Mr Driver's shares in Aurora would be given as security; (ii) finding that Mr Driver had conferred an equitable charge of the Units; (iii) making erroneous and irrelevant findings as to Mr Driver's conduct; and (iv) not finding that the Trustee was obliged to redeem the Units in accordance with the directions given to it by Mr Driver and not making an order for the said redemption and payment in accordance with the Withdrawal Price. The Court held (Ward P, Stern JA and Griffiths AJA), allowing the appeal in part with costs: (1) Paragraph [136] of the primary judgment was not a finding of an enforceable agreement between the parties that the shares would be given as security for the repayment of the loans. The reference to "agreement" is more comfortably read as referring to an agreement in principle that was said to have been earlier reached as to compensation for other complaints: at [110] (Ward P), [164] (Stern JA), [165] (Griffiths AJA). (2) Her Honour erred in finding that an equitable charge was conferred by Mr Driver's email. Nothing in the email supports the conclusion that Mr Driver intended immediately to grant a charge over the Units: at [100] -[101] (Ward P), [164] (Stern JA), [165] (Griffiths AJA). PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643; [1992] ANZ ConvR 513; In the matter of NL Mercantile Group Pty Ltd [2018] NSWSC 1337; Swiss Bank Corporation v Lloyds Bank Limited [1982] AC 584; Porter v Bonarrigo [2009] VSC 500 cited. (3) The observations made at [6] of the primary judgment did not influence the dispositive finding of her Honour as to the grant of an equitable charge. How it was characterised by her Honour was irrelevant to the question that her Honour clearly understood was to be determined, namely whether an equitable charge had been created: at [110], [114] (Ward P) [164], (Stern JA), [165] (Griffiths AJA). (4) On the evidence before her Honour, an inference should have been drawn that the Trustee had accepted the Withdrawal Date as 30 November 2023 and had chosen to proceed on that basis. It was not open to the Trustee to run a positive case that it remains open to it to determine some other Withdrawal Date having chosen not to contest that issue before the primary judge, given the obvious prejudice to the appellants in that they did not adduce evidence as to that calculation in the absence of any such contest: at [154] (Ward P), [164] (Stern JA), [165] (Griffiths AJA). JUDGMENT 1. WARD P: In this matter, the appellants (Aurora Australasia Pty Limited (Aurora) and its sole director and secretary, Mr David Driver), challenge orders made by the primary judge on 23 August 2024 (Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust [2024] NSWSC 1054 – the primary judgment) and 26 September 2024 (Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust (No 2) [2024] NSWSC 1210 – the costs judgment). 2. Relevantly, her Honour made declarations in respect of the units in the Aurora Australasia Investment Fund Unit Trust (Aurora Unit Trust) recorded in Certificate 3 (the Units) that had been issued by the first respondent, Hunt Prosperity Pty Ltd (the Trustee), as trustee of the Aurora Unit Trust; restrained the Trustee from processing any redemption request by or at the direction of Mr Driver in respect of the Units; and made costs orders against the appellants in relation to the proceedings (see [155] of the primary judgment and [43] of the costs judgment). 3. The central question arising on the appeal is whether her Honour was correct in concluding that Mr Driver had granted an equitable charge in favour of the second and third respondents (the Hartley Parties) over his beneficial interest in the Units (Ground 2 of the grounds of appeal – see Amended Notice of Appeal filed 28 October 2024). 4. The appellants maintain that her Honour erred in so finding on two bases: first, that no claim to that effect was pleaded or advanced in the proceedings and, second, that the conclusion that there was an equitable charge was incorrect in any event. There is also an issue as to the relief that flows if the appellants' contention on that central question is correct. In that event, the appellants seek an order that the Trustee redeem the Units and pay the redemption proceeds in the amount calculated by the Trustee as at 30 November 2023 (which they contend is the Withdrawal Date) whereas both the Trustee, on the one hand, and the second and third respondents, on the other, seek that the matter be remitted to the primary judge (although it is not clear what the primary judge would then need to determine). 5. For the reasons that follow, the appeal should be allowed and both the declaration (at Order (2)) and order (at Order (3)) made by the primary judge as to the equitable charge over the Units should be set aside. As to the relief to be granted, in my opinion it should be inferred (from the fact that the Trustee did not, in the hearing before the primary judge or otherwise, dispute its own calculation of the redemption price predicated on a 30 November 2023 Withdrawal Date and had, prior to the proceedings at first instance, communicated its intention to process the redemption without delay) that the Trustee elected to proceed on the basis that the Withdrawal Date should not be otherwise than the date provided for under the Trust Deed (in the absence of an "otherwise" determination). In those circumstances, the Units should now be redeemed at the Withdrawal Price that the Trustee had itself calculated on the basis of a Withdrawal Date of 30 November 2023, i,e, $1,696,472.17. 6. For completeness, had I not drawn the above inference then I would have concluded that the appropriate relief was simply to direct that the Trustee redeem the Units and pay the redemption proceeds to or at Mr Driver's direction without further delay (rather than remitting the matter to the primary judge as the respondents contend). 7. In either case, I see no reason why costs should not follow the event, although I note that the appellants do not seek to disturb Order 5 of the primary judge's costs orders (as to the entitlement of the Trustee to recoup its costs out of the Aurora Unit Trust funds). Parties 1. The first appellant, Aurora, the former investment manager of the Aurora Unit Trust, holds units in the Aurora Unit Trust as recorded in two separate certificates (Certificates 3 and 4). Aurora has two shareholders, Mr Driver (the second appellant) and AMHP Pty Limited (the second respondent) (AMHP), a company controlled by the third respondent, Mr Adam Hartley. As adverted to above, in 2022 Mr Driver was the sole director and secretary of Aurora. 2. The primary judge noted (at [84] of the primary judgment) that Mr Driver maintained that he was "personally entitled to Certificate No 3" in the Aurora Unit Trust and proceeded on the basis that Mr Driver was the beneficial owner of the Units, making a declaration to that effect in accordance with the first of the orders set out at [155] of the primary judgment. Her Honour similarly noted that the units described in Certificate 4 were notionally allocated by the Trustee to Mr Hartley (see primary judgment at [2]). The appellants here emphasise that there was no claim by the second and third respondents that Mr Driver was the beneficial owner of the Units though they do not challenge the finding to that effect. Rather, the second and third respondents had unsuccessfully contended that the units described in Certificates 3 and 4 were not validly issued. 3. As noted above, the first respondent (the Trustee) is the trustee of the Aurora Unit Trust. Aurora charged the Trustee a performance fee of one-third of the monthly profits of the Aurora Unit Trust (primary judgment at [2]) and it contended that those profits were reinvested in the Aurora Unit Trust in return for which Certificate No 3 and 4 were issued. The Trustee, both on this appeal and at first instance, took the position that it would make submissions only on the form of the relief sought by the appellants, though in the appeal the submissions went perilously close to adopting a position beyond that as to the form of the orders sought (as I explain in due course). 4. The dispute (described by the primary judge, no doubt accurately, as a bitter fight about money between two businessmen) is in essence between Mr Driver and Mr Hartley. Consistent with her Honour's observations, it was made clear in oral submissions for the second and third respondents that the determination of this appeal (at least if in the appellants' favour on the form of relief) will not be an end to the litigation between the two protagonists (AT 19.15-30). 5. As noted above, her Honour found that Mr Driver conferred an equitable charge over the Units in favour of the Hartley Parties and restrained the Trustee from processing a redemption request dated 29 November 2023 (the Redemption Request) that had been issued by Aurora in relation to the Units. The equitable charge, as found by her Honour, secured the repayment of loans admittedly made to Mr Driver (by one or both of the Hartley Parties) in amounts totalling $7.5 million. Background 1. In summary, the background to the dispute is as follows. 2. Mr Driver and Mr Hartley entered into a business venture which involved the setting up of a fund to invest in foreign exchange trading (primary judgment at [1]; [15]-[17]), for which purpose Aurora was incorporated in August 2022. 3. Between May 2022 and April 2023, Mr Hartley and AMHP separately advanced sums totalling $7.5 million to Mr Driver (primary judgment at [3], [14], [19], [27], [40]). 4. In May 2023, Mr Hartley and Mr Driver entered into a written loan agreement (the Loan Agreement) prepared by Mr Hartley's "offsider", Mr Trent de Wit, from an online precedent (primary judgment at [3]). The Loan Agreement recorded that the Lender was Mr Hartley (though, as the primary judge noted, some of the moneys advanced were from AMHP – see primary judgment at [28]) and the Borrower was Mr Driver. Under the Loan Agreement, Mr Driver promised to repay the sum of $7.5 million with interest (cl 1) and repayment was to be made in full including interest "on initial receipt of funds from court case" (cl 2) (a court case in which Mr Driver had an interest concerning a company known as Botanical Water Technologies Pty Limited (Botanical Water Technologies), to which I refer as the Water Case) (primary judgment at [43]-[45]; [117]-[122]). 5. The primary judge accepted Mr de Wit's evidence that Mr Driver had said that he planned to resolve the Water Case at a mediation in June 2023 and did not plan to proceed to trial; and that Mr Hartley could expect to be paid in full in July 2023 (primary judgment at [39]). 6. On 13 July 2023, Mr Hartley and Mr de Wit visited Mr Driver at his office, demanding that Mr Driver resign as a director of Aurora and transfer his shares in the company to AMHP (given the delay in the mediation of the dispute the subject of the Water Case) (primary judgment at [53]). 7. On 14 July 2023, Mr Driver sent an email to Mr Hartley, copied to Mr de Wit. This is the critical email on which the Hartley Parties rely as conferring an equitable charge. The email bore the subject header "David Driver – Security against Loans". In that email, Mr Driver apologised for having not repaid the loans and stated: To provide security against your loans and up until the loans are repaid in full, I offer you the below:- 1. Pledge my 50% shareholding in Aurora to you. 2. Pledge my share of the current retained profits and future profits held in Aurora under my name to you, currently $2 Million. … 1. Pausing here, the second and third respondents say (and it does not appear to be disputed) that the pledge at [2] was a reference to Certificate 3 in the Aurora Unit Trust, which represented what Mr Driver treated as his own property (see AT 31.19-27). 2. In the email, Mr Driver also offered security over his share in profits in various development properties and his shares in Botanical Water Technologies. The email further stated that: The above pledges can be formally placed in a document drafted by a lawyer. In the meantime, I am doing everything I possibly can to conclude the court case and return the loans to you, on or before December 2023. Following your consideration of the above, let us meet next week at a time convenient to you to go through everything. I genuinely want to give you comfort and security over the loaned amounts and I am deeply saddened that this has damaged our relationship and friendship. I am truly sorry for this. 1. Mr de Wit responded to that email later the same day (14 July 2023), noting that the issues discussed at the meeting the day before "need to be resolved and formalised for both you and Adam" and stating that "[a]s such" Mr Hartley "proposes the following". Mr de Wit then set out the components of Mr Hartley's proposal, which included repayment in full "at the earliest possible opportunity and at the latest via a direction to pay as part of your settlement in your current Supreme Court proceedings" and for compensation as if the loan moneys had been invested in the Aurora Unit Trust, compounded monthly, as well as a percentage of Mr Driver's "component of the determination value" of the legal proceedings. The proposal also provided for Mr Driver's shares in Aurora to be transferred "for security" to AMHP, for Mr de Wit to be appointed a director, and for the retained funds in Aurora to be distributed to AMHP in compensation "as previously agreed (up to $4.9 million)". The "relocation [sic] of the shares" was to be determined "in consultation" once the debt was repaid in full. 2. Mr de Wit then stated in the email that "[i]f you are in agreeance with the above, please confirm in writing so a loan agreement can be drafted. The security of the above will be determined on advice. Both Adam and I are willing to discuss the above with you at any time". 3. Pausing here, approaching this from a standard contract law perspective, then in offer and acceptance terms this was clearly a counter-offer, the effect of which would amount to a rejection of Mr Driver's 14 July 2023 "offer". However, the second and third respondents point out that the primary judge's conclusion as to the existence of an equitable charge did not proceed on a contractual analysis. 4. Mr Driver did not reply to Mr de Wit's email (primary judgment at [57]). 5. On 18 July 2023, Mr de Wit sent Mr Driver an email attaching ASIC documents which provided for the transfer of Mr Driver's shares in Aurora to AMHP and the appointment of Mr de Wit as a director of Aurora in Mr Driver's stead. Mr Driver did not reply thereto (primary judgment at [58]). 6. On 21 July 2023, Mr Hartley sent Mr Driver an email in which he stated that Mr Driver "had not provided anything of credibility or substance" and made a number of allegations as to Mr Driver's conduct. Mr Driver replied by email on 24 July 2023, advising that he had asked his solicitors to respond to Mr Hartley's request for further information on the Water Case, and to clarify the details and timing for the repayment of the loan (primary judgment at [59]). 7. On 25 July 2023, Mr Hartley's solicitor (Ms Munro) sent an email to Mr Driver advising that the law firm had been instructed to draw up two loan agreements to reflect the loans made to Mr Driver by Mr Hartley and AMHP (primary judgment at [60]). The email stated that "[i]f you believe that the Agreements accurately represent the intentions discussed in your email dated 14 July 2023 with Adam, kindly proceed with arranging its completion and signature as instructed". 8. The appellants accept that the two draft agreements that were attached to that email had been prepared in terms which "to some extent" picked up the terms of Mr Hartley's proposal of 14 July 2023 but they point out that the two agreements proposed a splitting of the loan between Mr Hartley and AMHP, even though Mr Hartley was the lender under the existing loan agreement and even though Mr Driver had not made any offer to AMPH through his 14 July 2023 email. They also note a number of other differences between the draft agreements and Mr Hartley's proposal (as to the proposed interest regime; the inclusion of proposed representations and warranties; proposed default provisions; and the provision of security in the form of a registered charge over Mr Driver's shares in a company associated with the Water Case and real estate owned by corporate entities). 9. The appellants thus maintain that Ms Munro's email of 25 July 2023 to Mr Driver represented the making of a new and different offer by Mr Hartley to vary the parties' existing loan agreement (in circumstances where Mr Driver's offer of 14 July 2023 had been rejected by reason of Mr Hartley's counter-proposal of the same day, and Mr Hartley's counter proposal had not been accepted by Mr Driver). 10. On 27 July 2023, Mr Driver advised Mr de Wit that his lawyers had suggested some amendments to the documents (primary judgment at [62]). On 3 August 2023, Mr Driver's solicitor, Mr Lacey, sent an email to Ms Munro attaching a marked up set of revised draft agreements and stating that Mr Driver would be prepared to agree to enter into agreements in those revised terms (primary judgment at [65]). The appellants note that the revisions to the drafts were substantial (including the removal of the interest regime and compensation regimes in cll 2.2 and 4 of the drafts and the removal of the proposed security regime, with amended interest and security provisions). 11. On 8 August 2023, Ms Munro sent an email to Mr Lacey, advising that the proposed amendments to the loan agreements did not reflect the parties' intentions nor provide adequate security, and that Mr Hartley would not agree to sign them (primary judgment at [68]). Ms Munro reattached the draft agreements in the form previously sent and stated that Mr Hartley required them to be signed within 7 days. The appellants say that, by so doing, Mr Hartley rejected Mr Driver's (27 July 2023) offer and again put the offer set out in Ms Munro's earlier email of 25 July 2023. Mr Lacey and Mr Driver did not respond to that email. 12. From 26 October 2023, Mr Driver took steps seeking to redeem the Units (see primary judgment at [72]ff). These culminated in the 29 November 2023 Redemption Request signed by Mr Driver on behalf of Aurora as director (primary judgment at [84]). 13. It is relevant here to note (given the dispute as to the form of any relief to be granted if the appeal succeeds) that under cl 8.2 of the Trust Deed for the Aurora Unit Trust the price payable on redemption (the Withdrawal Price) is to be determined by reference to the formula in cl 8.1, with each of the variables in the formula being determined "as at the next Withdrawal Date after the Trustee received (or is taken to have received) a withdrawal request". 14. "Withdrawal Date" is defined in cl 1.1 as "the last Business Day of each month unless otherwise determined". As the redemption notice was served on 29 November 2023, the Withdrawal Date was thus 30 November 2023 unless otherwise determined by the Trustee. There is no evidence that the Trustee in fact determined that the Withdrawal Date should be some other date than that for which the clause (in the absence of an "otherwise" determination) provided (i.e., 30 November 2023). Indeed, it does not appear to be disputed that the Trustee's own calculations at the time were premised on a 30 November 2023 Withdrawal Date (though the Trustee says that this was a "preliminary calculation" in an affidavit of the Trustee's director, Mr Hunt, the basis of which was explained in another affidavit of Mr Hunt, neither of which affidavits was read in the proceedings before her Honour and copies of which were not before us; see AT 21.20). 15. On 19 December 2023, a summons was filed on behalf of Aurora, commencing proceedings against the Trustee, seeking an order that the Trustee process the redemption request or alternatively that the Trustee be removed as trustee. Mr Driver was not a party to the proceedings as so instituted. In the Amended Statement of Claim subsequently filed on 13 May 2024, Aurora made various allegations of breaches of duty by the Trustee (see from [19] of the Amended Statement of Claim) in support of the contention that the Trustee should be removed as trustee. This is of some relevance when considering the position presently taken by the Trustee as to the relief sought by the appellants on this appeal. 16. On 30 January 2024, the Trustee's then solicitors wrote to Aurora's solicitor (copied to the solicitor for AMHP), in terms responding to correspondence from the solicitors for the respective parties (not before this Court) as to whether the Redemption Request was authorised by Aurora. The Trustee's solicitor there noted that no explanation had been received from AMHP's solicitors as to how it was said that the Redemption Request dated 29 November 2023, the subject of a resolution of that date signed by Mr Driver as sole director of the company, was not authorised. The Trustee' solicitor's letter concluded that "[a]ccordingly, the Trustee will process the Redemption Request dated 29 November 2023 without delay". The appellants rely on this letter as communicating an unqualified decision to process the request, with no suggestion that the Withdrawal Date be anything other than that nominated in the Redemption Request (i.e., 30 November 2023) (see AT 5.31; 6.23). The second and third respondents, however, point out that there was no express acceptance in the letter as to the Withdrawal Date being 30 November 2023 (see AT 28.31-38). 17. On 5 February 2024, Mr Hartley filed an amended cross-summons against Aurora, the Trustee and Mr Driver, seeking an interim injunction restraining the Trustee from paying any redemption entitlements, together with a declaration that Aurora had charged its right, title and interest in Certificate 3 in favour of AMHP to secure repayment of the moneys borrowed by Mr Driver (as described in the primary judgment at [89], though I note that in the subsequent cross claim filed on 7 March 2024 (Cross Claim) the declaration extends to Certificate 4 as well). Judgment was also sought against Mr Driver in respect of the unpaid loans. 18. The Cross Claim also contained allegations of breach by the Trustee of its obligations as trustee by allocating to Aurora in the Trustee's records amounts from time to time equal to one-third of "realised profits" and by issuing the units recorded in Certificates 3 and 4 in the name of Aurora (see [40]-[43] of the Cross Claim). 19. Thus, as the appellants contend, there was no claim by the second and third respondents that Mr Driver held a beneficial interest in the Units; rather, it was contended that the Units (and also the units recorded in Certificate 4) were not validly issued in the name of Aurora in the first place (see AT 7.20). 20. Ex parte injunctive relief was granted by Hammerschlag CJ in Eq on 1 February 2024, restraining the Trustee from redeeming the Units; and on 4 March 2024, Slattery J made orders inter partes, continuing the injunction until further order (Aurora Australasia Pty Limited v Hunt Prosperity Pty Limited [2024] NSWSC 195) (see primary judgment at [89]). The second and third respondents gave the usual undertaking as to damages in connection with the grant of injunctive relief. This explains in part the likelihood of ongoing litigation since the appellants have foreshadowed a claim on the undertaking as to damages in the event that the appeal succeeds but the redemption proceeds are not paid as calculated in accordance with the 30 November 2023 Withdrawal Date and calculation of the redemption proceeds at a later date results in a lesser sum (see AT 28.40-29.21). 21. The proceedings were expedited. On 13 June 2024, just over a month before the hearing, the Trustee's solicitor advised, without admission, that the Trustee was prepared to resign and for a new trustee to be appointed. However, no consensus was reached between the parties as to abridgment of the time when the Trustee could retire and as to a replacement trustee. Before the commencement of the hearing, the Trustee served notice that it would retire as trustee in 3 months' time. The primary judge noted that this had the consequence that many of the issues agitated by Mr Driver fell by the wayside (primary judgment at [90]). 22. Relevantly, the issues that "fell by the wayside" in relation to the Trustee included the claims made by Aurora as to breaches of duty by the Trustee. The significance of this for present purposes is that, as a result, neither the appellants nor the Trustee read at the hearing affidavits that had been prepared in relation to the valuation of the Units as at 30 November 2023 (including, as I understand it from the submissions made in this Court, expert evidence as to the valuation of the Units (see AT 14.32-39)). Significantly, there was no contest before her Honour as to the calculation of the Withdrawal Price (and no issue raised as to the Withdrawal Date upon which that calculation was premised). 23. It is of interest in passing to note that, despite service by the Trustee of notice of its retirement (which had the practical result that the allegations of breach by the Trustee were not determined), the Trustee has in fact not retired as trustee of the Aurora Unit Trust. There was no explanation as to why this was the case and nothing here turns out it (see AT 15.15-33). However, what is of relevance is that the consequence of the Trustee's notice of retirement was that there was then no evidence before her Honour as to the valuation of the Units or the basis of the Trustee's calculations in that regard (neither of those matters being in dispute at the hearing in which the Trustee participated and was represented by Senior Counsel). Primary judgment 1. After addressing other issues which are not relevant to the appeal, the primary judge turned (at [123]) to the issue as to whether there was an equitable charge. Her Honour noted that Mr Hartley had sought a declaration (in the event that Aurora was entitled to receive the redemption proceeds of Certificate No 3) that Aurora had charged any right, title and interest that it held in the certificate in favour of AMHP and Mr Hartley to secure repayment of $7.5 million plus interest borrowed by Mr Driver (primary judgment at [123]). This must be a reference to the declaration sought in prayer 4 of the prayers for relief, which I extract below. 2. As noted above, what her Honour ultimately found was that Mr Driver (not, as the appellants emphasise, Aurora) had conferred an equitable charge over the Units in favour of the cross-claimants (Mr Hartley and AMHP) (see primary judgment at [155]). The appellants' complaint is that in making that declaration, her Honour determined an issue that had not been pleaded. The corollary of this would seem to be that her Honour did not (at least directly) determine the issue that had been pleaded but there was no challenge made on this basis. 3. Her Honour considered the principles in relation to equitable charges (primary judgment at [126]-[131]). At [127], her Honour noted that an equitable charge may be created unilaterally from voluntary transactions, referring to the statement made to that effect in P Parkinson, The Principles of Equity (2nd ed, 2003, Lawbook Co) at 65 and to examples of such charges, referring to J Flood, K Galloway and M Castan, Fisher and Lightwood's Law of Mortgage 15th ed, 2019, Lexis Nexis at 82. At [128]-[129] and at [135], her Honour referred to cases where an equitable charge was found to have been created without contractual privity (see Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417; Re Roberts; ex parte Australian Telecom Employees Credit Co-Operative Ltd v Taylor (1982) 84 FLR 88; Toocooya Investments Pty Ltd (1978) 3 ACLR 252); and at [130] to the requirements for the creation of an equitable charge. 4. At [135], her Honour noted Mr Driver's acceptance in cross-examination that (when offering in the 14 July 2023 email that the pledges could be formally placed in an agreement) he was talking about recording something between the parties to reflect his intention. Her Honour read Mr Driver's email as representing that the email alone amounted to a pledge but that Mr Driver was also amenable to executing a further document if required to do so by Mr Hartley. (I do not accept that the email can be read in that way; the email in terms making it clear that Mr Driver was offering security in various ways as part of an overall package that was open to be accepted, or not, as Mr Hartley chose.) 5. At [136], her Honour said (and there is dispute between the parties on this appeal as to whether this amounted to a finding of an agreement as such – see the submissions in relation to Ground 1 of the grounds of appeal) that "[t]here was agreement between the parties that Mr Driver's shares in Aurora would be given as security for repayment of the loans" and that the only point of difference between the parties was how the security was to be held "that is, whether Mr Driver's email of 14 July 2023 sufficed, potentially supplemented by a formal document, or whether the shares would be held by AMHP until the loans were repaid in full". The appellants cavil with this, including the proposition that this was the only point of difference between the parties. 6. At [137], her Honour accepted that the parties did not agree that the Units would also be security for repayment of the loans, adding what I read to be the basis for her Honour's acceptance of that proposition, namely "where – from Mr Hartley's perspective – Mr Driver had already agreed that those funds would be distributed to AMHP in compensation for another failed investment undertaken by Mr Hartley on Mr Driver's advice" (emphasis as per primary judgment). This appears to be a reference to Mr de Wit's response to the 14 July 2023 email in which Mr de Wit referred to the distribution of the retained funds in Aurora to AMHP "in compensation as previously agreed". 7. Her Honour went on (at [138]) to say that the question remained whether, by his email of 14 July 2023, Mr Driver intended to create a charge over his units in the Fund. Her Honour concluded that the requirements of an equitable charge had been met: that Mr Driver's email stated an express intention to do so (i.e., to create a charge over his units in the fund); that the equitable charge was recorded in writing (being the email); and that the email identified definite ascertainable property, including future property, over which the charge would exist. Her Honour said (at [138]) that it was not clear whether consideration was necessary in the circumstances but that "presumably Mr Driver… thought there was something to be gained by offering a wide package of securities, of which an equitable charge over his units in the Fund was but one". Her Honour did not consider it necessary for Mr Driver's "offer" to be accepted for an equitable charge to arise "where Mr Driver was not then asking Mr Hartley for anything in return". 8. Accordingly, her Honour said that Mr Hartley was entitled to the relief sought in respect of the equitable charge. (As adverted to earlier, the appellants complain that the relief her Honour granted in relation to the equitable charge was not that which had been sought in the pleaded Cross Claim, whereas the second and third respondents argue that the relief granted was encompassed within the alternative declaration sought in prayer 5 – see below.) 9. From [139], her Honour considered the submissions made by Mr Driver and Mr Hartley as to "what to do" with the Redemption Request, noting at [142] that the Trustee did not take any position on the issue save that it wished to be heard "on the form of relief to make it clear what the trustee's obligations were, if any, following the trial". The Trustee's submissions at first instance on the "form of relief" did not raise any contention as to the determination of the Withdrawal Date or the quantum of the redemption proceeds. 10. The primary judge then considered the provisions of the Trust Deed and the Information Memorandum (the latter not being before this Court) relating to redemption of units (at [143]-[148]). At [148], her Honour said: There was no evidence that redemption of the units in Certificate No 3 posed any particular difficulty to the trustee, such as the need to realise substantial Fund investments, which may delay the payment of the redemption proceeds to the unit holder. But nor does it necessarily follow that the Withdrawal Price is the amount contended by Mr Driver of $1,696,472.17, where the trustee may "otherwise determine" the Withdrawal Date: cl 1.1, Trust Deed. The Information Memorandum states that the risk of any decline in the value of units between a redemption notice and the redemption day is borne by the unit holder: at [5.6]. Whether the trustee calculates the Withdrawal Price as at 30 November 2023 or when the units are ultimately redeemed is a matter for the trustee. [my emphasis] 1. The appellants emphasise that there was no suggestion by the Trustee at the first instance hearing that it had "otherwise determine[d]" the Withdrawal Date (i.e., that it had determined that some date other than 29 November 2023 would be the Withdrawal Date for processing the Redemption Request) or that it cavilled with the figure contended for by Aurora on redemption of the Units. 2. There was a dispute raised in submissions on the appeal as to whether at [148] her Honour made a finding (encapsulated in the second and last sentences) rejecting the contention by Mr Driver as to the Withdrawal Price; and as to whether, if there was such a finding, the appellants should be permitted now to challenge it given that it was not raised prior to submissions on the appeal. I consider this in due course. Grounds of Appeal 1. By the Amended Notice of Appeal filed on 28 October 2024, the appellants have raised 4 grounds of appeal. They are set out in full in the Annexure to these reasons but given their length they are not reproduced in these reasons. The appellants accept that if they are correct on the central question they have identified (i.e., whether the primary judge was correct in concluding that Mr Driver had granted an equitable charge over his beneficial interest in the Units) then some of the other grounds of appeal (relevantly, Grounds 1 and 3) may not matter very much (see discussion AT 1.45). In those circumstances, I propose to deal first with Ground 2, which raises the so-called "central question". Ground 2 1. As noted earlier, Ground 2 is put on two bases: first, what might be described as a pleading point; second, the contention that in any event her Honour erred in finding that there was an equitable charge over the Units. 2. In their amended grounds of appeal, the appellants raise the further contention (following on from the pleading point) that if (which they dispute) such a claim had been made, it could not have succeeded because of the requirements for signed writing in s 23C(1)(c) of the Conveyancing Act 1919 (NSW), given that an equitable charge involves an actual deduction in ownership (citing Young v Matthew Hall Mechanical & Electrical Engineers Pty Ltd (1988) 13 ACLR 399) and noting that s 23C(1)(c) applies to a charge over an equitable interest in personalty (citing Boulos Holdings Pty Ltd v Edwin Davey Pty Ltd [2021] NSWSC 689 at [353]; a finding not disturbed on the subsequent appeal). The second and third respondents complain as to the late raising of the s 23C(1)(c) issue, which I address in due course. Pleading point 1. First, in considering Ground 2, I turn to what I have termed the pleading point. 2. The appellants point out that there was no allegation in the Cross Claim that Mr Driver had a legal or beneficial interest in, let alone had granted a charge over, the Units; rather, they say that the pleaded position was that Aurora was the owner of all the units recorded in Certificates 3 and 4, and that it had granted a charge over all those units (i.e., the units in both certificates), referring to [30] of the Cross Claim; and the prayer for relief at [1]. 3. The appellants note that the primary judge accepted Aurora's contention that notionally, and for working purposes, the Units were treated as reflecting Mr Driver's 50% interest in Aurora (with the units in Certificate 4 treated as reflecting AMHP's 50% interest in Aurora) ([2]). They say that this finding was made in circumstances where Aurora claimed that, as a result of an agreement between its shareholders, and in any event where Mr Driver was the sole director of Aurora, it was open for Mr Driver to direct how any redemption proceeds of the Certificate 3 units would be paid. 4. However, the appellants maintain that the second and third respondents' claim remained directed only against Aurora (not against Mr Driver) and in respect of all units in Certificates 3 and 4. 5. The appellants thus contend that the primary judge erred by moving beyond the claim made by the second and third respondents and finding that Mr Driver had granted an equitable charge over an equitable interest he held in the Units. 6. The second and third respondents say that the appellants' submission as to the pleading point misreads their Cross Claim. They accept that the declaration sought in prayer 4 (as one alternative to the declaration in prayer 3 that Aurora has no entitlement to receive the redemption proceeds of the respective Certificates) assumes that a charge was given by Aurora. However, they contend that the further alternative declaration sought in prayer 5 (see below) is wide enough to support the relief granted (that being a declaration to the effect that the cross-claimants are entitled as chargees to receive payment of all entitlements which may be due to Aurora upon redemption of the Certificates). The second and third respondents say that the declaration sought by prayer 5 is equivalent in effect to the declaration in Order (2) as made by the primary judge. 7. The second and third respondents refer to [23]-[30] of their pleading, which set out the allegations made as to the claimed equitable charge created on 14 July 2023. They say that the first two lines of [27] (see below) embrace a case based upon Mr Driver having the requisite intention to charge "the redemption proceeds of Certificate Nos 3" without any underlying expressed or logical requirement that those proceeds were beneficially those of Aurora. Rather, they argue that Aurora was a constructive trustee of the redemption money to be received by it from the Aurora Unit Trust attributable to Certificate 3 on the findings of the primary judge. The second and third respondents say that, correspondingly, the allegation at [29] is that it is Mr Driver (not Aurora) who has acted unconscionably by denying the existence of the equitable charge which he himself granted over his claim against Aurora to the redemption moneys. 8. In this regard, the second and third respondents note that in the Defence to Cross Claim it is only Mr Driver who pleaded to [23]-[29] of the Cross Claim. They say that Mr Driver was clearly responding to allegations about his own intention at the time that he sent the critical email to Mr Hartley on 14 July 2023, not about any intention of Aurora. The appellants maintain that nothing can be drawn from the fact that only Mr Driver pleaded to these paragraphs of the Cross Claim, pointing out that [27] is an allegation as to Mr Driver's intention as to the email and [29] is an allegation of unconscientious denial by him of the existence of the charge. 9. The appellants also emphasise that, in a letter dated 26 June 2024 (sent shortly before the hearing before her Honour), the solicitor for the second and third respondents confirmed that the claim was as pleaded in the summons (i.e., indicating that the case was being conducted on the pleadings not some expanded case) (see AT 8.37). The appellants note that in this letter it is asserted that if (which the second and third respondents had put in issue) the Units were validly issued, then "Aurora validly charged its interests" as security for repayment. 10. The appellants say that prayers 4 and 5 of the relief claimed make clear that the identified alleged chargee and unit holder is Aurora, not Mr Driver; and that, consistently with that, in the second and third respondents' pleading, Aurora is the party expressly identified as chargee. The appellants say that the fact that the second and third respondents were alleging that Aurora was chargee by virtue of correspondence from Mr Driver is consistent with the fact that they contended that Aurora was the unit holder and knew that Mr Driver, as the sole director, controlled Aurora (see [27] of the Cross Claim). 11. The appellants also point to the issues for determination that were prepared at first instance (see further below) and say that it was expressly accepted by all of the respondents that the issues were whether Aurora (not Mr Driver) was entitled to payment of the redemption proceeds, and whether those proceeds (i.e., Aurora's proceeds) were the subject of a charge. Determination 1. It is convenient here to set out the relevant parts of the pleading in the Cross Claim and the relief that was there claimed. 2. At [27], the second and third respondents pleaded that: Mr Driver intended by the terms of his email of 14 July 2023 immediately to charge in favour of Mr Hartley, or alternatively in favour of Mr Hartley and AMHP, the redemption proceeds of Certificates Nos 3 and 4 issued by Hunt Prosperity as trustee of the Aurora Trust which had been issued in the name of Aurora which Mr Driver as sole director and secretary controlled. 1. At [28], it was alleged that, acting on the faith of Mr Driver's statement of intention in the 14 July 2023 email, Mr Hartley deferred recovery action against Mr Driver; and at [29] that Mr Driver had unconscientiously denied the existence of the charge claimed. 2. At [30], it was alleged that: As a consequence of the matters pleaded at paragraphs 23 to 29 above Aurora holds the benefit of the redemption proceeds of Certificates 3 and 4 in the Aurora Trust charged with repayment of the sums totalling $7,500,000 loaned to Mr Driver and which remain outstanding together with interest. 1. As the appellants point out, there is no allegation in the Cross Claim that Mr Driver held any beneficial interest in the Units; nor is there any express allegation that Mr Driver had granted a charge over the Units. Rather, what is pleaded is (at [25](c)-(d)) that in the 14 July 2023 email Mr Driver pledged his 50% shareholding in Aurora to Mr Hartley and his share of the current retained profits held in the Aurora Trust under his name and (at [27]) that Mr Driver intended immediately to charge the redemption proceeds of Certificates 3 and 4. The pleaded consequence of the matters alleged at [23]-[29] is that Aurora holds the benefit of the redemption proceeds of both Certificates charged with the repayment of the loan. 2. No distinction appears to have been drawn between a charge over units and a charge over the redemption proceeds in respect of those units but no issue is here taken by the appellants as to the import, if any, of such a distinction (see AT 9.6-19). Nor was any issue taken as to the fact that the allegation at [30] appears to assume that Aurora has received the redemption proceeds (which was not, and remains not, the case) (see AT 7.42-44). 3. There is, in my opinion, some ambiguity or lack of clarity in what is here pleaded by the second and third respondents, in that Mr Driver's "intention" to charge the redemption proceeds could relate to a charge by him personally over the redemption proceeds (assuming, which was not pleaded, that he had a beneficial interest in those proceeds) or to a charge by Aurora (to be granted in his capacity as a director of Aurora) over redemption proceeds to which Aurora was entitled as the holder of Certificate 3. In this regard, the fact that [27] and [30] encompass both Certificates 3 and 4 suggests that the charge that is alleged to have been intended by the 14 July 2023 email was one by Aurora (not Mr Driver) over the units in question, since there is no suggestion that Mr Driver ever held any beneficial interest in the units recorded in Certificate 4. I note that the allegation at [36]-[44] is that the issue of the units in Certificates 3 and 4 by the Trustee constituted a breach of its obligations as trustee. 4. The fact that the second and third respondents sought a charge not simply over the redemption proceeds of Certificate 3 (which the parties have treated a encompassing a charge over the units recorded in that Certificate) but also over those in relation to Certificate 4 strongly points against the pleaded equitable charge being directed to a charge by Mr Driver in his personal capacity, as opposed to a charge proffered by Mr Driver as sole director of Aurora over the units recorded in its name. 5. That said, the reference in [25](d) of the Cross Claim to Mr Driver's share of the current retained profits held in the Aurora Unit Trust "under his name" might be said to point to that pledge being offered in respect of proceeds to which Mr Driver was personally entitled (noting the complaint by the second and third respondents to the Units having been recorded by the Trustee as notionally referable to Mr Driver). 6. It is trite to note that a party in the position of Mr Driver, as a cross-defendant, is entitled to know the case that it is required to meet (Hastie Group Ltd (In Liq) v Bourne; Hastie Group Ltd (In Liq) v Moore [2017] NSWSC 709) but the question here is not whether there was any defect in the pleading; rather the question is whether the case as pleaded or advanced in the course of the hearing can be said to have encompassed a claim that Mr Driver had charged his beneficial interest in the Units in favour of the second and third respondents. 7. The relief sought in the Cross Claim in my opinion sheds significant light on that question. Relevantly, that relief included the following: 3. A declaration that [Aurora] has no entitlement to receive the redemption proceeds of Certificate No. 3 or Certificate No. 4 in the Aurora Trust. 4. Alternatively to the declaration claimed in paragraph 3 above, a declaration that [Aurora] has charged any right, title and interest that it holds in Certificates Nos. 3 and 4 in the Aurora Trust in favour of [AMPH and Mr Hartley] or one or other of them to secure repayment of moneys borrowed by [Mr Driver] from the Cross Claimants totalling $7.5 million plus interest. 5. Alternatively to the declaration sought in paragraph 3 above, a declaration that the Cross Claimants or one or other of them are entitled as charges to receive payment of all entitlements which may be due to [Aurora] upon redemption of Certificates Nos. 3 and 4 in the Aurora Trust in satisfaction of [Mr Driver's] obligations to repay to the Cross Claimants a total sum of $7.5 million plus interest thereon. 1. The relief sought by prayer 3 clearly goes to the allegation that the units in Certificates 3 and 4 were not validly issued. The alternative relief sought by prayer 4 is, as the second and third respondents accept, predicated on a charge granted by Aurora over any interest it has in the Certificates. Neither of those prayers for relief goes to a case that Mr Driver charged his interest in the Units in favour of the second and third respondents. 2. The further alternative relief to prayer 3, sought by prayer 5, also does not to my mind encompass such a claim because it goes to the claimed entitlement of the second and third respondents to receive payment of all "entitlements" which may be due to Aurora on redemption of Certificates 3 and 4. This must be understood in the context that Aurora was recorded in those certificates as the owner of the Units. In relation to units beneficially held by Mr Driver the "entitlement" to redemption payments would ultimately be the entitlement of Mr Driver, not Aurora. As against Mr Driver, Aurora would not be entitled to retain proceeds in which Mr Driver had a beneficial interest if he called for those proceeds (absent something which affected the position as between those two parties). 3. In my opinion, the pleading point is made good. But even if that conclusion be wrong, I consider that the central question must be answered in favour of the appellants because, for the reasons I set out shortly, I have concluded that her Honour erred in finding that an equitable charge was conferred by Mr Driver's email of 14 July 2023. However, before turning to that aspect of Ground 2, I will turn briefly to the s 23C point sought to be raised in the amended notice of appeal. Section 23C Conveyancing Act point 1. As noted above, the appellants contend that if the second and third respondents had pleaded or advanced a claim that Mr Driver had conferred an equitable charge over the Units, that claim would have failed for lack of writing (invoking s 23C(1)(c) of the Conveyancing Act). The second and third respondents maintain that as the appellants did not plead in their Defence to Cross Claim any non-compliance with s 23C(1)(c) of the Conveyancing Act as a bar to relief they cannot now raise the argument. The appellants say that this was not raised at first instance (nor was it necessary for them there to raise the defence) because there was no pleaded claim that Mr Driver was the beneficial owner of the Units nor that he had granted an equitable charge over his beneficial interest in them. Determination 1. There is an obvious circularity in the submissions on this issue. Clearly, if the pleading point is made good then the complaint by the second and third respondents as to the lack of a s 23C plea in the appellants' defence would go nowhere. Thus, in light of my conclusion as to the pleading issue this point does not strictly arise for determination. However, lest that conclusion be wrong I will address this point briefly. 2. As to the complaint that the appellants should not now be permitted to raise the point, it was not suggested that there would be any prejudice to the second and third respondents in meeting it if raised at this stage; and the ambiguity I have identified in the pleading leads me to conclude that the failure of the appellants to appreciate that the pleading might have encompassed a claim that Mr Driver had charged his beneficial interest in the Units (and hence to appreciate a need to raise a s 23C defence) is explicable and should not preclude it being raised at this stage. 3. There was no contention that s 23C would not apply to a claimed equitable interest in personalty (the Units or, as pleaded, the redemption proceeds in relation to the Units). In PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643; [1992] ANZ ConvR 513 Giles CJ in Comm Div considered that the better view was that the section does apply to personalty and Gleeson JA, sitting at first instance in In the matter of NL Mercantile Group Pty Ltd [2018] NSWSC 1337 proceeded on the basis that s 23C(1)(c) was not confined to dispositions of real property. 4. However, Mr Driver's 14 July 2023 email (which is what the second and third respondents rely upon as creating the equitable charge) may have sufficed to satisfy the condition of writing. I note that Sch 4 of the Interpretation Act 1987 (NSW), defines writing to include "printing, photography, photocopying, lithography, typewriting and any other mode of representing or reproducing words in visible form". Hence it is difficult to see that the s 23C defence would have been made good but I accept that in the absence of considered argument on that point the outcome of such a defence remains undetermined. Was the finding of an equitable charge erroneous in any event? 1. Finally, as to the substantive challenge to the conclusion that an equitable charge was conferred over the Units, the appellants say that the finding at [137] (as to the absence of an agreement to create a charge over the interest in Units) was correct (and reflects what the evidence revealed) but that the finding at [138] that Mr Driver had nevertheless granted an equitable charge over the Units was erroneous. It is submitted that the impugned finding was based on an incorrect premise, namely that an equitable charge could (in the context of a contractually based lender-borrower relationship) be created voluntarily by way of an offer from the borrower to grant a charge which was not accepted, but was instead met with a counter-proposal that was also not accepted. 2. Although in their written submissions, the appellants argue that in a commercial context (where the parties are in a contractual relationship and negotiating a variation to that relationship or a new agreement) the question whether an equitable charge has been created turns on the application of conventional principles of contract law (arguing that the relevant intention to be found is a mutual, not unilateral, intention), in oral submissions (see AT 12.40-47) the focus of the appellants seemed to be on whether the relevant intention to confer an equitable charge could be discerned from the 14 July 2023 email in any event (reading that email in its commercial context). 3. As to the commercial context in which the question here arises, the appellants point to various statements in texts and authorities which contemplate a mutual intention (Halsbury's Laws of Australia, 295 - Security Interests – General Principles at [295]-[2065]; Swiss Bank Corporation v Lloyds Bank Limited [1982] AC 584, where Buckley LJ observed that "whether a particular transaction gives rise to an equitable charge of this nature must depend upon the intention of the parties"; and Porter v Bonarrigo [2009] VSC 500 where (in the course of the discussion at [64]-[71]), Vickery J made reference a number of times to the intention of the "parties" in the context of considering the principles pertaining to an equitable charge in the context of a contractually based lender-borrower relationship). 4. While the appellants accept that there are circumstances in which an equitable charge may arise unilaterally, they maintain that this is not such a case and they submit that the primary judge erred by applying the principles related to those different circumstances to the present case. 5. The appellants accept that Mr Driver was making an "offer" to pledge various assets as security (noting that the primary judge characterised it as such, including at [55], [65], [132], [133], [138]). Indeed, they emphasise the description in Mr Driver's 14 July 2023 email of it being an "offer" of the pledges there set out. Nor do the appellants dispute that Mr Driver was intending to make that offer. However, they argue that it does not follow from the fact that a party offers to provide security, and intends to make that offer, that the security is thereby granted. 6. Insofar as the primary judge's finding is based on the premise that, not only did Mr Driver intend to create a charge, he did so, through the 14 July 2023 email in and of itself ([138]), the appellants identify two errors in that approach: first, that it does not accord with the finding that the email constituted an "offer" (noting her Honour's finding that the offer of a charge over the interest in the Units was not accepted); and, second, they say that, even if the email constituted a unilateral voluntary pledge, there is no principle of law which provides that the resulting product in circumstances such as the present is an equitable charge binding upon the party communicating it. 7. The second and third respondents, on the other hand, submit that the statement in Mr Driver's 14 July 2023 email that the pledges could be formally placed in a document drafted by a lawyer is consistent with an existing intention on the part of Mr Driver to be committed at the time, although he anticipated a formal document would follow. They say that the concluding statement in the email ("I genuinely want to give you comfort and security over the loaned amounts") should be reasonably and objectively interpreted as supporting an inference of a presently held intention on Mr Driver's part existing when the email was sent by him to Mr Hartley. 8. The second and third respondents say that a formal document was always contemplated by Mr Driver to be later discussed but that this does not damage the primary judge's conclusion that Mr Driver had formed a clear and fixed intention to secure the loan by pledging his interests there and then over the identified assets which he communicated in writing in the 14 July 2023 email (invoking by way of analogy the Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 analysis applicable when considering whether an informal agreement should be construed as immediately binding upon contracting parties). 9. In essence, on this issue the second and third respondents rely upon the reasoning of the primary judge at [123]-[138] and her Honour's conclusion in the last two sentences of [138]. Determination 1. The nature of an equitable charge has recently been considered in the High Court by the majority (Gageler CJ, Gleeson, Jagot and Beech-Jones JJ) in Naaman v Jaken Properties Australia Pty Ltd [2025] HCA 1 (see at [19]ff). In Roberts v Investwell Pty Ltd (in liq) [2012] NSWCA 134, Bathurst CJ (at [29]) noted that an equitable charge is a creature of intention (as noted in Morris Finance Ltd v Free [2017] NSWSC 1417) to which the second and third respondents have referred (see AT 33.11). 2. In the present case, it is not necessary to delve into the question whether there is a distinction to be drawn between the circumstances where the alleged equitable charge arises in the course of or as a result of a commercial negotiation process or where parties are in a contractual relationship (i.e., that the intention there must be mutual) or other cases where an unilateral intention would suffice (as the appellants' submissions contend). That is because I see nothing in the 14 July 2023 email to support a conclusion that Mr Driver intended immediately to grant a charge over the Units irrespective of whether Mr Hartley accepted the balance of the proposal there put forward and in isolation of the other aspects of his proposal. 3. That Mr Driver accepted in cross-examination that, when he wrote the email he was prepared to pledge the security offered in the email and that he was talking about recording something between the parties to reflect his intention (see 16/7/24;T 50.18-51.22) does not address the capacity in which a charge was to be (or, on the second and third respondents' case, was being) conferred nor as to the identity of the chargor (given Mr Driver's position as sole director and secretary of Aurora). Nor is it clear that Mr Driver was there accepting that he intended immediately (and come what may in relation to the offer he was proposing) to grant a charge. The communications between the parties are inconsistent with such an intention. 4. Ground 2 is therefore made good and the relevant declaration and order as to the equitable charge should be set aside. Ground 1 1. Ground 1 alleges error in the finding by the primary judge at [136] that there was an agreement between the parties that Mr Driver's shares in Aurora would be given as security for repayment of the loans. The second and third respondents dispute that there was such a finding. Given my conclusion as to Ground 2, I will deal only briefly with this ground. 2. The first basis on which the appellants submit that the "finding" at [136] was erroneous is, in essence, the same pleading point which I have considered above and my view remains the same on that issue. The second basis is that the appellants say that this finding was inconsistent with the evidence, which demonstrated an offer by Mr Driver to provide security in respect of the loans (which offer was not accepted by Mr Hartley and hence resulted in no binding contract). The appellants say that the finding at [136] is inconsistent with the primary judge's (correct) finding at [137] that the parties had not reached agreement in relation to a charge over the Units; the perceived inconsistency arising because Mr Driver's offer of 14 July 2023 included an offer to pledge both his shares in Aurora and the Units; and that offer was met with a counter-offer in substantially different terms. 3. The appellants argue that, to avoid inconsistency, it would be necessary to treat the elements of the 14 July 2023 offer from Mr Driver as being severable (such that acceptance of one element by itself would be able to produce a concluded bargain as to that matter, in the middle of an ongoing negotiation). The appellants argue that the offer advanced by Mr Driver was one offer comprising various elements; and that there was no acceptance of that offer; instead, there was a counter-proposal in markedly different and more onerous terms, which counter-proposal Mr Driver did not accept. The appellants thus maintain that there was one negotiation process which did not result in a binding contract. 4. Further, it is said that what Mr Driver actually offered in relation to his shares in Aurora, and what Mr Hartley counter-proposed in relation to those shares, were materially different things; that Mr Driver was only offering a pledge to Mr Hartley but that Mr Hartley, through his counter-proposal, required: an actual transfer of the shares to Mr Hartley's company, AMHP (an entity to which Mr Driver had offered nothing); the removal of Mr Driver as a director; and a term under which Mr Driver would not be sure of getting his shares back even if he repaid the loan, with any "relocation" of shares in Aurora (presumably meaning "reallocation") something to be "determined in consultation" following repayment. As noted earlier, it is submitted that the primary judge erred in characterising the difference between the parties as only being how the security would be held, and in proceeding on the basis that Mr Hartley's counter proposal provided that AMHP would only hold the shares "until the loans were repaid in full" (primary judgment at [136]). 5. As adverted to above, the second and third respondents argue that the first sentence of [136] does not represent a finding of "an agreement" as such but say that, even if it did, it is not a relevant finding because the relief granted by the primary judge did not depend on the existence of an "agreement" in any contractually enforceable sense. 6. The second and third respondents say that the first sentence of [136] (i.e., the sentence commencing "[t]here was agreement between the parties…"), read in conjunction with the preceding paragraph ([135]) (which refers to and comments on the 14 July 2023 email from Mr Driver and its effect), indicates that her Honour was commenting on what followed from the 14 July 2023 email (i.e., the response from Mr de Wit, which they say accepted the shares as security and proposed a formal transfer of the shares to AMHP). The second and third respondents say that it is that sense that the primary judge records an "agreement" in principle by Mr Hartley of Mr Driver's offer earlier that day. 7. In reply submissions, the appellants accept that Ground 1 may not ultimately assume importance in the ultimate determination of the rights between the parties but they submit that the existence of potential inconsistency in findings within the judgment may indirectly bear on an assessment of the other findings that are in dispute. Determination 1. I do not read [136] as a finding that there was a binding or enforceable agreement between the parties that the shares would be given as security for the repayment of the loans. Had it been such a finding, then in my opinion it would have been in error given that the 14 July 2023 email made an offer (comprising various components) which was rejected by the making of the counter-offer in Mr de Wit's email later that same day (and the inconsistency argument of the appellants would have force). I agree with the submission of the second and third respondents that the reference to "agreement" is more comfortably read as referring to an agreement in principle that was said to have been earlier reached as to compensation for other complaints. In any event, it is not necessary to consider this further given the conclusion reached in relation to Ground 2. Ground 3 1. Ground 3 challenges what the appellants contend was the making of irrelevant and erroneous findings (at [6]), that Mr Driver had sought to remove some $3 million from the reach of his creditor Mr Hartley and that such conduct was "difficult to admire". 2. The appellants accept that Ground 3 is unlikely to be material to the ultimate disposition of the appeal. However, they suggest that those observations create a perception that the observations were at least indirectly influential in the decision-making processes which led to the ultimate findings that are here impugned. 3. The second and third respondents contend that the finding that Mr Driver had sought to remove the redemption proceeds from the reach of Mr Hartley was justified by the actions of Mr Driver that her Honour found had occurred between 26 October 2023 and 29 November 2023 (set out in the primary judgment at [72]-[85]) as to which there is no factual challenge by the appellants. Reference is made in the second and third respondents' submissions to the cross-examination of Mr Driver in relation to the redemption requests (see submissions at [55]). The second and third respondents submit that the fact that the primary judge directed her mind to the question in issue is demonstrated by her Honour's recognition that the legal question was whether Mr Driver was entitled to the redemption moneys (see at [6]). 4. I do not see that the impugned observations (made at [6] of the primary judgment) influenced the dispositive finding of her Honour as to the grant of an equitable charge. It is therefore not necessary to consider Ground 3 any further. There is no dispute as to the conduct that her Honour found had occurred in relation to the redemption requests. How it was characterised by her Honour (and what her Honour thought as to its admirability or otherwise) was irrelevant to the question that her Honour clearly understood was to be determined, namely whether an equitable charge had been created. Ground 4 1. Ground 4 asserts error in the making of the declaration and order at (2)-(3) (primary judgment at [155]) and in the primary judge not finding that the Trustee was obliged to redeem the Units and pay the sum of $1,696,472.17 in accordance with the directions given to it by Mr Driver and not making an order for the said redemption and payment. Complaint is also made by this ground as to the making of costs orders adverse to the appellants. 2. As emerged in the course of oral submissions (following the articulation, only just before the hearing of the appeal following directions I made in light of the complaint by the appellants as to the lack of articulation of the Trustee's position as to the form of the relief to be granted if the appeal were to succeed – see below), this ground raises a question as to whether her Honour made a finding at [148] as to the rejection of the appellants' contention in respect of the Withdrawal Price, and, if so, whether the appellants should be permitted now to challenge that finding (not having raised it in any statement of challenged factual findings). 3. The Trustee (which maintains a position of neutrality on this issue) nevertheless reads [148] as the making of such a finding and says that if that finding stands then the appropriate relief is to remit the matter to the primary judge (the ambit of such remittal being somewhat unclear, as I explain in due course) or in the alternative to make a direction that it now determine the Withdrawal Date/Price and effect the redemption. The second and third respondents support such a stance. 4. The appellants cavil with the suggestion that [148] represents a finding but says that, if it does, they wish to challenge that finding (see AT 17.39-18.3). As noted above, the second and third respondents object to any such challenge being raised on the appeal, it not having been raised in advance (AT 35.13-24). 5. It is important again to note that there was no contest at first instance that the Withdrawal Price calculated as at 30 November 2023 was $1,696,472.17. No alternative calculation or figure was advanced by any of the respondents and there was no suggestion that the Trustee had determined that the Withdrawal Date should be some other date (nor had it indicated that it considered that such a determination could still be made at some future date). 6. The appellants complain that, at the final hearing, the Trustee adopted the position of a submitting party and did not seek to contend that the relief sought by Aurora should not be granted because the figure contended for was wrong or because it remained open to it to determine that the Withdrawal Date or redemption amount was other than that contended for by Aurora. The appellants note that the Trustee expressly stated that it did not take any position in opposition to the claim for payment of the above amount (a fact recorded in its answer to issue 1 in the statement of issues – see below). 7. Accordingly, the appellants say that the position before her Honour was that the second and third respondents themselves recognised that this was a matter for the Trustee; and the Trustee did not oppose the appellants' claim that, if the charge claim failed, the redemption was to be processed by payment of the amount specified above. The appellants say that this was the same position taken by the Trustee on the appeal up until the submissions that I directed be filed shortly before the hearing of the appeal. In that regard, complaint is made that the Trustee now seeks to advance in its 6 December 2024 submissions contentions that it did not advance before the primary judge. 8. The appellants say that, insofar as the Trustee now seeks positively to contend that it ought not be the subject of an order for the redemption in the amount claimed, this should have been raised at the hearing at first instance and the Trustee should have advanced arguments on that issue. The appellants say that, as it did not do so, the Trustee should be bound by the conduct of its case and not permitted now to raise a new argument which it could have put at the hearing (citing Metwally v University of Wollongong (1985) 60 ALR 68, 71 per Wilson J). 9. The appellants emphasise that the Trustee positively determined to process the redemption request immediately in January 2024, which they say is consistent with it having determined to deal with the redemption request in the usual way (and not "otherwise"); and they contend that, having made that determination, this is the determination that should be acted upon by the Trustee if they succeed on the equitable charge issue (i.e., the central question on this appeal). 10. Relevantly, the appellants say that, if the Trustee had advanced some other figure or calculation (other than the one it identified itself), or some other position as to redemption, the appellants would have had the opportunity to consider and make different forensic and evidentiary decisions. It is said that affidavit and other material sourced from the Trustee was not included in the court book at first instance given that the relief sought was not opposed by the Trustee. Further, the appellants note that the Trustee did not suggest that it would not do what it had expressly stated in January 2024 it had determined to do (namely, to process the redemption in the usual way immediately, save only for the resolution of the issue as to the claimed equitable charge). 11. It is noted that, as at mid-2024, the appellants were advancing a claim for the immediate removal of the Trustee as trustee, and agreed not to press that claim on the basis of the Trustee's confirmation that it would resign as trustee, and in a context in which the Trustee did not say that it would do anything other than what it had already said it had determined to do vis-à-vis redemption, or that the redemption amount would be anything other than was claimed based on the Trustee's own statements, or that it would later change its position on this issue. The appellants point out that their decision as to what claims to run in July 2024 cannot now be remade, and they say that it is inappropriate for the Trustee to have taken the advantage of that outcome, and at the same time now to take a different position on redemption. Determination 1. To put in context the issue as to the form of relief to be granted if (as I consider it should be) the appeal is allowed, it is relevant to note the following. 2. In the Amended Statement of Claim, the relief sought by Aurora in prayer 1 was an order that the Trustee do all things necessary to facilitate the payment to Aurora "of the amount payable by [the Trustee] to [Aurora] consequent upon [Aurora] having made the redemption request dated 29 November 2023 in respect of Unit 3 in the [Aurora Unit Trust]". No amount was there specified. 3. In the pleading, in a section headed "Inexplicable and unexplained changes in unit value", reference is made to a July 2023 monthly statement by the Trustee recording the value of "unit 3" as $2,781,257.78 ([77]) and a commensurate monthly statement of that date recording the value of "unit 4" as the same amount ([78]). Aurora then refers to a December 2023 statement the effect of which it alleges was to recognise that "unit 3" had a value as at 31 December 2023 of $3,125,631.76 ([89]). 4. At [83], Aurora pleads to the assertion by the Trustee ("[w]ithin these proceedings, and since their commencement") that "unit 3 only has a value of "approximately $1.7 million"" (emphasis in original). That assertion was particularised by reference to an affidavit by Phillip Hunt, the sole director of the Trustee, dated 13 February 2024 at [37]. At [87] of the pleading Aurora refers to a subsequent affidavit sworn by Mr Hunt on 18 April 2024 which it is said included a summary of the approach Mr Hunt took to the calculation of the figure of $1.7 million. The second and third respondents point out that the appellants in their pleading did not expressly adopt that figure as the value of Certificate 3 in about late 2023 (referring to [75]-[93A] of the Amended Statement of Claim). 5. In its pleading, Aurora alleged that the assertion by the Trustee as to the value of unit 3 (of approximately $1.7 million) had no identifiable basis, was without any or any proper calculation, was inconsistent with the Trustee's statements for the Unit Trust as at 31 December 2023 and 31 January 2024, and incorrectly and materially understated the true value of the unit ([92]). In the alternative, Aurora pleaded that if the value of unit 3 had fallen in the manner asserted since August 2023, then the Trustee had failed to take any or any appropriate action to identify and address the reasons for that collapse ([93]). Aurora relied on the matters alleged (and other matters pleaded from [94]) for its contention that the Trustee had acted in breach of trust, in a partisan manner, and had shown itself not to be a fit and suitable entity to act as the trustee of the trust ([105]). 6. As noted above, the Trustee served notice of its resignation as trustee shortly before the hearing before her Honour. As a consequence, neither of the two affidavits of Mr Hunt to which reference was made in Aurora's pleading was read by the Trustee at the hearing at first instance (nor were they tendered by any other party at the hearing) and they are not before this Court. Nevertheless, it is not disputed that such affidavits had been attested by Mr Hunt and had been served on the parties to the proceedings, deposing to a valuation of the Units at approximately $1.7 million. In oral submissions on the appeal, the appellants referred to having obtained expert evidence which supported the Trustee's calculations. That evidence was, as I understand it, served on the parties in advance of the hearing at first instance but not adduced at the hearing in circumstances where the Trustee's calculations were not by then in dispute (see AT 14.21-35) 7. At the hearing before her Honour the appellants prepared a Statement of Issues, to which the respective respondents responded. Relevantly, the Statement of Issues included the following (with the responses by each of the respective parties as noted): (1) Is the trustee obliged to redeem the units in certificate 3 in the Aurora Unit Trust and pay the plaintiff the sum of $1,696,472.17? [Aurora] : Yes [Trustee]: The Trustee does not take a position, with one caveat addressed below in Issue 6. [Hartley Parties]: No 1. The caveat to which the Trustee referred related to issue 6, which raised the issue whether, if Aurora had an entitlement to be paid one-third of the profits realised by the fund each month (issue 5), the Trustee had breached the trust by issuing the units in certificates 3 and 4 to Aurora in return for it investing its one-third profit share into the trust (issue 6). In its answer to that question, the Trustee said, inter alia: … (c) Second (this is the caveat to the first issue), if there was no entitlement to the performance fees: i. the Trustee can and will simply cancel the Units under clause 5.21 of the Deed and/or amend the Register under clause 20.3 of the Deed; ii. relief is sought by the Hartley Parties that the Court ought to cancel the Units (see paragraph 6 of the Cross-Claim); and iii. the Court would not order a redemption of the units (comprising the traceable proceeds of trust funds paid out without authorisation) where 1. that would cause the Trustee to breach his duty to the Trust; and 2. where that would unjustly enrich Aurora. [court book references omitted] … 1. In other words, the Trustee's only issue as to whether it was obliged to redeem the Units at the price stated in the Statement of Issues was in circumstances where it were to be found that the Certificates had been issued in breach of trust (to be answered by a combination of Issues 5 and 6), in which case the Trustee's position was that it proposed simply to cancel the Units. No such finding (as to breach of trust by the issue of the Certificates) was made by the primary judge. There was no reservation by the Trustee of some entitlement at that stage to determine some other Withdrawal Date than that specified in the Withdrawal Notice and provided for (absent an otherwise determination) in the Trust Deed; and no suggestion that the Trustee intended to do so. Nor did the Trustee challenge its own calculation of the Withdrawal Price based on the 30 November 2023 Withdrawal Date. 2. Accordingly, as the appellants have noted, by the time of the hearing, their position was that the Trustee was obliged to redeem the Units in the amount as at 30 November 2023 of $1,696,472.17 (see primary judgment at [139]-[140]); and there was no contest before her Honour as to that amount or the basis on which it had been calculated by the Trustee. 3. The transcript of the closing oral submissions before her Honour includes the following exchange between the primary judge and Mr Ireland KC, appearing for the second and third respondents: IRELAND: … if you did find that the agreement relied on by the plaintiff didn't support the entitlement [of Aurora to a one-third profit share], which is a primary submission of ours, it would be no good to sanction the trustee paying out the money, and the appropriate and practical answer would be to let the trustee cancel certificate number 3 so that the funds never left their source. All we have now is a certificate of entitlement. Your Honour appreciates that the dollar value of that – there hasn't been much debate about this. I thought when Mr Elliott [Senior Counsel for Aurora] began, he's fixing on a figure of, I think, $1.7 million was mentioned. If he succeeds in this case, there would be a question which hasn't really been developed as to whether the entitlement to a cash payout freezes as at that date because John understands that the value of this fund is constantly changing with the successes and failures of particular trades, and all that the certificate represents, if you look at the certificate is, effectively, a percentage of that fund from time to time. Mr Elliott hasn't really developed why he says he's entitled to freeze it back in November, I think, 2023, or whether the redemption would operate now on what it has left, whether it's more or less than there was at the time that the redemption application was made. I just signal that, your Honour. It's strictly a matter, I think, between the trustee and the plaintiff [Aurora] … 1. Relevantly, what was there raised by the second and third respondents was that there was a question as to whether the entitlement to a payout amount 'freezes' as at a date in November 2023. It is not clear from the transcript whether Mr Ireland considered that there was a question of the payout amount 'freezing' at the date of the Withdrawal Request (29 November 2023) or as at the Withdrawal Date on which the Trustee's calculation of the amount was predicated (30 November 2023) but in neither case was there a suggestion that the redemption proceeds should be calculated at some later date (by reference to a determination by the Trustee of some other Withdrawal Date). Ultimately, the position of the second and third respondents was a matter between the Trustee and Aurora (though they now foreshadow a "huge fight" on that issue) (see AT 29.16-21). 2. Relevantly, there was no suggestion by the second and third respondents that they challenged the Trustee's calculations as to the Withdrawal Price itself nor as to the Withdrawal Date at which it was to be calculated (simply a question as to whether the payment entitlement might "freeze" as at some date in November 2023). 3. Pausing here, in submissions on this appeal the Trustee submitted that it understood, based on the above exchange, that there was an issue about determination of quantum and that it read her Honour's reasoning at [137]-[148] as effectively her Honour's determination of that issue. The Trustee submitted that (in the absence of challenge to that finding) the appropriate relief if the appeal succeeded was a remitter to the primary judge or alternatively that it be directed to determine the redemption request (see AT 26.47-27.4). 4. The second and third respondents accept that in their submissions at first instance the appellants did adopt the figure of $1,696,472.17 but point out that the primary judge was not taken to any evidence that justified that figure nor to an explanation of the method used to produce it. 5. As to the need for remitter, the second and third respondents note that in the primary judgment, in setting out the facts, her Honour identified the performance fee amounts said to have been payable to Aurora in 2022 and 2023; and referred to the "profits" arising from the Fund's trading (for example, at [30]-[34]) and the reinvestment of Aurora's performance fees in the Fund (for example, [35] and [41]). The second and third respondents say that it is not known how the profits were calculated and in particular whether they took into account open transactions which were in loss-making positions at the time; nor is it clear how the reinvested amounts were translated into unit entitlements. The second and third respondents submit that this Court is in no better position than the primary judge to fix on any figure as to the value of Certificate 3 at any particular time; hence the need for the matter to be remitted to the primary judge if it were to be necessary to determine the value of Certificate 3 on a particular date or dates. 6. I have referred above to the reasons of her Honour as to "what to do" with the redemption request. In summary, her Honour recorded (at [139]) the contention of the appellants that the Trustee was obliged to redeem the units in Certificate 3 in the amount as at 30 November 2023 of $1,696,472.17 and the submissions made by the appellants in that regard ([139] and [140]). Her Honour recorded Mr Hartley's contention that the Trustee was not obliged to redeem the Units; the order that Mr Hartley sought to restrain the Trustee; and the contention that the redemption proceeds were not payable to or at the direction of Mr Driver ([141]); and her Honour recorded the Trustee's position that it took no position on this issue save that it wished to be heard on the form of relief "to make it clear what the trustee's obligations were, if any, following the trial" ([142]). The Trustee in its submissions as to the form of the relief sought by the appellants, maintains its position that it does not take any position on the substance of appeal (referring to its approach at first instance (16/7/24; T 18.36-46); Trustee's Outline of Submissions at [11]; Trustee's Answers to Plaintiff's List of Issues at [1]-[3]). However, the Trustee says that it retains an interest in the form of orders sought by the appellants "as it might be required, as trustee of the Trust, to implement such orders". 7. In that regard, while the Trustee takes no position on the substantive question of whether the Trustee should process the redemption of the units in Certificate 3 in the Aurora Unit Trust and pay the proceeds in accordance with directions to be given to it by Mr Driver, the Trustee says that, should the appellants succeed on that substantive question, it should not be ordered to carry out that redemption by the payment of "the principal sum of $1,696,472.17 (together with interest on that sum from 30 November 2024)". The Trustee agrees with the position of the second and third respondents that, if the appeal succeeds, then the question of the redemption value of the units in Certificate 3 ought be remitted to the primary judge. 8. This brings me to how [148] of the primary judgment (see as set out at [54] above) should properly be understood. 9. The Trustee says that the primary judge rejected the appellants' submission that, if successful, the appropriate order was for payment by the Trustee of the sum of $1,696,472.17. Similarly, the second and third respondents say that the primary judge made no determination as to the monetary value of the Units. 10. As referred to already, the primary judge made reference to the provisions of the Trust Deed as to the redemption of units. The primary judge also referred at [147] to various provisions of the Information Memorandum, including the statement at [8.5] that "[w]here Fund investments must be realised to fund a redemption request, the Redemption Price will generally be calculated on the basis of the value of the actual proceeds received from those realised investments". The Information Memorandum was not before this Court (see AT 24.36-39). 11. It was in that context that her Honour made the observations or statements set out at [148] (as extracted above). Did those amount to a finding, as contended by the Trustee? 12. The appellants say that none of the observations by the primary judge about provisions of the Trust Deed and the Information Memorandum concerning the redemption process constituted a finding in the circumstances of this particular case (having regard to the way in which the parties, relevantly the second and third respondents and the Trustee, had conducted their cases on this issue). It is submitted that if the primary judge had been making findings (as distinct from observations as to terms of documents), those findings would be expected to have made reference to, and addressed, the fact and impact of the way in which the Trustee had actually conducted this aspect of the proceeding. The appellants say that the absence of that reference and consideration suggests that [148] is more likely an observation (but if that is not so, then the finding is challenged by ground 4). 13. I would have considered there to be much force in the appellants' submission that the observation in the second sentence of [148] did not constitute a finding (given the language in which the observation was expressed – "…nor does it necessarily follow that…") but it is clear from the last sentence that her Honour proceeded on the basis that it remained open for the Trustee to determine whether the Withdrawal Price was to be calculated as to 30 November 2023 (i.e., that no such determination had been made and that, notwithstanding the time that elapsed, the Trustee was able now to make such a determination). Moreover, her Honour certainly considered that she had made a finding insofar as [27] of the costs judgment referred to the rejection of the appellants' contention that the Withdrawal Price was $1,696,472.17. Her Honour there said that Aurora had failed in its contention that the Withdrawal Price was the figure of $1,696,472.17 "as opposed to the price calculated by the trustee when the units are ultimately redeemed" (and expressly referred to [148] of the primary judgment). 14. Therefore, I have concluded that her Honour, in rejecting the appellants' contention that redemption proceeds in the sum of $1,696,472.17 should be ordered to be paid, did make a finding at least to the effect that it had not been established that the Withdrawal Price was in that amount. Implicitly, it would seem that this involved a conclusion or assumption that it remained open to the Trustee to determine a Withdrawal Date other than 30 November 2023 (and then to make the necessary calculations as to value as at that date). 15. Is it open to the appellants now to challenge that finding? I consider that it is. The appellants by Ground 4 have clearly challenged the fact that the primary judge did not determine or make a finding that the Withdrawal Price was $1,696,472.17 and did not order that amount to be paid. The reasoning at [148] (and any finding embedded therein) goes directly to that issue. The respective respondents have been on notice of that from the filing of the notice of appeal and well in a position to argue the issue. If the rejection of the contention as to the Withdrawal Price being $1,696,472.17 was a finding as such (and I consider it was) then it implicitly involved a conclusion that the Withdrawal Date was not, or might not ultimately be, 30 November 2023. 16. The fact that her Honour made no finding as to the value of the Units for the purposes of the redemption request seems to have been because her Honour, having considered the provisions of the Trust Deed (and the Information Memorandum which was not before us) proceeded on the basis that the Trustee had not made a determination as to whether the Withdrawal Date should be other than that nominated under the Trust Deed (i.e., any Withdrawal Date other than 30 November 2023). 17. The difficulty in proceeding on that basis is that there was no contest in the hearing before her Honour as to the fact that the Trustee had calculated the Withdrawal Price as at 30 November 2023 (the Withdrawal Date being an integral part of the calculations); nor as to the calculations themselves. All that was raised as a "question" by the second and third respondents in submissions was whether there had been some "freezing" of the entitlement to payment and the Trustee did not take issue with the amount claimed as due by the appellants. I accept that the 30 January 2024 letter did not expressly state that the Trustee accepted 30 November 2023 was the Withdrawal Date but had the Trustee "otherwise determined" then it was within its power to provide evidence of this; and had its position been that it reserved its discretion to make such a determination at another time, one would expect the Trustee to have made that clear to her Honour. Instead, the Trustee (having as a practical matter avoided, by reason of its notice of intention to retire, an investigation into and determination of the allegations of misconduct against it) raised no challenge to the appellants' position that the redemption proceeds due to it, calculated as at 30 November 2023, were $1,696,472.17. 18. I consider that in this regard her Honour fell into error. On the evidence before her Honour, I consider that an inference should have been drawn (from the communication by the Trustee on 30 January 2023 of its intention to process the redemption without delay coupled with the absence of any contest before her Honour by the Trustee as to its own calculation of the Withdrawal Price as at 30 November 2023) that the Trustee had accepted the Withdrawal Date as 30 November 2023 and had chosen to proceed on that basis. (I also consider that it is not open to the Trustee now, in effect, to run a positive case that it remains open to it to determine some other Withdrawal Date having chosen not to contest that issue before the primary judge, given the obvious prejudice to the appellants in that they did not adduce evidence as to that calculation in the absence of any such contest). 19. Accordingly, I would uphold Ground 4 and order the redemption to be effected at the Withdrawal Price calculated by the Trustee. 20. If my conclusion as to the inference to be drawn from the Trustee's conduct were to be in error, and her Honour did not err in rejecting the appellants' contention that the Withdrawal Price is $1,696,472.17, then the question as to whether there should be a remitter to the primary judge (as the respondents submit) would need to be addressed. 21. As already noted, the position taken by the respective respondents in their separate written submissions was that the appropriate course was that the matter be remitted to the primary judge. However, it is unclear what question or issue arises that would appropriately be remitted to the primary judge (nor was this satisfactorily identified by the respondents in their submissions). If what is now required is a determination by the Trustee of the Withdrawal Date and then calculation of the Withdrawal Price on that basis, then that is a matter for the Trustee to determine (as her Honour recognised). There might well be a challenge to any such determination by the Trustee but until such a determination has been made there would be no controversy for her Honour to quell in that regard. 22. The Trustee says that, in circumstances where the quantum of the proceeds payable at the direction of Mr Driver pursuant to any redemption of the Units in Certificate 3 will turn on construction of the terms of the Trust Deed and Information Memorandum; and matters of fact concerning the realisation of investments to fund the redemption, the best course is for the question of quantum of the proceeds payable by the Trustee on redemption to be remitted to the primary judge. However, as the second and third respondents quite fairly acknowledge, remitter as to any issues that might arise out of such a determination would at this stage be as to a contingent issue (arising only if one or other of the protagonists objects to the way in which the Trustee makes its determination as to the Withdrawal Price) (see AT 29.26). The fact that the second and third respondents have foreshadowed a "huge fight" about what the Units are really worth (leaving aside the irony that they chose not to contest this at the hearing before her Honour in the first place and said it was a matter between the Trustee and Aurora) does not make it appropriate to remit the matter to the primary judge. Such a dispute is for another day before whichever judge might be allocated to hear it. Nor is there any merit in the Trustee's suggestion that it be remitted for "case management" issues (see AT 24.25-27). This is not a question of case management and her Honour is now functus officio. 23. The fact that there may well in those circumstances be a future call on the undertaking as to damages given by the second and third respondents pursuant to the interlocutory injunction restraining the Trustee from redeeming the units (should the amount payable on redemption be less than $1,696,472.17) does not, as the Trustee submits, mean that all issues arising in respect of the question of quantum of the proceeds payable should be remitted to the primary judge to be addressed at the one time. At this stage it is not clear what those issues might be. Nor would it be necessary for a claim on the undertaking as to damages to be heard before the primary judge. 24. Remittal to the primary judge is thus not a palatable course. If (contrary to my conclusion) it remains open for the Trustee to determine some other Withdrawal Date than 30 November 2023, then the appropriate course would simply be a direction for the Trustee to redeem the Units without further delay (and pay the redemption proceeds as calculated by it to or at Mr Driver's direction). 25. In that regard, I note that the Trustee appeared to accept that, on receipt of a Redemption Request, the Trustee would have an obligation to make any determination as to the Withdrawal Date within a reasonable time (see AT 18.5-15). In the present case, as already noted, there was no suggestion that the Trustee was intending to make or had made a determination to nominate an alternative Withdrawal Date. The request was received on 29 November 2023 and the Trustee communicated his intention to process the redemption without delay in its letter of 30 January 2024. The Trustee did not suggest that there was anything further to be determined at that stage. True it is that the injunction prevented the Trustee from redeeming the Units from 1 February 2024 but there was no challenge by the Trustee at the hearing as to the Withdrawal Date or its own calculated Withdrawal Price. Any further dispute arising out of that redemption would then be appropriately brought in fresh proceedings to be heard by a judge to be allocated in the ordinary course. As it is, that is not the course that I propose be adopted, having regard to my conclusion as to the inference to be drawn from the Trustee's conduct, as explained above. Costs 1. The Court was informed that the appellants have confirmed in inter partes correspondence that they do not seek to set aside order 5 made in the costs judgment (i.e., the order that the Trustee's costs of the proceedings, including the Cross Claim, may be paid out of the assets of the Aurora Unit Trust except for the costs of the application for judicial advice dismissed in Aurora Australasia Pty Ltd v Hunt [2024] NSWSC 680 from 17 May 2024). Save in that and one other respect, the costs orders suggested by the appellants should be made. The other respect to which I refer is that I consider that the Trustee should bear its own costs of the appeal, having regard to the position it took on the form of the relief to be granted. Orders 1. For the above reasons, I propose the following orders: 1. Allow the appeal. 2. Set aside the declarations and order in (1)-(3) at [155] of the primary judgment. 3. Order the Trustee to redeem the units in certificate 3 in the Aurora Australasia Fund Unit Trust and pay the sum of $1,696,472.17 in accordance with directions to be given to it by its director, Mr Driver. 4. Set aside the costs orders at (2)-(4) of the costs judgment and in lieu therefore order that the second and third respondents pay the appellants' and first respondent's costs of the proceedings at first instance (save for the costs in respect of the appellants' claim for the removal of the first respondent as trustee to the extent that claim was based upon matters other than the non-redemption of the units in certificate 3). 5. Order the second and third respondents to pay the appellants' costs of the appeal. 6. For the avoidance of doubt, note that Order 5 of the costs orders made by the primary judge remains operative. 7. Order that the first respondent bear its own costs of the appeal. 1. STERN JA: I agree with the President. 2. GRIFFITHS AJA: I agree with the President. ********** annexure a Appeal Grounds 1. The primary judge erred by finding, at J[136], that there "was an agreement between the parties that Mr Driver's shares in Aurora would be given as security for the repayment of the loans". The second and third respondents had not made that claim. Further, contrary to this finding, and as the primary judge had elsewhere found, what Mr Driver did by way of email dated 14 July 2023, was to make an offer for the provision of security (see for example J[4], [55], [65], [132], [133] and [134]). The primary judge did not find that this offer had been accepted. Rather, as described in the judgment, and consistently with the documentary evidence which bore out that description, Mr Driver's offer was met with a counter-proposal which was then not accepted by Mr Driver, and further discussions between the parties did not lead to agreement: J[56]-[63]. 2. Although correctly finding that the parties did not agree that the units in Certificate No 3 would be security for repayment of loans to Mr Hartley (see J[137]), the primary judge erred in finding that Mr Driver conferred an equitable charge over that property as security for repayment of the loans: J[138] and declaration (2). The second and third respondents had not made that claim, and if they had, it would have failed having regard to s 230(1)(c) of the Conveyancing Act 1919 (NSW). Further, in arriving at the finding challenged, the primary judge erred by not applying the correct principles of law, including by: (a) proceeding on the basis that, in a case such as the present (where the protagonists were parties to loan agreements and communicating in respect of a potential alteration of that relationship so as to introduce security in respect of the loans), a charge could be created voluntarily by the making of an offer to grant a charge; (b) taking principles pertaining to different circumstances and legal contexts, in which the law may recognise the creation of a charge by voluntary transactions — for example by will - and treating them as applicable in the present circumstance: J[127]; (c) further to (b), and at J[128], placing reliance upon Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417. That authority concerned a different claim and legal circumstance to the one before the primary judge. That was a case about the proper construction of a testamentary trust, and whether the funds of the trust were given on terms which required the funds to be spent in a particular way and not otherwise; (d) further to (b), and at J[129], placing reliance upon Toocooya Investments Pty Ltd (1978) 3 ACLR 252. That authority concerned a different claim and legal circumstance to the one that was before the primary judge. That was a case about whether there had been an equitable assignment, with the judge in that case applying principles pertaining to the law of assignments; and (e) failing to take proper account of, and apply, the nd principles applicable to the present circumstances, in which the existence or otherwise of a charge falls to be determined by assessing whether an agreement for its creation was formed between the parties, having regard to their intentions (Swiss Bank Corporation v Lloyds Bank Ltd [1980], Pudney v Man GGH Logistics (VCA, 13/12/19, unreported). 3. The primary judge erred by making irrelevant and erroneous findings in first two sentences of J[6], that Mr Driver had "sought to remove some $3 million from the reach of his creditor [Mr Hartley]" and that such conduct was "difficult to admire". That finding was incorrect in circumstances where, as the primary judge later found, the loans were not due for repayment by Mr Driver, It is not commercially objectionable for a debtor to receive funds payable to him and decide how to apply them. Further, it was no element of the respondents' claim, there was no evidence, and it was not put to Mr Driver, that he was seeking to remove money from the reach of his creditor, as opposed to receiving money payable to him and dealing with it as he saw fit. The primary judge's finding and disapprobation, although irrelevant and incorrect, creates a perception that it was at least indirectly influential in the decision making processes which led to the ultimate findings appealed against above. 4. As a consequence of the above, the primary judge erred in: (a) making the declaration and order in (2)-(3) at J[155]; (b) not finding that Hunt Prosperity Pty Ltd (the trustee) was obliged to to redeem the units in certificate 3 in the Aurora Unit Trust and pay the sum of $1,696,472.17 in accordance with directions to be given to it by Mr Driver, the appellant's director; (c) not making an order for the said redemption and payment; and (d) making costs orders adverse to the appellants. 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: 20 February 2025