Supreme Court New South Wales Medium Neutral Citation: National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 4) [2019] NSWSC 1477 Hearing dates: 24 November 2017; 14-16 March, 24 April, 4 June, 26 June and 3 September 2018; 2 and 22 October 2018 (written submissions) Date of orders: 29 October 2019 Decision date: 29 October 2019 Jurisdiction: Common Law Before: Walton J Decision: The Court makes the following directions: (1) NAB should file and serve short minutes of order reflecting this judgment within 14 days of its publication together with a submission in support of the orders proposed in the event of any dispute as to the proposed orders. (2) In the event as to any dispute as to the short minutes of order reflecting the terms of this judgment, Ms Charlton and Mr O'Brien shall file and serve submissions as to that issue within 14 days of the receipt of NAB's short minutes of order and submissions in support thereof. (3) The Court will make orders administratively in Chambers upon the receipt of consent short minutes of order or, in the event of any dispute as to the form of the orders, after consideration of the submissions advanced by the parties. Catchwords: REAL PROPERTY – farm debt – possession of land –default under farm mortgage – Farm Debt Mediation Act – MEDIATION – whether s 11 certificate valid – whether satisfactory mediation – construction of s 4(1A) – was mediation in good faith – did mediator provide summary of mediation at end of mediation – was notice provided by bank that it had agreed to a mediation – was bank required to mediate with farmer in personal capacity and in capacity as trustee – whether subsequent mediation invalid –ENFORCEMENT ACTION – whether proceedings void pursuant to s 6 of the Farm Debt Mediation Act – whether enforcement action prior to mediation – scope of enforcement action under the Farm Debt Mediation Act – was notice of cancellation of overdraft a farm mortgage – whether bank entitled to withdraw reliance on default notices – whether bank engaged in continuation of enforcement action – TRUST LAW – was property held by trust – is trust liable to pay the loans rather than individual – whether joint trustee – whether individual validly resigned as trustee – whether individual indemnified under trust deed – SERVICE – was cancellation notice required to be served – was cancellation notice served – was default notice served – CONSUMER LAW – misleading or deceptive conduct – whether representation made by bank that facilities would be extended – ADMINISTRATIVE LAW – judicial review – error of law – procedural fairness – application for extension of time to bring proceedings – application dismissed Legislation Cited: Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW) Crimes Act 1900 (NSW) Crimes Act 1958 (Vic) Farm Debt Mediation Act 1994 (NSW) Farm Debt Mediation Amendment Act 2018 (NSW) Oaths Act 1900 (NSW) Real Property Act 1900 (NSW) Supreme Court Act 1970 (NSW) Trustee Act 1925 (NSW) Trustee Act 1958 (Vic) Uniform Civil Procedure Rules 2005 (NSW) Water Management Act 2000 (NSW) Cases Cited: Aiton v Transfield (1999) 153 FLR 236; [1999] NSWSC 996 ALYK (HK) Ltd v Caprock Commodities Trading Pty Ltd [2015] NSWSC 1006 Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57 Australian Innovation Ltd v Dean-Willcocks (2001) 166 FLR 360; [2001] NSWSC 1204 Bendigo and Adelaide Bank Ltd v Tombs [2010] NSWSC 1427 Boz One Pty Ltd v McLellan (2015) 105 ACSR 325; [2015] VSCA 68 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Carr v Finance Corporation of Australia Ltd (No 2) (1982) 150 CLR 139; [1982] HCA 43 Cherryop Pty Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337 Dewhirst v Edwards [1983] 1 NSWLR 34 Director of Public Prosecutions (SA) v District Court of South Australia and Lawrie (2005) 92 SASR 94; [2005] SASC 260 Dobbie v Department of Social Security [1995] FCA 1191 Escobar v Spindaleri (1986) 7 NSWLR 51 Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252 Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336 Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2017] NSWSC 1727 Kirkham Estate Wines Pty Ltd v General Manager, NSW Rural Assistance Authority [2004] NSWADTAP 24 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd [2012] NSWSC 911 Mayes v Mayes [1971] 2 All ER 397 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 Minister for Immigration and Border Protection v SZSSJ (2016) 259 CLR 180; [2016] HCA 29 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40 Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 National Australia Bank Limited v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157 National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 2) [2018] NSWSC 969 National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 3) [2018] NSWSC 970 Photios v Cussen [2015] NSWSC 336 R v Medical Practitioners Professional Conduct Tribunal; Ex parte Medical Board (1985) 40 SASR 84 R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180 Re Bluenergy Group Ltd (2015) 300 FLR 155; [2015] NSWSC 977 Re Maria's Farm Veggies Pty Ltd [2016] NSWSC 1770 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 State Bank of New South Wales v Topfelt Pty Ltd (Unreported, Supreme Court of New South Wales, Brownie J, 11 March 1993) State Bank of NSW v Freeman (Unreported, Supreme Court of New South Wales, Badgery-Parker J, 31 January 1996) Suncorp Insurance and Finance v Commissioner of Stamp Duties (1997) 36 ATR 514; [1998] 2 Qd R 285 Suncorp-Metway Ltd v Nam Property Holdings Pty Ltd (2010) 16 BPR 30,859; [2010] NSWSC 1078 Thai v Deputy Federal Commissioner of Taxation (1994) 53 FCR 252 Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 Van Stappen v Mackenzie (2008) 14 BPR 26,387 Varga v Commonwealth Bank of Australia (1996) BPR 97,617 Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 31; [2012] HCA 4 Texts Cited: Australian Law Dictionary (Oxford University Press, 2nd ed, 2013) D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8th ed, 2014) Encyclopaedic Australian Legal Dictionary (LexisNexis, online edition) Thomson Reuters, Ford and Lee: The Law of Trusts (at August 2019) Category: Principal judgment Parties: 2015/27843 National Australia Bank Ltd (Plaintiff / Cross-Defendant) Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust (Defendant / First Cross-Claimant) Kevin Michael O'Brien (Second Cross-claimant) 2016/122304 Josephine Joan Charlton (First Plaintiff) Kevin Michael O'Brien as trustee of the Phoenix Trust (Second Plaintiff) The General Manager, NSW Rural Assistance Authority (First Defendant) National Australia Bank Ltd (Second Defendant) Representation: Counsel: 2015/27843 C Colquhoun (Plaintiff / Cross-Defendant) 2016/122304 C Colquhoun (Second Defendant) Solicitors: 2015/27843 Dentons Australia Pty Ltd (Plaintiff / Cross-Defendant) 2016/122304 Dentons Australia Pty Ltd (Second Defendant) File Number(s): 2015/27843; 2016/122304 Judgment 1. HIS HONOUR: By a statement of claim brought on 16 January 2015, the National Australia Bank Ltd ("NAB") brought debt and possession proceedings against Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust ("the Trust") (case number 2015/27843) ("the debt and possession proceedings"). NAB claimed a debt owed by Ms Charlton which was made up of an Overdraft, a First Business Options Loan and a Second Business Options Loan (each of which will be set out below) and NAB sought an order for possession under a mortgage. 2. A reply to the statement of claim was filed 4 May 2016. A reply to this reply was filed 5 May 2016. An amended statement of claim was filed on 4 May 2016. An amended defence was filed on 20 May 2016. 3. By a statement of cross-claim filed 9 July 2015 (and later amended on 6 August 2015), Ms Charlton, then as the first cross-claimant, and Kevin Michael O'Brien, as a second cross-claimant, brought a cross-claim in the debt and possession proceedings ("the cross-claim proceedings"). A defence to the first cross-claim was filed 2 September 2015. An amended defence was filed to the cross-claim proceedings on 4 May 2016. 4. Proceedings were commenced by summons by "[Ms] Charlton in her own capacity" and "Mr O'Brien as Trustee of Phoenix Trust" on 21 April 2016 against the General Manager of the NSW Rural Assistance Authority ("the RAA") and NAB. These were judicial review proceedings and bore the case number 2016/122304 ("the judicial review proceedings"). 5. On 2 June 2016, Schmidt J made orders that the debt and possession and judicial review proceedings would be heard together whereby the evidence in the one matter would be evidence in the other. (Collectively the debt and possession, cross-claim and judicial review proceedings shall be referred to as "the proceedings"). 6. The proceedings have a lengthy case management history which was, in part, described in a judgment of the Court in National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157 ("Charlton No 1") at [21]-[50]. The pleadings are summarised in Charlton No 1 at [15]-[20]. 7. Ms Charlton filed a notice of motion dated 5 September 2017 ("the first notice of motion") seeking summary dismissal of the debt and possession proceedings, or alternatively that the judicial review proceedings be heard separately (and before) the debt and possession proceedings (the first notice of motion was formally filed on 27 September 2017). The first notice of motion was dismissed in Charlton No 1. 8. By notice of motion filed on 28 February 2018 ("the second notice of motion"), Ms Charlton sought a stay of debt and possession proceedings, pursuant to s 67 of the Civil Procedure Act 2005 (NSW), and a vacation of the hearing dates set for the proceedings upon the basis that Ms Charlton intended to appeal the decision in Charlton No 1 ("the stay application"). No stay application was brought in relation to the related cross-claim proceedings and judicial review proceedings. The second notice of motion was dismissed on 14 March 2018 (the first day of the trial) in National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 2) [2018] NSWSC 969. 9. By a notice a motion filed 8 March 2018 ("the third notice of motion"), Mr O'Brien sought to be added as a defendant in the debt and possession proceedings. This motion was heard on the latter half of the first day of the trial after the Court had delivered judgment on the stay application. The third notice of motion was dismissed on 15 March 2018 with reasons delivered on 26 June 2018: National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 3) [2018] NSWSC 970. 10. The trial then proceeded over 6 more days, albeit spread out over a considerable period of time for a variety of reasons. (The Course of the Proceedings up to Charlton No 1 appears in Charlton No 1, including settlement discussions, a further court ordered mediation, an intention to appeal from the same and a withdrawal of an application for mediation. The reasons for further delays are reflected in the transcript of proceedings but, in part, concerned Ms Charlton, a self-represented litigant, being afforded latitude in bringing her case). THE EVIDENCE 1. There was a substantial amount of documentary evidence. 2. The following witnesses gave evidence for NAB in the proceedings: 1. Murray Reid (affidavit dated 16 May 2018): Mr Reid operated V.C Reid & Sons Stock and Station Agency at Forbes NSW, a livestock marketing business. Ms Charlton was a client of the business. 2. Ingrid Scharenguivel (affidavit dated 23 May 2018): Ms Scharenguivel was a Legal Services Associate employed by NAB. Her roles included sending legal notices to customers and maintaining files in respect of those customers. 3. Benjamin Stead (affidavit dated 24 May 2018): Mr Stead was a CPA with David Bicket Certified Practising Accountancy firm in Parkes NSW who conducted a review of Ms Charlton's personal financial situation on 17 May 2018. 4. Ashley Gardiner: Ms Gardiner was an officer of NAB within the Strategic Business Services department ("SBS"). Ms Gardiner swore three affidavits dated 30 July 2015, 14 April 2016 and 8 March 2018, respectively. 5. Clive Hugh Thomas: Mr Thomas was an officer of NAB who was a "Junior Manager" at the Forbes branch of NAB from 6 July 2011 to December 2012 and an "Agribusiness Manager" at the Taree branch of NAB from January 2013. Mr Thomas swore two affidavits dated 24 September 2015 and 8 April 2016, respectively. 1. Ms Gardiner and Mr Thomas were required for cross-examination. 2. The evidence for Ms Charlton and Mr O'Brien respectively was as follows: 1. Ms Charlton swore seven affidavits dated: 1. 26 August 2015 (as defendant); 2. 26 August 2015 (as first cross-claimant); 3. 16 October 2015; 4. 1 April 2016; 5. 27 April 2016; 6. 15 June 2016; and 7. 28 May 2018. 1. Mr O'Brien swore eight affidavits dated: 1. 26 August 2015; 2. 14 October 2015; 3. 1 April 2016; 4. 27 April 2016; 5. 15 June 2016; 6. 13 March 2018; 7. 25 May 2018; and 8. 28 May 2018. 1. Ms Charlton and Mr O'Brien were required for cross-examination. 2. It should be noted that Mr O'Brien did not make oral submissions at the hearing. Rather, he alerted the Court that he would rely on the submissions made by Ms Charlton. Mr O'Brien did, however, file separate closing written submissions dated 2 October 2018. Where those submissions did not, in substance, differ from the submissions of Ms Charlton, they have been dealt with, without separate reference, from the submissions of Ms Charlton. Where Mr O'Brien's submissions differed or significantly expanded on Ms Charlton's submissions, I have endeavoured to attribute the submission to Mr O'Brien in the relevant section of this judgment. RELEVANT FACTUAL BACKGROUND 1. The relevant factual background will be summarised in chronological order and addressed seriatim below. Prior to that summary, for ease of reference, a summary of the key events and relevant dates appears in tabular form below (although the table anticipates some rulings that I will make as to the course of events): Event Relevant Date(s) Establishment of the Trust 1996 Purchase of the Property 2002 The Overdraft and Loan Facilities 2005 to 2008 Ms Charlton's Default 2011 Attempts by NAB to Discuss the Default with Ms Charlton July-August 2011 Purported Resignation as Trustee of the Trust August 2011 Discussions with the O'Briens August-September 2011 Notice of Cancelation 25 and 26 October 2011 Financial Ombudsman Service Complaint December 2011 to November 2013 Expiry of First Business Options Loan 31 August 2012 Farm Debt Mediation January- August 2014 Notice of Cancellation 17 October 2014 Second Business Options Loan in Arrears May 2011 to October 2014 Outstanding Debt 6 March 2018 Establishment of the Trust 1. The Trust was established on 22 January 1996 by the execution of the Trust Deed ("the Deed"). 2. Ms Charlton's brother, Gavin Michael O'Brien, was named as the original trustee of the Trust. Mr Gavin O'Brien, Ms Charlton and her brother, Justin William Laurence O'Brien, were named as beneficiaries. 3. Their uncle, John Laurence O'Brien, was named as the appointor of the Trust 4. On 1 June 1997, John O'Brien wrote a letter with an addressee marked as "To whom it may concern" which stated that Mr O'Brien was appointed as an additional trustee of the Trust. Mr O'Brien's appointment as trustee of the Trust, as well as NAB's notice of the same, will be discussed in relation to the Misrepresentation Issue in the proceedings (which is set out in the list of issues for the proceedings appearing later in the judgment). 5. On 1 July 2001, Gavin O'Brien resigned, and Ms Charlton was appointed, as a trustee of the Trust. Purchase of the Property 1. In about October 2002, Ms Charlton was considering purchasing a property. 2. On 7 October 2002, a meeting was held in relation to the proposed purchase of "Oriel", Tottenham NSW (Lot 22, Plan DP 724651, Folio Identifier 22/724651) ("the property"). A handwritten note of a "Meeting of Phoenix Trust" recorded that the meeting was held at 24 Court Street, Parkes, and commenced at 2.35 pm. The handwritten note was made by Mr Bill Burke, Ms Charlton's solicitor at that time. 3. The meeting was attended by Ms Charlton, Justin O'Brien and Gavin O'Brien. In addition, Mr O'Brien and a Mr Burke attended the meeting "by invitation only". 4. The handwritten note recorded the decision "that Phoenix Trust trustee enter into Contract for Sale from Eldridge for purchase of 'Oriel' Tottenham for $360,000" and "that Phoenix Trust trustee negotiate and enter mortgage arrangements (1) to Vendor 2nd Mortgage $60,000 and (2) to Suncorp-Metway 1st Mortgage for $250,000, with personal guarantees provided by all beneficiaries". 5. Following the meeting, on 8 October 2002, Ms Charlton executed a contract for sale in respect of the purchase of the property for $360,000 in her capacity as trustee of the Trust. 6. It appears that Ms Charlton obtained loans totalling $315,000 to finance the purchase of the property. On 25 October 2002, Ms Charlton executed a mortgage in favour of Suncorp-Metway Ltd in respect of the property. The stamp on that mortgage recorded the amount secured by the mortgage as $255,000. 7. At around the same time, Ms Charlton executed a further mortgage in favour of Mr Warrick Eldridge and Ms Joanne Eldridge in respect of the property. Annexure A to the mortgage recorded the amount secured by the mortgage as $60,000. 8. On 11 December 2002, Mr Warrick Eldridge, Ms Joanne Eldridge and Ms Charlton executed a transfer in respect of the property for $360,000. 9. All of these documents recorded Ms Charlton as the sole purchaser of the property, and at least insofar as the contract for sale is concerned, the sole trustee of the Trust. The Overdraft and Loan Facilities 1. This next section concerns the circumstances in which Ms Charlton obtained an Overdraft (with a limit of $150,000), the First Business Options Loan and the Second Business Options Loan. The following tables provide an overview of the history of the Overdraft (and its increased limits) as well as the two additional loan facilities with reference to the date that Ms Charlton executed the relevant documentation and the amounts of the facilities or loans as at the date they commenced (discussed below): The Overdraft Date Executed by Ms Charlton Limit 5 September 2005 $50,000 21 November 2006 $100,000 10 September 2007 $150,000 2 September 2008 $200,000 First Business Options Loan Date Executed by Ms Charlton Amount 10 September 2007 $110,000 Second Business Options Loan Date Executed by Ms Charlton Amount 10 September 2007 $340,000 (The circumstances of default will be returned to under a separate heading). First Business Letter of Offer 1. In around 2005, Ms Charlton approached NAB for further finance. 2. On 30 August 2005, NAB issued the "First Business Letter of Offer" to Ms Charlton as trustee for the Trust. Pursuant to the First Business Letter of Offer, NAB agreed to provide the Overdraft to Ms Charlton with a limit of $50,000, which was to be secured by a guarantee and indemnity from Ms Charlton. The account number of the Overdraft was 57-039-1525 ("the Overdraft"). 3. The First Business Letter of Offer contained the Overdraft Terms. A summary of the terms relevant to the proceedings, together with references to the corresponding clauses in that document, appear below: 1. Ms Charlton agreed to keep the Overdraft within the facility limit unless Ms Charlton obtained NAB's prior approval and the Overdraft could be cancelled or reduced by NAB at any time: cl A.2; 2. Ms Charlton agreed to pay the total amount owing, including all drawings and any other amounts received by her under the Overdraft, and interest charges and other amounts payable under the First Business Letter of Offer: cl 4; 3. Ms Charlton agreed to immediately repay any amount drawn on the Overdraft in excess of its facility limit unless NAB otherwise agreed: cl 6.1; 4. If the Overdraft was cancelled by NAB, Ms Charlton agreed to pay the total amount owing for the Overdraft, and the facility limit was reduced by the amount of any cancellation: cl 6.3; 5. Ms Charlton was in default if she did not pay on time any amount due under the First Business Letter of Offer or another agreement she had with NAB, or if she did something she agreed not to do or did not do something she agreed to do under the First Business Letter of Offer or another agreement she had with NAB: cl 15(a)-(b); 6. If Ms Charlton was in default and failed to correct the default within any period given in any notice, the total amount owing under the Overdraft became immediately due for payment, and if she did not pay it, NAB could sue for that amount or enforce any security (or do both): cl 16; 7. Ms Charlton warranted that she was the only trustee of the Trust, that she had the power under the Deed to enter into and observe the trustee's obligations under the First Business Letter of Offer, that she had in full force and effect the authorisation necessary to enter the First Business Letter of Offer, to perform her obligations under the First Business Letter of Offer and allow them to be enforced, and that she was not in default under the Deed: cl 23(b)(i), (iv), (v) and (viii); and 8. Ms Charlton undertook to ensure that, except with NAB's prior written consent, she would not retire as trustee of the Trust: cl 23(c)(ii). 1. Mr Michael Underwood executed the First Business Letter of Offer on behalf of NAB on 5 September 2005. Ms Charlton executed the First Business Letter of Offer at about the same time. 2. On 6 September 2005, Ms Charlton executed the guarantee and indemnity in respect of the Overdraft. 3. Two other matters should be mentioned in this context. 4. First, a "Trustee Company Confirmation" form was created by NAB on about 19 August 2005 ("the confirmation"). 5. The first page of the document contained the statement: "Account styling - Gavin Michael O'Brien and Josephine Joan O'Brien as trustee for the Phoenix Trust". The second page contained a heading "Comments" under which appears: "the letter appointing the new trustee, Josephine Joan O'Brien has been appointed as an additional trustee. However, your memo is headed Josephine Charlton". However, as noted above, Gavin O'Brien had resigned as trustee on 1 January 2001, which explains why he was not recorded as trustee of the Trust in the First Business Letter of Offer. Ms Charlton accepted in her submissions that her maiden name was Josephine O'Brien and that she and her brother Gavin O'Brien had never been trustees "at the same time". 6. The document also noted, "We have perused the Trust Deed", and in relation to whether the Deed allowed the trustee to claim a right of indemnity from the trust fund, it stated: "refer to 'Attachment 11'". Attachment 11 stated: "The Trust Deed does not provide for the Trustee to claim a right of indemnity from the Trust Fund and therefore the Trust Deed requires amendment". I agree with the submission by NAB that such a statement was internal advice to NAB, not to Ms Charlton. I will return to general law rights of trustees in the context of the Right of Indemnity Issue later in the judgment. 7. Second, the Overdraft appears to have been obtained in the context of a broader refinance by Ms Charlton. 8. On 1 September 2005, the mortgage in favour of Suncorp-Metway Ltd in respect of the property was discharged, and on 27 September 2005, Ms Charlton executed a mortgage in favour of Stacks Managed Investments Ltd in respect of the property ("the Stacks mortgage"). The mortgage recorded the amount borrowed by Ms Charlton under the Stacks mortgage as $380,000. 9. Ms Charlton suggested in cross-examination that the Stacks mortgage was taken out by herself and Mr O'Brien. She stated "National Bank paid out the mortgage to Stacks and there were two borrowers at the time, both trustees, Kevin O'Brien and myself at that time". She gave evidence that "the original document didn't have the other trustee on it but was later adjusted and the National Bank paid out the mortgage with two trustees on that document as the co-existing borrowers". However, no documents in evidence verified that statement. The Stacks mortgage recorded Ms Charlton as the sole borrower and mortgagor, and that mortgage remained on the title until it was discharged in October 2007. Whilst there is no issue raised as to Ms Charlton fabricating this evidence, her memory of the transaction is, in the light of the evidence before the Court, faulty. Her evidence cannot be accepted. First Notice of Agreed Changes 1. On 20 November 2006, NAB issued the First Notice of Agreed Changes to Ms Charlton. 2. Pursuant to the First Notice of Agreed Changes, NAB agreed to increase the limit of the Overdraft to $100,000, which was to be secured by a further guarantee and indemnity from Ms Charlton. The First Notice of Agreed Changes was executed by Ms Charlton on 21 November 2006. 3. On 21 November 2006, Ms Charlton executed a guarantee and indemnity in respect of the $100,000 limit under the Overdraft. Second Notice of Agreed Changes, Second Business Letter of Offer and Mortgage 1. On 31 August 2007, NAB issued the Second Notice of Agreed Changes to Ms Charlton. 2. Pursuant to the terms of the Second Notice of Agreed Changes, NAB agreed to increase the limit of the Overdraft to $150,000, which was to be secured by a mortgage to NAB in respect of the property. The Second Notice of Agreed Changes was executed by Ms Charlton on 10 September 2007. 3. Also on 31 August 2007, NAB issued the Second Business Letter of Offer to Ms Charlton. 4. Pursuant to the Second Business Letter of Offer, NAB agreed to provide two further facilities to Ms Charlton: 1. the First Business Options Loan in the amount of $110,000 ("the First Business Options Loan"); and 2. the Second Business Options Loan in the amount of $340,000 ("the Second Business Options Loan"). 1. Those facilities were secured by a mortgage to NAB in respect of the property. The Second Business Letter of Offer was also executed by Ms Charlton on 10 September 2007. 2. The Second Business Letter of Offer contained the Business Options Loan Conditions, which included the following: 1. The First Business Options Loan and the Second Business Options Loan were for facility terms of 5 and 10 years, respectively, from 31 August 2007; 2. Ms Charlton agreed to pay half yearly interest only instalments, payable in arrears; 3. Ms Charlton agreed to pay the total amount owing, including all drawings and any other amounts received by her under the First Business Options Loan and Second Business Options Loan, and interest charges, fees, charges, premiums and all other amounts payable under the Second Business Letter of Offer: cl 4.1; 4. Ms Charlton agreed to immediately repay any amount drawn on the First Business Options Loan and Second Business Options Loan in excess of the facility limits: cl 4.3; 5. Ms Charlton agreed to pay the total amount owing for the First Business Options Loan and Second Business Options Loan on the due date for last repayment of those facilities: cl 4.6; 6. Ms Charlton warranted that she was the only the trustee of the Trust, that she had the power under the Deed to enter into and observe the trustee's obligations under the Second Business Letter of Offer, that she had in full force and effect the authorisation necessary to enter the First Business Letter of Offer, to perform her obligations under the First Business Letter of Offer and allow them to be enforced, and that she was not in default under the Deed: cl 10(b)(i), (iv), (v) and (viii); 7. Ms Charlton undertook to ensure that, except with NAB's prior written consent, she would not retire as trustee of the Trust: cl 10(c)(ii); 8. Ms Charlton was in default if she did not pay on time any amount due under the Second Business Letter of Offer or another agreement she had with NAB, or if she did something she agreed not to do or did not do something she agreed to do under the Second Business Letter of Offer or another agreement she had with NAB: cl 12(a)-(b); and 9. If Ms Charlton was in default and failed to correct the default within any period given in any notice, the total amount owing under the First Business Options Loan and the Second Business Options Loan became immediately due for payment, and if she did not pay it, NAB could sue for that amount or enforce any security (or do both): cl 13(b). 1. On 10 September 2007, Ms Charlton made a statutory declaration to the effect that: 1. She was the trustee of the Trust; 2. She would not relinquish her trusteeship of the Trust without the prior consent in writing to NAB; 3. The Second Business Letter of Offer and mortgage had been signed or were being signed by her in her own capacity and as trustee of the Trust and for the benefit of the beneficiaries of the Trust; and 4. She had the power under the Deed to enter into and observe the obligations under these documents. 1. On 10 September 2007, NAB advanced $35,200 to Ms Charlton pursuant to the terms of the First Business Options Loan. The account number of the First Business Options Loan was 85-732-3431. 2. On 2 October 2007, NAB advanced a further $74,800 to Ms Charlton pursuant to the terms of First Business Options Loan, and $340,000 to Ms Charlton pursuant to the terms of the Second Business Options Loan. The account number of the Second Business Options Loan was 85-857-0549. 3. Of this total amount of $414,800, $383,848.22 was used to discharge the Stacks mortgage and the remaining amount of $30,951.78 was deposited into the Overdraft. 4. On 31 October 2007, Ms Charlton executed a mortgage over the property in favour of NAB, which was registered with dealing number AD551517 (that mortgage shall hereinafter be referred to as "the Mortgage"). The Mortgage incorporated a Memorandum registered with dealing number AB922379. 5. The Mortgage Terms of the Mortgage and Memorandum included: 1. For the purpose of securing to NAB the payment of amounts owing, Ms Charlton mortgaged to NAB all of her estate and interest in the property: cl 1.1; 2. Ms Charlton agreed that by signing the Mortgage she incurred certain obligations and gave NAB rights concerning her and the property, including that, if she did not comply with her obligations, NAB could take possession of the property, sell it and sue her for any remaining money she owed NAB: cl 2.1; 3. Ms Charlton agreed that she was liable for all of her obligations under the Mortgage: cl 2.2; 4. Ms Charlton agreed to ensure that she was not in default under the Mortgage and to carry out on time all of her obligations under every agreement covered by the Mortgage: cl 2.3; 5. Ms Charlton agreed that, if she held the property as trustee, she was liable both personally and in her capacity of trustee and declared that she had power and authority as trustee of the Trust to give the Mortgage: cl 20(a)-(b)(i); 6. Ms Charlton was in default if she did not pay the amount owning when due for payment, or did something she agreed not to do or did not so something she agreed to do under the Mortgage or an agreement covered by the Mortgage: cl 26(a)-(b); 7. Ms Charlton was also in default if she did not carry out in full an undertaking given in connection with the Mortgage or an agreement covered by the Mortgage within the period specified or within seven days if no period was specified, or she was in default under any agreement covered by the Mortgage or an event of default, however described, occurs under an agreement covered by the Mortgage: cl 26(d) and (f); 8. If Ms Charlton was in default for more than one day, NAB had given her a default notice allowing her a period of at least 31 days from the date of the notice to remedy the default (to the extent consumer credit legislation applies to the default), NAB had given her any other notice required by any provision of any law relating to the enforcement of the Mortgage and the notice was not complied with, then the whole of the amount owing became payable on demand, and if NAB demanded payment of the amount owing but it was not paid, NAB could enforce the Mortgage pursuant to cl 27.2: cl 27.1; 9. NAB could enforce the Mortgage by, amongst other matters, suing Ms Charlton for the amount owing and taking possession of the property: cl 27.2; and 10. To the extent consumer credit legislation applies, Ms Charlton agreed to pay to NAB, when it asked, the reasonable expenses reasonably incurred by it in enforcing the Mortgage: cl 27.3. Business Letter of Advice 1. On 27 August 2008, NAB issued the Business Letter of Advice to Ms Charlton. 2. Pursuant to the Business Letter of Advice, NAB agreed to increase the limit of the Overdraft to $200,000. Ms Charlton executed the Business Letter of Advice on 2 September 2008. 3. On 3 September 2008 NAB increased the Overdraft limit to $200,000, pursuant to the terms of the Business Letter of Advice. Ms Charlton's Default 1. Ms Charlton defaulted under the Overdraft on 29 April 2011, when the Overdraft went over its limit of $200,000. I accept NAB's contention that the default has not been remedied since that date. 2. It was contended by Ms Charlton (and by Mr O'Brien in his email to Mr Thomas dated 16 August 2011 at 8.23am) that the Overdraft returned back under the prescribed $200,000 limit at 31 August 2011. Ms Charlton referred, in that respect, to a "Transaction Listing" for the period 27 June to 1 September 2011, in which the amount of the Overdraft, on 31 August 2011, was shown as being $199,835 and then $199,845 before returning above the $200,000 limit. 3. However, the "Transaction Listing" specified, under the heading "Important": "This provisional list is NOT A STATEMENT of account". The actual statement of account for the period 21 June 2011 to 20 September 2011 (statement number 41) shows the balance of the Overdraft never appeared lower than the $200,000 prescribed limit. Mr Thomas, in his email dated 5 September 2011 at 10.17am to "Justin", "Kate" (Justin O'Brien's wife), "Kevin" and "Wendy" (Mr O'Brien's wife) explained that the account was not "back in order" on 31 August 2011 because, on that date, "interest was also charged on the Overdraft of $2,118.65" (while the account did briefly move below the $200,000 limit, it did not do so for a full day, which was required to restart the "days irregular" count). 4. Similarly, Ms Charlton had failed to make any payments towards the First Business Options Loan and the Second Business Options Loan since May 2011. Ms Charlton had also failed to make any payments towards the Overdraft since 31 August 2011. Attempts by NAB to Discuss the Default with Ms Charlton 1. Mr Thomas commenced as an Agribusiness Manager at NAB's Forbes branch on 6 July 2011. One of the customers he was responsible for was Ms Charlton. 2. As the Overdraft was 36 days overdrawn by this time, Ms Charlton was one of Mr Thomas' priority clients. That was because it was NAB's policy, that where facilities were more than 30 days overdrawn, the file would be sent to SBS for credit review. 3. From that time, Mr Thomas repeatedly attempted to contact Ms Charlton to ask that she urgently attend a meeting with him. Despite those attempts, he was never able to arrange a meeting with Ms Charlton. 4. On 6 July 2011, Mr Thomas tried to call Ms Charlton. As there was no answer, he sent an email to her. 5. The email noted that he had taken over from Mr Chris Eyles, who said that he should telephone her regarding the Overdraft. The email also stated that the account was $1,685 over the limit and sitting at 30 days irregular. The email further noted that once the Overdraft was more than 30 days irregular, control was taken out of Mr Thomas' hands and subsequent approvals became difficult. 6. On 7 July 2011, Mr Thomas made a file note of his attempt to call and email Ms Charlton in relation her failure to rectify the default under the Overdraft. 7. On 13 July 2011, Ms Charlton responded to Mr Thomas' email. The email stated that she had "let the family know at the farm" what was required to square the account, and that she understood the account went out of the local manager's control after 30 days so she would "try and be prompt". 8. On 13 July 2011, Mr Thomas responded to Ms Charlton's email. He confirmed that he was the new manager, that Mr Chris Eyles had been promoted to Orange, and said that he was looking forward to catching up. 9. On 14 July 2011, Mr Thomas sent an email to Ms Charlton saying that he wanted to let her know that the account was sitting at 44 days irregular. The email stated: Please if you can organise to regularise the excess asap that would be appreciated. If there is anything I can do to help don't hesitate to call. 1. Ms Charlton did not respond to that email. 2. On 15 July 2011, Mr Thomas issued a report to a NAB credit manager, Mr Nigel Dunn. The report indicated that Ms Charlton had an aggregated group debt of $650,000, and that the Overdraft had been irregular for 44 days. 3. On 18 July 2011, Mr Thomas attempted to leave a voicemail for Ms Charlton requesting an urgent discussion. He made a file note of this attempt. 4. On 21 July 2011, Mr Thomas sent an email to Ms Charlton, informing her that he had been attempting to contact her to discuss her current and future business plans. Mr Thomas also stated the account was 51 days irregular and that the credit team had requested to review the account. He stated: "As such I need to talk to you please. Don't hesitate to contact me". Ms Charlton did not respond to this email. 5. On 26 July 2011, Mr Thomas spoke to Ms Charlton's mother, Wendy O'Brien. Mr Thomas took a file note of that discussion. Mrs O'Brien informed Mr Thomas that her husband and son were out on the farm capturing goats and that she hoped that the "excess" would be cleared by 29 July 2011. No such rectification was undertaken. 6. On 26 July 2011, Mr Thomas attempted to send a fax to Ms Charlton asking her for an update of how the goat catching went over the weekend. It appears that the fax was unable to be transmitted, as on 30 July 2011 Mr Thomas sent an email to Ms Charlton requesting an update on the sale of the goats, noting: "I tried to fax you so you could ring me but the fax would not go through". 7. On 3 August 2011, Ms Charlton responded to Mr Thomas' email of 30 July 2011, stating that she had "finally got Dad on the phone last night" and that they were "carting goats now". The email also stated that her father would make a direct deposit into the account to speed up payments. Mr Thomas made a file note in relation to that email. 8. On 3 August 2011, Mr Thomas responded to Ms Charlton's email, requesting a meeting in order to prepare a cash flow and to ascertain the asset and liabilities position. Ms Charlton did not respond to this email. 9. On 4 August 2011, a payment of $233.53 on the Overdraft was returned on account of the Overdraft being overdrawn. Mr Thomas made a file note in relation to this. 10. On 4 August 2011, Mr Thomas sent an email to Ms Charlton, stating that he had been advised by his credit manager to have a meeting with her to better understand her position and plan in order to chart the way forward within 14 days. He stated: "Please get hold of me to discuss so we can plan a time & date". Again, Ms Charlton did not respond to that email. 11. On 8 August 2011, Mr Thomas spoke to Mrs O'Brien. Mr Thomas made a file note of that discussion. The file note recorded that Mr Thomas stressed the importance of a face to face meeting in order to prepare a cash flow budget, a statement of position and to propose a plan, as Ms Charlton's file was now with SBS. 12. On 10 August 2011, Mr Thomas left a voicemail on the telephone number to which the last four digits were 1059. Ms Charlton stated in cross-examination that this number was her mother and father's number being the number assigned to 110 Forbes Street. 13. Mr Thomas then wrote another email to Ms Charlton. The email again informed Ms Charlton that he had been advised to meet with her as soon as possible. Mr Thomas explained that her file had been "called for by the NAB team in Sydney which deals with delinquent accounts", and stated that, unless he met with her and received a cash flow budget for the next 12 months, the current asset and liability position and a proposed plan going forward, "control of your business would be transferred to the NAB team in Sydney". That team would then make an informed decision as to whether NAB would "continue with the relationship" or "take steps to exit our relationship". 14. Mr Thomas also explained that the situation was not as simple as getting the account back in order, and that the "pink" file supplied by Ms Charlton would need to be supplemented by the requested information, to determine whether Ms Charlton was going according to the plan she supplied to NAB in the "pink" file and whether she was likely to achieve her goals. 15. Mr Thomas also requested updated contact details, as he had found the methods of communication with Ms Charlton to be inefficient. He concluded by stating: I reiterate your business is now in a serious position. Getting the above information requested will go along [sic] way to alleviate your situation. Please do not hesitate to contact me. 1. Ms Charlton did not respond to the email. However, later on 10 August 2011, Mr Thomas received a telephone call from Mr O'Brien. Mr Thomas made a file note of that discussion. The file note recorded that Mr O'Brien said that his son was returning to the farm on 12 August 2011, and that Mr O'Brien would call Mr Thomas as soon as his son returned so that Mr Thomas could carry out the cash flow budget and statement of position, and prepare an updated plan. Mr Thomas again stressed importance of a meeting, because the file was with SBS. Purported Resignation as Trustee of the Trust 1. On 15 August 2011, Mr Thomas received an email from Mrs O'Brien. The email stated that Ms Charlton was "no longer Trustee for Phoenix Trust" and that matters concerning the Trust would be dealt with by Mr and Mrs O'Brien. The email also stated: "We have a large amount of paperwork to go through - we have been thrown in at the deep end". The email further stated that Justin O'Brien, who was described as "the hands on at the farm", was available to meet with Mr Thomas at the Forbes branch on 22 August 2011. 2. Ms Charlton prepared two separate letters to resign as trustee of the Trust on 20 August 2011. However, those were not provided to Mr Thomas until 31 August 2011. 3. On 22 August 2011, Ms Charlton sent Mr Thomas confirming that she had resigned as trustee of the Trust. The email continued: My reasons for resigning are numerous and I am very upset about the whole situation. The situation with the bank should not have even evolved had a few plans been followed. I am not about to run anyone down, theres [sic] more to me than that but I have recognised that I will not be put in a position anymore where my personal integrity is compromised. I hope you understand, that the emails I sent to you were truly what I was told was happening. In the interests of my young family its [sic] time for me to move on. Please make the appropriate changes to the contracts. 1. NAB submitted that it may be inferred from this email that Ms Charlton resigned as trustee because she was not happy with the way in which the property was being farmed and managed by her brother, Justin O'Brien, who as noted above, was the "hands on" at the farm. 2. In my view, such a finding is available on the evidence. Apart from the email in question, the evidence is consistent with such a finding. 3. In one part of her evidence, Ms Charlton denied that the reason she resigned as trustee was because she was upset with the way Justin O'Brien was operating the farm: Q. Do you agree with this proposition, the reason you resigned as trustee of the trust is because you were upset with the way in which Justin was operating the farm? A. No, that is not correct. Because he wasn't the only one operating the farm. 1. However, that resistance was, when understood in the light of the evidence referred to below, merely concerned with the question as to whether Justin alone was responsible for the resignation. That further evidence is as follows: Q. Yes, and just to round this issue out, the reason you resigned as trustee of the trust I will rephrase that. The reason that you purported to resign as trustee of the trust is because you were upset, correct? A. I have already said that, Mr Colquhoun. Q. Yes. A. But it wasn't the only reason. Q. Yes. And you were upset because of what was happening on the farm and the plans not being followed, correct? A. They were trying to do what they said they were trying to do. It was just proving that it was taking too long and I have already answered that too. Q. And that's Gavin, your brother A. No. Q. who was operating the farm at the time? A. No. It was Justin. 1. On 25 August 2011, Mr Thomas responded to Ms Charlton's email dated 22 August 2011, requesting that she remain a trustee of the Trust until such time as he has the loan application approved, and the documentation recording the change in trustee and the new loan documents had been executed. He noted that if Ms Charlton did not wish to remain as trustee, he would be forced to place all existing facilities in "reduction", meaning that all accounts would be stopped to debit and credit operations. 2. Ms Charlton did not respond to that email. Discussions with the O'Briens 1. On 22 August 2011, Mr Thomas met with Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien at the NAB office in Forbes. 2. Mr Thomas's file note of that meeting records that there was a discussion of the "overdrawn account & way forward", and that a "production plan for the next 12 months" and an "updated SOP [statement of position]" was prepared. A statement of position is a pro forma spreadsheet used by NAB to assess a customer's net asset position. During the course of the meeting, Mr Thomas populated the pro forma spreadsheet with information provided to him by Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien. 3. The file note also recorded that Mr Thomas would prepare a "cash flow budget" based on the assumptions in those documents and, after obtaining the clients' agreement, as well as put a plan to his Level 3 manager with a "view to rectifying current excess". A cash flow budget is another pro forma spreadsheet used by NAB to ensure that the debt can be serviced by the customer. 4. At the conclusion of the meeting, Mr Thomas said that he would need to visit the farm in order to verify the information provided to NAB. 5. Following the meeting, Mr Thomas prepared two cash flow budgets. 6. On 23 August 2011, Mr Thomas sent an email to Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien attaching copies of the two cash flow budgets for the business, stating: "Please look at these & let me know if there are any irregularities". 7. The email also stated that the cash flow budgets showed the need for an Overdraft of $25,000 and credit approval over a new term debt loan of $670,000 to cover the Overdraft, First Business Options Loan and Second Business Options Loan, as well as the interest on those loans which would be charged to the Overdraft at the end of August 2011. The email stated that the cash flow budgets were dependent on "sticking to projections i.e. we have the income coming in & expenses going out as predicted". 8. Mr Thomas concluded by saying: Have a look & let me know & then I will put up the proposition to credit. Don't hesitate to call me if you don't understand anything. 1. Whilst Mr O'Brien did not respond to this email, he accepted in cross-examination that he understood at this time that any transfer of the loans and security to him as a trustee would be dependent on the assessment of the credit department of NAB. 2. Mr Thomas sent a follow up email on 25 August 2011. The email noted that Mr Thomas had "not started anything with your application as I am waiting to hear back from you all". Mr Thomas' email also noted NAB's policy regarding a change in trustees. 3. On the same day, Mr Thomas sent a further email to Mr and Mrs O'Brien, Justin O'Brien and Kate O'Brien requesting an update on the goat sales and enquiring whether the account would be brought back under the limit before Mr Thomas submitted the application for the new facilities. 4. A response was sent from Kate O'Brien's email address on 30 August 2011. That email stated: "We are not adding a new trustee to the Trust, we are simply removing one and leaving the other existing trustee". 5. Mr Thomas responded to Mr O'Brien (but to Kate O'Brien and Mrs O'Brien's email addresses) on the same day, stating: In all the paperwork you have supplied us in the past with regards to the trust nowhere does it say that you are or ever have been a 'trustee'. 1. Mr Thomas also noted that the documents showed Gavin O'Brien being the original trustee, and following his resignation, Ms Charlton becoming the trustee. Mr Thomas asked for a deed of removal and appointment, and noted that NAB's legal department would need to confirm that the change in trustee was valid, and if so, the facilities and supporting security would need to be re-documented in the name of the new trustee. 2. I accept NAB's submission that Mr Thomas requested the documentation removing Ms Charlton as trustee and appointing Mr O'Brien as trustee, documentation from Mr O'Brien's solicitor for the Land Titles Office to record the new trustee as the registered owner and the execution of new mortgage and loan documentation. 3. Mr Thomas sent a further email on 30 August 2011 which attached a copy of the title search for the property, recording Ms Charlton as the sole registered proprietor. 4. On 31 August 2011, Mr Thomas received a fax from Mr O'Brien. The fax included a number of attachments, including a letter dated 20 August 2011 signed by Ms Charlton confirming her resignation as a trustee of the Trust, and the letter dated 1 June 1997 signed by John Lawrence O'Brien purporting to appoint Mr O'Brien as a trustee of the Trust. Mr O'Brien accepted in cross-examination that he had never provided the letter dated 1 June 1997 to NAB before that date. 5. Later that same day, Mr Thomas sent an email to Mr O'Brien. Mr Thomas noted that "NAB have never had the letter that you supplied us with today showing you has having been appointed as a 'trustee'". Mr O'Brien did not dispute this. 6. I find that the communication of 31 August 2011 was the first time NAB had been advised that Mr O'Brien had been appointed as trustee. My preliminary reasons for coming to that conclusion are derived from the factual background described at [110]-[116] above. However, there are further reasons in that respect which result from the resolution of part of the dispute arising in relation to the Misrepresentation Issue. 7. Whether Mr O'Brien was validly appointed as a trustee of the Trust and whether NAB had sufficient notice of the alleged appointment will be discussed below in consideration of the Misrepresentation Issue. 8. Mr Thomas also informed Mr O'Brien that he would send the original Deed along with the letters supplied by Mr O'Brien to NAB's legal department. He noted: "If all is [in] order & we can get your application through credit loan documents will have to be signed". That communication gave advice to Mr O'Brien that the entry into new loan documentation and the approval of any new loan by NAB's credit department was a prerequisite to any change in trustee. 9. Mr Thomas also noted that before any loans could be drawn in the new entity name "Kevin Michael O'Brien ATF Phoenix Trust", Mr O'Brien would need to provide a transfer prepared by Mr O'Brien's solicitor taking Ms Charlton off, and putting Mr O'Brien on, the title to the property. 10. On 2 September 2011, Mr Thomas prepared an internal file note recording that, as at 2 September 2011, the account was 94 days irregular and $23,179 overdrawn. 11. Mr Thomas also recorded that as the security over the loan was a mortgage over the property in the name of Ms Charlton, he had asked her to remain as trustee of the Trust until such time as NAB had made the necessary changes, approved the application for replacement facilities and the new documents had been executed, but he had not heard back from her. 12. The file note further recorded that NAB was not previously aware that Mr O'Brien had been appointed as trustee. It also noted that Mr Thomas would visit the farm the following week. 13. On 2 September 2011, Mr Thomas sent a further email to Ms Charlton. Mr Thomas asked Ms Charlton whether she would remain as trustee until the new loans and associated documentation had been executed. Once again, Ms Charlton did not respond to Mr Thomas' email. 14. On 4 September 2011, Mr Thomas sent an email to Justin O'Brien and Ms Kate O'Brien asking if he could attend the farm on 6 September 2011. 15. Ms Kate O'Brien responded on 5 September 2011. Ms Kate O'Brien said that it was not possible to attend the farm on 6 September 2011 because Justin was completing mine training. The email stated that Mr and Mrs O'Brien had an appointment with a solicitor in Sydney that week and that someone would call Mr Thomas when they were available for a visit. 16. Mr Thomas responded the same day. He asked Ms Kate O'Brien to let him know when he could visit the farm. He also noted: At this stage I am not going to put forward the application for additional finance until I have done the farm visit. I want to be sure myself of numbers, assets etc & confirm the cashflow with yourselves before I do so. 1. Mr O'Brien confirmed in cross-examination that he understood that one of the conditions required by NAB for the approval of a new loan was a farm visit and that Mr Thomas needed to take certain steps before putting forward the application for additional finance. 2. The email also noted that the Division of NAB which had authority over the file was now sitting in Sydney and that he and his senior credit manager no longer had control of the file. It further noted that the legal department had come back and informed him that Mr O'Brien as trustee was "OK going forward". Ms Charlton referred to this communication in support of her submission that NAB made a representation to her and/or Mr O'Brien that the trust facilities would be continued. Whether a representation was made will be discussed later in the judgment when the Misrepresentation Issue is dealt with in this judgment. 3. As mentioned above, the email noted that the account never got back in order, and that the account was 97 days irregular and $23,179.25 overdrawn. 4. On 13 September 2011, Mr Thomas telephoned Ms Kate O'Brien. Mr Thomas made a file note of this telephone discussion. The file note recorded that Ms Kate O'Brien had informed him that he could not visit the farm in the week of 12-16 September 2011, as Mr Justin O'Brien was away. She said that she would telephone on 16 September 2011 to let Mr Thomas know whether he could possibly visit on 22 September 2011. It does not appear that Ms Kate O'Brien ever telephoned Mr Thomas to arrange such a visit. 5. On 14 September 2011, Mr O'Brien sent an email to Mr Thomas requesting all signed documents pertaining to the mortgages and loans of the Trust. Mr Thomas responded on the same day, asking Mr O'Brien to telephone him. Mr O'Brien responded to this email by informing Mr Thomas that the best means of contact for him was via email. 6. Mr Thomas responded on 15 September 2011. Mr Thomas stated: NAB will not be able to supply documents you will be expected to sign yet as the restructure / plan / loans going forward have still to be accepted / signed off by credit in Sydney. Documents are only produced after credit has been approved. Hence my earlier emails about doing the farm visit asap before I have no say in the matter. I cannot do anything for you until the cash flow budget in agreed upon with yourselves. I also need to satisfy myself with stock numbers & assets before I will put my name forward in conjunction with your proposal. 1. Mr O'Brien accepted in cross-examination that he was aware of these requirements at the time. The Overdraft was 107 days irregular and $23,179 overdrawn at this time. 2. Mr O'Brien responded on 16 September 2011. He said that the "restructure" and the "farm visit" should be "placed on hold" until documents signed by Ms Charlton had been evaluated by his solicitor. He also noted that he was aware of the Overdraft account, but asserted that it should only have been 16 days irregular. As discussed above, I do not consider Mr O'Brien's assertion to be correct as the account did not remain under the prescribed limit for a day as was required to reset the "days irregular" count. Mr Thomas received the last of the loan documents requested by Mr O'Brien on 22 September 2011. He sent an email to Mr O'Brien confirming this on the same day, requesting him to send a signed letter from Ms Charlton authorising him to send Mr O'Brien the hard copies of the loan documentation. 3. The email also stated: I acknowledge receipt of your faxed letter sent to me stating that you are an actual trustee of Phoenix Trust. However in all NAB's dealings with yourself & subsequent loans taken out this was never mentioned or brought to NAB's attention until I received your fax on 31/8/11. 1. Mr O'Brien did not respond to this email. Notices of Cancelation 1. On 20 October 2011, NAB informed Ms Charlton that enforcement action would be taken by NAB immediately in order to recover the amounts owing, but asked her to contact Mr Thomas if she wished NAB to consider alternative arrangements in respect of her debts. It does not appear that Ms Charlton took steps to contact Mr Thomas. 2. On 25 October 2011, NAB issued a notice of cancellation to Ms Charlton at 110 Forbes Street, Trundle in respect of the Overdraft ("the 25 October 2011 cancellation notice"). The notice was signed "K. White". The notice demanded payment of $228,784.91, being the amount then owing in respect of the Overdraft. Ms Charlton accepted that she received the 25 October cancellation notice. 3. When Mr Thomas was sent a copy of the 25 October 2011 cancellation notice, he noticed that it ought to have been addressed to Ms Charlton at 74 Long Street, Trundle, so on 26 October 2011 he sent an email to Mr Gardiner noting that the correct address was 74 Long Street, Trundle. On that same day, NAB issued a notice to Ms Charlton at 74 Long Street, Trundle ("the 26 October 2011 cancellation notice"). The notice demanded payment of $228,860.48, being the amount then owing in respect of the Overdraft. Ms Charlton observed that the 26 October 2011 cancellation notice was not signed. It stated signed "on behalf of National Australia Bank Limited by its duly authorised attorney". Ms Charlton submitted that the service of the 26 October cancelation notice was defective because it was not served on her. 4. Ms Charlton contended there was no evidence that she had been served with the 26 October 2011 cancellation notice (and the 25 October 2011 cancellation notice was not relied upon by NAB). It was contended that Ms Scharenguivel's evidence did not address this question. It was further contended that NAB could not rely upon service of the 25 October 2011 cancellation notice to prove service of the 26 October 2011 cancellation notice. 5. However, the evidence supports the fact that NAB had notice that Ms Charlton's correct address was 74 Long Street, Trundle at the relevant period in 2011. The evidence of Mr Thomas in his affidavit of 24 September 2015 was: On 31 August 2011 I received a facsimile from Mr Kevin O'Brien. The facsimile attached two letters addressed to "Whom it may Concern" dated 20 August 2011 and 1 June 1997. 1. The letter of 20 August 2011 was a letter from Ms Charlton confirming her resignation as trustee of the Trust. Importantly, that letter states, in the top right hand corner, that Ms Charlton's address was "74 Long Street Trundle NSW 2875". 2. Further, it is apparent that Mr Thomas, as a result of his belief that the Long Street address was correct, thought that the notice sent to Ms Charlton on 25 October 2011 was sent to the incorrect address. Mr Thomas, in an email to Ms Gardiner dated 26 October 2011 stated: Ash It has been brought to my attention that the mailing address is incorrect. The correct mailing address is: 74 Long Street, Trundle NSW 2875. regards Clive Thomas 1. The details of the "correct" mailing address were then sent by Ms Gardiner to Ms Scharenguivel by email later that day. The email requested, inter alia, "Could you please confirm the address detail and re issue". As Ms Charlton accepted that she was properly served with the 25 October 2011 cancellation notice, a presumption of regularity arises that the 26 October cancellation notice was also properly served. This is supported by the following evidence of Ms Gardiner in cross-examination: Q. In your experience of dealing with Ms Scharenguivel what the usual practice she would follow in relation to requests such as one contained in this email? A. She would have reissued the document. 1. It is true that NAB, in its pleadings, relied solely on the 26 October 2011 cancellation notice. However, even if that notice was not served, Ms Charlton did, by virtue of the 25 October 2011 cancellation notice, which she accepted she received, have notice of the cancellation. A cancellation notice is not a notice pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) ("RPA"). No statutory requirements for the manner in which notice is provided, therefore, arise under s 57(2)(b). Similarly, a cancellation notice is not a notice required or authorised by the Conveyancing Act 1919 (NSW). Thus, the service requirements of s 170 of that Act do not apply (the provision is limited to notices "required or authorised by [that] Act"). I therefore consider that Ms Charlton was provided sufficient notice of the cancellation of the Overdraft by virtue of the 25 October 2011 cancellation notice. 2. Ms Charlton also claimed the 26 October 2011 cancellation notice was defective because it was not signed. For the reason just mentioned, there was no formal requirement for the cancellation notice to be signed. In any event, Ms Charlton was provided sufficient notice by the 25 October cancellation notice, which was signed. 3. By 26 October 2011, the Overdraft was 128 days overdrawn. From the time of the cancellation of the Overdraft on 26 October 2011 until 17 October 2014 Ms Charlton failed to make any payment towards the amount owing in respect of the Overdraft, and interest continued to accrue on the amount owing, calculated and compounded bi-monthly and on the basis of default interest rates. 4. On 27 October 2011, Ms Jennifer Harris rang Mr Thomas to advise him that she was the solicitor engaged by Mr and Mrs O'Brien. The substance of the discussion was recorded in a Note Details Report dated 2 November 2011. It does not appear that Ms Harris was further engaged in relation to the matter. 5. On 16 November 2011, NAB issued a default/demand notice on Ms Charlton demanding payment of $691,301.53 ("the first default notice"), being the total amount then owing under the Overdraft, First Business Options Loan and Second Business Options Loan, plus enforcement expenses. The first default notice was a statutory enforcement notice as it gave notice under s 57(2)(b) of the RPA. 6. On 24 January 2012, NAB served a further default/demand notice on Ms Charlton demanding payment of $707,710.08, being the total amount then owing under the Overdraft, First Business Options Loan and Second Business Options Loan, plus enforcement expenses ("the second default notice"). Unlike the notice issued on 16 November 2011, this notice did not give notice under s 57(2)(b) of the RPA. Financial Ombudsman Service Complaint 1. On 29 November 2011, NAB Resolve (a service that works with customers who are in dispute with the bank) received a formal letter of complaint from Mr O'Brien. Mr Thomas responded to Mr O'Brien's formal letter of complaint on 1 December 2011, noting that NAB could not respond to Mr O'Brien's complaint without the consent of Ms Charlton, as Ms Charlton was referred to in NAB's documentation as the trustee for the Trust. Mr O'Brien sent a further letter of complaint to NAB Resolve on 6 December 2011. 2. On 13 December 2011, Mr Thomas sent an email to Ms Charlton requesting that she confirm her availability for a meeting with Mr Underwood and himself of NAB to discuss the ramifications of the loans under her name as well as security for the loans. 3. Ms Charlton responded on 15 December 2011. The email stated that she felt that the meeting may be "premature" due to the pending investigation by the Financial Ombudsman Service ("FOS"). 4. This is a reference to the complaint made by Ms Charlton and Mr O'Brien to the FOS. 5. On 24 October 2012, the FOS sent a letter to NAB confirming that the matter would be allocated a case manager and would be investigated further. 6. On 19 August 2013, the FOS issued a recommendation in relation to the dispute. 7. On 7 November 2013, the FOS issued a determination in relation to the dispute. By this determination, the FOS concluded that NAB was able to enforce its mortgage and that Ms Charlton was liable for the credit facilities provided by NAB. The determination also found that the first default notice (issued by NAB on 16 November 2011) was invalid. That conclusion was based on the FOS's view that Ms Charlton was a farmer at the relevant time and therefore that NAB was required to send a notice offering mediation under s 8 of the Farm Debt Mediation Act 1994 (NSW) ("FDM Act") to her prior to the issuing of that s 57(2)(b) notice, namely, the first default notice, which constituted enforcement action. NAB did not rely on the first default notice in these proceedings. 8. An issue arose in the proceedings as to whether Ms Charlton was a farmer within the meaning of the FDM Act in late 2011, when NAB had sought to take action with respect to the defaults. NAB considered that Ms Charlton was not a farmer at this time as Justin O'Brien was operating the farm. Ms Charlton disagreed. However, as mentioned, the FOS determination that the first default notice was invalid, combined with the fact that NAB did not rely on that notice in these proceedings, leads to the conclusion that it is not necessary to determine whether Ms Charlton was a farmer at that time. 9. As to Ms Charlton being a farmer under the FDM Act later in time, NAB took the position that Ms Charlton had been a farmer since the end of 2013. There was no demur from Ms Charlton in that respect. In fact, in final submissions, Ms Charlton expressly argued that she was the farmer. She stated: CHARLTON: Yes. Now, I believe from my perspective, my father might have a different view on this, but I believe that because I was on the contracts and the bank was a creditor for the purposes of the Farm Debt Mediation Act, and I consider I was a farmer, they have admitted I was a farmer, FOS says I was a farmer, the Financial Ombudsman Service. HIS HONOUR: You say you're the farmer? CHARLTON: Yes, I believe I am a farmer. And I say that for a number of reasons… Expiry of the First Business Options Loan 1. The First Business Options Loan expired on 31 August 2012. 2. From 31 August 2012 to 27 October 2014, Ms Charlton failed to make any payment towards the amount owing in respect of the First Business Options Loan, and interest continued to accrue on the amount owing in respect of the First Business Options Loan, which was calculated and compounded bi-annually and on the basis of default interest rates. Farm Debt Mediation 1. On 22 January 2014, following the resolution of the FOS complaint, NAB issued a notice under s 8 of the FDM Act to Ms Charlton ("the s 8 notice"). The notice stated that NAB "intends to take enforcement action against property over which it holds a farm mortgage under which you [Ms Charlton] are in default". The notice then provided: 1. the details and dates of the act/s of default; 2. the details of the security instrument; 3. the details of the property; 4. the facilities and the balance of those facilities at the date of the notice; 5. the farmer's rights under the FDM Act; 6. the action required by the farmer; and 7. instructions as to the action required by the farmer. 1. On 13 February 2014, Ms Charlton issued a notice under s 9 of the FDM Act ("the s 9 notice") to NAB. That notice stated that Ms Charlton was "requesting mediation in regard to our farm debt and farm mortgage under which I am in default referred to in the Section 8 Notice … issued by the creditor on 21st January 2014, dispatched 22 January 2014 and received by the farmer on 28th January 2014". 2. On 14 February 2014, NAB sent a letter to the RAA advising that mediation was required in respect of the matter. NAB also asked the RAA to forward a mediation kit to Ms Charlton. That letter attached the s 8 notice and the s 9 notice. 3. On 20 February 2014, the RAA sent a mediation kit to Ms Charlton. 4. On 7 April 2014, NAB wrote to Ms Charlton stating the following: NAB has previously advised you that it does not seek to rely on any notices issued prior to the Farm Debt Mediation notice issued in February 2014. That position remains unchanged. 1. NAB also noted in that communication: You have failed to make arrangements to meet the interest obligations on your facilities since May 2011. 1. On 17 July 2014, NAB and Ms Charlton signed an agreement to mediate and attended a farm debt mediation ("the mediation"). 2. On 18 July 2014, the mediator, Mr Dan O'Keefe completed and signed a summary of mediation indicating that the parties did not reach an agreement. That same day, NAB applied to the RAA for a certificate under s 11 of the FDM Act in respect of the Overdraft, First Business Options Loan and Second Business Options Loan ("the s 11 certificate"). 3. On 25 July 2014, the RAA advised Ms Charlton that NAB had applied for the s 11 certificate. On the same day, Ms Fran Willard of the RAA made a note of the documents served on Ms Charlton. That same day, the RAA also wrote to NAB acknowledging receipt of the s 11 certificate application and noting that Ms Charlton had been advised of the application and that she had until 22 August 2014 to lodge a submission. 4. On 14 August 2014, both Ms Charlton and Mr O'Brien wrote separate communications to the RAA. Ms Charlton's communication objected to the issuance of the s 11 certificate. Mr O'Brien's communication advised that the contents of Ms Charlton's letter dated 14 August 2014 were true and correct. 5. On 25 August 2014, NAB sent a response to the RAA in relation to Ms Charlton's submission. 6. On 29 August 2014, NAB confirmed to the RAA that Ms Charlton was in default under the Mortgage and that she had failed to remedy the default detailed in the s 8 notice. 7. On 29 August 2014, the Section 11 Committee of the RAA met and determined to issue the s 11 certificate to NAB. The minutes noted: In reaching a decision to issue a certificate in terms of Section 11(1)(c)(i) NA the committee took into consideration the claims made by National Australia Bank Limited in their application, the summary of mediation provided by Dan O'Keefe the mediator at the completion of a 6 hour mediation session, the submission from the farmer and the response from the National Australia Bank and Mediator and the statement provided by National Australia Bank Limited claiming the farmer is in default under the farm mortgage as at 29 August 2014. 1. On 29 August 2014, the RAA issued the s 11 certificate to NAB, confirming that it was satisfied that the FDM Act did not apply in respect of the Mortgage. 2. In summary, the following notices were issued with respect to the mediation proceedings: Document Issued by Issued on Issued to s 8 notice NAB 22 January 2014 Ms Charlton s 9 notice Ms Charlton 13 February 2014 NAB s 11 certificate RAA 29 August 2014 NAB 1. Ms Charlton submitted that the decision of the RAA to issue the s 11 certificate was in error because, inter alia, the RAA did not have reference to Ms Charlton's complaints about the "2011 conduct" (as Ms Charlton described it), being the issuance of the first default notice and the 25 October 2011 cancellation notice (as stated above, Ms Charlton disputed the service of the 26 October 2011 cancellation notice). 2. However, I accept the submission of NAB that the material before the RAA contained references to the "2011 conduct". For example, Ms Charlton's bundle of submissions to the RAA included in it a letter titled "Confidential to Mediator Only At This Point" and dated 4 July 2014, which, inter alia, stated: On top of all of this the laws have already been broken the Farm Debt Mediation Act breached by the bank, statutory enforcement notices already issued, contracts terminated against applicable law guidelines and Section 8 (1) Notice issued 797 days approx. after enforcement action already committed and enforcement fees charged to bank account all actions able to be voided by Section 6) of the Farm Debt Mediation Act, are we going to add an invalid mediation to that list based on a "void" Section 8 (1) notice possibly an incorrect Section 11 issued to me as the beneficiary (not legal) based on a dysfunctional contract which voided the farmers rights to legally mediate, I think we need to stop this now treat the situation for what it is "wrong & illegal", the worst part of this is if it continues if s a financial gain by deception by the bank and we all know what that means. Resolution is simple really but it requires addressing the problem not covering it up at my expense or the expense of the continuing Trustee and the beneficiaries. 1. That statement, provided to the RAA, was clearly a complaint directed towards the 2011 conduct. Notice of Cancellation 1. On 17 October 2014, NAB issued a notice demanding payment of the sum of $422,717.14, being the amount then owing in respect of the Overdraft ("the 2014 cancellation notice"). 2. On or about 27 October 2014, NAB issued a default/demand notice to Ms Charlton demanding payment of $1,023,719.70, being the total amount then owing under the Overdraft, First Business Options Loan and Second Business Options Loan, plus enforcement expenses ("the third default notice"). NAB relied upon the affidavit of Ms Scharenguivel sworn 23 May 2018 to prove service. 3. Ms Charlton contended that the third default notice had not been served on her. She advanced the following submissions: 1. The affidavit of Ms Scharenguivel could not prove service. In order to prove service, NAB needed to provide evidence of Ms Renel Cabezuelo, a legal services assistant who authored a form (referred to in the proceedings as "the acknowledgment of service") showing service at 74 Long Street trundle. Ms Scharenguivel was unable to directly confirm service. 2. The acknowledgement of service referred to steps taken in the singular, namely, "a document" in "an envelope". This suggests there was not a distribution to two persons, namely Ms Charlton and Mr O'Brien (it was only served on Mr O'Brien). 3. The signature of Ms Cabezuelo on the acknowledgement of service raises "authenticity issues" given the signature on the third default notice and the acknowledgment of service do not match. 4. No copy of the envelope used to serve the third default notice was produced by NAB. 5. Ms Scharenguivel did not state how the notices were served. 1. Based on the evidence contained in the affidavit of Ms Scharenguivel sworn 23 May 2018, I accept NAB's submission that Ms Charlton was served with the third default notice. 2. The affidavit of Ms Scharenguivel was not objected to and NAB correctly submitted that the evidence of Ms Scharenguivel was not challenged. In fact, Ms Charlton argued that she wanted the affidavit admitted to prove that it was deficient and to challenge the evidence contained within the affidavit. The absence of evidence from Ms Cabezuelo is of no significance as her evidence was tendered, without objection, in circumstances where Ms Cabezuelo was no longer employed by NAB and Ms Scharenguivel, who essentially had the same role as Ms Cabezuelo, was employed, and had access to the relevant files. 3. Annexed to Ms Scharenguivel's affidavit was a screenshot of NAB's electronic Charlton File displaying a document titled "Notice.pdf" within a folder titled "Charlton (Section11)". The document had last been modified on 27 October 2014. Ms Charlton seemed to contend that the authenticity of those documents was in question. She stated: At no stage did Ms Scharenguivel indicate that she actually saw those notices served. There was no definite answer. And I also want to bring to your attention, your Honour, that in the transcript where we discussed that, I did challenge issues on this very notice quite extensively, and I brought your attention to the fact that there was a lot of signatures, there was differences in the signatures from the signature of Ms Renel Cabezuelo. 1. There was no proper basis for this challenge to authenticity. No objection was made in that respect upon the tender of the affidavit of Ms Scharenguivel. It is true that Ms Charlton considered the file to be incomplete. She stated: It seems to be an incomplete file in regard to my entire matter and it's actually just showing an electronic record absent of a lot of statutory enforcement notices in the matter. I do not feel it includes anything. 1. However, contrary to her submission, Ms Charlton had not in fact previously raised the issue of signatures prior to the submission. 2. The business records held on the electronic Charlton file by NAB also included an acknowledgement of service form signed by Ms Cabezuelo, which stated that the notice was served by prepaid mail on 27 October 2014 to Ms Charlton at "74 Long Street Trundle, NSW 2875" (and to Mr O'Brien at "110 Forbes Street Trundle, NSW 2875"). 3. The acknowledgement of service recorded that Ms Cabezuelo had placed the third default notice in "an envelope" which had been sent by prepaid mail to both Mr O'Brien and Ms Charlton. In the latter case, the third default notice was sent to 74 Long Street Trundle. 4. The evidence of Ms Scharenguivel confirms that NAB's general practice was for an acknowledgement of service to be completed and placed on the customer file when a legal services associate sent a legal notice of demand to a customer, which was intended to record which legal services associate or other employee served the legal notice of demand, how the document was served, the date that the document was served and the address to which the documents were sent. As the acknowledgement of service was on the customer file, it can and should be inferred that the document had already been served. 5. By the Default Notice Issue in the proceedings (which is set out in the list of issues for the proceedings appearing later in the judgment), the issue of the operation of s 170(1) of the Conveyancing Act is raised. Relevantly, that issue concerns Ms Charlton's submission that the third default notice was not served. 6. Section 57(2)(b) of the RPA required a written notice that complied with s 57(3) to be served on the mortgagor, charger or covenant charger in the manner authorised by s 170 of the Conveyancing Act. Section 170(1) of the Conveyancing Act provides: 170 Service of notices (1) Any notice required or authorised by this Act to be served shall be in writing, and shall be sufficiently served: (a) if delivered personally, (b) if left at or sent by post to the last known residential or business address in or out of New South Wales of the person to be served, (b1) in the case of a mortgagor in possession or a lessee, if left at or sent by post to any occupied house or building comprised in the mortgage or lease, (b2) in the case of a mining lease, if left at or sent by post to the office of the mine, (c) if delivered to the facilities of a document exchange of which the person on whom it is to be served is a member, or (d) in such manner as the Court may direct. 1. The Conveyancing Act only requires that a notice be delivered personally or left at or sent by post to the last known residential or business address in or out of New South Wales. 2. The phrase "last known address" means the address or the addresses of the addressee which has or have become known to the sender and which, to the sender's knowledge, remains or remain the addressee's residential or business address or addresses: Van Stappen v Mackenzie (2008) 14 BPR 26,387 at [49] (per White J). 3. As earlier discussed, the address "74 Long Street, Trundle" was Ms Charlton's last known address. 4. The fact that 74 Long Street, Trundle was the last residential or business address of Ms Charlton known to NAB in October 2014 can also be seen from the address used by Ms Charlton on the agreement to mediate dated 17 July 2014. 5. Further, Ms Charlton confirmed in cross-examination that she resided at 74 Long Street, Trundle at the date of the service of the third default notice. She stated in cross-examination: Q. Tab 104, Miss Charlton, this is a document which you dispute you have received and so just to forestall you telling us that again, the only question I have in relation to tab 104 is that is to ask you to confirm that you were still at 74 Long Street, Trundle in October 2014? A. In October 2014, yes, I was, that's my home address where I live with my husband. But I do not verify that is the document because I would need to compare it to the other one. There's actually two. 1. It was not disputed that NAB issued Mr O'Brien with a copy of the third default notice in his capacity as caveator of the property on 27 October 2014. Second Business Options Loan in Arrears 1. From May 2011 to 27 October 2014 Ms Charlton failed to make any payment towards the amount owing in respect of the Second Business Options Loan. Interest continued to accrue on the amount owing in respect of the Second Business Options Loan, which was calculated and compounded bi-annually and, in respect of the amount owing in excess of $340,000 (being the facility limit of the Second Business Options Loan), on the basis of default interest rates. By 27 October 2014, the Second Business Options Loan was in arrears in the amount of $88,151.85. Summary of Notices Issued by NAB: 2011 to 2014 1. In summary, the following notices were issued by NAB to Ms Charlton, with respect to her default, between 2011 and 2014, noting that the 2011 notices were not relied upon: Notice Date Issued Relating to Debt 25 October 2011 cancellation notice 25 October 2011 Overdraft $228,784.91 26 October 2011 cancellation notice 26 October 2011 Overdraft $228,860.48 2014 cancellation notice 17 October 2014 Overdraft $422,717.14 Overdraft; first default notice 16 November 2011 First Business Options Loan; $691,301.53 Second Business Options Loan; and enforcement expenses Overdraft; second default notice 24 January 2012 First Business Options Loan; $707,710.08 Second Business Options Loan; and enforcement expenses Overdraft; third default notice 27 October 2014 First Business Options Loan; $1,023,719.70 Second Business Options Loan; and enforcement expenses Outstanding Debt as at 6 March 2018 1. As at 6 March 2018, Ms Charlton was indebted to NAB in the amount of $1,633,022.53, which was compromised of the following: 1. $739,987.01 in respect of the Overdraft; 2. $272,511 in respect of the First Business Options Loan; and 3. $620,524.52 in respect of the Second Business Options Loan. THE ISSUES 1. Based on the above findings NAB has discharged its onus of establishing the matters necessary to found its prima facie entitlement to possession of the property and judgment for debt. 2. That is because the evidence makes clear that: 1. Ms Charlton is the registered proprietor of the property and holds (or at least held) the legal interest in that property in her capacity as trustee of the Trust; 2. Ms Charlton entered into the First Business Letter of Offer and Second Business Letter of Offer; 3. Ms Charlton received, and had the benefit of, monies from NAB pursuant to the Overdraft, First Business Options Loan and Second Business Options Loan; 4. Ms Charlton granted security over the property to NAB in respect of those facilities pursuant to the Mortgage; and 5. Ms Charlton has defaulted in her obligations under the First Business Letter of Offer, the Second Business Letter of Offer and the Mortgage. 1. Just whether NAB ultimately should have a judgment for debt and possession depends upon the resolution of the relatively complex set of issues discussed below. 2. There was not a common set of issues settled between the parties despite a number of attempts to achieve that outcome. NAB contended that the true issues in the proceedings, having regard to Ms Charlton's defence, the cross-claim prosecuted by Ms Charlton and Mr O'Brien, Ms Charlton's summons and the written and oral submissions of the parties were nine-fold as follows: 1. Issue 1: whether the s 11 certificate should be set aside because there was not a "satisfactory mediation" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act ("Section 11 Certificate Issue"); 2. Issue 2: whether action taken by NAB in 2011 constituted "enforcement action" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act ("2011 Action Issue"). 3. Issue 3: whether NAB made any representations to Ms Charlton and Mr O'Brien concerning the refinance of the loans to Ms Charlton which constituted misleading or deceptive or unconscionable conduct, such as to entitle Ms Charlton and Mr O'Brien to relief ("Misrepresentation Issue"); 4. Issue 4: whether internal legal advice obtained by NAB concerning the Deed for the Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the property pursuant to the Mortgage ("Right of Indemnity Issue"); 5. Issue 5: whether the third default notice failed to comply with s 57(2)(b) of the RPA because it did not comply with s 170(1) of the Conveyancing Act ("Default Notice Issue"); 6. Issue 6: whether the exclusion of s 38 of the Trustee Act 1925 (NSW) by the Deed for the Trust means that Ms Charlton was unable to acquire and mortgage the property ("Section 38 Trustee Act Issue"); 7. Issue 7: whether the fact that Mr O'Brien was the joint trustee of the Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the property pursuant to the Mortgage ("Joint Trustee Issue"); 8. Issue 8: whether the conduct of a further mediation in January 2016 affects NAB's ability to enforce the loan agreements and the Mortgage ("Further Mediation Issue"); and 9. Issue 9: whether the provision of a draft deed of release by NAB's solicitors to Ms Charlton's then solicitors, in the context of this litigation, affects NAB's ability to enforce the loan agreements and the Mortgage ("Deed of Release Issue"). (Those issues shall, collectively, be referred to as "the nine issues"). 1. Whilst NAB accepted that issues 1-6 above arose on Ms Charlton's and Mr O'Brien's pleaded case, it did not accept that issues 7-9 did so. 2. It may be noted that NAB submitted that the contentions advanced by Ms Charlton, as reflected in her closing submissions of 20 August 2018, 3 September 2018 (oral) and 2 October 2018, were not pleaded by Ms Charlton (most notably omitted from the amended defence filed 20 May 2016). In substance, NAB submitted that not only were the contentions not pleaded, but further that the contentions were inconsistent with the pleaded case. 3. Ms Charlton filed her own list of issues, which raised 31 issues. A number of those issues overlap or intersect with the nine issues identified by NAB. Where that is so, I have endeavoured to identify those issues in the course of considering the nine issues. Nonetheless, there are a number of issues raised by Ms Charlton which have no counterpart with the nine issues. Those issues were numbered on Ms Charlton's list 3, 16, 17, 18, 21, 27, 28, 30 and 31(but will receive a sequential numerical reference for the purposes of this judgment). Those issues were, respectively, as follows: 1. Whether NAB "intended to create circumstances by which the trustees would commit a breach of Trust, such as documents to be executed at contract and mortgage stage, indemnity clause given to Mr O'Brien following 22 August 2011 meeting and purported mediation 17th July 2014 without the Authority of Mr O'Brien trustee of Phoenix Trust" ("additional issue 1"). 2. Whether "the 74F Caveat prohibits the NAB from possessory application as prescribed in sections 74F form itself" ("additional issue 2"). 3. Whether NAB "holding Ms Charlton on the title following her resignation was premeditated resulting in civil deprivation of liberty in respect of her right to retire as trustee and a waiver of mediation rights pursuant to s 21 of the FDM Act in relation to Mr O'Brien as trustee of the Trust a party only to the second purported mediation undetermined by the RAA" ("additional issue 3"). 4. Whether NAB "engaged in intent to defraud the customer by using penalty interest rates as enforcement action prior to offering farm debt mediation thereby escalating the debt to erode the capital of Phoenix Trust to enable "monetary gain by deception". As a result of the above activity whether the conduct was in contravention of s 8(1) of the FDM Act, the Victorian Crimes Act 1958 s 72(1) and (2), s 73 (8), (10) and (12), s 82(1) and the NSW Crimes Act 1900 s 192B(1) and (2) Deception, 192 C Obtaining property belonging to another (1) & (2) Subsection 192 C (3) & (4) & 192D Obtaining financial advantage or causing financial disadvantage (1) and (2)" ("additional issue 4"). 5. Whether, along with all other protection given in the Deed, NAB is seeking to obtain realty "in contravention of the Crimes Act Victoria 1958 or NSW Crimes Act 1900 by taking action in the Supreme Court of NSW Case 2015/27843 for judgement of debt and possession of Real Property based on criminal actions" ("additional issue 5"). 6. Whether NAB had the legal right to withhold the certificate of title on the property and prevent the necessary changes required by law for a change of trustee following retirement (now only a beneficiary) on title over to the continuing trustee so the business of the Trust could operate normally and the continuing trustee carry out his fiduciary role as needed ("additional issue 6"). 7. Whether NAB has "the ability to produce the Certificate of title in question relating to "Oriel" Tottenham Folio 22/724651" ("additional issue 7"). 8. Whether NAB has "systemically breached the Code of Banking Practice copyright 2016 by the Australian Bankers Association the standard of conduct set out therein" ("additional issue 8"). 9. Whether as a result of this dispute NAB has "encouraged officers in its employ without sanction to contravene the Oaths Act 1900 (NSW) in sworn affidavits filed in the matter to mislead the court unfairly gain legal advantage in contempt of court to disadvantage Ms Charlton and Mr O'Brien" ("additional issue 9"). (Additional issues 1-9 shall hereinafter be, collectively, referred to as "the additional issues"). 1. As to the additional issues, the following may be observed: 1. Additional issue 2 was pleaded in the cross-claim and was subject to a very brief submission. That will be discussed below in the context of the Right of Indemnity Issue, as Ms Charlton suggested that the fact that the Registrar General allowed Mr O'Brien to put the caveat on the title under s 74F of the RPA was evidence of Mr O'Brien's vesting rights under the Trust. 2. Additional issue 8 was pleaded in the amended defence but not the subject of submissions. 3. Additional issue 3 was partially pleaded in the cross-claim (and seemed somewhat linked to additional issues 6 and 7). Further, a brief submission was made in respect of that additional issue. That additional issue will be discussed in the context of the Section 11 Certificate Issue below, as it goes to Ms Charlton's resignation under the Deed (the matter may also arise in the context of damages, to the extent that issue arises for determination). 4. Additional issues 1, 4, 5, 6, 7 and 9 were not pleaded (although, as mentioned, additional issues 6 and 7 were somewhat linked to additional issue 3). 5. Even allowing for Ms Charlton and Mr O'Brien's unrepresented status, no propositions in relation to the additional issues were put to any NAB witness. As to additional issue 2, it is true that NAB witnesses were cross-examined on the topic of the caveat, but only in relation to the service of the third default notice on Mr O'Brien (not the effect of the caveat on NAB's possessory application). Further, none of the additional issues formed part of the evidence of Ms Charlton and Mr O'Brien. 6. Additional issues 1, 4, 5 and 9 seemed to allege breaches of criminal law. 1. While there is considerable force in the submission advanced by NAB, having regard to the circumstances in which Ms Charlton brings proceedings, namely, as a self-represented litigant, I am inclined to adjudicate upon the arguments presented by the respective parties as to issues 7-9 of the nine issues even though, strictly speaking, they were not the subject of appropriate pleading. 2. However, the additional issues are of a different character. They were not only often not pleaded, but additionally were the subject of little or no evidence led by Ms Charlton or Mr O'Brien, or cross-examination, and, in some cases, raised issues of fraud, inducing a breach of trust, deception, criminality, a breach of ethical conduct and an encouragement to perjury. It is not appropriate to resolve most of those issues, which as NAB correctly submitted, sprung out of the submissions of Ms Charlton, on any other basis than they were not pleaded and/or have not been established in the evidence. Additional issues 2, 3, 6 and 7 may, however, be considered insofar as they are coincident (or largely coincidental) with the aforementioned nine issues. As mentioned above, additional issue 2 will be discussed in the context of the Right of Indemnity Issue. Additional issues 3, 6 and 7 will be briefly dealt with in the context of the Section 11 Certificate Issue. THE FDM ACT 1. Since the FDM Act is critical to the resolution of some of the issues in dispute, it is useful to briefly revisit the relevant provisions. 2. Section 6 of the FDM Act provides: 6 Enforcement action in contravention of Act void Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void. 1. "Enforcement action" in relation to a farm mortgage, means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any "statutory enforcement notice", or the continuation of any action to that end already commenced: s 4(1). "Statutory enforcement notice" means a notice under s 57(2)(b) of the RPA, or a notice under s 111(2)(b) of the Conveyancing Act, or a notice under s 71X(1)(b) of the Water Management Act 2000 (NSW): s 4(1). 2. Section 8(1) of the FDM Act contains the general prohibition against enforcement action prior to giving notice of the availability of mediation. It provides: 8 No enforcement action until notice of availability of mediation given (1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section. 1. Again, this provision contains a number of terms defined in s 4(1): 1. A "creditor" means a person to whom a "farm debt" is for the time being owed by a farmer. 2. A "farm debt" means a debt incurred by a farmer for the purposes of the conduct of a "farming operation" that is secured wholly or partly by a farm mortgage. 3. A "farming operation" includes a farming (including dairy farming, poultry farming and bee farming), pastoral, horticultural or grazing operation; 4. A "farm mortgage" includes any interest in, or power over, any "farm property" securing obligations of the farmer whether as a debtor or guarantor; 5. A "farm property" includes "a farm or part of a farm", where "farm" is defined as "land on which a farmer engages in a farming operation"; 6. A "farmer" means a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation and includes a person who owns land cultivated under a share-farming agreement and the personal representatives of a deceased farmer. 1. The notice to the farmer under s 8(1) is to be in writing in a form approved by the RAA: s 8(2). Section 8(1) does not apply if a certificate is in force under s 11 in respect of the farm mortgage concerned: s 8(3). 2. A farmer to whom notice has been given under s 8(1) may, within 21 days after the notice was given, notify the creditor in writing that the farmer requests mediation concerning the farm debt involved: s 9(1). A farmer who has not been given notice under s 8 but who owes money to a creditor in relation to a farm debt may notify the creditor in writing that the farmer requests mediation concerning the farm debt involved: s 9(1A). A farmer may request mediation under subs (1A) whether or not the farmer is in default: s 9(1A). If a farmer requests mediation but subsequently refuses to mediate, the FDM Act ceases to apply to the farm mortgage concerned: s 9(3). 3. A creditor who has received a request from a farmer to mediate may, by notice in writing given to the farmer, agree or decline to mediate in respect of the farm debt involved: s 9A(1). If a farmer is in default, a refusal by a creditor to mediate may result in the issuance of an exemption certificate: s 9A(3). 4. A farmer who is in default and who has requested a creditor to mediate in respect of the farm debt involved (whether or not the farmer has been given a notice under s 8) may apply to the RAA for a certificate of exemption from enforcement action ("an exemption certificate") if the creditor does not mediate: s 9B(1). 5. The RAA must issue an exemption certificate if: 1. The farmer is in default under a farm mortgage; and 2. The farmer has requested the creditor to mediate in respect of the farm debt involved; and 3. No certificate under s 11 is in force in relation to the farm mortgage; and 4. The RAA is satisfied that the creditor does not wish to enter into or proceed with mediation, the creditor has failed to respond in writing to the request to mediate, within 21 days after the receipt of the request, or 3 months have elapsed after a request was made by the farmer under s 9 and the farmer has throughout that period attempted to mediate in good faith but no satisfactory mediation has taken place between the farmer and the creditor: s 9B(2). 1. While an exemption certificate is in force in relation to a farm mortgage, no certificate can be issued by the RAA under s 11, and no enforcement action can be taken by the creditor: s 9B(3). 2. Once a farmer has given a creditor a notification in accordance with s 9 requesting mediation, the creditor must not take enforcement action in respect of the farm mortgage concerned unless a certificate is in force under section 11 in respect of the farm mortgage: s 10(1). Section 10(1) does not invalidate any statutory enforcement notice or other process given, served or executed in order to fulfil a condition precedent to the taking of any enforcement action, but operates to prohibit the taking of the action concerned, or the enforcement by a court or tribunal of any such process, except as provided by s 11(6): s 10(2). 3. Section 11(1) sets out the circumstances in which the RAA will issue a certificate that the FDM Act does not apply to the farm mortgage in question: 11 Certificate that Act does not apply to farm mortgage (1)The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and (b) no exemption certificate is in force in relation to the farm mortgage, and (c) the Authority is satisfied that: (i) satisfactory mediation has taken place in respect of the farm debt involved, or (ii) the farmer has declined to mediate, or (iii) 3 months have elapsed after a notice was given by the creditor under section 8 and the creditor has throughout that period attempted to mediate in good faith (whether or not a mediation session or satisfactory mediation took place during that period). 1. A "satisfactory mediation" is defined in s 4(1A) as follows: (1A) A reference in this Act to 'satisfactory mediation' is a reference to: (a) a mediation that has achieved a resolution of a farm debt dispute, or (b) a mediation that has proceeded as far as it reasonably can in an attempt to achieve a resolution of a farm debt dispute but has nevertheless failed to resolve the dispute, or (c) a mediation specified or of a class described in regulations made for the purposes of this subsection to be a satisfactory mediation. 1. "Mediation" means a mediation by an accredited mediator, where "mediator" means a mediator for the time being accredited by the RAA pursuant to arrangements instituted by the RAA under the FDM Act: s 4(1). 2. The function of a mediator is to mediate impartially or attempt to mediate impartially between the farmer and creditor for the purpose of arriving at an agreement for the present arrangements and future conduct of financial relations among them. A mediator has such other functions as are conferred or imposed on the mediator by or under the FDM Act or any other Act: s 13(1). It is not a function of a mediator to advise a farmer or creditor about the law, to encourage or assist a farmer or creditor in reserving or establishing legal rights, or to act as an adjudicator or arbitrator: s 13(2). 3. A failure by a creditor to agree to reduce or forgive any debt does not, of itself, demonstrate a lack of good faith on the part of a creditor in attempting to mediate: s 11(1B). 4. The expiry of a certificate under s 11 does not affect any proceedings for recovery of a farm debt, or for the exercise or enforcement of any right of the creditor, already taken or commenced by a creditor while the certificate was in force, and any such proceedings may be continued and concluded as if the certificate were still in force: s 11(6). 5. Evidence of anything said or admitted during a mediation session and a document prepared for the purposes of, in the course of or pursuant to, a mediation session are not admissible in any proceedings in a Court or before a person or body authorised to hear and receive evidence: s 15(1). "Mediation session" includes any steps taken in the course of making arrangements for a mediation session or in the course of the follow-up of a mediation session: s 15(2). Section 15(1) does not apply to, relevantly, a summary of mediation under s 18A: s 15(3)(c). 6. Section 17 of the FDM Act deals with representation and assistance during a mediation. Any person representing a party to a mediation (whether or not the person is himself or herself a party to the mediation) must not attend a mediation session unless the person has been given written authority by the party the person represents to enter into Heads of Agreement: s 17(3A). However, a contravention of s 17 does not invalidate a mediation: s 17(6). 7. At the end of a mediation, a mediator must fill in the form approved by the RAA for setting out a summary of the conduct and results of the mediation (including any Heads of Agreement entered into by the parties): s 18A. 8. If land is subject to a farm mortgage and another Act requires the mortgagee to give notice to the mortgagor before exercising in relation to the land a power or right conferred by the other Act or by the farm mortgage: (a) nothing in the FDM Act derogates from the requirement to give the notice under the other Act, and (b) a notice required by the FDM Act to be given before the exercise of the power or right does not fail to comply with the FDM Act only because it includes matter required to be specified in a notice required by the other Act to be given before exercise of the power or right: s 22. 9. Some preliminary observations should be made about the judgment of Heydon J in Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 31; [2012] HCA 4 ("Waller") by reliance upon the following extracts from the judgment in Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336 ("Gooley") at [58]-[60]: [58] … Those observations are as follows: (1) The fundamental question which arose in Waller was how far the scheme of the Act worked if a certificate was issued with respect to one farm debt but the creditor later wished to take enforcement action in relation to another ([at [29]). (2) Ms Waller purchased a farm which was initially financed with a loan or mortgage. There was then a refinancing which resulted in the original mortgage being discharged. The resultant loan was described in the proceedings as the First Loan Agreement which was secured by a mortgage in favour of the respondents in the proceedings which was described as a Registered First Mortgage. There was no dispute that the Registered First Mortgage read with the First Loan Agreement was a farm mortgage for the purposes of s 4(1) of the Act. (3) Upon the failure to make the necessary payments, the respondent took enforcement action. In the result, a mediation took place as contemplated under the Act which resulted in Ms Waller and the respondent entering into a deed of settlement by which the respondent agreed to increase the advance. The further loan agreement was described as a Second Loan Agreement (at [35]). As a result of further difficulties, the parties executed a further loan agreement known as the Third Loan Agreement (at [36]). (4) As a result of the default under the Third Loan Agreement the respondent brought proceedings in this Court for possession of the farm and judgment for outstanding borrowings. (5) Ms Waller claimed in defence, in those proceedings, that the provisions of the Act had not been complied with because the certificate issued under the mediation related only to the farm debt created by the First Loan Agreement while the proceedings constituted an enforcement action in relation to the Third Loan Agreement with respect to which no mediation had taken place (at [40]). (6) The respondent who had sought to file a notice of contention which was rejected by the Court. By that contention the respondent had wished to argue that the judgment below had been wrong to treat the Second Loan Agreement as discharging the obligations of the First Loan Agreement and the Third Loan Agreement as discharging the obligations under the second (at [43]). (7) Mediation under Pt 2 of the Act can only take place in relation to a "farm debt". The operative provisions of that Part do not apply to mortgages but creditors, namely, a person to whom the farm debt is for a time being owed by a farmer. The definition of a farm debt under s 5(1) of the Act refers to creditors secured under a farm mortgage. A farm mortgage is defined as including any interest in or power over any farm property including obligations of the farmer whether as a debtor or guarantor (at [48]). (8) There is, therefore, a close connection between a farm mortgage in relation to which a creditor desires to takes an enforcement action and any farm debt which it secures. (9) The certificate under s 11 concerns a farm mortgage under which money is owed by a farmer to a creditor, that is, a particular farm debt in respect which a creditor intends to take enforcement action against a farmer (at [51]). A s 11 certificate is "in respect of the farm mortgage concerned" but only because "farm mortgage concerned secures a particular farm debt" (at [51]). There is, therefore, a distinction between the interest in or powers over farm land secured by the farm debt in the mediation and the interests in powers over farm land which the respondent wished to enforce in relation to proceedings. (10) Each of the First, Second and Third Loan Agreements when read with the Registered First Mortgage successively created a distinct interest in and powers over the farm property by Ms Waller securing her obligations as a debtor. Each previous debt had been discharged by the successive loan agreement (at [56]). (11) The respondent argued that, even if the respondent's claim to possession was barred, he had a right to claim a money judgment. This was rejected (at [64]-[68] of the judgment). (12) The enforcement action as defined in s 4(1) of the Act, means not only taking possession of the property but any other action to enforce the mortgage (at [66]). The amended statement of claim brought by the respondent pleaded that it was a term of the First Registered Mortgage that the interest be paid monthly in accordance with, inter alia, the Third Loan Agreement. (13) The same claim pleaded that Ms Waller was obliged under the Registered First Mortgage to pay the principal sum with interest owing. The respondent contended that the claim for a debt was not an enforcement action because it does not involve an enforcement of security over farm property. However, Hayden J found that the better view was that the definition of the enforcement action was wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage. His Honour opined that "since the claim to the order for the possession was solely based on the breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement, it was inextricably interlinked with the claim for a money judgment" (at [66]). (14) His Honour held that it followed that an action to obtain a money judgment after the commencement of the Act is an "enforcement action to ensure the mortgage". His Honour continued the "structure of the Amended Statement of Claim, and the manner in which the proceedings were conducted, justified the characterisation of the respondent's conduct as action to enforce a mortgage, and hence as enforcement action" (at [66]). [59] It may be gleaned from these extracts that the Act only has reach to creditors secured under a farm mortgage, namely, a person to whom a farm debt is for the time being owed by a farmer. A certificate under s 11 only has operation in relation to the particular farm debt, which the creditor intends to take enforcement action against the farmer. [60] The actual claim pursued by the respondent in Waller was said to constitute an "enforcement action" for the purposes of s 4(1) of the Act because the claim for possession was solely based upon a breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement. That is, the Amended Statement of Claim pleaded that it was a term of the Registered First Mortgage the interest was to be paid under the loan agreement. The "inextricable" link referred to by his Honour was between the claim for the order for possession based on the Registered First Mortgage and the claim for the money order. 1. I will further discuss Waller under the discussion of the 2011 Action Issue. 2. One further observation should be made. A s 11 certificate concerns a particular farm debt with respect to which the creditor intends to take an enforcement action against the farm. In Waller, the successive loan agreements created a distinct interest and power over the farm property such that each successive debt discharged the earlier loan agreement. The contentions advanced in the matter presently before the Court raised questions as to the operation of the FDM Act upon what would appear to be a different factual substratum in which the s 11 certificate was issued in relation to a farm debt which is sought to be enforced by default notices issued both prior to and after the s 11 certificate and in circumstances where NAB only relied upon the third default notice which was issued after the issuance of the s 11 certificate. 3. It should be noted that cl 33 of the Deed provided that the proper law of the Deed was Victorian Law (despite the fact that cl 13(a)(iii) referred to the Trustee Act 1925 (NSW)). 4. As the Deed was governed by Victorian law, s 44 of the Trustee Act 1958 (Vic) applied. That section provides: 44 Retirement of trustee without a new appointment (1) This section applies where a trustee declares by writing that he is desirous of being discharged from all or any of the trusts reposed in him, and after his discharge there will be either a trustee company or at least two individuals to act as trustees to perform the trusts from which that trustee desires to be discharged. (2) In any case to which this section applies if the co-trustees and such other person (if any) as is empowered to appoint trustees consent by writing to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property, the trustee desirous of being discharged— (a) shall be deemed to have retired from the trusts from which he has declared he desires to be discharged; and (b) subject to subsection (3) of this section, shall, by the writing by which consent is given to his discharge, be discharged from the trusts under this Act— without any new trustee being appointed in his place. (3) Any conveyance requisite for vesting in the continuing trustees alone the property subject to the trusts from which the retiring trustee is to be discharged shall be executed or done; and in respect of any part of the trust property for the vesting of which in the continuing trustees a conveyance is necessary, the retiring trustee shall not be discharged until that part is duly conveyed. 1. In NAB's Further Reply Submissions dated 22 October 2018, under the heading "Postscript", NAB made the following submission: 53. It now appears that by reason of the commencement of the Farm Debt Mediation Amendment Act 2018 (NSW) (Amending Act) on 9 September 2018, amendments have now been made to the FDM Act. 54. Item 12(a) of Schedule 1 to the FDM Act suggests that amendments made to the FDM Act by the Amending Act extend to "any farm debt in respect of which mediation was concluded before the commencement date and an exemption certificate is in force, or an application for an exemption certificate is pending, on that date". 55. NAB's position is that the amendments made by the Amending Act do not affect the analysis of the issues arising for disposition. 1. I accept that submission. 2. The Farm Debt Mediation Amendment Act 2018 (NSW) ("the Amendment Act") commenced on 3 September 2019, shortly before the close of submission in this matter. 3. The Amendment Act made substantial changes to the structure and content of the FDM Act, including the introduction of a new part: Pt 1A Enforcement Action. 4. Schedule 1 of the FDM Act is entitled: "Savings and transitional provisions". Part 7 of that schedule concerns the provisions consequent on enactment of the Amendment Act. Clause 12 of that part provides: 12 Mediation concluded before commencement of amending Act The amendments made to this Act by the amending Act extend to the following: (a) any farm debt in respect of which mediation was concluded before the commencement date and an exemption certificate is in force, or an application for an exemption certificate is pending, on that date, (b) any mediation commenced, but not concluded, before the commencement date. 1. The following section of this judgment concerns the construction of cl 12(a) of Sch 1 and explains why the amendments made to the FDM Act by the amending Act do not extend to the current proceedings. 2. The word "extends" in cl 12 has its own ordinary meaning "to make larger". Given the temporal aspect of cl 12(a) that extension of the reach of the Amendment Act concerns particular circumstances prior to the commencement of the Amendment Act; the presumption against retrospectivity would otherwise apply: George Hudson Limited v Australian Timber Workers' Union (1923) 32 CLR 413 at 434; [1923] HCA 38; D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8th ed, 2014) at Ch 10. 3. That temporal aspect is given by the words appearing in cl 12(a) "before the commencement date", "is in force" and "is pending, on that date". (Whilst the words "before the commencement date" do not appear after the words "exemption certificate" it is clear that, when read in context, the reference to "is in force" means is in force at the commencement date). 4. This extension of the Amendment Act under cl 12(a) is obtained when two conditions operate: 1. any farm debt in respect of which mediation was conducted (before the commencement date); and 2. an exemption is in force by that date. 1. Having regard to the conclusions I reach with respect to the Section 11 Certificate Issue below, the first conditions is met in this matter. 2. However, the second condition is not because these proceedings do not concern an exemption certificate which was in force by the commencement of the Amendment Act (or indeed at any time up to the publication of this judgment). My reasons for that conclusion follow. 3. Prior to the commencement of the Amendment Act, an "exemption certificate" was defined in s 4 as "a certificate of exemption from enforcement action that is issued under 9B". Section 9B concerned an application that may be brought by a farmer to the RAA. It is extracted in full below: 9B Exemption certificates (1) A farmer who is in default and who has requested a creditor to mediate in respect of the farm debt involved (whether or not the farmer has been given a notice under section 8) may apply to the Authority for a certificate of exemption from enforcement action (exemption certificate) if the creditor does not mediate. (2) The Authority must issue an exemption certificate if: (a) the farmer is in default under a farm mortgage, and (b) the farmer has requested the creditor to mediate in respect of the farm debt involved, and (c) no certificate under section 11 is in force in relation to the farm mortgage, and (d) the Authority is satisfied that: (i) the creditor does not wish to enter into or proceed with mediation, or (ii) the creditor has failed to respond in writing to the request to mediate, within 21 days after the receipt of the request, or (iii) 3 months have elapsed after a request was made by the farmer under section 9 and the farmer has throughout that period attempted to mediate in good faith but no satisfactory mediation has taken place between the farmer and the creditor. (3) While an exemption certificate is in force in relation to a farm mortgage: (a) no certificate can be issued by the Authority under section 11, and (b) no enforcement action can be taken by the creditor. (4) An exemption certificate ceases to be in force on the earlier of the following: (a) 6 months after the day on which the creditor declined to mediate, (b) the day on which the farmer and creditor enter into mediation in respect of the farm debt. 1. A certificate under s 11 (pre-amendment), as referred to in s 9B(2)(c), concerned a certificate issued by the RAA, on the application of a creditor under a farm mortgage, stipulating "that this Act does not apply to the farm mortgage". Section 11(1)(b) expressly provided that the existence of an exemption certificate (in force) would prevent the issuing of a certificate to the creditor under that section. 2. Following the commencement of the Amendment Act, an "exemption certificate" is now defined in s 4 by reference to s 13. Section 13 concerns an application brought by a creditor to the RAA and is extracted below: 13 Application for exemption certificate (1) A creditor under a farm mortgage may apply to the Authority for a certificate that this Act does not apply to the farm mortgage (an exemption certificate). (2) An application is to be in the approved form. 1. The post-amendment definition of "exemption certificate" in s 13 adopts the language of s 11 (pre-amendment). Thus, following the commencement date, the certificate previously applied for by a creditor under s 11 is now defined as an exemption certificate. An exemption certificate no longer concerns any application brought by a farmer. The procedure for which exemption certificates are applied for and their duration are set out in Div 3 of Pt 1A in the FDR Act (post-amendment). 2. Following the commencement date, s 9B, which previously provided the definition of exemption certificate, was repealed and a new mechanism was implemented for the benefit of farmers, namely, "prohibition certificates" (see Pt 1A Div 2). By that mechanism, a "farmer who is in default and who has requested a creditor to mediate in respect of the farm debt concerned may apply to the Authority for a certificate prohibiting the creditor from taking enforcement action (a prohibition certificate)" (emphasis added). It may be noted that the definition of "prohibition certificate" in s 9 (post-amendment) adopts the language of s 9B (pre-amendment). Thus, the farmers may still bring an application for a certificate that prevents a creditor from taking enforcement action, except now it is described as a "prohibition certificate" (post-amendment) (as opposed to an "exemption certificate" (pre-amendment)). The procedure for which prohibition certificates are applied for and their duration are set out in Div 2 of Pt 1A in the FDR Act (post-amendment). 3. The Amendment Act also expanded the definition of "mediation". Prior to the commencement date, mediation was defined in s 4 with reference to mediator, as extracted below: mediator means a mediator for the time being accredited by the Authority pursuant to arrangements instituted by the Authority under this Act, and mediation means mediation by such an accredited mediator. 1. It is now defined in s 4AA of the FDM Act: 4AA Mediation (1) Mediation is a structured negotiation process in which a mediator, as a neutral and independent party, assists the participants in the process: (a) to communicate effectively with each other, and (b) to reach agreement on the issues in dispute, and (c) to achieve their own resolution of the dispute. (2) The regulations may declare that any process of a specified kind is, or is not, mediation for the purposes of this Act. 1. Further, the procedures with respect to mediation under the FDR Act have also been significantly amended (see Pt 2 Divs 1-5 (post-amendment); cf Pt 2 ss 8-11C (pre-amendment)). 2. Those amendments, however, do not create controversy in the current proceedings. This is because, notwithstanding the contentions raised with respect to the Section 11 Certificate Issue vis-à-vis as to the satisfactory nature of the "mediation" (which will be discussed later in judgment), an exemption certificate as defined by s 13 was not in force (or pending), with respect to these proceedings, at the time of the commencement date. Hence, the amendments made to the FDR Act by the Amendment Act do not extend to the proceedings currently before the Court by virtue of item 12(a) of Sch 1 of the FDR Act. 3. Accordingly, the references to various provisions in the FDR Act throughout this judgment shall concern the FDR Act in its form prior to the commencement date. ISSUE 1: SECTION 11 CERTIFICATE ISSUE 1. The corresponding issues raised by Ms Charlton seemed to be issues 8-13, 22-24 and 26. Those issues were explained by Ms Charlton as follows: 8. Whether the purported farm debt mediation on the 17th July 2014 was validly held and whether the parties to the mediation agreement possessed the requisite authority to mediate and execute a Heads of Agreement pursuant to 17 (3A) of the Farm Debt Mediation Act 1994. 9. Whether Ms Charlton was denied procedural fairness in respect of the Farm Debt Mediation process by the NSW Rural Assistance Authority. 10. Whether the Section 11 Certificate issued pursuant to section 11 (1) c (i) by the NSW Rural Assistance Authority was issued ultra-vires. 11. Whether the National Australia Bank Limited is entitled to proceed to Judgement and possession without a valid Section 11 Certificate under the Farm Debt Mediation Act. 12. Whether the proceedings to seek judgement and a writ of possession filed in the Common Law Possession List Case number 2015/27843 constitute further enforcement action. 13. Whether s 6 of the Farm Debt Mediation Act applies to these proceedings. 2015/27843. … 22. Whether the Rural Assistance Authority has submitted to the relief sought in the Action Josephine Joan Charlton & Kevin Michael O'Brien vs RAA, by the filing of Snr Crown Solicitor a submittal to every section of the relief sought therein invalidates the Section 11 Certificate in force; In that the Section 11 Certificate in force has been issued ultra- vires under the Farm Debt Mediation Act 1994 and therefore the protection afforded under the Farm Debt Mediation Act is restored to "Oriel" Folio Identifier 22/724651 and hence whether the prohibition of possessory action is therefore barred by the Farm Debt Mediation Act 1994. 23. Whether NAB is entitled to proceed in contravention of the Farm Debt Mediation Act 1994 based on an ultra-vires issued Section 11 Certificate whilst trespassing on the Real Property Act 1900 Section 74F, 11R Caveat which at Section 4 Prohibits Possessory Applications. 24. Whether NAB seeking judgement for debt and possession of property being "Oriel" Tottenham - Folio Identifier 22/724651 is enforcement action according to the Farm Debt Mediation Act 1994 by way of action, the filing and commencement of proceedings in the Supreme Court of NSW Case 2015/27843. … 26. Whether NAB had the legal right to issue Real Property Act 1900 57 (2) b notices and enforcement action before satisfying the requirements of applicable law, the Farm Debt Mediation Act 1994 Section 8(1) and issuing the notice to a beneficiary of the Phoenix Trust with no legal authority to deal with them. Ms Charlton's Submissions 1. Ms Charlton's overall submission in answer to the Section 11 Certificate Issue was that the s 11 certificate should be set aside because there was not a "satisfactory mediation" for the purposes of the FDM Act. However, she supported that submission with several subsidiary contentions, which I summarise below: 1. Ms Charlton resigned as trustee of the Trust on 20 August 2011, leaving Mr O'Brien as the sole trustee of the Trust. Ms Charlton carried out all of the required steps to resign under the Deed save for the production of the Certificate of Title which NAB withheld. 2. As trustee of the Trust, Mr O'Brien was required to participate in the mediation that took place on 17 July 2014. Since Mr O'Brien did not participate in that mediation (in his closing submissions, Mr O'Brien submitted that the mediator allowed him to be a "support person only"), there was not a "satisfactory mediation" for the purposes of s 4(1A) of the FDM Act. 3. Ms Charlton did not have authority to represent Mr O'Brien under s 17(3A) of the FDM Act. 4. As a result of contentions 1-3 above, the s 11 certificate ought to be set aside. If the s 11 certificate is set aside, the proceedings brought by NAB are void by reason of s 6 of the FDM Act. 5. The provision of the Mediation Summary by Mr O'Keefe was not in compliance with s 18A of the FDM Act because it was not provided "at the completion of the session" (the Mediation Summary was provided on 18 July 2014, the day following the mediation). 6. The s 11 certificate should be set aside under s 69 Supreme Court Act 1970 (NSW) for the following reasons: 1. Aside from the Mediation Summary, the circumstances surrounding the mediation were not taken into account by the RAA. 2. The RAA failed to take into account Mr O'Brien's non-involvement in the mediation. 3. NAB failed to give Ms Charlton notice that it had agreed to a mediation pursuant to s 9A(1) of the Act. This affected Ms Charlton's rights under s 9B(1) having regard to the provisions of s 9B(2)(ii) and (iii). 1. The RAA was obliged to provide to Ms Charlton with NAB and Mr O'Keefe's response to Ms Charlton's submission of 14 August 2014. 2. A satisfactory mediation did not take place because Ms Charlton had initially given a guarantee and indemnity to NAB in respect of the Overdraft in her personal capacity. Hence, NAB was also obliged to mediate with her under the FDM Act in her personal capacity (the mediation that took place was with Ms Charlton in her capacity as trustee). 3. The RAA failed to take into account the action by NAB in 2011. (This will be discussed in the context of the 2011 Action Issue below). 4. The s 11 certificate expired and therefore NAB was not entitled to rely on s 11(6) as authority for the proposition that the mediation was not invalid. (This contention will also be discussed in the context of the 2011 Action Issue below). (Those ten contentions shall be hereinafter referred to, with respect to the Section 11 Certificate Issue, by their respective numbered designations, namely, "contention 1" through to "contention 10"). NAB's Submissions 1. NAB's submissions as to contention 1 were directed at whether Ms Charlton had in fact validly resigned as trustee of the Trust. As to this point, NAB submitted that neither the requirements of the Deed, nor s 44 of the Trustee Act 1958 (Vic) were complied with in order to effect Ms Charlton's resignation. 2. As to contention 2, NAB submitted that, if Ms Charlton had validly resigned as trustee of the Trust, Mr O'Brien's alleged failure to participate in the mediation did not mean that no satisfactory mediation took place for the purposes of s 11(1)(c)(i) of the FDM Act. 3. To this end, NAB submitted that NAB was only obliged to mediate with Ms Charlton under the FDM Act, as Ms Charlton was the farmer and the person owing the farm debt. NAB also submitted that Mr O'Brien could have involved himself in the mediation process as he was present. NAB contended that a satisfactory mediation under the FDM Act did not require the involvement of every person potentially affected by the outcome of the mediation. NAB also advanced the alternate position that, even if a satisfactory mediation had not occurred, the s 11 certificate was still validly issued under s 11(1)(c)(iii) of the FDM Act. 4. As to contention 3, for the reasons expressed in relation to contentions 1 and 2, NAB submitted that it was not relevant that Ms Charlton did not obtain written authority from Mr O'Brien to enter into a Heads of Agreement prior to the mediation. 5. For the purposes of contention 4, NAB submitted that, for the reasons in contentions 1-3, the s 11 certificate was not invalid and, even if this was not the case, the mediation would not be invalid pursuant to s 11(6) of the FDM Act. 6. In relation to contention 5, NAB submitted that the construction of s 18A of the FDM Act did not suggest that the Mediation Summary needs to be completed immediately following the mediation. Therefore, the completion of the Mediation Summary by Mr O'Keefe the day following the mediation was sufficient. 7. As to contention 6, NAB pointed to the fact that the judicial review proceedings had been commenced out of time under r 59.10(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and that time should not be extended under r 59.10(2) because of the prejudice to NAB (having regard to the matters in r 59.10(3)). NAB noted in that respect that Ms Charlton became aware of the decision of the RAA to issue the s 11 certificate at the time it was issued. 8. In that respect, NAB submitted that, for the contentions below, relevant to Ms Charlton's prospects of success, the Court would not exercise its discretion to extend time. NAB referred in that respect to the decision of Basten JA in Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 ("Tomko") at [57]-[58]. 9. Those contentions were as follows. 10. NAB submitted that circumstances outside of the Mediation Summary were taken into account by the RAA. In that respect, NAB referred to the following matters being taken into account: 1. Ms Charlton's and Mr O'Brien's submissions of 14 August 2014; and 2. documents referred to within those submissions, such as a letter from Ms Charlton to the mediator dated 4 July 2014. 1. Further, NAB submitted that such evidence concerning the mediation was not admissible due to the effect of s 15 of the FDM Act. NAB further submitted that the common law position, such as that advanced in Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252 ("Gain"), was that s 15 of the FDM Act is not only applicable to judicial review of a decision of the RAA to issue a s 11 certificate, but also that s 15 would restrict judicial review of such decisions to very rare situations (and not in this case). 2. NAB submitted that even if this threshold question was met, the RAA did not make an error in issuing the certificate for the reasons outlined in contention 1-5. NAB also submitted that Ms Charlton was not denied procedural fairness by RAA in its decision to issue the s 11 certificate. Nor did the RAA fail to take into account relevant material. 3. NAB submitted that it had complied with s 9A of the FDM Act, but made the alternate submission that, if NAB had failed to comply with that provision, that fact did not infect the RAA's decision to issue the s 11 certificate. 4. As to contention 7, NAB submitted that in order to afford procedural fairness, it is not necessary to give an aggrieved person the opportunity to comment upon and respond to each and every communication received from another interested party. NAB, in this respect, reiterated the submissions it had made as to procedural fairness arising in contention 6. 5. In relation to contention 8, NAB first submitted that, as a matter of fact, Ms Charlton did not enter into the guarantees and indemnities only in her personal capacity, but also in her capacity as trustee of the Trust. NAB also submitted that the initial guarantee and indemnity in support of the Overdraft was no longer relied upon after the execution by Ms Charlton of the Second Notice of Agreed Changes and the Second Business Letter of Offer on 10 September 2007. NAB submitted that from this time, only the mortgage was taken as security in respect of Ms Charlton's indebtedness. It was submitted that it does not sue Ms Charlton on any guarantee and indemnity and therefore, that those documents were irrelevant. NAB further contended that Ms Charlton's contention that a trustee has two separate legal personalities is incorrect at law having regard to Suncorp Insurance and Finance v Commissioner of Stamp Duties (1997) 36 ATR 514; [1998] 2 Qd R 285 ("Suncorp Insurance") at 305-306; MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd [2012] NSWSC 911 ("MacarthurCook") at [117] (per Hammerschlag J); ALYK (HK) Ltd v Caprock Commodities Trading Pty Ltd [2015] NSWSC 1006 at [22] (per Black J). NAB finally noted that if Ms Charlton's submissions extended to the RAA failing to afford procedural fairness to Ms Charlton in this respect, or failing to take this matter into account, that Ms Charlton did not agitate this issue to the RAA. 6. As mentioned, contentions 9 and 10 will be discussed in the context of the 2011 Action Issue below. Consideration 1. I shall deal with each of the subsidiary contentions raised by Ms Charlton with respect to the Section 11 Certificate Issue seriatim. Contention 1 1. Ms Charlton contended that she validly resigned as trustee of the Trust, leaving Mr O'Brien as the sole trustee with whom NAB was required to involve in the mediation. I consider Ms Charlton's contention is wrong in law. Clause 15 of the Deed provided, inter alia, as follows: 15. The person(s) named in the Schedule hereto as "The Appointor(s)" or the survivor of them shall have the power by instrument in writing at any time and from time to time to remove any Trustee of these presents and to appoint a new or additional Trustee or Trustees whether in addition to or in substitution for any other Trustee or Trustees… … Upon the appointment, removal or retirement of a trustee pursuant to these presents or whether made or done pursuant to the provisions of the Trustee Act as amended from time to time it shall not be necessary for such appointment, removal or retirement to be effected by registered deed or by any deed and such appointment, removal or retirement shall be fully effective provided the same is made by instrument in writing and signed by the relevant persons pursuant to this deed or such persons as authorised or nominated by or pursuant to the Trustee act aforesaid and any minute recorded in the minutes of the trustee of this deed as to the appointment, removal or retirement of any trustee or trustees shall be conclusive proof that such appointment, removal or retirement was effective in all respects. 1. The "Schedule" of the Deed names the appointor as "John Laurence O'Brien" (Ms Charlton's uncle). As cl 15 of the Deed provided that Ms Charlton, as trustee, could only be removed by the authority of the appointor of the Trust or his personal representatives, Ms Charlton's letter of resignation of 20 August 2011 was not sufficient to meet the requirement of cl 15. 2. It should be noted, in that respect, that the appointor, John Lawrence O'Brien, did author a letter dated 20 March 2016 which stated "[I] hereby accept and confirm the resignation of Josephine Joan Charlton (nee O'Brien) as Trustee of the Phoenix Trust on August 20. 2011." However, while the document appears to comply with cl 15 of the Deed, the letter was not created until after the subject proceedings were commenced. As such, I do not consider the letter to be relevant to my determination of the validity of Ms Charlton's resignation as trustee of the Trust for the purpose of these proceedings; the sole document relevant to the resignation was Ms Charlton's letter of 20 August 2011. In fact, it underlines the absence of evidence that Ms Charlton had validly resigned as trustee before March 2016. 3. Further, Ms Charlton's resignation was not valid under s 44 of the Trustee Act 1958 (Vic). Section 44 provides, inter alia: 44 Retirement of trustee without a new appointment (1) This section applies where a trustee declares by writing that he is desirous of being discharged from all or any of the trusts reposed in him, and after his discharge there will be either a trustee company or at least two individuals to act as trustees to perform the trusts from which that trustee desires to be discharged. (2) In any case to which this section applies if the co-trustees and such other person (if any) as is empowered to appoint trustees consent by writing to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property, the trustee desirous of being discharged— (a) shall be deemed to have retired from the trusts from which he has declared he desires to be discharged; and (b) subject to subsection (3) of this section, shall, by the writing by which consent is given to his discharge, be discharged from the trusts under this Act— without any new trustee being appointed in his place. 1. It is clear that s 44(2)(a) and (b) of that Act are not excited unless "the co-trustees and such other person (if any) as is empowered to appoint trustees consent by writing to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property". From the analysis above, the appointor, John O'Brien, was empowered to appoint or discharge trustees under the Deed. As he had not consented by writing to the discharge of Ms Charlton as trustee at the relevant time, s 44 of the Trustee Act 1958 (Vic) was not satisfied. 2. For those reasons, I do not consider that Ms Charlton had validly resigned as trustee of the Trust at the time of the mediation. Additional Issues 3, 6 and 7 1. Ms Charlton made the following oral submission in closing addresses: … I say I resigned according to trustee I did everything the trustee told me to do, the only thing I couldn't do was the title because the bank said they were not going to provide the certificate of title. 1. Regardless of whether NAB failed to, withheld, or could not provide Ms Charlton the Certificate of Title, for the reasons expressed above I do not consider that Ms Charlton had done everything else required under the Deed to resign as trustee of the Trust. Contention 2 1. In my view, the FDM Act, properly construed, placed an obligation on NAB to mediate only with Ms Charlton (not also with Mr O'Brien). 2. The FDM Act provides that mediation must take place between the "farmer" and the "creditor" (see ss 8(1), 9(1), 9(1A), 11(1A), 11AA(1) and 17(4)). 3. Further, under the FDM Act, the mediation must concern a "farm debt" (see ss 4(1A), 8(2), 9(1), 9(1A), 9A(1), 9B(1), 11(1)(c)(i), 11(5) and 12A(1)). Section 4(1) of the FDM Act provides that a "farm debt" is a debt "incurred by a farmer" that is secured wholly or partly by a "farm mortgage". A "farm mortgage" secures the obligations of the farmer. 4. The relevant provisions of the FDM Act were discussed by Heydon J in Waller. His Honour stated (at [52]): [52] Section 8(1) forbids enforcement action by a creditor against a farmer "in respect of" a farm mortgage. The expression "in respect of" can encompass several farm debts secured by the farm mortgage. Similarly, "enforcement action" can encompass remedies sought by the creditor in relation to several distinct disputes about distinct farm debts. Section 8(3) only operates to permit enforcement action under s 8(1) in relation to a dispute about a farm debt if a s 11 certificate is in force in respect of the farm mortgage. But in circumstances like the present, s 11(1)(c)(i) provides that the certificate cannot be issued unless the Authority is satisfied that satisfactory mediation has taken place in respect of "the farm debt involved" in the dispute which went to mediation. The issue of the certificate does not depend on the Authority being satisfied that satisfactory mediation has taken place in respect of any aspect of the farm mortgage at large. Thus the dispute about a farm debt – "the farm debt involved" – which was satisfactorily mediated under s 11(1)(c)(i) must be the same dispute as that which triggered the creditor's desire to take the enforcement action referred to in s 8(1). 1. As mentioned in the factual background above (at [161]-[162]), Ms Charlton agreed that she was, from late 2011 (including the time that mediation was held), the farmer under the FDM Act (despite pleading that the trust was the farmer in the amended defence filed 20 May). Ms Charlton also agreed that she incurred the farm debt and that the farm mortgage secured her obligations. It is clear that Mr O'Brien did not owe a farm debt. The farm debt was the debt owed under the mortgage. That mortgage listed Ms Charlton as the only mortgagor. I am satisfied that, based on the provisions of the FDM Act listed at [291]-[292] above, it was not necessary for Mr O'Brien to be involved in the mediation for the purposes of the FDM Act. 2. NAB was also correct to submit the term "satisfactory mediation" in s 4(1A) of the FDM Act, properly construed, did not require the mediation to involve every person potentially affected by the outcome of the mediation. 3. As earlier mentioned, s 4(1A) provides: (1A) A reference in this Act to satisfactory mediation is a reference to: (a) a mediation that has achieved a resolution of a farm debt dispute, or (b) a mediation that has proceeded as far as it reasonably can in an attempt to achieve a resolution of a farm debt dispute but has nevertheless failed to resolve the dispute, or (c) a mediation specified or of a class described in regulations made for the purposes of this subsection to be a satisfactory mediation. 1. Section 4(1A)(b) gave statutory effect to the construction of satisfactory mediation in Gain. 2. In Gain, Gleeson CJ stated (at 257): A satisfactory mediation is one which fulfils the object of the Act. It is not an object of the Act to force people to settle their disputes. The object of the Act is to give them an opportunity to do so by establishing a procedure to be followed. That procedure, however, cannot produce a result unless both parties want it. Legislation cannot force people to agree. 1. Cole JA stated (at 264): The use of the expression "satisfactory mediation" in s 11(1) is regrettable for it does not express with any lucidity what parliament intended to convey. However as a matter of construction, in my view "satisfactory mediation" where there used means a mediation which has proceeded as far as it can. The outcome may be either resolution of the dispute or the reaching of a stage where the mediation being a consensual arrangement to continue discussions before an approved mediator, has broken down. 1. Sheppard AJA stated (at 266): Accordingly, the expression "satisfactory mediation" must mean a mediation which is either successful in achieving a settlement or one which has been taken as far as it reasonably can be in an attempt to achieve a settlement but which has nevertheless failed in that object. 1. Section 4(1A) does not include a requirement that the mediation involve every person potentially affected by the outcome of the mediation, nor can the same be implied. 2. Further, even if it was the case that Mr O'Brien, as an affected party, was required to be involved in the mediation, Mr O'Brien was himself present at the mediation and was able to involve himself in the mediation process. That was sufficient for the purpose of s 4(1A)(b) despite his contention that he was a "support person only". Contention 3 1. For the reasons above, Ms Charlton, as the farmer and person owing the farm debt, was the proper party with whom NAB was required to mediate. As NAB was not required to mediate with Mr O'Brien, it is strictly unnecessary for me to consider whether Ms Charlton lacked the authority to enter a Heads of Agreement on behalf of Mr O'Brien at the mediation as she had not been given written authority as is required by s 17(3A) of the FDM Act. 2. In any event, a breach of 17(3A) of the FDM Act would not invalidate the mediation by reason of s 17(6) of the FDM Act. Section 17(3A) states: (3A) Any person representing a party to a mediation (whether or not the person is himself or herself a party to the mediation) must not attend a mediation session unless the person has been given written authority by the party the person represents to enter into Heads of Agreement. 1. Section 17(6) states: (6) A contravention of this section does not invalidate a mediation. 1. The clear wording of s 17(6) leaves no doubt that it applies to breaches of s 17(3A). Contention 4 1. As I have rejected Ms Charlton's submissions in respect of contentions 1-3, I do not consider that the s 11 certificate was invalidly issued on those bases. However, even if I was to accept one or all of Ms Charlton's contentions, it does not necessarily follow that the s 11 certificate was invalidly issued, namely, due to the operation of s 11(1)(c)(iii). 2. That provision is as follows: 11 Certificate that Act does not apply to farm mortgage (1) The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and (b) no exemption certificate is in force in relation to the farm mortgage, and (c) the Authority is satisfied that: … (iii) 3 months have elapsed after a notice was given by the creditor under section 8 and the creditor has throughout that period attempted to mediate in good faith (whether or not a mediation session or satisfactory mediation took place during that period). 1. It is clear that 3 months had elapsed from the issuance of the s 8 notice (on 22 January 2014) to the issuance of the s 11 certificate (on 29 August 2014). NAB submitted that during that period, there was no evidence that NAB had failed to attempt to mediate in good faith. 2. The concept of good faith in the context of farm debt mediation was discussed by Einstein J in Aiton v Transfield (1999) 153 FLR 236; [1999] NSWSC 996 ("Aiton") at [151]-[152]: [151] [s 11 of the Farm Debt Mediation Act 1994 (NSW)] was considered by Badgery-Parker J in State Bank of NSW v Freeman (unreported, Supreme Court of NSW, 31 January 1996) who at 7, made plain that the Farm Mediation Act does not deal with the substantive rights of the parties. Rather, "what it does is to interpose, between default of a mortgagor and enforcement action by a mortgagee, a barrier which is, however, limited in duration". [152] To my mind, the following observations of Badgery-Parker J are particularly pertinent to the matter before me: 'An undertaking to mediate in good faith no doubt connotes a willingness on the part of a party to consider such options for resolution of a dispute as are propounded by the mediator or the opposing party; but it does not appear to me than an inference of lack of good faith can be drawn from the adoption of a strong position at the outset and a reluctance to move very far in the direction of compromise, without more' [at 11]. 1. Ms Charlton also referred to Einstein J's discussion of the core content of the obligation to mediate in good faith as follows (Aiton at [155]-[156]): [155] In the same way the court ought be wary in the extreme of hampering itself by defining in any exhaustive way or by laying down as a general proposition, the ambit of what will constitute a compliance with or failure to comply with an obligation to negotiate or mediate in good faith. [156] These are matters to be determined depending always on the precise circumstances of each individual case. But the 'certainty' issue does require that the court spell out, even in non-exhaustive terms, the perceived essential or core content of an obligation to negotiate or mediate in good faith. To my mind, but without being exhaustive, the essential or core content of an obligation to negotiate or mediate in good faith may be expressed in the following terms: (1) to undertake to subject oneself to the process of negotiation or mediation (which must be sufficiently precisely defined by the agreement to be certain and hence enforceable). (2) to undertake in subjecting oneself to that process, to have an open mind in the sense of: (a) a willingness to consider such options for the resolution of the dispute as may be propounded by the opposing party or by the mediator, as appropriate. (b) a willingness to give consideration to putting forward options for the resolution of the dispute. Subject only to these undertakings, the obligations of a party who contracts to negotiate or mediate in good faith, do not oblige nor require the party: (a) to act for or on behalf of or in the interests of the other party; (b) to act otherwise than by having regard to self-interest. 1. Having regard to the discussion of good faith above, I consider that NAB's submission has some substance, as the admissible evidence does not disclose conduct representing the absence of good faith of NAB. In that respect, the mediator did not suggest the mediation was not "satisfactory", let alone conducted not in good faith. Further, the failure by NAB to agree to reduce or forgive the debt did not, alone, demonstrate a lack of good faith (see s 11(1B) of the FDM Act). However, by reason of my findings as to contentions 1-3, it is strictly unnecessary to decide this point. Contention 5 1. Section 18A of the FDM Act provides as follows: 18A Summary of mediation At the end of a mediation, a mediator must fill in the form approved by the Authority for setting out a summary of the conduct and results of the mediation (including any Heads of Agreement entered into by the parties). Note. Failure to comply with this section may result in the withdrawal of the accreditation of a mediator (see section 12 (3)). 1. I do not consider that Mr O'Keefe's provision of the Mediation Summary on 18 July 2014, the day following the mediation, was in breach of s 18A because, as advanced by Ms Charlton, it was not provided literally "at the end of a mediation". Ms Charlton's submission was that the Mediation Summary was not provided "at the completion of the session". 2. I do not consider that Ms Charlton's construction of the provision may be accepted. 3. The expression "[at] the end of" in that provision is a prepositional phrase referring to the noun mediation. However, by its ordinary meaning, and having regard to the context in which the expression is used, the expression is no more than a reference to the closing or finish of the mediation. The mediator must not prepare the summary before this time but the expression "by the end of the mediation" does not mean literally by the moment the mediation ends. 4. The purpose of the provision is simply to provide that a summary meeting the conditions set by the provision is provided and that the time for doing so should be the end of the mediation. 5. The construction proposed by Ms Charlton would create an impractical and unworkable requirement and one inconsistent with the provisions of s 18A which require the mediator to fill out a form setting out a summary of "the conduct and results of the mediation"; the obligation which subsists until the very end of the mediation. It is very unlikely that the legislature would have imposed a requirement which may be virtually impossible to fulfil if the provision were read literally in the manner contended by Ms Charlton. It is unnecessary to decide what degree of latitude in the fulfilment of the provision is available as it is sufficient to conclude that the provision of the summary by the next day could not offend the provision including any implied condition as to the time by which a summary should be provided. 6. In my view, s 18A did not require the summary of mediation to be provided immediately upon the completion of the mediation; the next day was sufficient. Contention 6 1. Prior to addressing the substantive grounds forming the basis of the application to set aside the judicial review proceedings, it is necessary to consider the submissions by NAB that the judicial review application was out of time and no extension should be granted to bring the application in time in the exercise of the Court's discretion. 2. It may be noted that Ms Charlton, in her written reply of dated 27 April 2016, pleaded that s 29 of the FDM Act had the effect of allowing a 3 year period from the commission of an offence to bring proceedings. No submissions were made in support of that contention. In any case, the proposition is incorrect in the case of the bringing of the judicial review proceedings. 3. Section 29 of the FDM Act provides: 29 Limitation Despite anything in any Act, proceedings for an offence against this Act or the regulations may be brought within the period of 3 years after the commission of the offence or, with the consent of the Attorney General, at any later time. 1. The judicial review proceedings were not proceedings for an offence against the FDM Act. Further, the FDM Act does not mandate that the RAA consider certain circumstances in order to satisfy itself of the matters in s 11(1)(c). Thus, the judicial review proceedings exist outside of the scope of the FDM Act. 2. Having decided that s 29 of the FDM Act does not operate with respect to the judicial review proceedings, I turn to r 59.10 of the UCPR, which provides as follows: 59.10 Time for commencing proceedings (1) Proceedings for judicial review of a decision must be commenced within 3 months of the date of the decision. (2) The court may, at any time, extend the time for commencing proceedings fixed by subrule (1). (3) In considering whether to extend time under subrule (2), the court should take account of such factors as are relevant in the circumstances of the particular case, including the following: (a) any particular interest of the plaintiff in challenging the decision, (b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings, (c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision, (d) any relevant public interest. (4) This rule does not apply to proceedings in which there is a statutory limitation period for commencing the proceedings. (5) This rule does not apply to any proceedings in which the setting aside of a decision is not required. 1. Here, the judicial review proceedings were commenced by Ms Charlton out of time, namely, more than three months after the RAA decided to issue the s 11 certificate. If the time is to be extended under r 59.10(2), then regard must be had to the matters in r 59.10(3). 2. There are a number of factors to be considered in determining what I have taken is Ms Charlton's application to extend time. 1. There is no doubt Ms Charlton and Mr O'Brien have a particular interest having regard to an action being brought with respect to the property. However, it is equally clear that there would arise, if time were extended, a prejudice to NAB as it has incurred expense on the basis of the s 11 certificate being valid by commencing and prosecuting the debt and possession proceedings (see r 59.10(3)(b)). 2. Ms Charlton became aware of the decision to issue a s 11 certificate at the time the s 11 certificate was issued (see r 59.10(3)(c)). 3. Whether Ms Charlton's application would have prospects of succeeding is relevant to the Court's discretion to extend time (see for example Tomko at [57]-[58] (per Basten JA)). As demonstrated below, I have concluded Ms Charlton's case for judicial review must fail. 1. In the circumstances, the application to extend time by bringing the proceedings in matter number 2016/122304 should be refused. 2. In terms of the contentions raised by Ms Charlton in relation to the judicial review proceedings, it is first necessary to consider the effect of s 15 of the FDM Act as it applies to the admissibility of evidence. 3. Section 15 provides as follows: 15 Confidentiality of mediation sessions (1) Evidence of anything said or admitted during a mediation session and a document prepared for the purposes of, in the course of or pursuant to, a mediation session are not admissible in any proceedings in a court or before a person or body authorised to hear and receive evidence. (2) In this section, mediation session includes any steps taken in the course of making arrangements for a mediation session or in the course of the follow-up of a mediation session. (3) This section does not apply to the following documents: (a) Heads of Agreement, (b) a contract, deed, mortgage or other instrument entered into as a result of, or pursuant to, Heads of Agreement, (c) a summary of mediation under section 18A. 1. In Gain, s 15 was relied upon by Gleeson CJ to dispose of an application for judicial review of a decision by the RAA to issue a certificate under s 11 on the basis that a satisfactory mediation had not taken place. His Honour stated (at 256): For reasons that will appear, I consider that it was reasonable of the Authority, in those circumstances, to decide that a satisfactory mediation had taken place. However, whether or not that be correct, the attempt by the appellants to demonstrate that no reasonable administrator in the position of the Authority could have concluded that a satisfactory mediation had taken place depended upon proving what had occurred before the mediator. The argument about the reasonableness of the Authority's opinion that a satisfactory mediation had taken place could not have been seriously advanced, or determined, without evidence of what was said and done during the mediation session. Evidence of that kind, however, is rendered inadmissible by s 15. The reason for such legislative provision is obvious. It is the policy of the legislation that parties should be encouraged to discuss their differences without the risk that things they say might later be used against them, in court, if the mediation does not result in settlement. The circumstance that s 15 renders inadmissible the evidence essential to their case is sufficient to dispose of the present appeal adversely to the appellants. It is unnecessary to decide whether there is a narrower area of exclusion of judicial review, co-extensive with the ambit of s 15. As indicated above, I would reject the broad claim for exclusion advanced on behalf of the respondent. Argument was not addressed to the possibility of a narrower exclusion on the basis that parliament has, in s 15, evinced an intention to exclude review in any case in which the just determination of an application for review would require consideration of matter, evidence of which is rendered inadmissible by s 15. I would leave that question open. It may be of only theoretical importance. It is not of practical significance in the present case. 1. To similar effect, Cole JA stated (at 263): The consequence of s 15 is that the circumstances in which a successful challenge by way of judicial review to a decision to issue a s 11 certificate can be mounted will be rare indeed, but I would not exclude the possibility of such a challenge. 1. Sheppard AJA stated (at 265-266): The problem which confronts the appellants in relation to the first question is not whether or not in absolute terms the decision is reviewable under any circumstances. Rather the difficulty for them is an evidentiary one. In order to raise the second question, the appellants need to rely on evidence of what occurred before the mediator, or at least on a document entitled "Summary of Mediation" which the mediator himself has signed. On its face, s 15 of the Act appears to operate to render those matters inadmissible in these proceedings for it provides, so far as relevant, that evidence of anything said or admitted during a mediation session and of a document prepared for the purposes of, in the course of or pursuant to, a mediation session are not admissible in any proceedings in a court or before a person or body authorised to hear and receive evidence. The question is whether there is any basis upon which these words should be read down. One could have understood the legislature making the proceedings before the mediator and documents issued in the course of or as a consequence of it inadmissible in proceedings for the enforcement of a mortgagee's security or in an action on the personal covenant contained therein. But the difficulty for the appellants is the width of the language which s 15 uses. I have reached the conclusion that, in the circumstances of this case, the clear and unambiguous language which is employed operates to make inadmissible the material on which the appellants need to rely in order to raise the question of substance which they wish the Court to consider. That said, I wish to say that I ought not to be taken as deciding that there are no cases in which proceedings before a mediator and documents issued in the course of or as a consequence of a mediation may be admissible. I have in mind cases where either the mediator or the other party has engaged in fraud or perhaps where an analysis of what occurred before the mediator demonstrates that there has been no mediation at all. I instance cases in which there may have been no real attempt by the mediator to discharge the functions conferred upon mediators by s 13 of the Act. 1. The application of the analysis of s 15 in Gain should be qualified in this case, as Gain was decided before s 15 was amended to include s 15(3), which provides that s 15(1) does not apply to a summary of mediation under s 18A. In this case, evidence as to whether a "satisfactory mediation" occurred is limited to the summary of mediation itself. 2. There was no evidence that the mediation fell within the limited circumstances alluded to in the final paragraph of the above extract of Sheppard AJA's judgment in Gain. 3. Ms Charlton seemed to suggest that a lack of good faith on the part of NAB demonstrated that what occurred before the mediator was not in fact a mediation (although that position was not entirely clear). I do not consider that Sheppard AJA contemplated that a lack of good faith by a party to the mediation was sufficient to draw a conclusion that there had been "no mediation at all", especially having regard to the example his Honour gives of a mediator, not a party, not attempting to discharge their functions under the FDM Act. Further, I have already expressed significant doubt as to the strength of Ms Charlton's contention that the mediation was not in good faith for the reasons expressed at [309]-[312]. My inclination was that Ms Charlton's contention should fail, however I found it unnecessary to decide the issue. Here, I reject the premise of Ms Charlton's argument, namely, that a lack of good faith by NAB could bring the mediation within the limited circumstances outlined by Sheppard AJA in Gain. Therefore, it is again unnecessary to decide whether the mediation was in good faith, although there is nothing apparent on the admissible material to indicate that NAB acted other than in good faith. 4. From this analysis, in addition to the effect of s 15 discussed above, the only evidence bearing upon the judicial review proceedings is the Mediation Summary. 5. Nothing on the face of the admissible evidence - the Mediation Summary - is suggestive that the judicial review proceedings can be sustained by Ms Charlton. 6. Had the evidence not been limited by s 15, my conclusion would not change for the following reasons. 7. As to the general proposition that the RAA failed to afford Ms Charlton procedural fairness in its decision to issue the s 11 certificate, I accept the submissions advanced by NAB. 8. Where a decision has the potential to affect rights or interests, procedural fairness ought to be observed. Nevertheless, it has recently been emphasised that the proper focus in any case is on "what is required in order to ensure that the decision is made fairly in the circumstances having regard to the legal framework within which the decision is to be made": see Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40 at [30]. 9. Here, the decision-making framework was not one requiring the RAA to provide "a running commentary" on Ms Charlton's contentions: Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 at [31]. 10. The High Court recently stated, in Minister for Immigration and Border Protection v SZSSJ (2016) 259 CLR 180; [2016] HCA 29 ("SZSSJ"), that ordinarily, affording a reasonable opportunity to be heard in the exercise of a statutory power requires that a person whose interests are likely to be affected to be put on notice of: the nature and purpose of the inquiry; the issues to be considered in conducting the inquiry; and the nature and content of information that the repository of power undertaking the inquiry might take into account as a reason for coming to a conclusion adverse to the person (see SZSSJ at [83]). 11. In my view, the RAA met those fundamental requirements. 12. I do not accept Ms Charlton's contention that the RAA's decision to issue the s 11 certificate miscarried because it refused to accept her argument about the enforcement action taken by NAB in 2011. 13. As Mason J said in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 (at 40-41): The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned: Wednesbury Corporation. … it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power. 1. Ms Charlton cannot seek to impugn the decision of the RAA on the basis that they failed to take into account relevant material, simply because the decision-maker ascribed it little to no weight. I accept the submission of NAB that such an approach would amount to an impermissible merits review: see Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 at [27]-[33]. 2. To the extent that Ms Charlton's contentions are confined to the issue of the RAA not taking into account a relevant consideration (rather than the RAA not accepting her argument), I also accept the contentions of NAB. 3. In Kirkham Estate Wines Pty Ltd v General Manager, NSW Rural Assistance Authority [2004] NSWADTAP 24 ("Kirkham Estate"), the Administrative Decisions Tribunal of NSW held (at [22]): [22] The Act requires the Authority to be 'satisfied' that a satisfactory mediation has taken place. In order to reach a state of satisfaction, factors beyond those reflected in the summary of mediation or the exit questionnaire may sometimes need to be considered. One might be whether the appointed mediator held the required qualifications under the Act. (That was not an issue in this case.) 1. In that case, the authority "relied entirely on the mediator's summary of mediation and exit questionnaire as to the question of whether the mediation could be said to be a 'satisfactory mediation'" (see at [22]). Ms Charlton relied on Kirkham Estate to support her proposition that the RAA did not take into account the relevant circumstances surrounding the mediation (apart from the summary of mediation). On balance, I do not consider this to be the case. The RAA took into account the submissions of Ms Charlton and Mr O'Brien of 14 August 2014. In this respect, the RAA's chronology of events dated 29 August 2014 recorded the following entries: 25/7/2014 Authority wrote to the farmers advising them of the application, the effect of a S11, details of mortgages and loans, details of the act of default as claimed by the creditor, grounds upon which the certificate had been claimed, factors to be considered in determining the application, the farmers' right to lodge a submission and the date by which it should be received. 25/7/2014 Authority wrote to the bank acknowledging receipt of their application and advising that the farmers had been allowed until 22 August 2014 to lodge a submission. 19/8/2014 Submission received from Ms Charlton, refer file. 19/8/2014 Copy of submission forwarded to NAB for response with copy also forwarded to mediator Dan O'Keefe. Response requested by 25/08/2014. 25/8/14 Replies received from the Mediator and Bank. Refer file. 1. In the communication sent from the RAA to Ms Charlton on 25 July 2014 (referred to in the chronology), the RAA stated that in determining the application, it would take into account, inter alia, "any submissions you make". In the determination to issue the s 11 certificate, the RAA noted that it had received the submission of Ms Charlton on 19 August 2014 and that it had taken into account, inter alia, "the submission from the farmer and the response from the National Australia Bank and Mediator". It seems clear from the documentary evidence that the RAA did in fact take into account Ms Charlton submissions. 2. Further, I consider that the RAA also took into account correspondence prior to the mediation, as such correspondence was referred to within the submissions. Those additional materials included a letter from Ms Charlton to the mediator dated 4 July 2014, which contended that NAB had taken "enforcement action" for the purposes of the FDM Act in 2011, and correspondence sent to Ms Fran Willard. As to the latter correspondence, Ms Willard was one of the members of the Section 11 Committee that decided to issue the s 11 certificate. 3. Even if account is taken of material beyond the summary of mediation, the RAA has not failed to take into account relevant circumstances surrounding the mediation as contended by Ms Charlton. 4. As to whether the RAA failed to take into account Mr O'Brien's non-involvement in the mediation, for the reasons I have expressed above, the RAA was not required to take that non-involvement into account. NAB was not required to mediate with Mr O'Brien, nor was NAB required to involve him in the mediation. In any event, Mr O'Brien did attend the mediation. 5. I turn then to the contention that NAB failed to comply with s 9A of the FDM Act. 6. By way of brief repetition, Ms Charlton submitted that NAB failed to give her notice that it had agreed to a mediation pursuant to s 9A(1) of the FDM Act. Ms Charlton contended that this affected her rights under s 9B(1), having regard to the provisions of s 9B(2)(ii) and (iii). 7. Section 9A states as follows: 9A Creditor may agree to or decline mediation (1) A creditor who has received a request from a farmer to mediate may, by notice in writing given to the farmer, agree or decline to mediate in respect of the farm debt involved. (2) A refusal by a creditor to mediate does not, of itself, give rise to any claim or other consequence under this Act if the farmer is not in default. (3) If a farmer is in default, a refusal by a creditor to mediate may result in the issuance of an exemption certificate. 1. Section 9B is in the following terms: 9B Exemption certificates (1) A farmer who is in default and who has requested a creditor to mediate in respect of the farm debt involved (whether or not the farmer has been given a notice under section 8) may apply to the Authority for a certificate of exemption from enforcement action (exemption certificate) if the creditor does not mediate. (2) The Authority must issue an exemption certificate if: (a) the farmer is in default under a farm mortgage, and (b) the farmer has requested the creditor to mediate in respect of the farm debt involved, and (c) no certificate under section 11 is in force in relation to the farm mortgage, and (d) the Authority is satisfied that: (i) the creditor does not wish to enter into or proceed with mediation, or (ii) the creditor has failed to respond in writing to the request to mediate, within 21 days after the receipt of the request, or (iii) 3 months have elapsed after a request was made by the farmer under section 9 and the farmer has throughout that period attempted to mediate in good faith but no satisfactory mediation has taken place between the farmer and the creditor. (3) While an exemption certificate is in force in relation to a farm mortgage: (a) no certificate can be issued by the Authority under section 11, and (b) no enforcement action can be taken by the creditor. (4) An exemption certificate ceases to be in force on the earlier of the following: (a) 6 months after the day on which the creditor declined to mediate, (b) the day on which the farmer and creditor enter into mediation in respect of the farm debt. 1. Ms Charlton's contentions in this respect cannot be accepted for the following reasons: 1. Section 9A(1) is intended to deal with a request for mediation under s 9(1A) of the FDM Act. It is important that Ms Charlton's request for mediation was made under s 9(1) of the Act, not s 9(1A). 2. Unlike s 8(1) of the FDM Act, there are no formal notice requirements for notice under s 9A(1). I consider that constructive notice of NAB's agreement to mediate was given to Ms Charlton when the RAA issued the mediation kit to her on 20 February 2014. 3. The RAA does not require a creditor to give a notice under s 9A(1). 4. A failure to give notice under s 9A(1) only entitles a farmer to apply for an exemption certificate if "the creditor does not mediate" (see s 9B(1)). As mentioned, Ms Charlton's contention was that the failure of NAB to give her notice pursuant to s 9A(1) of the FDM Act had affected her right under s 9B(1) to apply for an exemption certificate having regard to the provisions of s 9B(2)(ii) and (iii). However, it cannot be said that Ms Charlton's rights were affected in that way. In order to issue an exemption certificate, the RAA must be satisfied that "the creditor does not wish to enter into or proceed with mediation" or "the creditor has failed to respond in writing to the request to mediation" (see s 9B(2)(d)(i)-(ii)). A failure to give notice under s 9A(1) only has legal consequences if the RAA is satisfied as to the existence of one of the conditions in s 9B(2)(d)(i) and (ii). The RAA could not be satisfied of such matters given NAB's response to Ms Charlton's request for mediation under s 9(1) of the FDM Act on 14 February 2014. 5. In any event, even if an exemption certificate was issued, it would have been deprived of any force upon the mediation by virtue of s 9B(4). As no practical injustice would have been suffered by Ms Charlton, her argument that a failure to comply with s 9A of the FDM Act would have adversely affected her rights must be rejected: see Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [36] per Gleeson CJ. 6. The prohibition on enforcement action under s 10(1) only operates upon the giving of notice under s 9 requesting mediation. Although it is unnecessary to decide the question, non-compliance with s 9A does not appear to have any legal consequences under the FDM Act. Contention 7 1. The submission that the RAA failed to accord Ms Charlton procedural fairness by failing to provide Ms Charlton with NAB's and Mr O'Keefe's response to Ms Charlton's submission of 14 August 2014 must fail for the same reasons as expressed at [339]-[343] above. In substance, Ms Charlton's complaint was that she was not given the opportunity to reply to NAB's submissions. 2. It is true that the opportunity to reply must generally be afforded to a person whose rights or interests are affected in the context of a court hearing: see for example Mayes v Mayes [1971] 2 All ER 397; R v Medical Practitioners Professional Conduct Tribunal; Ex parte Medical Board (1985) 40 SASR 84; Escobar v Spindaleri (1986) 7 NSWLR 51; Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57; R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180; Thai v Deputy Federal Commissioner of Taxation (1994) 53 FCR 252; Dobbie v Department of Social Security [1995] FCA 1191; Director of Public Prosecutions (SA) v District Court of South Australia and Lawrie (2005) 92 SASR 94; [2005] SASC 260. However, the same cannot be said in the context of the RAA's decision to issue the s 11 certificate. 3. The legal framework within which the decision was to be made was s 11 of the FDM Act. As mentioned above, the decision-making framework here was limited and did not provide that the RAA was to provide NAB and Mr O'Keefe's reply submissions to Ms Charlton. Nor did s 11 provide that Ms Charlton was required to have the opportunity to make a further submission. The provision did not list the matters that the RAA was required to take into account in coming to its decision. The provision merely stated that the authority be "satisfied" of the matters in s 11(c)(i), (ii) and (iii). In order to afford procedural fairness in the circumstances of this case, it was not necessary to give Ms Charlton the opportunity to comment upon and respond to each and every communication received from other interested parties, namely, NAB and Mr O'Keefe. Contention 8 1. The contention that Ms Charlton had initially given a guarantee and indemnity to NAB in respect of the Overdraft in her personal capacity cannot be sustained. The guarantees and indemnities identified Ms Charlton "as trustee for the Phoenix Trust". 2. It is true that there was no dispute that Ms Charlton initially gave a guarantee and indemnity in support of the Overdraft. However, that initial guarantee and indemnity was not relied upon as security for that facility (or any other facility) after the Second Notice of Agreed Changes and the Second Business Letter of Offer were executed by Ms Charlton on 10 September 2007. Those documents had the effect of increasing the limit of the Overdraft to $150,000, and providing Ms Charlton with the First and Second Business Options Loans for the amounts of $110,000 and $340,000 respectively. 3. From 10 September 2007, the only security in respect of Ms Charlton's indebtedness to NAB was the Mortgage. Further, NAB did not sue Ms Charlton in respect of any guarantee and indemnity. Nor did NAB seek to enforce any right it has, or had, under any guarantee and indemnity. 4. I also consider that the argument proceeds on the incorrect basis that a trustee has two separate legal personalities; Ms Charlton in her personal capacity and in her trustee capacity are not different persons. 5. That conclusion is supported by a series of authority. For example, in MacarthurCook, Hammerschlag J stated (at [117]): [117] An insuperable difficulty lying in the way of the second defendant's submission that the first defendant contracted as two separate personalities in relation to those obligations is the well-established precept that a trustee, in its personal capacity, and in its trustee capacity, remains the same person. The first defendant could have contracted with MacarthurCook in two different capacities, but it cannot contract with itself. The assumption that a trustee in its personal capacity and in its trustee capacity are different persons is a false one: Minister Administering National Parks and Wildlife Act 1974 v Halloran (2004) 12 BPR 22,391 at 22,409. (See also Suncorp Insurance at 305-306). 1. Further, even if it was accepted that Ms Charlton entered those arrangements in her personal capacity, that fact would not lead to the conclusion that NAB was obliged to mediate with her under the FDM Act in her personal capacity as well as in her capacity as trustee of the Trust. 2. Finally, to the extent that Ms Charlton's submissions on this issue extend to form the basis of a judicial review argument, I find that the issue was not agitated by Ms Charlton to the RAA. Further, even in the case that is was agitated, Ms Charlton was not denied procedural fairness in respect of it, nor did the RAA fail to take it into account as a relevant consideration for the same reasons as expressed in relation to contention 3. 3. For those reasons, it was not incumbent upon NAB to mediate with Ms Charlton in her personal capacity, as well as in her capacity as trustee of the Trust; NAB was only required to mediate with Ms Charlton once. Contentions 9 and 10 1. As mentioned earlier, these contentions will be discussed in the context of the 2011 Action Issue below. ISSUE 2: 2011 ACTION ISSUE 1. The corresponding issues raised by Ms Charlton appear to be issues 7 and 29 as follows: 7. Whether National Australia Bank Limited unconscionably engaged in enforcement action as described by the Farm Debt Mediation Act 1994 against Ms Charlton & Phoenix Trust from 2011 to 2014, before any farm debt mediation was conducted, constituting enforcement action barred by S 8 (1) Farm Debt Mediation Act 1994. … 29. Whether NAB had the right considering all the circumstances to categorise the property as a "categorised asset", on or about the 9th September 2011 before enforcement action on the 20th October 2011 and before the purported mediation on the 17th July 2014. Ms Charlton's Submissions 1. Ms Charlton made a number of submissions as to why the proceedings were bad in law or void by virtue of the first and second default notices (being enforcement actions under the FDM Act) predating the issuing of the s 8 notice, the s 9 notice, the mediation and the issuance of the s 11 certificate. 2. It should be noted at the outset that, while NAB did rely on the 26 October 2011 cancellation notice (and, in the alternative, the 2014 cancellation notice), NAB did not rely on the first and second default notices which were issued prior to the issuance of the s 8 notice. Instead, NAB relied upon the third default notice, after and in reliance upon the s 11 certificate. 3. Ms Charlton made submissions that, notwithstanding NAB's non-reliance on the earlier notices (and reliance on only the third default notice), the proceedings remained void or available to be set aside or dismissed in consequence of the two earlier notices. 4. In summary, Ms Charlton raised eight contentions, with respect to the 2011 Action Issue, which shall once again be referred to, within this section of the judgment, by their respective numbered designations, namely, "contention 1" through to "contention 8". Contention 1 1. Prior to the mediation, NAB engaged in enforcement actions being the "cancellation of facilities as well as other actions to enforce the mortgage such as, the issuance of a s 57(2)(b) notice under [the RPA]". Ms Charlton submitted that the following notices issued in 2011 and 2012 were the relevant enforcement actions: 1. the 25 and/or 26 October cancellation notice; 2. the first default notice; and 3. the second default notice. (Those notices, for the purposes of this contention, shall be collectively referred to as "the 2011 and 2012 actions"). 1. Ms Charlton contended that the 2011 and 2012 actions were enforcement actions for the purpose of the FDM Act for the following reasons. 2. First, having regard to the purpose of the FDM Act, it is clear that the FDM Act was intended to be remedial legislation, "its overriding purpose was to prevent persons being driven off their farms because of the inability to pay debt, afford the possibility of mediation to the farmer, and in some cases result in the ability to restructure loans in a bona fide mediation process, thus avoiding the need in successful cases for litigation". 3. In support of that proposition, Ms Charlton referred to the judgment of Young J in Varga v Commonwealth Bank of Australia (1996) BPR 97,617 ("Varga") (at 5), which was approved by Harrison AsJ in Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2017] NSWSC 1727 ("Kiriwina") (at [59]). 4. In Varga, Young J stated (at 5): One must construe the Act to fulfil its purpose. The purpose was to prevent persons being driven off their farms because of inability to pay debt where it was possible for the debt to be rearranged after a bona fide mediation process. To fulfil the purposes of the Act, one must construe it, to my mind, favourably to the farmer, and unless compelled by the language, not permit the overriding purposes of the Act to be defeated by technicalities. 1. Ms Charlton also relied on the observations of Hayne J (at [25]) and Heydon J (at [29], [37], [66] and [67]) in Waller in support of her application. Those passages are extracted below: [25] As Heydon J further explains, the expression "enforcement action" (as it is defined in s 4(1) of the Act) extends to all of the relief that was claimed by the lender in its proceedings. The lender by its pleadings asserted its "entitle[ment] to repayment, including principal and the unpaid arrears of interest" only "under the terms of the Mortgage". The width of the definition of "enforcement action", extending to "any other action to enforce the mortgage" (emphasis added), and the express exclusion of "the enforcement of a judgment" obtained before the commencement of the Act from the definition (emphasis added), point strongly to this construction. And any other construction would frustrate the evident purpose of the Act: to require mediation in respect of the farm mortgage concerned (which is defined by reference to a particular farm debt) before a lender can enforce – that is, bring proceedings in respect of – the farm mortgage. Whether the Act would have prevented a claim for a money judgment, brought only by reference to the third loan agreement, need not be decided. … [29] In outline the legislative scheme is that if a farmer incurs a "farm debt" that is secured by a "farm mortgage", the "creditor" is unable to take "enforcement action" under the farm mortgage until, inter alia, a certificate is issued that the Act does not apply because satisfactory mediation has taken place. The question which the appeal raises is how far that scheme works if a certificate is issued in respect of one farm debt but the creditor later wishes to take enforcement action in relation to another. … [37] Section 11(1) of the Act provides for the issue of a certificate by the New South Wales Rural Assistance Authority ("the Authority"). The relevant part of s 11(1) is as follows: "The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and (b) no exemption certificate is in force in relation to the farm mortgage, and (c) the Authority is satisfied that: (i) satisfactory mediation has taken place in respect of the farm debt involved". The provisions in relation to exemption certificates are immaterial, since no exemption certificate was ever issued. … [66] The expression "enforcement action" is defined in s 4(1) of the Act as meaning not only taking possession of the property, but "any other action to enforce the mortgage". In the Amended Statement of Claim the respondent pleaded that it was a term of the Registered First Mortgage that interest be paid monthly in accordance with, inter alia, the Third Loan Agreement. In the Amended Statement of Claim the respondent also pleaded that the appellant was obliged, under the Registered First Mortgage, to pay the principal sum ($640,000) with interest owing. The respondent contended that a claim for a debt is not "enforcement action" because it does not involve the enforcement of security over the farm property. The better view, with respect, is that the definition of "enforcement action" is wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage. And since the claim to the order for possession was solely based on the breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement, it was inextricably interlinked with the claim for a money judgment. The definition of "enforcement order" in s 4(1) provides that it does not include "the enforcement of a judgment that was obtained before the commencement of this Act". The word "judgment" is not limited to judgments other than money judgments. Had that type of enforcement action not been excluded, it would have fallen within the definition of "enforcement action". The exclusion leaves the enforcement of judgments (including money judgments) open if they were obtained after the commencement of the Act. It follows that action to obtain a money judgment after the commencement of the Act is "enforcement action" so long as it is action to enforce the mortgage. The structure of the Amended Statement of Claim, and the manner in which the proceedings were conducted, justify the characterisation of the respondent's conduct as action to enforce the mortgage, and hence as "enforcement action". [67] Hence the attempt in the Supreme Court proceedings to obtain a money judgment was an action barred by s 8(1) as much as the seeking of possession. 1. Ms Charlton contended that having regard to the construction of the FDM Act in Varga and Waller, the 2011 and 2012 actions were enforcement actions, which had the effect of making those actions void pursuant to s 6 of the FDM Act. Ms Charlton pointed out, for example, that the first default notice claimed principal not yet due for two facilities and also claimed "enforcement expenses", evidencing the fact that the notice was indeed an enforcement action. 2. Ms Charlton also seemed to make two further arguments in that respect. First, that the creditor could not accumulate an increasing farm debt until the s 11 certificate was obtained. In other words, the farm debt remained "at the status quo" level at the point it was issued until the s 11 certificate was issued. I do not consider that this point goes directly to the 2011 Action Issue, rather, the argument goes to the relief sought by NAB. Therefore, to the extent necessary, it will be discussed below. Secondly, Ms Charlton seemed to make the argument that the RAA was required to satisfy itself that an earlier enforcement action (namely, the 2011 and 2012 actions in her submission) had not occurred before issuing a s 11 certificate. In my view, this point formed part of the judicial review proceedings and thus will form part of my consideration as to contention 8 below. 3. Ms Charlton also submitted that the "right to take possession and right to sue for unpaid money arise from conditions in the mortgage". Specifically, she contended that the right to sue for the amount owing arises under cl 27.2(a) of the Mortgage. I accept NAB's characterisation that these submissions appeared to be directed towards the question of whether the 26 October 2011 cancellation notice constituted "enforcement action" within the meaning of s 4(1) of the FDM Act. 4. Ms Charlton also suggested that NAB's actions combined with the RAA's interpretation of "enforcement action" impacted the intended purpose of the FDM Act, and allowed contravention of the FDM Act by NAB, which supported a conclusion of "cronyism and maladministration by the RAA". 5. I might interpose that the issue of "cronyism and maladministration" appears nowhere in the pleadings and there was no notice to the RAA of an intention to make such an allegation. For those reasons, the contention must be put aside. Contention 2 1. The 2011 and 2012 actions were barred by ss 8(1) and 10 of the FDM Act as they occurred prior to Ms Charlton being informed of NAB's intention to take enforcement action in respect of the Mortgage and of the availability of mediation under the FDM Act in respect of farm debts (see s 8(2)). The second default notice was, in any event, invalid due to the operation of s 57(5) of the RPA. 2. Ms Charlton contended that the second default notice was invalid because, even if the Mortgage contained a provision that the principal could be claimed immediately upon any default, s57(5) in the RPA precludes that provision from taking effect until the s 57(2)(b) notice under the RPA has been served and the time given for compliance with the notice has expired and is unsatisfied. Section 57(5) of the RPA provides: (5) Without prejudice to any other manner in which it may be deprived of force or effect, a covenant, agreement or condition whereby upon a default referred to in subsection (2) (a): (a) the whole of the principal or other money of which the payment is secured by a mortgage or charge becomes payable, or (b) a part of that principal or other money (not being a part to which that default relates) becomes payable, has no force or effect until the powers conferred by section 58 become exercisable by reason of that default. Contention 3 1. Subsequent steps purportedly taken in compliance with the FDM Act did not cure the earlier breach of s 8 such that the issuance of the s 11 certificate was invalid. Those steps were: 1. the issuance of the s 8 notice; 2. the issuance of the s 9 notice; and 3. the mediation. Contention 4 1. As the issuance of the s 11 certificate was invalid, the issuing of the 2014 cancellation notice and the third default notice (constituting a statutory enforcement notice pursuant to s 57(2)(b)), remained contrary to the FDM Act because those actions represented a continuation of the enforcement action engaged in 2011. In that respect, the 2014 cancellation notice and the third default notice were "simply an attempt to validate already invalid actions" and NAB "continued to use the unlawful basis on which they obtained the s 11 certificate knowing it was ultra vires". 2. In support of this contention, Ms Charlton placed reliance upon Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 ("Roxo"); Cherryop Pty Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337 ("Cherryop"); and Waller. 3. Ms Charlton also submitted that the commencement of these proceedings constituted enforcement action which was also linked to the initial enforcement actions. 4. Ms Charlton submitted that Kiriwina and Roxo were authority for the proposition that, for the purposes of the FDM Act, notices under s 57(2)(b) of the RPA can be inextricably interlinked to the commencement of proceedings and therefore constitute a single enforcement action. Reference was first made to the judgment of Harrison AsJ in Kiriwina at [131]-[136] as follows: [131] On 23 December 2015 when Kiriwina exercised its power of sale under s 58, Mr Denshire lost his beneficial interest in Greenlees. However, his obligations under his personal covenant to repay the debt contained within the mortgage instrument still existed. (See the first covenant in Annexure A of the mortgage instrument which I have set out earlier in this judgment). Kiriwina (as mortgagor) was also entitled to bring proceedings for the shortfall of any debt after Greenlees' sale on the basis of this covenant. To my mind, because the statutory process in exercising the power of sale under s 58 requires the issue of s 57(2)(b) notices, these notices cannot be separated from either the sale or proceedings or the remaining obligations that still remain. In other words, the issuing of default notices and the subsequent proceedings brought for a shortfall following sale are viewed as a single, inextricably interlinked process founded upon Mr Denshire's personal covenant to repay. It is my view that the current proceedings arise from the reliance upon rights arising from Greenlees' mortgage which are inextricably interlinked to the issue of the s 57(2)(b) notices. In this respect, the proceedings are similar to Waller despite no s 57(2)(b) notices being issued in that case. [132] Kiriwina has not made any submissions to this Court as to why the commencement of these proceedings should be viewed as a separate action to the s 57(2)(b) notices. It is my view that the evidence leads to a contrary conclusion. [133] Hence, the time of the enforcement action was 10 September 2014, being the date on which the s 57(2)(b) notices were issued. At that time, Kiriwina had not yet exercised its power of sale pursuant to s 58 of the Real Property Act. As the mortgage debt was secured by Greenlees it fell into the definition of farm debt contained in s 3 of the Farm Debt Mediation Act. It follows that Kiriwina was also a creditor within the meaning of the Act at the relevant time. As a creditor under a farm debt, the Act applies pursuant to s 5(1). [134] While Mr Denshire was aware of the provisions of the Farm Debt Mediation Act at the time the s 57(2)(b) notices were issued, there is nothing in the Act that suggests this would deprive him of the benefits the Act confers upon him. This conclusion is also supported by s 9(1A) of the Act, which provides that a farmer may request a mediation where notice under s 8 has not been given. (My emphasis). It is my view that the provisions of s 9(1A) of the Act means that there is no statutory obligation upon Mr Denshire to request such a mediation even if he knew of its availability. [135] In these circumstances, Kiriwina was required to give notice of availability of mediation under s 8 of the Farm Debt Mediation Act. Kiriwina did not do so. As a consequence, s 6 of the Farm Debt Mediation Act renders the current proceedings void. Conclusion [136] In summary, firstly, Mr Denshire and Denshire Enterprises fall within the definition of "farmer"; Mr Denshire was engaged in a "farming operation" at all relevant times; and he owed a farm debt that was secured by the Greenlees property at the time of commencement of the enforcement action. Kiriwina is therefore a creditor within the meaning of the Act. The nature of the all monies mortgage and Kiriwina's current claim for debt are inextricably interlinked. On this basis, there is a single enforcement action running from 10 September 2014, being the date on which the s 57(2)(b) notices were issued. 1. Ms Charlton also referred to the following passage of Roxo, as follows (at [31]-[38]): [31] It follows that the Act applied to the enforcement action by the plaintiff in these proceedings and the plaintiff was prohibited from giving a s 57(2)(b) notice to the defendant unless and until it had obtained a s 11 certificate. The proceedings were commenced in contravention of s 10 and thus were void by reason of s 6 of the Act. The plaintiff failed to comply with s 8 of the Act; accordingly the s 57(2)(b) notice was prohibited and accordingly void under s 6. Does certificate issued under s 11 of the Act have retrospective operation? [32] As referred to above, I declined the plaintiff's application for an adjournment since I did not accept that s 11 could operate retrospectively to validate proceedings that were otherwise a nullity by reason of s 6. In my view clear words would have been required in the Act to resuscitate the s 57(2)(b) notice which was void because it was issued in breach of the Act. No such clear words are to be found in the Act. Furthermore I consider that it would be at odds with the purpose of the Act to permit a creditor to stand-over a farmer with proceedings on foot before mediation had been conducted or refused by the farmer. [33] The plaintiff contended that the wording of s 11(4) indicated a Parliamentary intention that if a s 11 certificate were obtained at any time, proceedings which had already been commenced could remain on foot and a s 57(2)(b) notice which had already been issued would be validated. Section 11(4) provides: "A certificate may be given under this section (except where subsection (1)(c)(iii) applies) whether or not any notice has been given under section 8." [34] I consider that s 11(4) is designed to provide for a situation where a farmer refuses to engage in mediation at all. To require a creditor to give a notice under s 8 of the Act in such circumstances would be a solemn farce. Section 11(4) makes it clear that a creditor may apply for a certificate, and a certificate may be given in such circumstances. I reject the plaintiff's argument that it has the effect of validating either a s 57(2)(b) notice or proceedings that are void by reason of s 6. [35] A creditor's right to take enforcement action when the Act applies was considered in Cherryop Pty Ltd v Commonwealth Bank of Australia [1996] NSWSC 194. Cole JA said, at [5]: "The only 'enforcement action' which the Act contemplates as being permissible is enforcement action after the provisions of Part 2 of the Act have been complied with. Part 2 contemplates mediation. Shortly stated, Part 2 permits a creditor to take enforcement action 'in respect of a farm mortgage' only after 21 days have elapsed from it giving the farmer a notice informing the farmer of the creditor's intention to take action 'in respect of the farm mortgage', and of the availability of mediation in respect of farm debts (Section 9(1) and (2)). The farmer on receipt of such notice may within 21 days request mediation 'concerning the farm debt involved' (Section 9(1)). Once that notice has been given, the creditor must not take enforcement action "in respect of the farm mortgage concerned' unless and until the Authority has given a Certificate under Section 11 in respect of the farm mortgage (Section 10). That Certificate is to be issued by the Authority only when it is satisfied that either satisfactory mediation in respect of the farm debt has taken place, the farmer has declined mediation in respect of the farm debt or three months have elapsed since the creditor gave the Notice under Section 8 and the creditor has, during that period, attempted to mediate in good faith." [36] The consequences of the plaintiff's failure to comply with the provisions of the Act are, as Cole JA said, at [6]: "It follows, in my view, that the effect of Section 6 is to extinguish all rights of the secured creditor in respect of farm debts, being those incurred by a farmer for the purpose of the conduct of farming operations and secured over farm property, except rights to take 'enforcement action' in relation to the farm mortgage, and then only after the mediation process contemplated by Part 2 has been implemented, or attempted and failed because the farmer has declined mediation, or bona fide attempts at mediation by the creditor have been unsuccessful. Only then may the secured creditor take enforcement action in relation to the farm mortgage." [37] The defendant submitted that it would be inconsistent with the objects of the Act to permit these proceedings to be maintained. The defendant submitted that it cannot be expected to participate fairly in a mediation process as is required by the Act while the proceedings remain on foot. [38] It follows from what I have said above that the plaintiff had no right to commence the proceedings when it did. The proceedings and the s 57(2)(b) notice are a nullity. Accordingly the proceedings must be dismissed. 1. Ms Charlton noted that, in both Kiriwina (at [137]) and Roxo (at [38]), the proceedings were void pursuant to s 6 of the FDM Act as there was no right to commence the proceedings at the time commenced. 2. Ms Charlton also contended that, as the third default notice was not served on her, "all other s 57(2)(b) notices 'given' in the matter remain 'live'" and therefore constituted "enforcement action" for the purposes of the FDM Act. As found above, I do not accept the submission that Ms Charlton was not served with the third default notice. Further, as previously mentioned, the issue of the service is not a necessary pre-condition to an order for possession. 3. Ms Charlton also submitted that "[a]t no point did NAB withdraw" the first default notice. 4. Ms Charlton also contended that NAB's right to charge interest arose under both the First Business Letter of Offer and the Mortgage. On her argument, because the right to charge interest arose under those instruments, any time NAB charged interest to the Overdraft, this constituted "enforcement action" within the meaning of the FDM Act. Contention 5 1. The issuance of the first default notice could not be withdrawn because the definition of "enforcement action" under s 4(1) of the FDM Act includes "the giving of any statutory enforcement notice". Thus, the taking of any enforcement action in respect of the farm debt was prevented, even though a farm debt mediation occurred before the third default notice was issued and in spite of the fact that the notice was not relied upon by NAB. Contention 6 1. Ms Charlton contended that, although she was served with the 25 October 2011 cancellation notice and the first default notice, those notices were not provided to her as "guarantor". Contention 7 1. Ms Charlton's submitted that the debts in the s 8 notice were the same source as those referred to in the first default notice. Ms Charlton's contention seemed to be that NAB was barred, under the FDM Act, from issuing a s 8 notice which concerned the same debt as had been relied upon with respect to an earlier default notice (in 2011or 2012). Contention 8 1. Ms Charlton also contended that the RAA had committed a "jurisdictional error of law" in issuing the s 11 certificate as it did not have regard to the matters in contentions 1-7 when issuing that certificate, including whether the 2011 and 2012 actions were enforcement actions occurring prior to the issuance of the certificate. That submission formed part of the judicial review proceedings. NAB Submissions 1. NAB met Ms Charlton's contentions upon the bases listed below. It should be noted at the outset that NAB accepted that a s 57(2)(b) notice is enforcement action for the purposes of s 4(1) of the FDM Act. In summary, NAB's submissions were as follows: 1. The cancellation of facilities prior to the date of the mediation, namely, the 26 October 2011 cancellation notice, did not constitute an enforcement action for the purposes of the FDM Act. Rather, that cancellation concerned the failure of Ms Charlton to maintain the Overdraft within its limits. That cancelation was an action taken under the First Business Letter of Offer, and did not depend upon the terms of the Mortgage. 2. In any event, NAB pleaded its case for debt and possession upon the third default notice. It did not rely upon the first or second default notices, which were issued prior to the issuance of the s 8 notice and the mediation. It was contended the third default notice was issued after the requisite notices under the FDM Act and subsequent to the mediation and the s 11 certificate being issued by the RAA. 3. There was a factual context in which the first default notice was issued, namely, the involvement of the FOS which resulted in NAB treating Ms Charlton as a farmer and the debt as a farm debt under the FDM Act and issuing the s 8 notice in early 2014. 4. Whilst Ms Charlton's complaint was that she underwent a mediation in the context of an enforcement action, there was nothing in the FDM Act which prohibited NAB from taking the course it did. There was no prohibition under the FDM Act in issuing a s 8 notice which concerned the same debt as had been relied upon with respect to the first default notice. Reliance, in that respect, was placed upon the provisions of ss 10(2) and 22 of the FDM Act. 5. The authorities relied upon by Ms Charlton did not apply to this matter because of the differing facts and circumstances and the consequential application of principle. Consideration Contention 1 1. I accept NAB's submission that the 26 October 2011 cancellation notice did not constitute "enforcement action" for the purposes of the FDM Act. The Scope of Enforcement Action under the FDM Act 1. The definition of "enforcement action" in the FDM Act makes it clear that the enforcement action must relate to a "farm mortgage". Enforcement action in relation to a farm mortgage means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any statutory enforcement notice, or the continuation of any action to that end, where a "statutory enforcement notice" includes a notice under s 57(2)(b) of the RPA. 2. As mentioned earlier, in Waller, Heydon J held at [66] that "the definition of 'enforcement action' is wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage", including by attempting to obtain a money judgment. 3. However, I accept NAB's submission that Waller should be distinguished from the present matter. From the preliminary observations made in Gooley as to the decision in Waller (extracted at [237] above), the key difference to be observed is that in Waller, the statement of claim relied upon new loan agreements in addition to the mortgage (see Waller at [29]). In the subject proceedings, the 26 October 2011 cancellation notice only related to the Overdraft (see Waller at [66]). Further, this matter does not involve the entry into of new loan agreements after the farm debt mediation (see Gooley at [58(10)] as extracted at [237] above). 4. Additionally, while I accept, with respect, the statement of Young J in Varga (extracted at [380] above) as to the construction of the FDM Act, I disagree with Ms Charlton's submission that "enforcement action" should be construed to include any exercise of a contractual right by a creditor. 5. If that approach were adopted, s 6 of the FDM Act would capture action that falls well short of anything that could be properly described as "enforcement action", such as charging a higher interest rate, or the imposition of an additional fee. The FDM Act cannot have been intended to operate in this way, particularly having regard to the object of the Act being, inter alia, "to provide for the efficient and equitable resolution of matters involving farm debts" (see s 3 of the FDM Act). It is plain that requiring mediation prior to the exercise of any contractual right by a creditor would be neither efficient nor equitable. 6. The proposition that not every action taken by a creditor against a farmer constitutes "enforcement action" for the purposes of the FDM Act is supported by a large body of case law. 7. For example, it is well established that the appointment of an administrator and the commencement of winding up proceedings are not examples of "enforcement action" for the purposes of the FDM Act: see for example Cherryop; Australian Innovation Ltd v Dean-Willcocks (2001) 166 FLR 360; [2001] NSWSC 1204 at [33] (per Palmer J); Boz One Pty Ltd v McLellan (2015) 105 ACSR 325; [2015] VSCA 68 at [253]; Photios v Cussen [2015] NSWSC 336 at [44]-[45] (per Robb J); Re Bluenergy Group Ltd (2015) 300 FLR 155; [2015] NSWSC 977 at [71]; Re Maria's Farm Veggies Pty Ltd [2016] NSWSC 1770 at [23]. Was the 26 October 2011 cancellation notice an Enforcement Action? 1. Based on the above analysis of the scope of "enforcement action" for the purposes of the FDM Act, the 26 October 2011 cancellation notice did not constitute enforcement action for the following reasons: 1. The First Business Letter of Offer dated 30 August 2005 upon which the 26 October 2011 cancellation notice relied was not a "farm mortgage" within the meaning of the FDM Act. To adopt the reasoning in Gooley at [61], the issuance of the 26 October 2011 cancellation notice was not "predicated upon a farm mortgage". 2. The issuance of the 26 October 2011 cancellation notice was the mere exercise of a contractual right under the Overdraft Terms contained in the First Business Letter of Offer to cancel the Overdraft (see cll A.2, 6.3 and 16 of the Overdraft Terms). It did not purport to be, and did not involve, the exercise of any right under the Mortgage, including, as Ms Charlton contended, the right of possession. The 26 October 2011 cancellation notice did not invoke or rely upon the Mortgage, nor did the Mortgage afford a contractual right to NAB to cancel the Overdraft. That contractual right was contained in the First Business Letter of Offer only. 3. It is true that the 26 October 2011 cancellation notice reduced the limit of the Overdraft to zero and required the repayment of the amount then outstanding under the Overdraft. It is also true that the right to sue for the unpaid money existed under cl 27.2(a) of the mortgage. However, NAB did not seek to enforce those rights. In fact, the 26 October 2011 cancellation notice specifically left open the question of whether NAB would "pursue action for recovery for any balance indebtedness and enforce any securities". 4. As the 26 October 2011 cancellation notice only pertained to the Overdraft, and did not relate to the First Business Options Loan and the Second Business Options Loan, it cannot be used to impugn NAB's action with respect to those loans. Was the 26 October Cancellation, in any event, void? 1. As I have found that the 26 October 2011 cancellation notice was not enforcement action for the purpose of the FDM Act, it is strictly unnecessary for me to determine the effect of s 6 of the FDM Act. 2. However, I shall briefly address the submission made by NAB that, if the 26 October 2011 cancellation notice constituted enforcement action for the purposes of the FDM Act, the notice would be void, the effect of which would be that it could not "now infect the legal proceedings that have been commenced by NAB". 3. I would accept NAB's submission that if the 26 October 2011 cancellation notice constituted enforcement action, that notice would be void pursuant to s 6 of the FDM Act. Section 6 of the FDM Act states, "Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void". If assumed to be enforcement action, the 26 October 2011 cancellation notice was not otherwise in compliance with the FDM Act as it occurred prior to the mediation. 4. I also accept that the effect of the notice being void pursuant to s 6 would be that the notice would not affect any subsequent enforcement undertaken by NAB in accordance with the FDM Act, including the bringing of the subject proceedings for the following reasons: 1. The word "void" is not defined in the FDM Act, but it usually means "legally non-existent" or "of no legal effect" (see for example, Australian Law Dictionary (Oxford University Press, 2nd ed, 2013) and Encyclopaedic Australian Legal Dictionary (LexisNexis, online edition)). 2. Typically, the term "void" is distinguished from "voidable", which means that something is capable of being set aside, by some further action of a party or by order of a Court. 1. NAB made a further submission that, if the 26 October 2011 cancellation notice was void, the 2014 cancellation notice was, in any event, valid, as the Overdraft remained in default at the time of the issuance of the 2014 cancellation notice which occurred in accordance with the FDM Act after the mediation, and after the RAA had issued the s 11 certificate in accordance with the FDM Act. 2. NAB relied on the following evidence to substantiate that the Overdraft remained in default and was so at the time of the issuance of the 2014 cancellation notice: 1. the terms of the Overdraft included terms that Ms Charlton must keep the Overdraft within the facility limit of $200,000 and immediately repay any amount drawn on the facility in excess of the facility limit; 2. by 26 October 2011, the Overdraft was 128 days overdrawn and had an outstanding balance of $228,860.486; and 3. no payments have been against the Overdraft since 26 October 2011. 1. Once again, I find it unnecessary to decide whether, if the 26 October 2011 cancellation notice was void, the 2014 cancellation notice was nonetheless valid as I have determined that the 26 October 2011 cancellation notice was not void as it was not an enforcement action. Even so, I consider that NAB's submission has some substance. NAB's Non-Reliance on the First and Second Default Notices 1. By way of background, at the time of the issuance of the first and second default notices in November 2011 and January 2012, respectively, NAB considered that Ms Charlton was not acting as a "farmer" for the purposes of the FDM Act. 2. However, since late 2013, when the FOS determined that Ms Charlton was a farmer at that time (described at [160] above), NAB proceeded on the basis that Ms Charlton was the "farmer" for the purposes of the FDM Act at that time. 3. Whilst I do not accept that the issuance of the first and second default notice by NAB were justified based on its belief at the time that Ms Charlton was not the farmer for the purposes of the FDM Act, I do accept that NAB withdrew reliance on those notices. 4. The pleadings within the amended statement of claim are consistent with NAB's contention that: 1. NAB pleaded its claim for debt and possession upon the third default notice and the mortgage security the farm debts referred to in that notice. 2. No reliance was placed, in that respect, upon the first and second default notices. 1. Those contentions may be sustained upon the basis of para 17A of the amended statement of claim when read in the light of the immediately preceding paras 14, 15 and 16 (and the heading accompanying those paragraphs). Further, no pleadings were made with respect to the first and second default notices. The pleaded third default notice was issued after the mediation and the s 11 certificate was issued. 2. Thus, in my view, while the first and second default notices were enforcement actions for the purposes of the FDM Act, those notices have no bearing on the matters arising in the 2011 Action Issue. Contention 2 1. In contention 1, I concluded that the 26 October 2011 cancellation notice was not an enforcement action such as to breach the FDM Act and that the first and second default notices were not relevant to the 2011 Action Issue as they were not relied upon by NAB in these proceedings. It is therefore unnecessary to consider whether the 2011 and 2012 actions were barred by ss 8(1) and 10 of the FDM Act. 2. I similarly find it unnecessary to consider whether the second default notice was invalid pursuant to s 57(5) of the RPA as that notice was not relied upon by NAB. Contentions 3 and 4 1. Contentions 3 and 4 shall be discussed together as they are, in effect, founded upon the same premise that earlier breaches of the FDM Act can infect later actions which are seemingly valid under the FDM Act. 2. I once again repeat my conclusion that the 26 October 2011 cancellation notice was not an enforcement action and the first and second default notices were not relied upon by NAB and therefore not relevant to the 2011 Action Issue. 3. It is therefore strictly unnecessary for me to consider whether the issuing of the 2014 cancellation notice and the third default notice represented a continuation of that purported enforcement action. Nevertheless, if I were to accept contention 1 of Ms Charlton, contentions 3 and 4 would fail for the following reasons. Does a breach of the FDM Act prevent future enforcement action? 1. It is true that ss 8 and 10 of the FDM Act entitled Ms Charlton, as the farmer and person owing the farm debt, to have a mediation under the FDM Act prior to enforcement action by NAB. 2. However, on a proper construction of the FDM Act, it does not follow that, if enforcement action is taken in respect of a farm mortgage in contravention of the FDM Act, the creditor can never take enforcement action in respect to that farm mortgage. I accept NAB's submission that such a construction would give rise to a "procedural vortex" whereby the creditor would never enforce its rights under that farm mortgage. 3. That a creditor could never enforce its rights is inconsistent with authority suggesting that the FDM Act does not alter the substantive rights of parties, but rather imposes procedural requirements. 4. In State Bank of NSW v Freeman (Unreported, Supreme Court of New South Wales, Badgery-Parker J, 31 January 1996), Badgery-Parker J aptly stated (at 13-14): The Act does not deal with those rights of the parties, which are clearly substantive rights. What it does it to interpose, between default of a mortgagor and enforcement action by a mortgagee, a barrier which is, however, limited in duration. … It appears to me to be the very clear effect of s.10 and s.11, that they deal not at all with substantive rights but only impose procedural requirements. 1. A construction of the FDM Act where a creditor could never enforce its rights is also inconsistent on a reading of the FDM Act itself. 2. Section 10(2) of the FDM Act provides that enforcement action is only postponed to allow for mediation to occur; any statutory enforcement notice or other process given, served or executed is not invalidated. 3. Additionally, as mentioned above (at [414]-[416]), s 6 of the FDM Act may render enforcement action void and unable to infect later proceedings in accordance with the FDM Act. 4. On the basis of the proper construction of the FDM Act, I reject Ms Charlton's submission in contention 3 that an earlier breach of the FDM Act cannot be cured by later valid acts. I therefore also reject Ms Charlton's submission in contention 4 that the issuance of the s 11 certificate was invalid. The issuance of the 2014 cancellation notice and the third default notice were not a continuation of the enforcement action engaged in by NAB in 2011. Did the commencement of these proceedings constitute enforcement action which was linked to the initial purported enforcement actions? 1. Ms Charlton relied on Kiriwina and Roxo to support her proposition that a notice issued under s 57(2)(b) of the RPA (such notice was contained within the first default notice) can be inextricably interlinked to the commencement of proceedings and can therefore constitute a single enforcement action. 2. I accept NAB's submission that Kiriwina and Roxo concerned facts which are far removed from the present case. 3. In Kiriwina, s 57(2)(b) notices were issued and the property sold by the mortgagee, following which proceedings were commenced against one of the mortgagors for the shortfall. Harrison AsJ rejected an argument that the filing of the statement of claim for recovery of debt was a distinct "enforcement action" from the taking of possession such that it was not necessary for there to be a farm debt mediation, holding (at [131]) that the issuing of default notices and the subsequent proceedings brought for a shortfall following sale should be viewed as a single, inextricably interlinked process founded on the mortgagor's personal covenant to pay under the mortgage. Her Honour held that "the current proceedings arise from the reliance upon rights arising from [the] mortgage which are inextricably linked to the issue of the s 57(2)(b) notices". In these proceedings, the third default notice was not issued, and the proceeding was not commenced, until after a farm debt mediation had taken place under the FDM Act. 4. The differences between the circumstances in Roxo and the subject case can be summarised as follows: 1. In Roxo, the defendant had granted a mortgage to the plaintiff. Some 6 years later, the plaintiff served a s 57(2)(b) notice on the defendant. The defendant thereafter served a notice pursuant to s 9(1A) of the FDM Act. 2. A mediation was undertaken but, as the RAA later found, not one that was conducted in accordance with the FDM Act. After that mediation, the plaintiff lodged an application for a s 11 certificate and commenced proceedings filed by statement of claim seeking, inter alia, possession. Thereafter, the RAA advised the parties that it would not grant a s 11 certificate because of the deficiency in the mediation. Nonetheless, the plaintiff, after that advice, obtained a default judgment and shortly thereafter a writ of possession was issued. 3. The defendant sought a stay of the possession proceedings. The plaintiff then sought an adjournment of that application on two bases, one of which was that another s 11 certificate was sought and, if granted, any defects in the proceedings occasioned by non-compliance with the FDM Act would be cured because the s 11 certificate operated retrospectively (the judgment referred to the defendant making the submission whereas it would be appropriate to be a reference to the plaintiff). 4. It is true that at [31] of the judgment, Adamson J was of the opinion that, having made findings that the defendant was a "farmer" for the purposes of the FDM Act, the FDM Act applied to the enforcement action by the plaintiff in the proceeding, and that the plaintiff was prohibited from giving a s 57(2)(b) notice to the defendant unless and until it had obtained a s 11 certificate. However, in contrast to the present proceedings, as noted from the prior recitation of the circumstances of the matter, no s 11 certificate had been issued by the RAA whatsoever. The default notice which was prohibited was a default notice given prior to the application for a s 11 certificate (or any determination as to the same). 5. Thus, at [32], Adamson J found that she did not accept that a s 11 certificate (if issued) could retrospectively validate proceedings that were otherwise a nullity under s 6, namely, the default notice issued earlier in time. Thus, it was said that the clear words would be required in the FDM Act to resuscitate a s 57(2)(b) notice which was void because it was issued in breach of the FDM Act. The counterpart of that notice in the present case are the first and second default notices upon which NAB places no reliance. The discussion by Adamson J at [34], as to the operation of s 11(4), does not seem to take the discussion any further. 1. Even if Kiriwina and Roxo could be applied to the proposition put by Ms Charlton, NAB only sought to enforce any rights under the Mortgage after the farm debt mediation had occurred. NAB was entitled to commence these proceedings when it did. NAB's withdrawal of the first default notice 1. Ms Charlton's contention that NAB did not withdraw the first default notice cannot be accepted. A letter from Ms Fiona Worboys, Agribusiness Manager, to Ms Charlton dated 7 April 2014 stated: NAB has previously advised you that it does not seek to rely on any notices issued prior to the Farm Debt Mediation notice issued in February 2014. That position remains unchanged. 1. That communication made it abundantly clear that NAB had withdrawn the first default notice and that Ms Charlton was aware of NAB's withdrawal of reliance. The Charging of Interest to the Overdraft 1. I do not accept that because NAB's right to charge interest arose under both the First Business Letter of Offer and the Mortgage, the charging of interest to the Overdraft constituted enforcement action. The right to charge interest under the First Business Letter of Offer and the right to charge interest under the Mortgage were rights arising from separate instruments and are plainly distinct. 2. Thus, for the reasons expressed at [405]-[411] above, the charging of interest to the Overdraft under the First Business Letter of Offer was not enforcement action. Contention 5 1. I do not consider that the definition of "enforcement action" under s 4(1) of the FDM Act carries the effect that, once a statutory enforcement notice is given, it cannot subsequently be withdrawn. I have formed this conclusion on the basis of the "procedural vortex" analysis discussed at [431]-[438] above whereby a creditor would never be able to enforce its rights under a farm mortgage if a statutory enforcement notice was issued in breach of the FDM Act. As above, I do not consider that a proper construction of the FDM Act would support that outcome. Contention 6 1. I reject the submission of Ms Charlton that the 26 October 2011 cancellation notice and the first default notice were not provided to Ms Charlton as "guarantor". Ms Charlton in her personal capacity and Ms Charlton as guarantor are not distinct for similar reasons to those expressed at [365] to [366]. In any event, Ms Charlton accepted that she received both notices. Contention 7 1. I accept NAB's submission that the FDM Act did not preclude NAB from issuing a s 8 notice which concerned the same debt that was the subject of an earlier default notice (this conclusion assumes that earlier default notices had been relied upon, which as I have found above, is a conclusion which cannot be sustained). Contention 8 1. As I have rejected Ms Charlton's submissions in relation to contentions 1-7, I do not consider that Ms Charlton's judicial review arguments within the 2011 Action Issue have sufficient prospects of success to warrant the exercise of the Court's discretion to extend time to being proceedings (see [324]-[326] above). I have taken that into account when forming my conclusion at [327] above that time should not be extended for Ms Charlton to bring the judicial review proceedings. ISSUE 3: MISREPRESENTATION ISSUE 1. The counterpart issue raised by Ms Charlton was issue 5, namely, "whether National Australia Bank engaged in conduct which was misleading and deceptive in relation to representations about future dealings with Mr O'Brien Trustee of Phoenix Trust from 22 August 2011 onwards in breach of the ACL, following Ms Charlton's resignation as Trustee 20th August 2011". This issue formed the basis of the cross-claim proceedings. Ms Charlton's Submissions 1. The central contention of Ms Charlton was that NAB's conduct constituted unconscionable conduct or misleading or deceptive conduct in contravention of various statutory prohibitions. Ms Charlton's key arguments can be summarised as follows: 1. Mr O'Brien was at all relevant times, a trustee of the Trust. 2. NAB knew that Mr O'Brien was trustee of the Trust at the time the Overdraft was originally obtained in 2005. Ms Charlton pointed to the following evidence in that respect: 1. Ms Charlton had told Mr Underwood that Mr O'Brien was a co-trustee whilst they drove around at the farm just prior to the establishment of the Mortgage. 2. NAB must have known that there was an additional trustee as Mr Gavin O'Brien was named on the "trustee company confirmation account styling" as a trustee (thus Ms Charlton was not the sole trustee). 3. Mr Chris Eyles had sent communications on the subject of the interest rates applicable to the loan facilities on 11 August and 2 September 2011 which addressed to Ms Charlton, but which stated "DEAR MR KM O'BRIEN". 4. Mr O'Brien also pointed to evidence bearing upon NAB's knowledge that Mr O'Brien was a trustee, as follows: 1. NAB were provided with the Deed with all attachments, appointments and resignations. This was required by NAB Legal to conduct a review of the Deed. 2. The result of the review was faxed to Mr Underwood, NAB Agribusiness Manager Forbes, on 19th August 2005 approximately 2 years before draw down on the loan accounts. The letters of offer identified Ms Charlton as trustee of the Trust. 3. Mr O'Brien's appointment was prominent with the attached documents to Debbie Cram, Senior Legal and Securities NAB, as he was the first trustee appointed to the Trust after the originating trustee, Gavin Michael O'Brien, became trustee at Settlement. NAB was well aware of these facts and "even charged a substantial read fee". 1. In August 2011, NAB represented that it would continue the Trust's financial facilities beyond the date of the expiration of the loan for $110,000 on 31 August 2011. Further, NAB failed to inform Ms Charlton and Mr O'Brien that it would not continue the Trust's financial facilities. 1. As mentioned at [131] of this judgment, Mr Thomas communicated on 5 September that NAB's legal department was "Ok going forward with Kevin as Trustee". Ms Charlton submitted that this statement was misleading as Mr Thomas was not in a position to provide the statement as it was subject to "credits approval". It was contended that he did not hold reasonable grounds at that point to make that future representation as he did not hold all the information required as this involved "cash-flow's, assessment on the ground at [the] farm and was subject to credit department approval". 1. In reliance upon NAB's conduct, Ms Charlton and Mr O'Brien did not seek to refinance the debt prior to its expiry on 31 August 2011 or prior to 20 October 2011 when NAB informed Ms Charlton that enforcement action would be taken. Further, after 20 October 2011, Ms Charlton and Mr O'Brien were unable to refinance the Trust's debt to NAB with another financial institution or to service the interest obligations. 2. Ms Charlton submitted that the bank had improperly departed from her, the primary customer, by holding the meeting of 22 August 2011, mentioned at [101] of this judgment, without her, and that going forward with another party created a state of confusion. Due to the confusion, Ms Charlton and her family did not act and in those circumstances, the bank essentially acted prematurely in withdrawing the funds. 3. Ms Charlton and Mr O'Brien have suffered loss and damage. NAB Submissions 1. NAB made the following six contentions as to this issue: 1. Mr O'Brien was not a trustee of the Trust at all relevant times. He was not a trustee at 7 October 2002. By 31 August 2011, Mr O'Brien had disclaimed his position as trustee by virtue of his inaction since his alleged appointment on 1 June 1997. 2. Assuming that Mr O'Brien was a trustee, NAB was not aware of that fact until notified on 31 August 2011. 3. NAB did not engage in misleading or deceptive conduct or unconscionable conduct. The relevant facilities were not expiring on 31 August 2011. Further, any representation that the facilities would be extended beyond that date was clearly subject to NAB undertaking due diligence. Mr O'Brien was aware of that process. NAB did not fail to inform Ms Charlton and Mr O'Brien that it would not continue the Trust's financial facilities. In fact, NAB made every effort to communicate with Ms Charlton and her family that potential outcome. 4. There was no evidence that Ms Charlton and Mr O'Brien would have been able to refinance the facilities with another financial institution. 5. Similar to contention 3 of NAB, NAB attempted to assist Ms Charlton throughout the whole process, not to create confusion. 6. The evidence pertaining to loss was limited to Ms Charlton's proposed pig enterprise, which Ms Charlton accepted would not have been pursued on behalf of the Trust if the facilities continued. (The six contentions of NAB, for the purposes of the Misrepresentation Issue, shall be referred to by their respective numbered designations, namely, "contention 1" through to "contention 6"). Consideration Contention 1 1. It is strictly unnecessary for me to determine whether Mr O'Brien was a trustee of the Trust at all relevant times, as I will conclude below that NAB was not aware that Mr O'Brien was trustee and that no misleading representation was made. Nevertheless, the following observations may be made. Was Mr O'Brien a trustee of the Trust as at 7 October 2002? 1. I would accept NAB's submissions that there are some inconsistencies in Ms Charlton's case in that respect. 2. First, the evidence that Mr O'Brien was "invited" to the meeting (referred to at [24] of this judgment). 3. Secondly, as to the decision made at the meeting on 7 October 2002, that the trustee of the Trust would enter a contract for sale for the purchase of the property and enter mortgages thereof (see [26] of this judgment), a solicitor only recorded these decisions as being implemented by a sole trustee. 4. Thirdly, as found at [44] of this judgment, the evidence does not support a conclusion that the loan with Stacks was taken out by both Ms Charlton and Mr O'Brien; Ms Charlton was recorded on the Stacks mortgage as the sole borrower and mortgagor. By 31 August 2011, had Mr O'Brien disclaimed his position as trustee of the Trust? 1. The evidence did not explain why Mr O'Brien had done nothing between 1 June 1997 (his alleged appointment) and the end of August 2011 (the first date that NAB was informed that Mr O'Brien was trustee). 2. Mr O'Brien submitted that, in 2001, he "moved [the] Phoenix Trust herd from the Lachlan River system to the Bogan stock route and stayed there for approximately eight months – virtually no mobile reception there. I was just not available to do other things with the business of the Trust or purchasing a property or whatever". However, that contention was only raised in closing submissions and was not supported by evidence. Mr O'Brien also submitted that he "was able to be present at the meeting of the Phoenix Trust on Monday October 7, 2002". However, as found at [25] above, he attended by invitation only. As discussed at [456]-[459] below, the fact that he was invited seems inconsistent with him acting as trustee of the Trust at that time. 3. On this basis there seems to be some argument that Mr O'Brien disclaimed his position as trustee if he indeed held that position. However, it is unnecessary to decide that point. Contention 2 1. As to whether NAB knew that Mr O'Brien was trustee of the Trust from the time at which the Overdraft was originally obtained in 2005, NAB was correct to submit that the cross-claim was not pleaded in that way. Nevertheless, for reasons previously expressed above (at [213]), I will give latitude to Ms Charlton and Mr O'Brien to pursue this issue. 2. As I have found, the evidence does not support a conclusion that NAB was aware until 31 August 2011 that Mr O'Brien was a trustee of the Trust. 3. As earlier discussed (at [110]-[118]), Mr Thomas considered that NAB had not, before 31 August 2011, been provided with any paperwork suggesting that Mr O'Brien was a trustee. Communications sent by Mr Thomas in 2014 stated, for example, that NAB did not previously have the letter showing Mr O'Brien having been appointed as a trustee. A file note made by Mr Thomas on 2 September 2011 indicated the same. Mr O'Brien did not dispute this. 4. I do not accept Ms Charlton's contention that she had told Mr Underwood that Mr O'Brien was a co-trustee whilst they drove around at the farm. That evidence emerged for the first time in cross-examination, was not supported by documentary evidence and was, in my view, not convincing. 5. In relation to Mr Gavin O'Brien being named as a trustee on the "trustee company confirmation account styling", I accept NAB's submission that there was no evidence within that document, or otherwise, to suggest the appointment of Mr O'Brien as co-trustee a few years earlier. 6. No evidence supported the contention that NAB was provided with the Deed with all attachments, appointments and resignations. 7. Further, although Mr O'Brien asserted that his appointment as trustee of the Trust was "prominent with the attached documents to Debbie Cram Senior Legal and Securities NAB", no evidence supported that claim. 8. The existence of a substantial "read fee" cannot prove that such documents existed or that NAB was aware of those documents. In any event, the fee on the Trustee Company Confirmation was not referred to as a "read fee" and the amount of $350 does not seem substantial. 9. The significance of the letters of offer identifying Ms Charlton as trustee of the Trust was not properly explained. I do not see how that evidence bears upon NAB's awareness of Mr O'Brien being trustee of the Trust. 10. As to the communications from Mr Chris Eyles on 11 August and 2 September 2011, I do not entirely accept NAB's submission that "the letters appear to be automatically generated, such that inclusion of Mr O'Brien's name on them can only be assumed to have been a systems glitch". However, in the light of the fact that those communications were also addressed to Ms Charlton, and having regard to the body of evidence as to this contention, I conclude that, on the balance of probabilities, NAB did not know that Mr O'Brien was a trustee of the Trust at the relevant time. 11. Finally, I refer to a component of the discussion of the Joint Trustee Issue discussing the evidence of Ms Charlton and Mr O'Brien at [523] below. Contention 3 1. NAB did not engage in misleading or deceptive conduct or unconscionable conduct for the following reasons. 2. First, I accept NAB's submission that the facilities, in particular, the First Business Options Loan, were not to expire on 31 August 2011. 3. It is true that the fixed interest period for both the First Business Options Loan and the Second Business Options Loan were to expire on 31 August 2011. However, the facilities themselves were not due to expire until 31 August 2012 and 31 August 2017, respectively. 4. Secondly, the evidence does not support a conclusion that representations were made by NAB to the effect that it would continue the Trust's financial facilities beyond the date of the expiration of the loan for $110,000 on 31 August 2011. 5. Ms Charlton and Mr O'Brien's reliance on one part of the email of 5 September 2011 from Mr Thomas stating that the legal department had come back and had informed him that they were "OK going forward" with Mr O'Brien as trustee of the Trust, was not a true reflection of the conduct as a whole. 6. In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60, the High Court emphasised the need for the conduct as a whole to be taken into account for the purposes of a claim for misleading or deceptive conduct. Gleeson CJ, Hayne And Heydon JJ stated (at [39]): [39] In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account. It is also important to remember that the relevant question must not be reduced to a crude inquiry: "Did the agent realise the purchasers were relying on the diagram?" To do that would be impermissibly to dilute the strict liability which s 52 imposes. 1. It is true that Mr Thomas' evidence was that he was willing to consider an application to refinance the facilities, on the basis that the property would be transferred into Mr O'Brien's name (as the replacement trustee). However, it was made clear that any transfer of the facilities to Mr O'Brien was contingent upon credit approval; Mr O'Brien would have to satisfy NAB of the financial position of the farming business. It was clear from the second paragraph of the 5 September 2011 email from Mr Thomas that part of that process was to undertake a farm visit so that he could be assured of "numbers, assets etc & confirm the cash flow". Despite his efforts, Mr Thomas was never able to visit the farm to verify the information provided to him. 2. Additionally, Mr O'Brien accepted in cross-examination that he understood that any transfer of the facilities were dependent on a further application being made and approved by NAB's credit department. Mr O'Brien also accepted that Mr Thomas needed to verify the information underpinning that application before it was made, including a farm visit. 3. The communications from Mr Chris Eyles on 11 August and 2 September 2011 merely recorded that the fixed interest rate applicable to the facilities had ceased, and that a variable interest rate had commenced; there was no suggestion in those documents that the facilities themselves would be transferred to Mr O'Brien as the replacement trustee. 4. I reject Ms Charlton's submission that NAB failed to inform Ms Charlton and Mr O'Brien that it would not continue the Trust's financial facilities. It is clear from the evidence that NAB consistently endeavoured to communicate with Ms Charlton and her family to inform them of the need to rectify the defaults in order to, inter alia, prevent the cancellation of facilities. These attempts were unsuccessful largely due to the inaction of Ms Charlton and her family (see [67]-[91] above). Contention 4 1. There was no evidence that Ms Charlton and Mr O'Brien would have been able to refinance the facilities with another financial institution. Contention 5 1. As to Ms Charlton's submission that NAB departed from her, the primary customer, causing a confusing situation, the following observations can be made. 2. The statement of position and the cash flow budgets obtained at the meeting on 22 August 2011 were in the context of NAB undertaking due diligence, namely, the credit approval (referred to at [480]-[481] above). 3. The evidence of Mr Thomas in cross-examination was that the meeting, held in the context of that due diligence, was for NAB to attempt to assist, not to create confusion. The following evidence was given: Q. So you were happy that if you had - given that you knew that I had resigned on 20 August 2011, you were happy then to approach the rest of the members in the family on 22 August to go through finance arrangements with them and as per your affidavit that meeting that involved Kevin O'Brien as the trustee of Phoenix Trust, the - my brother Justin O'Brien and his wife Kate, and my mother Wendy. They were - so given that you knew that I had resigned and you were sitting there at a meeting on 22 August, did it concern you that perhaps discussing going forward with another party that wasn't a party to the contract may create a situation of confusion? A. As I said all I was doing was trying to help. I didn't realise your dad was a trustee. Q. Yeah? A. But I did know your dad and your brother were running the farm and all I was trying to do was help. 1. I accept Mr Thomas's evidence in that respect, especially having regard to his efforts to communicate with the family in order to assist and clarify the situation which are described at [67]-[91] above. In accepting Mr Thomas' evidence, I also accept NAB's submission that it did not cause a confusing situation. Contention 6 1. The evidence pertaining to loss was limited to Ms Charlton's proposed pig enterprise. However, Ms Charlton accepted that this was the enterprise that she intended to pursue herself; it was not something that would have been pursued on behalf of the Trust if NAB's facilities had been extended. In any event, the evidence in relation to Ms Charlton's pig enterprise did not rise higher than a mere assertion. ISSUE 4: RIGHT OF INDEMNITY ISSUE 1. The counterpart issue raised by Ms Charlton was issue 1, namely, "whether [NAB] was reckless not to have disclosed the findings of its own legal department prior to the draw down and execution of contracts with Ms Charlton who acted then as trustee of [the Trust]". 2. A number of Ms Charlton's submissions, in this respect, traverse contentions made by her in other contexts. For completeness, the summary below will capture most, but not all, of those contentions, avoiding repetition where it is unnecessary. Some issues raised by Ms Charlton in this context have been resolved earlier in this judgment. Ms Charlton's submissions, in summary, were as follows: 1. The issue concerned the confirmation (of 19 August 2005) discussed at [39]-[41] above. 2. The advice concerned the Trust and the Deed relating to the Trust. Ms Charlton never obtained a loan with respect the property "for herself". She is not liable to pay the loans. The property was purchased by her as trustee. All moneys and property were held or "vested" in a trust fund. The assets were held by the Trust until distribution to the beneficiaries. The property was never distributed to Ms Charlton as a beneficiary. 3. After Ms Charlton's resignation as trustee Mr O'Brien was the remaining trustee and held "full vesting rights" or the property vested in him as trustee or was "possessed of the capital of the trust fund". The Deed by its terms vested the property in Mr O'Brien. Ms Charlton suggested that the fact that the Registrar General allowed Mr O'Brien to put the caveat on the title under s 74F of the RPA was also evidence of Mr O'Brien's vesting rights under the Trust. 4. The Deed stated that every trustee was fully indemnified out of the Trust. 5. The confirmation referred to in (1) reveals that NAB knew there was another trustee. 6. The suggested amendment under "Attachment 11" to the confirmation was "never advised or done". The document was concealed from Ms Charlton and the Trust. The customer was never afforded that expert advice. The contracts and the Trust were totally incompatible and, to the extent of that conflict, the Deed prevails. 7. The "financial accommodation" from NAB was "for the purpose of the conduct of a farming operation". Primary production was the source of business income. 8. Mr Underwood, who was mentioned in the confirmation, visited the property just prior to establishing the mortgage. In the years that followed the loan "exceptional circumstance interest rate subsidies were approved in drought circumstances" where NAB was the lender. Nonetheless at the time of the "farm debt dispute", NAB challenged that Ms Charlton was a farmer. 9. A farm debt mediation under the FDM Act should have been afforded to Ms Charlton in 2011 "because the obligations of the creditor [were] not confined to just 'debtor' but extended to the defendant as 'guarantor' regardless of resignation status". 10. It was disputed that Mr O'Brien took no action as trustee between 1 June 1997 and 30 August 2011. Reliance was placed upon the letter by Mr Chris Eyles of 11 August 2011, the meeting between Mr O'Brien and Mr Thomas on 22 August 2011 and the registration of an Australia Business Number. 11. NAB gained interest payments for many years after 2011, notwithstanding NAB did not afford a mediation in 2011 as it should have. That the FOS investigation was underway was not an excuse. This only prohibited NAB from an enforcement action. The obligation imported by s 8(1) is on a creditor in respect of a farm debt for the purpose of the FDM Act. The FOS was incorrect at para 15 of its recommendations as NAB did not have a s 11 certificate at the time of its determination. 12. The RAA did not take into account the change in position of the parties as the summary of mediation "in regard to the farmer debtor and the 2011 conduct which involved cancellation of overdraft 25 October 2011 and 16 November 2011 s 57(2)(b) enforcement action notice". By 14 August 2014 "elections to sever relations with NAB had already been made" and there was no change in the position of the parties. Ms Charlton lacked a capacity to settle. 1. I reject Ms Charlton's submissions in this respect. My reasons for that conclusion are as follows: 1. I repeat my finding at [44] above, that the evidence did not support a conclusion that the loan with Stacks was taken out by both Ms Charlton and Mr O'Brien; Ms Charlton was recorded on the Stacks mortgage as the sole borrower and mortgagor. 2. The legal interest in the property was and is held by Ms Charlton as trustee for the Trust and the beneficial interest was and is held by the beneficiaries of the Trust. 3. If Mr O'Brien was also a trustee of the Trust (which I find it unnecessary to decide), I would accept that he was vested with rights relating to the property under the Deed. I would further accept that the caveat lodged over the property by Mr O'Brien was evidence of those rights. However, Mr O'Brien was not the sole holder of those rights. That conclusion is based on my finding above that Ms Charlton did not validly resign as trustee of the Trust. More importantly though, any rights vested in Mr O'Brien were merely rights under the Deed to administer the Trust and the property of the Trust (including the property). Mr O'Brien did not have any ownership interest in the property (Ms Charlton was the registered proprietor). Mr O'Brien conceded as much when he submitted: "As the Caveator and Trustee Kevin Michael O'Brien has no ownership interest in the above property but has the right to protect the future interests of the beneficiaries of the Phoenix Trust". Hence, Ms Charlton's submission that Mr O'Brien was vested with ownership interest in the property is wrong, even if Mr O'Brien was a trustee of the Trust; Mr O'Brien was only vested with rights allowing him to administer the property on behalf of the beneficiaries of the Trust in the case that he was a trustee. 4. As to the "failure" by NAB to advise the contents of the confirmation, I accept the submission of NAB that, irrespective of whether the Deed includes a right of indemnity, such a right is available at general law: see e.g. Thomson Reuters, Ford and Lee: The Law of Trusts (at August 2019) at [14.110]. That right continues even after a trustee has resigned or been removed as trustee. 5. Ms Charlton still has a right of indemnity as trustee. In any event, any failure by NAB to inform her of some lack of right cannot have affected her obligations under the loan agreements and the mortgage. 6. As stated at [460]-[462] above, the evidence did not explain why Mr O'Brien had done nothing between 1 June 1997 (his alleged appointment) and the end of August 2011 (the first date that NAB was informed that Mr O'Brien was trustee). On this basis there seems to be some argument available to NAB that Mr O'Brien disclaimed his position as trustee if he indeed held that position. 7. Contentions 7 and 8 of Ms Charlton are not entirely clear but seemed to be directed to NAB challenging the fact that Ms Charlton was a farmer, in circumstances where NAB's actions disclosed that they knew that she was a farmer. First, I note that the precise effect of this submission on the current proceedings was not properly explained. Secondly, I reiterate my findings at [161]-[162] and [420]-[425] above, namely, that the matter of whether Ms Charlton was a farmer was not at issue in these proceedings. 8. I consider that contention 9 fails upon the same basis as contentions 1-4 within the 2011 Action Issue. The 26 October 2011 cancellation notice was not an enforcement action such as to breach the FDM Act and the first and second default notices were not relied upon by NAB. That conclusion holds true regardless of whether an obligation to mediate was owed to the guarantor in addition to the debtor. 9. Contention 11 is founded upon the false premise that the 26 October 2011 cancellation notice was contrary to the FDM Act and therefore interest should not have continued to accrue. I refer to my finding at [412] above. 10. Contention 12 is unclear but seems to restate an earlier submission made by Ms Charlton in respect of the judicial review proceedings. Based on my conclusion that the application to extend time to bring the judicial review proceedings should be refused (at [327]), I do not consider the submission can be sustained. ISSUE 5: DEFAULT NOTICE ISSUE 1. Ms Charlton's list of issues did not contain a counterpart issue. 2. This issue may be dealt with shortly given my earlier rejection of Ms Charlton's submissions that the third default notice was not served upon her in accordance with the requirements of s 170 of the Conveyancing Act. In short, service was properly undertaken in accordance with that Act. 3. It should be noted that, as service was properly undertaken, Ms Charlton's submission that NAB failed to allow the lapse of time required by cl 29.2(a) of the Mortgage and s 57(2)(b) of the RPA by failing to serve the third default notice must also fail. 4. While unnecessary to decide, the NAB rejoinder to any contention that the third default notice was invalid because of improper or ineffective service must, in my view, be accepted. 5. Ms Charlton contended: No Section 57(2)(b) notice under Real Property Act 1900 was served on the Defendant Ms Charlton following the issuance of the s 11 certificate by the RAA on 29 August 2014 and the 17th October 2014 Cancellation Notice for the Overdraft ending last four digits 1525. The Plaintiff has failed to provide evidence to support the actual service of a s 57(2)(b) notice under the Real Property Act 1900 to the Defendant Ms Charlton, following the s 11 Certificate dated 29 August 2014 which the defendant also states has issued ultra-vires. As such the Plaintiff has also failed yet again to allow the lapse of time permitted pursuant to 29.2(a) of the Mortgage Memorandum, being the time permitted by the Real Property Act 1900 under s 57(2)(b). This notice is a condition precedent to the commencement of proceedings for the judgement for debt and possession of land the relief sought by the Plaintiff in these proceedings. 1. Ms Charlton also submitted: The s 57(2)(b) notice on which the plaintiff relies cannot be relied upon as it was not served on the Defendant and they have failed to prove they did, the onus is on them as mortgagee to do so. The Defendant, has maintained throughout the entire matter that the 27 October 2014 s 57(2)(b) notice under the Real Property Act was not served on her. Failure to serve a statutory notice under s 57(2)(b) of the Real Property Act 1900 means the Mortgagee cannot invoke any acceleration clause in the mortgage and therefore are unable to exercise a power of sale at any later date. 1. Ms Charlton further contended: Because of no service particularly if the Plaintiff seeks to rely on a notice not served on the Defendant dated 27 October 2014 then relevant case law in regard to 'time for rectification of default' becomes important in terms of a notice giving one month from its date, instead of one month from service which was held to be invalid by Brownie, J in State Bank of New South Wales v Topfelt Pty Ltd SC (NSW) unreported, (11 March 1993) BC9302006 & Carr v Finance Corp of Australia Ltd (1982) 150 CLR 139 at [151] to the effect of … "a notice purporting to diminish the rights of a mortgagor, as distinct from overstating the amount said to be due ... but is understandable terms, the breach of the obligation on the part of the mortgagor required to be remedied, is a notice that does not give to the mortgagor the opportunity which the statute requires the mortgagee to give the mortgagor; hence that notice does not enliven the power of sale. 1. A s 57(2)(b) notice is only required in order for the mortgagee to exercise its power of sale. It does not prevent the mortgagee – in this case, NAB – from issuing proceedings to enforce its mortgage. 2. Section 57(2)(b) imposes a condition in respect of the exercise of a mortgagee's power of sale, either under s 58 of the RPA or the mortgage itself. NAB does not seek to or bring an action to exercise its power of sale in respect of the property; all it seeks to presently do is to recover possession of the property through these proceedings. 3. I accept the submission advanced by NAB that the authorities relied upon by Ms Charlton – State Bank of New South Wales v Topfelt Pty Ltd (Unreported, Supreme Court of New South Wales, Brownie J, 11 March 1993) ("Topfelt") and Carr v Finance Corporation of Australia Ltd (No 2) (1982) 150 CLR 139; [1982] HCA 43 – are both primarily directed to the circumstances in which a mortgagee is entitled to exercise its power to sell the mortgaged property and are, therefore, irrelevant to the question of whether an order for possession should be made; in Topfelt, Brownie J still made an order for possession of the mortgaged property, despite also finding that the s 57(2)(b) notice that had been issued in that case was defective. 4. The service of a default notice is not a precondition to the mortgagee bringing proceedings seeking possession of the mortgaged land as a result of a default because such a notice relates to the exercise of the power of sale: Bendigo and Adelaide Bank Ltd v Tombs [2010] NSWSC 1427 at [36] (per Johnson J) and Suncorp-Metway Ltd v Nam Property Holdings Pty Ltd (2010) 16 BPR 30,859; [2010] NSWSC 1078 at [41] (per Garling J). The suggestion by Ms Charlton that the s 57(2)(b) notice is a "condition precedent" to the commencement of this proceeding is incorrect. ISSUE 6: SECTION 38 TRUSTEE ACT ISSUE 1. This issue appears to relate to issue 25 of the issues identified by Ms Charlton and Mr O'Brien in the following terms: 25. Whether there are exceptions in relation to the indefeasibility of "Oriel's" title, due to the existence of the discretionary trust and the terms of the Phoenix Trust Deed whereby neither the Trustee nor the beneficiary can own any part of the capital of the Trust and given Section 38 of the Trustee Act 1925 being expressly excluded from the Trusts Deed removing any registered title holder being for the time being possessed in respect of any mortgage charge and in particular as the property has not been distributed out of the capital of the Trust Fund. 1. The axis of this submission appears to be cl 7 of the Deed. 2. Clause 7 of the Deed is in the following terms: 7. The provisions of Sections 37 and 38 of the Trustee Act shall not apply to the provisions of this Trust and the same are hereby expressly excluded and save as may be hereinafter contained any power of accumulation given by that Act or by any Act of the Commonwealth of Australia or of any ordinance of a Territory of the Commonwealth of Australia or of any Act of a State thereof is hereby negatived. 1. Reference must also be made to cll 12, 13 (b)-(c), (o) and (z). Those clauses are extracted below: 12. All moneys available for investment may be invested in any one or more of the following investments in the Commonwealth of Australia or in any part of the world that is to say in the purchase of any real or personal property or interest of any nature whatsoever therein or in any of the Public funds or Government securities of any Government or in the purchase of or loan upon mortgage over any freehold or leasehold lands in any of the Australian States or Territories or elsewhere or shares whether fully paid up or otherwise or stock debentures secured or unsecured notes or rights to new issues of shares in any corporation whether public or private carrying on business in the Commonwealth of Australia or elsewhere or upon deposit for a fixed term or otherwise with any corporation or institution carrying on a business in the Commonwealth of Australia or elsewhere with liberty to vary or transpose any such investments from time to time. … 13. Notwithstanding the trust powers and provisions hereinbefore contained the Trustee shall have the following absolute powers and discretions in addition to the cowers vested in it by law: … (b) To purchase and or to sell real property or any interest Therein and generally to traffic in real property or any interest therein including the taking and granting of leases or licences over such property in such manner as the Trustee shall deem fit and so long as any real property or interest in real property shall form part of the Trust Fund at the discretion of the Trustee to manage use or let the same or any part or parts thereof to receive stock on agistment to erect pull down rebuild and repair buildings and erections to carry out improvements of any nature to purchase such stock plant equipment and fittings as the Trustee considers necessary having regard to the purposes for which the real property is from time to time being used to make allowances to any arrangements with tenants to grant or acquire easements or other rights and generally to deal with such property or interest or join in dealing with the same as if it was absolute owner beneficially entitled thereto without being responsible for loss and without any of the restrictions imposed by law on Trustees. (c) To raise or concur in raising any money which the Trustee shall think expedient for any purpose in relation to the execution of the Trusts and powers conferred on the Trustee by this settlement including the purchase of property and the payment of calls on shares or generally for the benefit of the beneficiary by mortgaging or charging with or without a power of sale all or any part of the Trust Fund or the assets from time to time representing the same or without security and with or without interest and any such mortgage may be an overdraft or contributory one and may also be a joint mortgage with other persons or a guarantee mortgage and whether in any case whatsoever the liability arising out of such borrowing is joint or several and no lender shall be concerned to enquire into the necessity for any such borrowing or the application of the money borrowed. … (o) To contract with and/or sell or grant options to purchase any part of the Trust Fund to or to purchase real or personal property from or to borrow money from or to enter into any sharefarming or agistment agreements leases or tenancies or partnerships with the trustee in its own capacity or any or either of the Trustees if more than one in its personal capacity either alone or in conjunction with another or others notwithstanding that if it may be a Trustee hereof and any partnership agreement may provide for reasonable remuneration of partners including the Trustees or one or more of them. … (z) To encumber all or any part of the assets of the trust by way of charge, mortgage or otherwise for the purpose of giving third party security to any person body or organisation for any reason whatsoever in order to secure a loan to the Trustee or Trustees for the tame being hereof any one or more of the beneficiaries for the time being hereof or any other person whether he or they be associated with this trust or otherwise or any company organisation corporation or other entity. 1. Section 38 of the Trustee Act 1925 (NSW) provides: 38 Raising money (1) Where a trustee is authorised by the instrument, if any, creating the trust or by law to pay or apply capital money for any purpose or in any manner, the trustee shall have and shall be deemed always to have had power to raise the money required by sale, conversion, calling in, or mortgage of all or any part of the trust property for the time being in possession held upon the same trusts as the capital money. (1A) Where a trustee holds land in respect of which moneys are due and payable for rates or taxes or in respect of which the trustee is under a statutory obligation to expend moneys and the trustee has no moneys subject to the same trusts as such land wherewith to pay such rates or taxes or discharge such statutory obligation the trustee shall have and shall be deemed always to have had power to raise the money required to make such payment or discharge such obligation by sale or mortgage of the whole or part of such land or by sale, conversion, calling in, or mortgage of all or any part of the trust property for the time being in possession held upon the same trusts as such land. (2) This section shall not apply to a trustee of property held for charitable purposes. 1. Ms Charlton's submission was that, by the exclusion of s 38 of the Trustee Act (and also s 37 of that Act) by the Deed, Ms Charlton was unable to hold "acquire and mortgage" property in her own right. The limit of Ms Charlton's capacity was to acquire the property as a trustee on behalf of the trustees. 2. As to that contention, NAB submitted: This contention concerns the exclusion of s 38 of the Trustee Act 1925 (NSW) by cl 7 of the trust deed for the Phoenix Trust. Whilst difficult to understand, it appears to be contended that, although Ms Charlton had been appointed as trustee, she had no power to acquire or mortgage the Property by reason of the exclusion of s 38 by cl 7 of the trust deed. … This contention proceeds on a misapprehension. That is because the trust deed confers express powers on the trustee - Ms Charlton - to acquire and mortgage the Property: see e.g. cll 12, 13(b)-(c), (o), (z). 1. I accept NAB's submission that the Deed provided that a trustee of the Trust had the power to acquire and mortgage trust property pursuant to cll 12, 13(b)-(c), (o) and (z). It follows that Ms Charlton was permitted to buy trust property on her own account. A similar conclusion will apply to the Joint Trustee Issue discussed below. ISSUE 7: JOINT TRUSTEE ISSUE 1. There appears to be five issues raised by Ms Charlton and Mr O'Brien which concern or relate to the Joint Trustee Issue. Those issues are 2, 4, 6, 19 and 20, which were in the following terms: 2. Whether National Australia Bank should have raised the issue of Ms Charlton being an additional Trustee with her and then included Mr O'Brien as Trustee of Phoenix Trust as the Co-Trustee in the execution of the contracts and subsequent mortgage. … 4. Whether the loan contracts and mortgage were correctly executed with the requisite authority in relation to Phoenix Trust given the that Trustees are required to act jointly when more than one exists to effectuate legal dealings as described in the Trustee Act 1925 and Phoenix Trust Deed Clause 13t). … 6. Whether the National Australia Bank was aware of the missing legal authority in respect of its dealings with the Phoenix Trust. … 19. Whether NAB was entitled to use the contract against Ms Charlton as being legally binding and enforceable without Phoenix Trust co-trustee's Mr O'Brien authorisation, such as Mr O'Brien being required to be a named party to the contract for contract to have legal effect, then proceed to obtain a Section 11 Certificate without the participation of Mr O'Brien the Trustee of Phoenix Trust in the purported 1st Mediation. 20. Whether NAB is entitled to use a contract which lacks requisite authority, to seek judgement for a debt where there is no default, by the Trustee of Phoenix Trust, the continuing trustee who is not a contracting party, and the beneficiary of the Phoenix Trust who resigned as a Trustee according to the rights given under Phoenix Trust Deed prior to NAB commencing legal action. 1. Further, Ms Charlton did not agree with the statement of issue by NAB, which she described as "misleading and deceptive". 2. The development of Ms Charlton's critique of the issue exposes the nature of the contentions advanced by her. Those submissions were as follows: 1. The "loans" were offered to the Trust by letter of offer. 2. Clause 13(t) of the Deed requires the trustee to act "jointly". NAB knew there was more than one trustee but offered "the loans only to Ms Charlton at the time a trustee". 3. Ms Charlton had "absolute unfettered discretionary powers confined on the Trustee" so long as it was for the benefit of the beneficiaries. 4. Mr O'Brien was a trustee jointly with Ms Charlton until she resigned. Mr O'Brien remained a trustee with "sole vesting rights" to manage and operate the Trust. 5. Ms Charlton cannot deliver up possession and is not liable to repay the loans "she never received personally". 6. NAB refused to change the Certificate of Title from Ms Charlton (recorded as Ms O'Brien), notwithstanding her resignation as trustee. This is "unconscionable" and damaging to all parties. 1. Reference was made again to the confirmation provided to Ms Charlton (see the Right of Indemnity Issue, discussed above). 2. NAB described the contention of Ms Charlton, in this regard, as follows: Ms Charlton contends that because Mr O'Brien was joint trustee of the Trust at the time that she took out the loans from NAB, she is not bound by those loan agreements and the Mortgage securing her obligations under those agreements. Her contention appears to be to the effect that because she and Mr O'Brien acted in breach of trust by failing to act jointly in taking out the loans and executing the Mortgage, NAB cannot enforce those loan agreements and the Mortgage against her. 1. This apprehension of the contentions advanced by Ms Charlton is not entirely consistent with her written and oral submissions but is reflected in Ms Charlton and Mr O'Brien's statement of issues set out above. 2. I also accept NAB's characterisation of Ms Charlton's submissions as being consistent with a proposition that the fact Mr O'Brien was a joint trustee affected the validity of her loan agreements and the Mortgage with NAB but not the validity of her acquisition of the property. 3. The Deed contemplated there may be more than one trustee (see cll 1 and 15). As discussed in the context of the Section 38 Trustee Act Issue above, the Deed also provided that a trustee has power to acquire and mortgage trust property (cll 12, 13(c), (t) and (z)). 4. NAB is correct to submit that, whatever the various expressions of the issue, the central tenet of these contentions was not pleaded. That contention is correct but, in any event, Ms Charlton's submissions, such as they are, cannot be sustained. 5. I will firstly turn to the factual premises for Ms Charlton's contentions, neither of which were available on the evidence. The first is that, if there was a breach of the Trust, that NAB was aware of the same. 6. As mentioned in the context of the Misrepresentation Issue above, the evidence did not support the conclusion that, if Mr O'Brien was a trustee of the Trust, NAB was aware of the same at the time it entered into the loan agreements and accepted the Mortgage. Nor was there evidence that Ms Charlton or Mr O'Brien sought to clarify with Mr Thomas that position. 7. As mentioned above, I do not accept the evidence of Ms Charlton and Mr O'Brien during cross-examination to suggest NAB had knowledge of Mr O'Brien's position as a trustee. It was, as Mr Colquhoun submitted, "belated" and it was in the light of the entirety of the evidence, unconvincing. 8. In any event, if Mr O'Brien was a trustee of the Trust, I find on the balance of probabilities that he gave Ms Charlton delegated authority to enter into the loan agreements and grant the Mortgage. 9. I also find that Ms Charlton had authority to acquire the property. That conclusion is supported by the evidence of Mr O'Brien in cross-examination. Relevantly, he stated: Probably two days before that I didn't even know that I'd be attending that meeting. And that was the situation why she had permission to do that purchase because I could not tell you. I was subject to the Rural Lands Protection Board telling where me to be at a certain time with the cattle, when to move it, and when you're doing a mob like that by yourself your company is 12 dogs, four or five horses and a motorbike and a truck and a ute. So I knew that through the negotiations of buying the property and all of that I would not be available to the solicitor. I would not be available to dealing with the people. And in actual fact I didn't even see the property until right near the sale day. And I was given another day off by another farmer to go out and have a quick look and he took my mob in my absence. So because of the circumstances of the time I delegated under 13T of the Trustees Act Josie had the right to act in my thing. 1. However, even aside from that finding, I do not consider the position of Ms Charlton may be sustained on the broad basis she has articulated for three reasons: 1. If Mr O'Brien was the joint trustee of the Trust then Ms Charlton breached the warranties given by her under cl 23 of the Overdraft Terms in the First Business Letter of Offer, cl 10 of the Second Business Letter of Offer and cl 20 of the Mortgage Terms. 2. Any equitable relief sought by Ms Charlton (for example, a constructive trust or declaratory relief) should not be granted because she does not come to the Court with clean hands. This is because any claim against NAB for knowingly receiving trust property necessarily relies on her own breach of trust, which means that the impropriety (Ms Charlton's breach of trust) has "an immediate and necessary relation to the equity sued upon": Dewhirst v Edwards [1983] 1 NSWLR 34 at 51 (per Powell J) 3. On the assumption that Ms Charlton's case is one of knowing receipt of trust property, knowing receipt does not mean that a registered purchaser is subject to a personal equity: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [193]-[196]. ISSUE 8: FURTHER MEDIATION ISSUE 1. This issue appears to concern or relate to issues 14 and 15 of the issues presented by Ms Charlton and Mr O'Brien, now extracted: 14. Whether the second purported mediation while proceedings on foot in matter 2015/27843 which included different parties can serve to validate the existing Section 11 Certificate. 15. Whether the undetermined second mediation whether for the sake of conformity the named registered proprietor entitles NAB to enforce or seek possession without proper legal proprietorship. 1. The issue concerns a mediation ordered by Schmidt J in those proceedings. Ms Charlton contended that the orders required Mr O'Brien to participate, notwithstanding that "he did not appear on the loan contracts" and he did not participate in the mediation held 17 July 2014. It was said the further mediation was ordered to be "a mediation that satisfied the [FDM Act]". 2. Ms Charlton seemed to contend this mediation was not in accordance with the FDM Act because the mediation occurred in circumstances where enforcement action remained on foot, including the very proceedings before Schmidt J. No s 11 certificate was applied for by NAB although it was submitted that no s 11 certificate could ever be validly issued by this further mediation because it would be a retrospective "issuance of a s 11 certificate" to serve the purpose of validating proceedings. 3. I agree with the submission of NAB that it is difficult to understand the purport of that submission on the issues raised. 4. It is not entirely clear that Ms Charlton did contend that the mediation affected NAB's ability to enforce the loan agreement and the Mortgage or that the mediation could not overcome defects arising with respect to the earlier mediation. Schmidt J ordered the following with respect to the mediation: DIRECTIONS MADE: Parties take the necessary steps to arrange a mediation which satisfies the requirements of the Farm Debt Mediation Act and that mediation occur on or before 30 October 2015. In the event that the mediation is unsuccessful, the parties have liberty to approach the Listings Manager for a hearing date with an estimate of 1 day. 1. It is sufficient to find, in the disposition of this issue, that the mediation ordered by Schmidt J does not prevent NAB relying upon the extant s 11 certificate, provided that it is (as discussed with respect to earlier issues) valid. ISSUE 9: DEED OF RELEASE ISSUE 1. NAB contended that the issue raised by Ms Charlton was that the provision of a draft Deed of Release by NAB's solicitors to Ms Charlton's then solicitors, in the context of this litigation, affects NAB's ability to enforce the loans agreements and the Mortgage in these proceedings. 2. Ms Charlton disagreed and contended the significance of the draft Deed of Release reflected the conduct of NAB in the proceedings and its attitude to the FDM Act. It was designed to avoid the exposure of the "factual matrix" of the matter and to avoid the operation of law. 3. NAB is entirely correct to submit that the issue does not arise on the pleadings. There is no evidence as to the draft Deed of Release and any role it played in the proceedings. Just how any offer by NAB by deed or otherwise may have affected its ability to enforce loan agreements or the Mortgage was not explained. 4. I reject Ms Charlton's contentions under this issue. ADDITIONAL ISSUES 1. The additional issues were earlier dealt with under the heading "Issues". THE CROSS-CLAIM PROCEEDINGS 1. The cross-claim proceedings were ventilated in the context of the Misrepresentation Issue. As I have rejected Ms Charlton's submissions as to the Misrepresentation Issue, the cross-claim proceedings must accordingly fail. CONCLUSION 1. Having regard to the findings made at [205] and [206] of this judgment, and the resolution of the issues raised by the parties in these proceedings so far as they were properly amenable to resolution (see [207]-[214]), I consider that NAB has discharged its onus of establishing the matters necessary for an entitlement to possession and judgment for debt. 2. For the reasons given above, the cross-claim proceedings should be dismissed. 3. So far as Ms Charlton and Mr O'Brien brought an application to extend time to bring the judicial review proceedings, that application is refused. In any event, the judicial review proceedings would alternatively have been dismissed as a matter of merit. 4. The question of costs has not been the subject of submissions and is reserved. 5. NAB shall bring in short minutes of order reflecting this judgment within 14 days of the publication of the judgment. If there is dispute as to the orders proposed, NAB should file and serve a submission in support of the order within the same period. Ms Charlton and Mr O'Brien should, in the event of a dispute as to whether the proposed orders reflect this judgment, file and serve a submission in reply within a further 14 days. DIRECTIONS 1. The Court makes the following directions: 1. NAB should file and serve short minutes of order reflecting this judgment within 14 days of its publication together with a submission in support of the orders proposed in the event of any dispute as to the proposed orders. 2. In the event as to any dispute as to the short minutes of order reflecting the terms of this judgment, Ms Charlton and Mr O'Brien shall file and serve submissions as to that issue within 14 days of the receipt of NAB's short minutes of order and submissions in support thereof. 3. The Court will make orders administratively in Chambers upon the receipt of consent short minutes of order or, in the event of any dispute as to the form of the orders, after consideration of the submissions advanced by the parties. ********** 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: 29 October 2019