New South Wales Supreme Court CITATION : Lambden & Anor v Merrotsy & Anor [2005] NSWSC 278 JUDGMENT DATE : 8 April 2005 JURISDICTION : Common Law JUDGMENT OF : Cooper AJ at 1 DECISION : See paragraph 106 - Orders 1 - 7 CATCHWORDS : Joint Tenancy Agreement - Property Transfer - Mortgage Repayment LEGISLATION CITED : Contracts Review Act 1980 Wayne Richard Lambden & Anor PARTIES : Donald Leslie Merrotsy & Anor FILE NUMBER(S) : SC 20466 Eric Petersen (Plaintiffs) COUNSEL : Douglas Knaggs (Solicitor) (Defendant) SOLICITORS : Sautelle White Lawyers (Plaintiffs) LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : No 8 of 2002 LOWER COURT JUDICIAL OFFICER : D Regan (Acting Registrar) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COMMON LAW LIST Acting Justice Cooper 8 April 2005 20466 of 2004 WAYNE RICHARD LAMBDEN & ANOR v DONALD LESLIE MERROTSY & ANOR JUDGMENT THE BACKGROUND 1 COOPER AJ: The two plaintiffs are husband and wife. Around June 1987 they purchased as joint tenants one-half share of land at Devils Hole Road, Wyndham being Lot 90 in DP 750240. This block of land will hereafter be referred to as the land. 2 The Certificate of Title shows that in June 1987 the plaintiffs were registered as proprietors as joint tenants of a half share and Peter John Cumming and Kathrynn Ann Cumming as joint tenants of the other half share. The two couples held their respective half shares as tenants in common. 3 In about June 1991 Peter John Cumming and Kathrynn Ann Cumming transferred their shares to the first defendant Donald Leslie Merrotsy and Terri Vera Ryan. 4 On about 13 September1994 Terri Vera Ryan transferred her one-quarter share in the property to the plaintiffs. 5 Thus, by this stage the plaintiffs were registered as proprietors as joint tenants of a three-quarter share in the land and the defendant, Mr Merrotsky, was registered as the proprietor of a quarter-share. As between the plaintiffs of the one part and Mr Merrotsy of the other part they were tenants in common. 6 According to the Grant (Annexure A to the affidavit of Mr Lambden) the land had an area of 100 acres. 7 The evidence establishes that there were discussions between the plaintiffs of the one part and Mr Merrotsy (who will be referred to as the defendant) of the other part under which, in due course, they hoped to sub-divide the property so that the defendant would have a parcel of land equivalent to about one-quarter of the total area located in approximately the south-east corner of the land. This proposal never reached finality because there were differences of opinion as to who should pay for the costs of surveying necessary to achieve the registration of the sub-division of the land. However, the defendant did in fact occupy an area roughly equivalent to the south-east corner of the land and the parties kept to their respective sections. 8 In about October or November 1994 the defendant contacted the first plaintiff and told him that he wished to borrow $13,000 from the Bank, that the Bank had asked for security and the only security he had was his interest in the land. The defendant then asked the first plaintiff if he would be agreeable to allowing the Bank to take some form of security over the property. The plaintiff replied that he and his wife were prepared to assist the defendant to raise the loan but they needed to protect their own interest in the property and indicated that they would seek legal advice as to how they could best do so. 9 The Bank concerned, National Australia Bank, also required the plaintiffs to guarantee the loan to the defendant such guarantee being secured by a Mortgage over their interest in the land. 10 In about November 1994 the plaintiffs consulted their solicitor, Mr White, telling him that they were prepared to assist the defendant but they required some form of security in the event that the defendant defaulted in repaying the loan to the Bank. 11 The defendant had advised the plaintiffs that his solicitor was Mr Michael Britten of Merimbula. This information was passed on to Mr White. 12 On about 24 November 1994 Mr White contacted Mr Britten, told him that he was acting for the plaintiffs and that they were concerned to arrange a form of security in the event that there was a default by the defendant resulting in their becoming liable under the guarantee. 13 On 24 November 1994 Mr Britten wrote to Mr White saying:- "I refer to the telephone conversation with you and would advise that I have the loan approval from the National Australia Bank for $13,000 and would appreciate your advice as the way in which your clients, Mr & Mrs Lambden, wish to arrange their security as previous discussion by phone." (See Annexure A to Exhibit C.) 14 By letter dated 2 December 1994 Mr White forwarded to Mr Britten a draft Deed for his client's consideration. 15 On 7 December 1994 Mr Britten replied referring to the draft Deed and seeking amendments to be made as shown in the attached copy. He added that the finalisation of the matter by 9 December 1994 would be appreciated. 16 On 14 December Mr White wrote to Mr Britten a letter the relevant parts of which are:- "We refer to previous correspondence and now enclose the form of Deed duly executed by our clients and confirm we are holding a form of guarantee and indemnity which is required by the National Bank. We would be pleased if you could arrange for the Deed to be executed by your clients and the Bank, whereupon we will be in a position to release the form of guarantee to the Bank and your client's loan can proceed." 17 It is common ground that the defendant signed the Deed in the office of his solicitors. 18 It is common ground that a copy of the Deed dated 15 December 1994 and called a Deed of Indemnity is Annexure E to the affidavit of Mr Lambden sworn on 30 March 2004 being Exhibit A in these proceedings. 19 That Deed refers to the plaintiffs as the "Consentors" and the defendant as "the Borrower." 20 It recites that the Bank had agreed to lend the Borrower $13,000 and that for the purposes of such loan the Consentors have agreed to join with the Borrower to Mortgage the subject land. It then goes on to recite that:- " Whereas the Borrower is solely responsible for repayment of the loan to the Bank and whereas the Borrower has agreed with the Consentors that in the event of him defaulting in his obligations to the Bank and the Consentors being forced to assume such obligations then the Borrower will transfer all his right, title and interest in the land at the value certified by the Valuer-General's Office pursuant to Valuation Number 10813.1, a copy of which is annexed hereto, or such other Valuation by the Valuer-General as is relevant at the date of default." 21 The Deed further recites that in the event of the Borrower's share of the land being in excess of the amount due to the Bank the difference, after payment of all costs and expenses associated with such default and incurred by the Consentors in effecting the transfer, shall be paid to the Borrower. 22 Clause 1 of the Deed grants consent by the plaintiffs to the defendant borrowing $13,000 from the Bank secured by a Mortgage over the land. 23 Under clause 2 the defendant indemnifies the plaintiffs against all costs, expenses, charges associated with the loan including the plaintiff's reasonable legal costs associated with the Deed. 24 The most significant clause in the context of this litigation is clause 3 which states:- "In the event of Donald Leslie Merrotsy defaulting under the terms of the said loan, the said Wayne Richard Lambden and Kerry Leanne Lambden will accept responsibility for repayment of the loan to the bank and the said Donald Leslie Merrotsy will forthwith transfer the land to the said Wayne Richard Lambden and Kerry Leanne Lambden at the value then applicable as certified by the Valuer-General's Office in exchange for the Consentors paying to the Borrower monies equivalent to the Valuer-General's Valuation less monies outstanding to the Bank, after payment of costs and expenses incurred in the Borrower's default and transfer of Title." 25 The Notice of Valuation annexed to the Deed is for the whole of the land and states the land value at the base date of 1 July 1994, namely $42,000. 26 The plaintiffs executed the Mortgage and guarantee of the land. See Annexure F to Exhibit A. 27 The defendant duly received the amount of the loan from the Bank and made all payments due under the Mortgage until about February 2000. 28 The next that the plaintiffs heard in connection with the loan was receipt of a Default Notice from the National Australia Bank dated 5 May 2000, Annexure "G: to exhibit A. 29 This Notice is addressed to the defendant at Lot 90 Myrtle Mountain via Wyndham NSW 2550 and also to Mr Lambden at his address at Candelo NSW 2550. It refers to the securities as the Guarantee and Indemnity given by the plaintiffs and the first registered Mortgage over the property. 30 The defaults under the loan referred to in the Notice were non-payment of loan repayments due on 15 February, 15 March and 15 April 2000 totalling $512.67. 31 The Notice continues that if the default is not remedied by payment within 31 days from the date of the Notice then the liabilities under the contract would have the effect of requiring the parties to repay immediately the whole of the unpaid balance and any other money owing under the contract. Details are set out and the total amount required to pay out the contract as at 5 May 2000 was $7,696.80. 32 Clause 3(b) of the Notice goes on to say that the Bank intends to exercise a power of sale in respect of the property the subject of the security. 33 On the same day Mr Lambden spoke to the defendant by telephone, told him that he had received a letter from the Bank about the loan and that the Bank claimed that the defendant was in default and asked what was going on. According to the plaintiff the defendant replied "Well the Bank hasn't contacted me. I'll talk to the Bank about and fix it. Don't worry." 34 The plaintiff accepted this assurance and did nothing further. 35 In October 2000 the plaintiff (Mr Lambden) received a Formal Demand from the Bank dated 18 October 2000 (see Annexure H to Exhibit A). In that Notice the Bank demanded payment from him of the sum of $8,044.73 being the amount owed at the date of Demand under the terms of the Guarantee and Indemnity given by him and his wife in respect of the obligations of the defendant to the Bank. The calculations of the amount are set out in the Formal Demand. It further points out that the plaintiffs' obligations under the Guarantee were secured by Registered Mortgage and that failure to comply with the Demand would constitute a default under the Mortgage. 36 It concludes that any communication in response to the Demand should be directed to Mr Gerald Pacholec, Asset Realisation Officer, Homeside Lending of Melbourne and an address and a telephone number are given. 37 On the day he received the Formal Demand Mr Lambden telephoned the defendant, told him that he had received a Formal Demand from the Bank and that he thought that the defendant had fixed it up and asked what was happening. The defendant replied that this was news to him and that he had received nothing from the Bank and would look into it. 38 Not surprisingly the plaintiff was not comfortable with this answer and so he contacted Mr Pacholec. His evidence was that as a result of this conversation he believed that the defendant had made no appropriate arrangements with the Bank and that Mr Pacholec was threatening that the Bank would exercise its power of sale under the Mortgage. 39 Following on this conversation the plaintiff contacted the defendant and told him that he had spoken to Mr Pacholec of the National Bank in Melbourne. He also told the defendant that he needed to get the loan into order because the Bank was threatening to sell up the property based on its rights under the Mortgage. According to Mr Lambden the defendant replied:- "I did this deal with the Bank Manager in Pambula. I am not going to deal with any suits in Melbourne." 40 On about 9 November 2000 Mr Lambden made further enquiries of Mr Pacheloc. 41 In the absence of any co-operation from the defendant the plaintiffs made a payment on 10 November 2000 to the loan account in the name of the defendant in the sum required by the Bank to satisfy the loan. The amount so required and so paid was $8352.36. See Annexure "I" to Exhibit A. 42 On the instructions of the plaintiffs Mr White wrote to the defendant on 16 November referring to the Deed, pointing out that the defendant had defaulted and that he was now under an obligation to transfer his interest in the land to the plaintiffs and enclosed an appropriate form of transfer. See Annexure "J" to Exhibit A. 43 It is common ground that the defendant has refused to execute such a transfer. 44 Mr White also wrote to Mr Pacholec seeking the Certificate of Title and a discharge of the Mortgage. 45 By letter dated 28 February 2001 the Corporate Lawyer for the National Australia Bank wrote to Mr White saying that the solicitors for the defendant had written to the Bank advising it that their client intends to contest the plaintiffs' transfer of legal title over the property to them. See Annexure "M" to Exhibit C. 46 By letter dated 9 April 2001 the solicitors for the Bank wrote to the solicitors for the plaintiffs and to the solicitor for the defendant a letter (see Annexure "P" to Exhibit C) the relevant parts of which are as follows, - "The Bank acknowledges the loan has been repaid and is ready, willing and able to provide a Discharge of its Mortgage and Certificate of Title to whomever is authorised or entitled to receive them. However, the Bank is on notice of a dispute between your clients and that it will be assisting Mrs & Mrs Lambden's course in that dispute if it accedes to Sautelle White's request. While Sautelle White's letter of 6 March 2001 states that nothing has been heard from Carroll & O'Dea since December 2000 the Bank has not received anything from Mr Merrotsy's solicitors that positively renounces the position outlined in Carroll & O'Dea's 5 December 2000 letter or authorises the Bank to grant Sautelle White's request. It is unreasonable to ask the Bank to do something that would expose it to a claim, including litigation, in respect of a dispute between your clients in which the Bank has no involvement or interest. The Bank will provide a Discharge of Mortgage and the Certificate of Title in accordance with an authority jointly given by your clients or a court order. In respect of any court proceedings between your clients to which the Bank is joined solely for the purpose of having it bound by such an order, the Bank will file a submitting appearance in respect of any order save a costs order against the Bank." THE PARTIES 47 By their Statement of Claim the two plaintiffs sue Donald Leslie Merrotsy as first defendant and National Australian Bank Ltd as the second defendant. The Statement of Claim sets out a brief summary of the above facts and then, pursuant to the Deed, seeks the following relief:- (a) That the first defendant do such acts and things necessary to procure delivery of the Certificate of Title of the Devils Hole Road Wyndham property Lot 90 in DP 750240 including executing a direction and authority to the second defendants to deliver the Certificate of Title to the plaintiffs. (b) That the first defendant forthwith do all such things and execute all such documents necessary to effect a transfer of the property into the names of the plaintiffs. (c) That in the event the first defendant fails to comply or comply fully with Order (b) above the Registrar of the Court is hereby appointed to execute the said Transfer of the property on behalf of the first defendant and deliver that Transfer up to the plaintiffs. (d) That the second defendant forthwith deliver up to the plaintiffs the certificate of title to the said property being Lot 90 in DP 750240. (e) Costs. 48 To this Statement of Claim the Second Defendant, the Bank, filed an appearance submitting to the making only of order numbered 5(d) sought in the Statement of Claim and the giving or entry of judgment in respect of claims made. 49 By his Grounds of Defence the defendant alleges that he agreed with the manager of the Merimbula branch of the Bank that the Bank would extend the time for repayment of the loan until a date after that on which the payment was in fact made by the plaintiffs and that he made this agreement known to the plaintiffs. He further alleges that the plaintiffs' payment of $8352.36 to the Bank was made without demand by the Bank or notice to or default by the defendant and therefore it was not a forced payment but was gratuitous and premature. Accordingly the defendant was not in breach of the Deed so as to trigger the consequences outlined in the statement of claim. 50 In addition he says that in early July 2000 he tendered $10,000 to the plaintiffs in satisfaction of all of his obligations to them under the Deed, which tender the plaintiffs refused. 51 In paragraph 6 of his Defence he contends that the Deed, prepared by the solicitors for the plaintiffs, and for which he was not recommended to obtain independent advice and did not do so, was harsh and unconscionable against him in its consequences within the meaning of the Contracts Review Act 1980. 52 The defendant has also filed a cross-claim in which he repeats the paragraphs of his Defence and claims an order under the Contracts Review Act varying the Deed by deleting paragraphs 3 and 4. Alternatively he seeks an order declaring the Deed void, an order for partition of the property, and relief against forfeiture and costs. 53 The evidence on behalf of the defendant commences with his affidavit Exhibit 1. 54 In relation to his execution of the Deed he says that the plaintiffs asked him who his solicitor was adding that their solicitor wanted to send him a draft of a Deed to protect them on signing for the loan. The affidavit continues:- "Shortly afterwards I had a brief conversation with my solicitor, Mr Britten, in which I engaged him if he would act for me on the Deed which Mr White would submit to him. I did not ever see or talk to or receive any communication from Mr Britten about the proposed Deed, neither before or after he apparently sent the letter to Sautelle & White which is Annexure C to the affidavit of Hugo Patrick White in these proceedings. Nor did anyone else ever give me advice as to the meaning and consequences of the Deed." 55 The defendant further states that on the day before he signed the Deed the defendant rang Mr Britten and asked if it was ready and was told that he had not yet received the final draft. The defendant said that because there was some urgency he drove the next day to Mr White's office and saw Mr White who gave him the Deed and a letter to Mr Britten. The defendant said that he commented that the Deed seemed pretty lengthy to which Mr White responded:- "It's a standard way of securing such matters. It gives rights to the Lambdens if you don't make the payments. It has to be signed round at your own solicitors." 56 Then defendant then went to his solicitor's office and signed the Deed in the presence of one of the secretaries who witnessed his signature. 57 The defendant said that in September 1999 he suffered a serious injury which has incapacitated him for ordinary work and activities. 58 His affidavit continues that in about February 2000 he saw Mr Colin McManus the Manager of the Merimbula branch of the Bank and told him he was injured and was unable to work and asked if the Bank would consent to defer payments on the loan until he received compensation. Mr McManus replied that the application would be considered under the Bank's normal guidelines and that the defendant had to fill in a form applying for payments to be deferred. The defendant says that he filled in the form and returned it to Mr McManus. 59 He responds to paragraph 14 of Exhibit A by saying that he agrees that he received a telephone call from Mr Lambden on or about 5 May 2000 in which Mr Lambden told him that he received a letter from the Bank about the loan saying that he was in default. He testified that his response was:- "I applied for deferment of the loan repayment only a short time ago. I will ring the Bank and see what is going on." 60 The defendant said that he immediately rang the Bank Manager who told him that the Notice of Arrears was automatically generated and sent out by mistake. Also that the application for deferral had been lost in transit between the Branch and Homeside Melbourne which is the administrative section of the Bank, that it was nothing to worry about but the defendant needed to file a second application for deferral and that he would send a new form to the defendant. 61 The defendant in paragraph 18 of his affidavit refers to paragraph 17 in Mr Lambden's affidavit Exhibit A in which the latter said he rang the defendant and told him of having received the Formal Demand dated 18 October 2000 from the Bank. However he says that he told the plaintiff that he had fixed matters up and had sent a second deferment application after the Bank lost the first. He says that the plaintiff gave him details of the sender of the Formal Demand, namely Mr Pacholec. 62 The defendant said that he rang Mr Pacholec, told him that he had been informed by Mr Lambden that a Default Notice had been sent out over the property, repeated that he had sent an application for deferral and was told by Mr Pacholec that the second application would be processed when it was received, that no action would be taken on the second notice and that "these things take a while to get through our internal mail." The defendant said that he telephoned Mr Lambden straight away and told him of his discussion with Mr Pacholec to which he said Mr. Lambden replied "very well". 63 In his oral evidence he agreed that he received a phone call from the plaintiff who told him that he had spoken to Mr Pacholec and that the Bank was threatening to sell the property. The defendant says that in response he said that that was not right, that he had made arrangements with Mr Pacholec, that he had to see a specialist in Sydney in a few days and as soon as he got back he would see his Bank Manager and sort it out. 64 In paragraph 22 of his affidavit, the defendant says that shortly afterwards he spoke on the phone to Mr Lambden and had the following conversation:- Merrotsy: " As I have told you, I have to be in Sydney next week for medical reasons, from 15 to 21 November and when I get back I'll be going straight to my bank manager to finalise this. Lambden: It's got nothing to do with him any more. You've already lost your property. Merrotsy: What are you talking about? He's from my local branch, where I applied for the loan deferment. Lambden: The bank is going to sell the land, as I told you, and won't give you a deferment. We will have to pay it and that means you will have to give us your land, as you agreed. Merrotsy: I told you not to interfere. I have grounds for deferment and the bank has not told me otherwise. I've already told you I'm due to go to Sydney tomorrow for medical reasons, and that I will see my manager immediately I return." "I flew to Sydney (as I had said I would), on 15 February November 2000, and returned on 21 November. On my return I found two items of mail: a demand from NAB for arrears on the loan of $1800. a letter from Lambden's solicitor, enclosing a transfer which they demanded I sign to give the Lambdens my title to the land." 65 In paragraphs 25 and 26 of this affidavit the defendant says that he made offers of money to the Mr Lambden to satisfy his indebtedness to him. 66 It is worthy of note that there is nothing in writing to support such offers. 67 The plaintiff has filed an affidavit in reply denying the versions of conversations given by the defendant and confirming the versions originally stated by him in his earlier affidavit. Furthermore there is a further affidavit from Mr White, Exhibit F, in which he denies receiving any formal offer from a solicitor representing the defendant in the sum of $8,352 or any other sum. 68 In evidence before the court the defendant conceded that the Bank required the plaintiffs to join in the Mortgage to secure the loan to him from the Bank and that they were giving a guarantee of his indebtedness to the Bank. 69 He said that he was also aware that he was required by the plaintiffs to enter into a Deed which had the effect that if he defaulted in paying off the loan resulting in the plaintiffs having to pay the Bank then he was obligated to transfer his interest in the land to them at a price to be calculated on the basis of the Valuer-General's Valuation applicable at the time. That price was to be satisfied in part by the amount which they had paid on his behalf to the Bank and in part by the costs incurred by them and the balance by cash. 70 He further conceded that Mr Britten did act for him. However he maintained that the terms of the Deed were never explained to him. 71 His evidence continued that he made monthly payments under the loan agreement until February 2000 and that he was under the impression that the Bank was going to defer his obligation to make further payments.. 72 He agreed that as at May 2000 he was living at Lot 90 Myrtle Mountain via Wyndham NSW 2550 the address set out in the Default Notice dated 5.May 2000 (Annexure "G" to Exhibit A) and said he did not receive this notice until some time after 5 May 2000. 73 He further agreed that Mr Lambden phoned him and told him that he had a notice from the Bank advising that the loan was in default and said that he told Mr Lambden that he would fix the problem. 74 The defendant agreed that between May and November 2000 he made no further repayments on the loan saying that he did not think the Bank would take action because of his previous conversation with the manager of the Merimbula branch. 75 Having summarised the evidence and the pleadings it is now necessary to examine the grounds of defence. 76 Paragraphs 4.1, to 4.4, in effect allege that the defendant agreed with the Manager of the Merimbula branch of the Bank that the Bank would extend the time for repayment of the loan until a date after that on which the plaintiffs made their payment. Accordingly the plaintiffs' payment to the Bank was made without demand by the Bank or notice to or default by the defendant. Accordingly the defendant was not in breach of the Deed so as to trigger the consequences provided in paragraph 3 of the Deed. 77 The short answer to these allegations is that I am comfortably satisfied that the defendant had no such agreement with the Bank. 78 Viewed at its highest, the defendant had sought a deferment of his obligation to make monthly payment under the loan agreement. However the Bank never agreed to such an application. The defendant has produced no evidence from the Bank or the Bank Manager of the Merimbula branch in support of his contention and indeed it is contrary to the evidence given by Mr Lambden of his conversations with Mr Pacholec. 79 Mr Lambden's evidence is supported by the fact that he received the Default Notice dated 5 May 2000 addressed to both him and the defendant and that he accepted the defendant's assurance that the default would be rectified but, nonetheless, it was not rectified and led to the Formal Demand dated 18 October 2000. The plaintiff said in his affidavit that he was not satisfied with the explanation given by the defendant. I accept this evidence and agree that he had every justification for not being so satisfied. 80 As at 18 October 2000, having received the Formal Demand, he and his wife faced the very real prospect that if the money was not paid the Bank could and would exercise its power of sale under the Mortgage securing their obligations to the Bank under the Guarantee. In order to preserve their property the plaintiffs had no realistic alternative than to make the payment demanded by the Bank which they did. 81 There is a second reason why I would reject the matters set out in paragraphs 4.1 to 4.4 of the defendant's defence. These allege an agreement between the Defendant and the Bank – not an agreement between the plaintiffs and the Bank. Notwithstanding such an agreement between the defendant and the Bank (and I am satisfied there was no such agreement) the plaintiffs were under an obligation pursuant to the demand from the Bank either to suffer the consequence of having their property sold up by the Bank or of paying out the amount due. They quite reasonably and properly decided on the latter course. 82 Further support is given to the contention that there was no such agreement between the Bank Manager and the defendant by the terms of paragraphs12 and 13 of the Defendant's affidavit. In those paragraphs the Defendant said that he went to the Manager, told him that he had been injured and was unable to work and asked if the Bank would consent to defer payments on the loan until compensation was received. In paragraph 13 he said that the Manager replied:- "That will be considered under our normal guidelines. You will have to fill out that form." 83 This is not an agreement between the Bank and the defendant to defer repayment of the loan. This is merely a statement that if the defendant made application for deferral such an application would be considered under the Bank's normal guidelines. 84 In paragraph 5 of his defence the defendant says that in early July 2000 he tendered $10,000 to the plaintiffs in satisfaction of all of his obligations to them under the Deed which tender the plaintiffs refused. 85 In paragraph 25 of his affidavit he says that on the telephone he offered to pay $10,000 to Mr Lambden but Mr Lambden said that he wanted $11,000. In paragraph 26 he said that he offered $11,000 but was told that Mr Lambden needed $13,000 and at a later stage $14,000. 86 In his affidavit in reply Mr Lambden denies this. 87 An offer to pay money is not a tender of that money. If the plaintiff wishes to rely upon the tender of money he needs to show that he is ready, willing and able to pay the money at that time. The defendant has not paid any money into the court or given any security for the payment of money. Indeed his whole history and his evidence and demeanour satisfies me quite comfortably that if he did offer money it was an empty offer made without the ability to deliver the money. Accordingly I would reject any defence by way of tender. 88 In paragraph 6 of his grounds of defence the defendant: - "Contends the Deed, prepared by the Solicitors for the Plaintiffs, and for which he was not recommended to obtain independent advice and did not do so, was harsh and unconscionable against him in its consequences within the meaning of the Contracts Review Act 1980." 89 The evidence comfortably satisfies me that not only was the defendant recommended to obtain independent advice but also be in fact obtained such advice from Mr Britten. Furthermore although the Deed was prepared by the solicitors for the plaintiffs it was reviewed by the defendant's solicitor, Mr Britten, who made suggestions for alterations which alterations were apparently agreed to. But even if they were not agreed to, the final form of the Deed was approved by Mr Britten and so the defendant signed it. In other words I am satisfied that he had independent advice in relation to the Deed before he executed it. 90 As mentioned earlier the defendant seeks relief under the Contracts Review Act 1980. In submissions made on behalf of the defendant his solicitor argued that the contract was unjust in the circumstances relating to the contract at the time it was made. The argument continues that the amount which the defendant is to be paid in the event that the plaintiffs paid out the Mortgage is based upon the unimproved capital value of the land. This is because the money to be paid by the plaintiffs to the defendant under the recital and clause 3 of the Deed is for the defendant's right title and interest in the land at the value certified by the Valuer-General's Office. The valuation has to be relevant at the date of default. The Valuer-General's valuation is based upon the unimproved capital value of the land and does not take into account the value of improvements. Consequently the effect of the Deed is to prevent the defendant from making any improvements on the land after receipt of the loan because if he defaults the value of those improvements would not be taken into account in the amount of money due to him. 91 The short answer to this submission is that there is no evidence that there were improvements on the land provided by the defendant other than perhaps some bulldozing work and the only evidence that it was contemplated that there would be future improvements was the statement by the defendant in his affidavit that he obtained the loan for the purpose of installing a solar power plant on the land. There is, however, no evidence that such a solar power plant would become an improvement on the land or whether it would merely be a removable item. 92 A further argument in support of the submission that the contract is unjust is based upon the fact that the amount which the plaintiffs have to pay to the defendant upon the transfer to them of the defendant's interest in the land is one-quarter of the total Valuer-General's valuation of the land. The argument continues that under the arrangement made between the plaintiffs of the one part and the defendant of the other, he was allowed to occupy exclusively one-quarter of the whole parcel which was approximately defined as the south-east corner of the land and it is unfair to the defendant to assume that the value of this specific parcel of one-quarter of the land is equivalent to one-quarter of the totality of the land. 93 There is no evidence that the value of this specific parcel of one quarter of the land is equivalent to more than one-quarter of the totality of the land. It could be more, but it could be less. 94 The submissions made on behalf of the defendant fall far short of satisfying me on the balance of probabilities that the provisions of the Deed are unjust in the circumstances relating to it at the time that was made. I have considered all of the circumstances of the case and those specific matters set out in section 9(2) of the Contracts Review Act 1980. 95 There was no material inequality in bargaining power between the parties. The provisions of the Deed were the subject of negotiation between the solicitors for the parties. There were in fact reasonably practical means for the defendant through his solicitor to negotiate the alteration of or rejection of any of the provisions of the Deed. There is no provision in the Deed which imposes conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of the plaintiffs. The defendant had independent legal advice. 96 When one looks at the Deed as a whole it is seen that far from being harsh and unconscionable or unjust it is in fact fair and reasonable as between both parties. 97 The defendant wanted to raise a loan of $13,000 secured over the land in which he had only a one-quarter share. He needed the consent of the plaintiffs to join in the loan documents including the Mortgage and to give a guarantee. The plaintiffs were receiving no benefit from this loan. What they were doing was to place in jeopardy their three-quarter interest in the land, that jeopardy being the potential loss of the land should the defendant default in his obligations under the loan agreement with the Bank. 98 The plaintiffs were entitled to have protection for their three-quarter interest in the land in the event that the defendant defaulted under the terms of his loan. That protection was afforded by providing that if they satisfied the obligations of the defendant by paying out the loan, then the defendant was under an obligation to transfer his interest in the land to them. But the plaintiffs do not receive the defendant's interest in the land as a gift. They are under an obligation to pay to the defendant the value of the defendant's interest of that land. 99 That payment for the value of the defendant's interest in the land was to be made, in part by the amount which they paid to the Bank on behalf of the defendant plus, in part by the costs and expenses incurred by them in respect of the defendant's default and the transfer of the title and the balance, if any, by way of cash. 100 The parties had to set out in the Deed the means whereby the value of the defendant's right title and interest in the land could be ascertained. They could have provided for a valuation to be made by an independent valuer but the cost of this would have been quite high in relation to the loan which was for only $13,000. Instead they chose a means which was comparatively inexpensive namely to assess the value of the basis of the Valuer-General/s valuation. In the circumstances of this case it was clearly a fair and reasonable way of assessing the valuation. 101 The upshot is that the defendant has failed to satisfy the court on the balance of probabilities that he is entitled to any relief under the Contracts Review Act 1980. 102 In addition the defendant claimed that in the exercise of discretion the Court should not make the orders sought but, instead, order the defendant pay a sum of money plus interest in lieu of any other order. 103 When I asked the solicitor for the defendant if the defendant was in a position to make any payments promptly he was unable to give a satisfactory answer. The evidence, in fact, satisfies me on the balance of probabilities that the defendant has no means and would be unable to pay any money ordered by the court. Consequently I would reject this application. 104 The plaintiffs therefore have satisfied the court on the balance of probabilities that they are entitled to the relief sought in the Statement of Claim with some amendments. 105 The value of the land by the Valuer-General at the date of default is $39,900. The value of the right title and interest in the land of the defendant at that date is one-quarter of the total valuation equivalent to $9,975. Accordingly the total amount which the plaintiffs have to pay to the defendant to receive the transfer of the defendant's interest in the land is $9,975. 106 The plaintiffs have already paid $8,352 (omitting the cents) by satisfying the defendant's obligations to the Bank. This leaves a difference of $1,623. In addition the plaintiffs are entitled to credit for the costs and expenses incurred by reason of the defendant's default and for the transfer of the title to them. There is no evidence as to the amount of these costs and expenses. However, because of the smallness of the amount involved and the need to bring this matter to a speedy conclusion and avoid any further need to appear before the court I propose to make a form of order that the $1,623 be credited towards the costs of the action and cross-claim to be paid by the defendant to the plaintiffs. 107 I am satisfied that the plaintiffs are entitled to an order against the Bank as set out in paragraph 5(d) of the Statement of Claim, an order to which the Bank submits. In view of the submitting appearance I consider it inappropriate to make order against the Bank in respect of costs. 108 I make the following orders: - 1 That the defendant Donald Leslie Merrotsy forthwith do all such things and execute all such documents necessary to effect a transfer of his right title and interest in the land situate at Devils Hole Wyndham in the Parish of Wyndham; being Lot 90 in Deposited Plan 750240 into the names of the plaintiffs Wayne Richard Lambden and Kerry Leanne Lambden. 2 That the first defendant Donald Leslie Merrotsy do all such acts and things necessary to procure delivery of the Certificate of Title to the land described in order 1 above including executing a direction and authority to the National Bank of Australia, the second defendant, to deliver the Certificate of Title of the said land to the plaintiffs. 3. That in the event that the said defendant fails to comply or comply fully with orders 1 and/or 2 above within 21 days of this date, the plaintiffs have leave to apply on 24 hours notice for an Order pursuant to section 100 of the Supreme Court Act nominating a person to execute the said Transfer of the property on behalf of the first defendant and to deliver that Transfer up to the plaintiffs in accordance with Order 1 and further to execute the direction and authority in accordance 2.. 4 That the second defendant the National Australia Bank forthwith deliver up to the plaintiffs Certificate of Title to the land described in order 1 above to the plaintiffs. 5 The cross-claim is dismissed. 6 That the first defendant Donald Leslie Merrotsy pay the plaintiffs' costs of the action and the cross-claim and that the first defendant is to be credited in respect of such costs in the sum of $1,623. 7 In respect of the action against the second defendant National Australia Bank no order as to costs. ********** 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.