CASSEGRAIN v COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LTD & ANOR

Court of Appeal (NSW)|2003-08-25|Before: Sheller JA, Ipp JA, McColl JA, Einstein J, Coll JA

CITATION : CASSEGRAIN v COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LTD & ANOR [2003] NSWCA 260 HEARING DATE(S) : 25 August 2003 JUDGMENT DATE : 23 September 2003

JUDGMENT OF : Sheller JA at 1; Ipp JA at 58; McColl JA at 59 DECISION : Appeals dismissed with costs.

CATCHWORDS : Appeal - Mediation Agreement - Evidence - Whether entered into in good faith - whether obtained by unconscionable conduct. - Appeal - Courts and Judges - Bias - Claim of actual or ostensible bias - No material support - No objection taken during trial - Waiver of subsequent right to complain. Commonwealth Bank Sale Act 1995 LEGISLATION CITED : Commonwealth Banks Act 1959 Farm Debt Mediation Act 1994 Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 Burger King Corp v Hungry Jacks Pty Ltd [2001] NSWCA 187 CASES CITED : Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Overlook v Foxtel [2002] NSWSC 17 Vakauta v Kelly (1989) 167 CLR 568 Claude George Rene Cassegrain - Appellant PARTIES : Commonwealth Development Bank of Australia Ltd - First Respondent Commonwealth Bank of Australia - Second Respondent FILE NUMBER(S) : CA 41055/02; 41056/02 COUNSEL : C G R Cassegrain in person on behalf of himself and the companies A G Bell/D A McLure - Respondents SOLICITORS : In person L E Taylor - Respondents

LOWER COURT Supreme Court - Equity Division JURISDICTION : LOWER COURT 50062/00; 50072/00 FILE NUMBER(S) : LOWER COURT Einstein J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41055/02; CA 41056/02 ED 50062/00; ED 50072/00

SHELLER JA IPP JA McCOLL JA CASSEGRAIN v COMMONWEALTH DEVELOPMENT BANK OFAUSTRALIA LTD & ANOR GERARD CASSEGRAIN & CO PTY LTD & ORS v COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LTD & ANOR

These two appeals arose out of proceedings brought to recover monies owed by Mr Cassegrain and associated companies, on loans from the Commonwealth Development Bank of Australia Ltd (CDB) and Commonwealth Bank of Australia (CBA) (the banks). The appellants and respondents took part in a farm mediation under the Farm Debt Mediation Act 1994, which resulted in Heads of Agreement. The Heads of Agreement acknowledged the appellants indebtedness to the banks; the validity of mortgages and securities held by the respondents; and an agreement to repay the loans before 1 March 1999. If the loans were defaulted, the Heads of Agreement included clauses, which the banks claimed would create a bar to any defence the appellants could raise in subsequent proceedings for recovery. After two extensions of time to repay the loans, the loans were defaulted on 28 May 1999. Pursuant to the Heads of Agreement the banks then bought proceedings in the Commercial List of the Supreme Court.

At first instance the trial Judge held that the mediation and the Heads of Agreement were entered into in good faith and were not obtained by unconscionable conduct on the part of the respondents. The banks should succeed in the proceedings. The appellants' claims were dismissed. Held: (1) That on its face the Heads of Agreement stood as a bar to the success of both appeals. That the evidence did not support a conclusion contrary to the one that Einstein J came to at first instance. The Heads of Agreement provided the banks with a complete answer to the matters raised by the appeal.

(2) That the appellants submissions that the trial Judge's attitude and conduct toward the appellants amounted from time to time, to an ostensible or an apprehension of bias, failed. There was no material support for such a suggestion. Furthermore, the appellants' counsel did not object to the trial Judge's conduct during the trial and accordingly the appellants have waived any subsequent right to object on that ground: Vakauta v Kelly (1989) 167 CLR 568.

Commonwealth Bank Sale Act 1995 Commonwealth Banks Act 1959 Farm Debt Mediation Act 1994

Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 Burger King Corp v Hungry Jacks Pty Ltd [2001] NSWCA 187 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Overlook v Foxtel [2002] NSWSC 17 Vakauta v Kelly (1989) 167 CLR 568 ORDER Appeals dismissed with costs.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41055/02; CA 41056/02 ED 50062/00; ED 50072/00

SHELLER JA IPP JA McCOLL JA

Tuesday, 23 September 2003 CASSEGRAIN v COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LTD & ANOR GERARD CASSEGRAIN & CO PTY LTD & ORS v COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LTD & ANOR Judgment 1 SHELLER JA:

These two appeals, the first by Claude George Rene Cassegrain (Mr Cassegrain) against Commonwealth Development Bank of Australia Ltd (CDB) and Commonwealth Bank of Australia (CBA) (the banks), and the second by Gerard Cassegrain & Co Pty Ltd (GCC), Clos Farming Estates Pty Ltd (Clos), Le Clos Sancrox Pty Ltd (Le Clos), Endwise Holdings Pty Ltd (Endwise) (the Cassegrain companies) and Mr Cassegrain (the Cassegrain parties) against CDB and CBA, arise from proceedings brought in the Equity Division of the Court, Commercial List, by CDB and CBA against Mr Cassegrain and by the Cassegrain parties against CDB and CBA. In the first of these proceedings, CDB recovered $436,392.74 and CBA $780,873.81 from Mr Cassegrain. In the second set of proceedings, the claims by the Cassegrain parties were dismissed but CDB recovered $436,392.74 from GCC, Clos and Le Clos on its cross-claim and CBA recovered $780,873.81 from the Cassegrain companies on its cross-claim.

The relationship of CDB and CBA 2 Section 71 of the Commonwealth Banks Act 1959 established the CDB. According to s72 the functions of the CDB were: "(a) to provide finance for persons - (i) for the purposes of primary production; or (ii) for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provisions of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions; and (b) to provide advice and assistance with a view to promoting the efficient organization and conduct of primary production or of industrial undertakings." 3 Section 73(1) provided that in determining whether or not finance should be provided for a person, the CDB should have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and should not necessarily have regard to the value of the security available in respect of that finance. Section 74 set out the powers of the CDB. 4 The Commonwealth Bank Sale Act 1995, which was assented to on 16 December 1995, repealed ss 71, 72, 73 and 74 of the Commonwealth Banks Act 1959. 5 After referring to the relevant legislation, the trial Judge, Einstein J, in his reasons for judgment of 22 October 2002, said: "20 In those circumstances the CBA up until the 1995 Act, as a matter of fact and pursuant to the above regulated regime and relevant instruments (including a private treaty between the CBA and the Commonwealth), had by relevant officers, effectively run and administered the business and affairs of the CDBA. The position which followed after the enactment of the 1995 Act was different in that the CDBA had effectively been converted into an entirely different vehicle and its previous charter, stipulated for in section 73 of the 1959 Act, and its functions, stipulated for in section 72 of the 1959 Act, had now disappeared. Loans which the CDBA had made remain valid contracts but no further applications for loans could be made to the CDBA which had become the Commonwealth Development Bank of Australia Limited [" CDB Ltd "]. CDB Ltd could not undertake any increase in its on or off balance sheet exposure through provision of additional loans. Effectively the position was that any application for a variation to an existing facility, which had previously been granted by the CDBA, could only be dealt as described in exhibit D1 which is appended to the judgment and is dated 23 September 1996. 21 A new " DevBank " commenced to operate as a division of CBA but the " not otherwise available" aspect of the CDBA's previous charter disappeared. The new DevBank, as before, was to operate efficiently in accordance with commercial principles and was held out as still primarily having regard to prospects ahead of security."

Factual background 6 On 4 October 1995 CDB lent $3 million to GCC. The loan was to be repaid in annual instalments of $615,200 due each August commencing in August 1997. On 18 October 1995 Mr Cassegrain executed a guarantee in favour of CDB in respect of GCC's indebtedness. The CDB loan was also secured by registered mortgages over various properties owned by GCC and Clos and by registered equitable mortgages over the assets of GCC, Clos and Le Clos. 7 On 2 April 1997 CBA approved an overdraft of $750,000 to GCC. The loan was repayable on demand but in any event by no later than 30 June 1998. On 24 April 1997 Mr Cassegrain executed a guarantee in favour of CBA in respect of GCC's indebtedness. 8 On 12 May 1997 the CBA loan to GCC was secured by registered mortgages over various properties owned by GCC and Clos and by registered equitable mortgages over the assets of GCC, Clos, Le Clos and Endwise. 9 On 30 July 1997 the time for repayment of the CDB loan was varied so that the first instalment was required to be paid in August 1998 with the balance due by August 2004. About 25 March 1998 GCC requested an extension of time to repay the CBA loan and the first instalment of the CDB loan until 30 October 1998. On 27 March 1998 CBA requested further information in order to consider GCC's application to reschedule repayment of the CBA loan and the first instalment of the CDB loan to 30 October 1998. On 8 April 1998 Mr Lloyd (GCC's financial consultant), met with Mr Wilmott of the CBA to discuss rescheduling the loans. On 29 April 1998 GCC wrote a letter to CBA providing some of the information requested but acknowledging that the accounts requested were still outstanding. 10 By letter dated 5 June 1998 and faxed to CBA on 10 June 1998 GCC provided accounts for GCC, Clos and Le Clos up to 30 March 1998, as well as some other accounts. On 25 June 1998 Mr Wilmott telephoned Mr Lloyd and told him that the bank had decided to decline the request for an extension of time and that the overdraft was to be repaid by 30 June 1998. On 7 July 1998 Mr Burgess, Senior Manager Group Risk Management, at the bank, and Mr Walsh, a former Credit Manager in Group Risk Management, met Mr Cassegrain and had a conversation regarding default and repayment. On 3 September 1998 CDB notified GCC by letter that GCC was in default of the CDB loan for non-payment of the instalment of $615,200 due in August 1998. 11 On 12 November 1998 the Cassegrain parties, CDB and CBA entered into Heads of Agreement consequent upon a farm mediation held that day. The mediation followed a notice of intention to take enforcement action, given on 7 July 1998, in respect of a farm mortgage within the meaning of the Farm Debt Mediation Act 1994 (the FDM Act), given by CBA to GCC, Clos, Le Clos and Endwise pursuant to s8(1) of the FDM Act. The form of the notice contained this statement: "Under the Farm Debt Mediation Act you are entitled to insist that a mediation between the creditor/bank and yourselves take place within the next three months at a time and place to be agreed upon. You should give consideration to obtaining independent professional advice before making any decision regarding mediation." 12 The balance outstanding at the date of the issue of the s8 notice was said to be $723,249.77. With the notice went a standard three page document issued by the New South Wales Rural Assistance Authority and headed "What is mediation?". On 23 July 1998 Mr Cassegrain signed a document on behalf of GCC being a request for mediation concerning farm debt pursuant to s9 of the FDM Act. In September 1998 Mr Cassegrain signed similar requests under the FDM Act on behalf of each of the Cassegrain companies and sent them to CBA. On 12 November 1998 CBA, CDB, and the Cassegrain parties agreed in writing to the appointment of a mediator to mediate between the parties as required by the FDM Act.

The Heads of Agreement 13 The parties to the Heads of Agreement of 12 November 1998 were CBA and CDB, referred to as "the Bank", GCC (referred to as "the Farmer") and the Cassegrain parties, including GCC, (referred to as "the Security Providers"). The agreement acknowledged the Farmer's indebtedness to the Bank under an overdraft facility and term loan as at 10 November 1998 as $4,106,915.03 and the Farmer's default in its obligations to the Bank in respect of the loans. By cl 2 the Farmer and the Cassegrain parties confirmed the validity of all the mortgages and securities held by the Bank and acknowledged that the mortgages and securities secured their obligations under the agreement and continued to secure their obligations to the Bank in respect of the loans from the Bank which were to continue except as varied by the agreement. By cl 6 the Farmer and Security Providers agreed to repay the loans on or before 1 March 1999. Clause 7 contained this provision: "If the Loan is not repaid on or before 1 March 1999 or if there is a default under this agreement the Bank may commence proceedings against the Farmer and the Security Providers in the Supreme Court of New South Wales for judgment for possession of the Property in Default Judgment for the Loan debt. In this event the Farmer and Security Providers will consent to the entry of judgments for possession of the Property and the Loan debt and will by 5.00 pm on the 10th calendar day following the Bank's solicitor's written request, provide the said consents in a form which is to be prepared by the Bank's solicitors, to the effect of the form annexed and marked 'A' hereto together with a duly executed solicitor's certificate". 14 Clause 8 was as follows: "The Farmer and Security Providers unconditionally agree that if the Bank commences legal proceedings pursuant to clause 7 above, they will not contest these proceedings and if they attempt to do so, this Agreement may be pleaded by the Bank as a bar to any defence that may be raised." 15 On 31 March 1999 GCC wrote a letter seeking an extension of time until 28 May 1999 to repay the CDB and CBA loans. On 12 April 1999 CDB and CBA agreed to this extension. On 28 May 1999 there was default in repayment of the loans. On 15 June 1999 Messrs Smith and Kershaw were appointed as receivers of GCC, Clos, Le Clos and Endwise.

Proceedings in the Commercial List 16 By summons filed on 18 May 2000 CDB claimed judgment, for an amount of $2,902,889.39 and CBA for an amount of $551,294.56 against Mr Cassegrain under his guarantee dated 18 October 1995 to CDB and under his guarantee dated 24 April 1997 to CBA. In points of defence Mr Cassegrain relied on several defences. 17 By a third amended summons against CDB, CBA and the receivers the Cassegrain parties sought relief based on alleged breaches of good faith, the Trade Practices Act and sections of the Corporations Law. The summons raised various questions and sought relief against what was described as unlawful appropriation of property. In reply, amongst other things, CDB and CBA relied on the Heads of Agreement, particularly the recitals and clauses 2, 4, 6, 7 and 8, and said that the Heads of Agreement was a bar to any defence of the proceedings by Mr Cassegrain. 18 In their defence to the claim of the Cassegrain parties in its second amended form, the banks pleaded the Heads of Agreement and said that the plaintiffs were not entitled to plead as against them the matters raised in the second amended summons. In addition, CDB and CBA cross-claimed against the Cassegrain parties for sums of money recoverable in accordance with the terms of the Heads of Agreement. The Cassegrain parties amended their summons (the third amended summons) to seek an order pursuant to s87 of the Trade Practices Act declaring the whole of the Heads of Agreement made on 12 November 1998 to have been void ab initio. 19 The two proceedings came on for hearing together before Einstein J between 8 and 16 October 2002. On 22 October 2002 his Honour gave judgment with the orders already referred to. Mr Cassegrain appealed against the judgment against him on the guarantees and the Cassegrain parties

Appeal 20 On the hearing of the appeals Mr Cassegrain represented himself and, without objection by CDB or CBA, the Cassegrain companies. Since no conflict existed between the appellants' arguments, the Court allowed Mr Cassegrain to speak for himself and for the Cassegrain companies. 21 On its face the Heads of Agreement and the circumstances in which this Agreement came into being stood as a bar to the success of both appeals. Einstein J said this about the Heads of Agreement: "30 The Cassegrain parties' pleaded case is to be found in a Rejoinder filed on 22 February 2002 in the banks' proceedings. The substantive issue pleaded is the allegation that the execution of the Heads of Agreement was obtained by unconscionable conduct on the part of the banks' representatives described in numbered paragraphs as follows: (i) at the time of the mediation the plaintiffs had not been able to prepare the various statutory notice of demand they were required as mortgagees to prepare and serve. [Claim no longer pressed in final submissions] (ii) the plaintiffs needed more time within which to prepare and serve the notices. [Claim no longer pressed in final submissions] (iii) the extension of time given in the Heads of Agreement was given to suit the convenience of the plaintiffs and gave an illusory indulgence only to the defendant and those he represented. (iv) the mediation was stated by the plaintiffs to be only a formality. (v) the Heads of Agreement offered no compromise by the plaintiffs to the defendants. (vi) the plaintiffs had resolved upon the outcome before the mediation and had prepared the document before the mediation. (vii) the defendants were under great emotional strain and disturbance and the plaintiffs were aware of that disadvantage. (viii) the plaintiffs offered the defendants only the choice of executing the document or suffering the appointment of receivers on the following day. (ix) the plaintiffs ignored the defendants' protests and insisted they execute the agreement which they did. ('the Heads of Agreement issues')" 22 In the course of evidence given by Mr Cassegrain which the trial Judge set out at length, Mr Cassegrain said that after receiving a bundle of documents about the Farm Mediation Agreement he spoke to Mr Walsh, who told him that it was just formality stuff the bank had to go through because Mr Cassegrain was in farming and was really just a waste of time as far as the bank was concerned. Mr Cassegrain said that Mr Burgess proposed at the mediation that in exchange for not appointing receivers Mr Cassegrain should sign the documents that were executed. Mr Burgess said, according to Mr Cassegrain, "You have the choice of executing the document or having receivers immediately appointed". Mr Cassegrain said he did not seek any legal advice and co-operated with the bank. He was at the time an executor and trustee defending a challenge by four of his siblings to his late mother's will. He said he agreed to the Heads of Agreement to avoid appointment of receivers and to get time to re-finance. Under cross-examination he gave evidence that one of his strategies for the mediation was to attempt to obtain some breathing space so that a Mr Fermanis, and others, whom he had retained to try to obtain re-financing, could arrange re-financing of the total group facilities. 23 According to Mr Lloyd, a former consultant to GCC, who was present with Mr Cassegrain at the mediation, the mediation lasted about three hours and during the course of it Mr Burgess said words to the effect "we are not interested about talking compromising or reducing the debt." He also said he recalled Mr Burgess saying: "This is the bank's final position. You either sign the agreement or we will immediately appoint receivers. Take it or leave it." Under cross-examination his evidence was that Mr Burgess had said that Mr Casssegrain either sign the document or the bank would appoint receivers on the following day. 24 Mr Walsh in evidence denied that Mr Burgess said that if Mr Cassegrain did not sign he would put receivers in the next day. "Receivers were mentioned but not in a threatening manner." Mr Burgess gave evidence that he told Mr Cassegrain that he was not prepared to agree to an extension of nine or more months believing that period was far too long. He stated that the bank initially was prepared to give Mr Cassegrain until mid-January. That date was moved to the end of February and finally moved to 1 March 1999, which was agreed. He said of Mr Cassegrain's emotional state during the mediation that the emotion was attached to the business plan put forward by Mr Cassegrain and that his crying arose when pointed questions were asked about the resolution of the family dispute. Mr Burgess did not believe the emotion arose during the discussion of the time extensions. He denied telling Mr Cassegrain that unless he signed he would put the receivers in the next day. 25 A document entitled "Summary of Mediation" signed by the mediator went into evidence without objection. Amongst other things this revealed that the mediation process continued for nine hours. Two to three settlement options were proposed mutually. Both parties were prepared to consider and discuss the other's settlement options and both moved off their initial position. Present were Mr Cassegrain and Mr Lloyd and Mr Burgess and Mr Walsh. Legal representatives were not present. 26 Receivers were appointed in June 1999. Mr Cassegrain agreed in evidence that until that time he had never disputed the debt and recognised without objection that the bank had the right to expect the repayment of its loan to the company. 27 Einstein J found Mr Cassegrain not to be a reliable witness. His Honour accepted the evidence of Mr Walsh as generally reliable and the evidence of Mr Burgess as reliable. Mr Lloyd's evidence was compromised by his discussions with Mr Cassegrain about their joint recollections. His Honour said in relation to Mr Lloyd's evidence of his absolute certainty that Mr Burgess had said at the mediation that if the agreement was not signed receivers would be appointed the next day: "However taking into account the endemic difficulty thrown up by the joint approach by Mr Lloyd and Mr Cassegrain in terms of their recollections and statements and taking into account the firm position taken by Mr Burgess and by Mr Wilmott to the effect that no such statement was made, the Cassegrain parties have not proven on the balance of probabilities that the statement was so made. Having said that I am entirely satisfied that during the course of the mediation reference was made to securities and to the enforcement of securities and it is likely that on the evidence, receivers were mentioned. However Mr Burgess having attended numerous mediations and having given evidence that it would take several weeks to obtain a section 11 Certificate, it seems to me that the probabilities are clearly against his having made a threat which could never have been carried out and more importantly which it was not necessary to make. The threat of receivers and of taking relevant action under the securities, hung generally over the whole of the dealings between the banks and the Cassegrain parties at material times and particularly during the mediation. General discussion about securities and the parties respective positions was unexceptional. Whilst I accept that by the time he gave evidence in the witness box Mr Lloyd had come to sincerely believe that a threat to appoint receivers on the following day had been made at the mediation, I am unable for the above reasons to accept this evidence on the balance of probabilities." 28 The certificate referred to was one required pursuant to s11 of the FDM Act. Part 2 of that Act headed "Mediation" contains ss 8 to 11B. Section 8(1) provides that 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 twenty-one days have elapsed after the creditor has given a notice to the Farmer under the section. Section 9(1) provides that a Farmer to whom notice has been given under s8 may, within twenty-one days after the notice was given, notify the creditor in writing that the Farmer requests mediation concerning the farm debt involved. Section 10(1) provides that once a Farmer has given a creditor a notification in accordance with s9 requesting mediation, the creditor must not take enforcement action in respect of the Farm Mortgage concerned unless a certificate is in force under s11 in respect of the Farm Mortgage. Section 11(1) provides that the New South Wales Rural Assistance Authority (the Authority) must on the application of a creditor under a Farm Mortgage issue a certificate that the Act does not apply to the Farm Mortgage if the Authority is satisfied that, inter alia, a satisfactory mediation in respect of the farm debt concerned has taken place.

29 Dealing with the issues Einstein J said: "208 The proceedings may be determined on the facts. Little reference to principle is called for where, on the facts, no unconscionability by the banks, no overreaching by the banks, no failure to act in good faith, and no misleading and deceptive conduct is shown to have taken place." 30 After discussing the principles of good faith and unconscionable conduct and applying those principles, his Honour concluded at par 220 that the proceedings of the Cassegrain parties failed at many levels. Turning to the Heads of Agreement and the mediation the trial Judge was satisfied that no form of unconscionable conduct had been established by the evidence in relation to the holding of the mediation and the entry into the Heads of Agreement. He said: "222 Mr Cassegrain had been seasoned in terms of litigation over a considerable time, was no stranger to the negotiating process and fully appreciated the significance of the entry into of the Heads of Agreement. He was aware by the second half of 1998 that mediations were a method of resolving litigious disputes. Mediations had occurred in relation to the family disputes. There had also been a mediation on behalf of the holding company with the CSIRO in 1993 which had resulted in a $9.5 million settlement being received." 31 In evidence Mr Cassegrain had sought to suggest that the banks had said that the mediation was only a formality and it would not change anything and further, that all attendees at the mediation were acutely aware that Mr Cassegrain's attention was distracted. The reasons for judgment continued: "225 As to the formality representation his evidence was as follows: 'His [ie Mr Walsh's] exact words which were to the effect - 'the banks have been frustrated' - by words to the effect 'frustrated by the politicians' who had passed some Act that only negates[sic] the bank to go through a process of mediation for farmers; and that it was just another technicality, that made life more difficult for the banks.' 226 It does not seem to me that the words 'formality' and 'technicality' are necessarily at all synonymous in this context. 227 As to the awareness of distraction allegation his evidence in chief was as follows: 'Q. Now in paragraph 14, in the second sentence beginning 'All attendees' and ending with the words on the next line 'Attention was distracted and' do you see that? A. Yes. Q. Now what happened at the mediation that caused you to arrive at that state of awareness that you are referring to? A. I went in to the mediation on the understanding - as I considered the mediation as a matter of formality; and I went to it by having a break from another court matter that I was involved in, concerning the family and the - I made it known. I said words to the effect that everybody who was in attendance, you know, I apologised for the fact that I was drained out and very tired and that I was - effectively here in presence, but my mind was elsewhere.' " 32 Einstein J set out the allegations put in terms of vitiating factors in relation to the mediation which his Honour said did not stand the test of the close examination of what actually occurred and what was accepted by the appellant as having occurred at the mediation. His Honour said: "228 … During cross-examination, Mr Cassegrain accepted the following propositions which were put to him and which, to my mind, make plain that his engagement in the mediation was both coherent as well as logical as well as of utility in terms of a continued campaign to gain time in obtaining refinance as and wherever practicable and possible: · That he was trying to buy as much time as possible from the banks so that his restructuring plans could have a chance at success. [Transcript 68 - 69] · That what was put to him initially was a period of extension up to approximately one month namely until mid January 1999. [Transcript 69] · That his position was that he wanted 9 or more months. [Transcript 69] · That he was strongly arguing that his company would be able to be refinanced. [Transcript 70] · That he could not deny that the mediator had said that the difference between the parties as to the date for repayment was their only difference but that it was a crucial one. [Transcript 72] · That he was aware because the mediator had read out clause 5 of the agreement, that this provided for a cooling off period of 14 days during which time the agreement could be rescinded. [Transcript 74] · That by signing the mediation agreement he had at least extended the time for repayment until 1 March 1999. [Transcript 77] · That after the mediation, Mr Fermanis was successful in obtaining refinancing for the Expressway Spares facility is with the Colonial State Bank. [Transcript 77] 229 Importantly Mr Lloyd gave evidence that as he apprehended it, there was something positive in terms of the result that was achieved at the mediation: " we achieved a three month or four month period of time in which to sort our position out ." 33 Einstein J dealt carefully with each of the outstanding allegations which his Honour had set out in para 30 of his reasons for judgment [see para 21 above] and which were relied upon to suggest that the execution of the Heads of Agreement was obtained by unconscionable conduct on the part of the bank's representatives. I quote from his Honour's reasons:

(iii) the extension of time given in the Heads of Agreement was given to suit the convenience of the plaintiffs and gave an illusory indulgence only to the defendant and those he represented. There is no substance in this complaint. The banks were entitled to invoke the mediation provisions of the Farm Debt Mediation Act at the material time. There was nothing illusory in the indulgence granted by the banks. (iv) the mediation was stated by the plaintiffs to be only a formality. The courts finding is that the word "technicality" was used. In truth this statement does not bespeak a closed mind. Indeed the mediation, as Mr Lloyd readily accepted, had a beneficial result for the Cassegrain parties interests who procured a material time extension. As to the allegation that Mr Walsh stated that the mediation was a formality, this was denied by Mr Walsh who was not challenged on any of this evidence in cross examination. Furthermore, in circumstances where this was Mr Walsh's first mediation it is inherently unlikely that Mr Walsh would have stated that he regarded the process as a formality. Mr Burgess also denied ever stating that the mediation was a formality or being aware that anyone else had made such a statement and was not cross-examined on this evidence. Mr Lloyd did not claim that any statement had been made that the mediation was a formality in either of his statements. Mr Cassegrain's evidence to the contrary is not accepted as reliable. (v) the Heads of Agreement offered no compromise by the plaintiffs to the defendants. The Heads of Agreement, as Mr Lloyd accepted [Transcript 197] and as Mr Cassegrain accepted [Transcript 77] in fact contained a degree of compromise by the banks in terms of permitting the time extension. All of the facilities were then due and payable. As a result of the Heads of Agreement an extension of time of almost four months was provided. That date followed a process of negotiation which involved each side amending its offer in relation to the date for repayment. Initially, the Cassegrain parties had asked for nine or more months and the Banks had sought a date for repayment by mid January 1999. By later in the morning on the mediation, the Cassegrain parties had modified their offer to a repayment date of 30 April 1999 and this was followed by an offer from the Banks to extend the date until 28 February 1999. The date ultimately agreed upon was 1 March 1999. This process of negotiation is confirmed by the mediator's summary [Ex PX Vol 3 pp 854-856]. Mr O'Moore confirms in that document that two to three settlement options were proposed mutually and that both parties moved off their initial position. This followed a process in which, in the mediator's opinion, both parties made an adequate opening statement, both parties issues and concerns were identified, the parties had sufficient face to face discussion to enable each party to appreciate the other's perspective and both parties' options for settlement had been canvassed. (vi) the plaintiffs had resolved upon the outcome before the mediation and had prepared the document before the mediation. This allegation in order to succeed would have to include as a parameter, some such proposition as that the banks had resolved not to offer any form of compromise and/or not to consider any offers which came forward from the Cassegrain parties. The evidence did not bear out any such form of resolution. To the contrary, the Heads of Agreement contained a degree of compromise in terms of the time extension granted. The Banks had not resolved upon the outcome of the mediation before it had occurred. The written instructions given to Messrs Burgess and Walsh suggested that they were able to compromise the amount of the debt by up to $250,000 (Ex PX Vol 2, p 703), yet, in the way in which the mediation progressed, and as Mr Cassegrain acknowledged that the whole debt was owed, no such compromise of the quantum of the claim was required. Further, the instructions permitted Messrs Burgess and Walsh to extend the date for repayment until 15 January 1999, yet in order to achieve a settlement Messrs Burgess and Walsh were required to extend the date for repayment to 1 March 1999. Indeed Mr Burgess made it clear in his oral evidence that he was fully authorised to mediate on whatever terms seemed to him to be commercial . Mr Burgess justified this extended time in his memorandum in relation to the mediation at Ex PX Vol 2 pp 730-731. (vii) [Mr Cassegrain] was under great emotional strain and disturbance and the plaintiffs were aware of that disadvantage. This allegation whilst given the closest of scrutiny by the Court, is ultimately not made out on the evidence. Mr Cassegrain had been involved in innumerable court issues and hearings over an extended period of time involving members of his family and lawyers. He had participated in mediations. The world of commerce and the enforcement of contractual obligations continue notwithstanding, inter-family litigious forensic steps. Whilst a particular circumstance may be envisaged where a person was forced to participate in a mediation literally being wrenched out of a witness box and into a mediation room and hence being unable to properly treat (or be expected to be able to treat) in any way shape or form with the mediation, that was not, on the evidence, remotely this case. I accept as reliable the evidence given by Mr Burgess to the effect that the occasion when Mr Cassegrain broke down in terms of crying was when pointed questions were addressed to him with as to whether there was a resolution of the family dispute insight, obviously a problem area of great sensitivity. No case has been made out of emotional strain and disturbance to the extent of a finding of unconscionable conduct in the banks having been prepared to participate in the mediation. See in particular the evidence of Mr Walsh which establishes that nothing was said during a time when Mr Cassegrain had been 'a bit teary' and that the matter had passed possibly following an adjournment to allow Mr Cassegrain to compose himself. Mr Cassegrain had not become emotional again to the same degree. The mediator was an independent party. The authority issued a section 11 certificate which could only be issued if it were satisfied that a satisfactory mediation in respect of the farm debt had taken place. (viii) the plaintiffs offered the defendants only the choice of executing the document or suffering the appointment of receivers on the following day. In terms of the finding that all that occurred was a general threat of receivers and of taking relevant action under the securities and that there was no threat to appoint receivers on the following day, this allegation of unconscionable conduct fails at a factual level. Neither of the parties to the mediation was a babe in the woods. Significantly it is also to be noted that Messrs Burgess, Walsh and Lloyd all knew that any action to enforce the securities could not be taken until a section 11 certificate had issued. Realistic discussion of options which either side may have had could only be expected during a mediation. On the findings of the court this is all that occurred. Indeed the whole of the background and context in which the mediation was taking place by definition concerned a degree of great anxiety in the Cassegrain parties as to the next step which may be taken by the banks. (ix) the plaintiffs ignored the defendants' protests and insisted he execute the agreement which he did. This allegation in the events which happened is unexceptional." 34 In concluding his consideration of this part of the case Einstein J said: "231 Moreover it is particularly significant that the acknowledgements, admissions and promises to be found in the recitals to the Heads of Agreement and in the body of the document were made in a context in which, on the evidence, the Cassegrain parties believed that they had a cause for complaint in relation to the manner in which the rescheduling application had been declined [Transcript 179] and claimed that they considered that the banks alleged conduct in asserting a cross default under the CDBA facility was ' outrageous '." 35 It should be observed that the last part of this paragraph refers to a claim that bank officers had said that if there was a default in the CBA facility on 30 June 1998 there was as a consequence a default in the CDB facility. Einstein J found that this allegation was not made out on the evidence and was inconsistent with contemporaneous legal advice to the bank that a default by the mortgagor under its securities with CBA did not create a "cross default" under the CDB securities enabling the CDB to enforce its securities. The trial Judge said: "239 … The Bank's contemporaneous documents clearly demonstrate that Messrs Wilmott, Walsh and Burgess did not believe that default of the CBA loan would constitute a default of the CDB loan. Specifically: · The Bank's internal memorandum dated 15 June 1998 raised the question of whether default of the CBA loan would also constitute default of the CDB loan; · Mr Wilmott's file note of his telephone conversation with Mr Lloyd dated 25 June 1998 noted that he had not suggested to Mr Lloyd that default of the CBA loan would constitute default of the CDB loan and that he would not assert as much in his letter to Mr Lloyd without confirmation from the Legal Department. Ms Heatherington of the Bank's legal department gave advice in the memorandum dated 25 June 1998 that default of the CBA loan would not constitute default of the CDB loan; · Mr Wilmott's letter dated 26 June 1998 does not suggest that default of the CBA loan would constitute default of the CDB loan; · the Farm Debt Mediation Act notices issued on 7 July 1998 (PX 521 - 527) and 26 August 1998 (PX 572 - 574) only relate to default of the CBA loan; · In response to a letter from Mr Lloyd proposing that the parties also mediate the CDB loan, Mr Burgess responded in a letter dated 13 July 1998 that: 'Unless mutually agreed with you beforehand, CDB farm debt mediation invitation will issue upon default under the Term Loan facility.' · The Farm Debt Mediation Act notice in respect of default of the CDB loan was not issued until 3 September 1998 when it was in fact in default; · Mr Lloyd agreed that the implication in the Bank's letter of 13 July 1998 was clear; · Clearly Mr Burgess did not believe that the CBA loan would constitute default of the CDB loan. As Mr Walsh's superior, it is most improbable that Mr Burgess would have permitted Mr Walsh to assert what is alleged by Mr Cassegrain, when he (Mr Burgess) regarded this to be incorrect. 240 The most likely explanation is that either or both of Mr Cassegrain and Mr Lloyd formed the incorrect conclusion that default of the overdraft would be default of the CDB loan. Mr Cassegrain gave evidence that Mr Lloyd informed him of this very matter and Mr Lloyd accepted that he believed default of the CBA overdraft would be default of the CDB loan, but does not suggest that he was told this by any officer of the Banks." 36 Continuing with the Heads of Agreement, Einstein J said: "232 Further the evidence establishes that the whole focus of the negotiations at the mediation concerned the time frame for refinance. This was in a context in which Mr Cassegrain did not dispute that the Bank was owed the money that it claimed: [Transcript Mr Cassegrain, 68, 69, Mr Lloyd, 193] Indeed, the mediator at one point stated that the difference in date was the only difference between the parties but that it was a crucial difference and that if agreement could not be reached on the date he would have to set aside the mediation as one in which no agreement was reached. 233 There is further no substance in the plea of the equitable set-off whereunder Mr Cassegrain asserts that he neither knew nor intended at the time that by executing the Heads of Agreement he would waive and forfeit his alleged equity to rely upon other defences. Heads of Agreement reached in a mediation have considerable significance. A cooling off period was allowed. Whilst a case may arguably succeed in terms of a vitiating factor such as was here suggested, this was not, on the evidence, such a case. This allegation fails by reason of the general holding concerning there having been no material misrepresentations, or conduct at the mediation, of a character such as to vitiate the Heads of Agreement. The entry of the parties into the Heads of Agreement was unexceptional. Significance of finding as to Heads of Agreement 234 The finding that the entry of the parties into the Heads of Agreement was unexceptional and is not vitiated by any wrongful conduct of the banks in terms of the pleaded unconscionable conduct, in effect mandates, as it seems to me, the banks success in relation to all issues of alleged misconduct in these proceedings (outside of the receivership issues which are no longer live). And for the reason that the Heads of Agreement were entered into after this alleged misconduct was said to have been engaged in. 235 Whether or not I be correct in this view, bearing in mind the manner in which the hearing was conducted, it is convenient to treat also with the allegations of anterior misconduct. As will be apparent from the reasons which follow, those allegations are of no substance. Hence even if the Heads of Agreement might in a proper case be set aside on the basis of a mistake concerning one's curial rights, which case would have to be remarkable indeed, this was not such a case." 37 If the trial Judge's conclusions about the Heads of Agreement and the attack upon them is correct, subject to one matter both appeals must be dismissed. 38 The one matter arises from the alleged discharge of the CBA debt by payment on 10 January 2000. 39 Immediately before that date GCC's account with CBA was in debit $536,735.91. On 10 January 2000 deposits of $126,036.77 for the sale of a property Lot 49 Sancrox Road, $134,946.44 for the sale of a property Lot 27 Bushland Drive, and $241,553.06 for the sale of a property Lot 53 Bushland Drive, each sale having been made by the receivers and managers, reduced the debit to $34,199.64. On 14 January 2000 the debit was reduced to zero by the deposit of the deposits held for those sales which totalled $36,433.83, which, taking account of interest, duty and tax debits, produced that result. All these amounts were thought to have been wrongly paid into the account with CBA because the deposit of them overlooked the fact that the GCC debt to CDB had priority by agreement and in time. 40 On 27 January 2000 Mr Watson, Manager, Credit Management in Group Risk Management, realised this and reversed the credits with the result that GCC's account with CBA went into debit in an amount of $538,970.01 and the debit in GCC's account with CDB was reduced in the same amount. There still remained, however, an error. 53 Bushland Drive secured only the CBA loan and not the CDB loan. Accordingly, on 10 July 2000, $260,679.31, the total proceeds including the deposit which had come in from the sale of Lot 53, was debited against the account with the CDB and credited to the account with CBA. 41 Einstein J accepted the evidence that the reduction of the debit of GCC in the CBA loan to zero was the result of a mistake. His Honour said: "There is simply no substance in the allegation by the Cassegrain parties that in these circumstances the CBA debt was discharged and the Guarantee which had been given by Mr Cassegrain accordingly discharged." His Honour referred to David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 for the proposition, amongst others, that a payer is prima facie entitled to recover monies paid under a mistake if it appears that the monies were paid in the mistaken belief by the payer that he was under a legal obligation to pay them or that the payee was legally entitled to payment. A defence to such a claim to recover money under a mistake is available to a payee who had adversely changed his position in reliance on the payment. His Honour said: "262 There is no pleaded allegation in either suit that the banks are estopped from correcting these mistakes. No evidence was adduced from any of the Cassegrain parties that they were either misled or relied upon the mistakes or changed their position. 263 The submission advanced by the Cassegrain parties was that the priority agreement, which is annexure "A" to Mr Watson's affidavit, was ineffective because the CBA was both " the Bank " and " the Mortgagee " in the priority letter. This is clearly a typographical error which would be cured by the insertion of the word " Development " between the words " Commonwealth " and " Bank " in the first line of the letter. The letter was written to the CDB and with that typographical correction the document makes perfect sense. If the assertion of ineffectiveness had been raised at an appropriate time by the Cassegrain parties then an application could plainly have been made to rectify the document. 264 More importantly, this submission by the Cassegrain parties overlooks the fact that even if the letter of priority did not exist, the priority position would be identical. The CDB was the first registered mortgagee in respect of the relevant security properties. As first registered mortgagee it was entitled to priority to the extent of its advance plus interest and other charges even if there had been no express priority arrangement. 265 In these circumstances, it was correct as a matter of law, even disregarding the letter of priority, to credit the amounts obtained on realisation of the securities other than Lot 53 to the CDB and to credit the realisation on Lot 53 to the CBA. This was the ultimate position after the original errors had been corrected. 266 In all of those circumstances there is no substance in the claim that the CBA debt was discharged following these payments and the identified initial accounting entries and later reversals." 42 In my opinion, his Honour's conclusion is correct beyond argument. This removes the only possible and limited exception to the proposition that if the trial Judge was correct in concluding that the Heads of Agreement bound the Cassegrain parties, their claims in the proceedings and similarly their appeals must fail.

The Cassegrain parties' submissions 43 Mr Cassegrain relied upon written submissions filed in the appeal on his behalf and on behalf of the Cassegrain companies by their former solicitors, written submissions that he handed up to the Court and oral submissions adding to or explaining those written submissions. The Court granted leave to Mr Cassegrain to correct and complete his written submissions within a time limited after the Court reserved its decision. The banks were given leave, if necessary, to answer these submissions in writing. In furtherance of this, Mr Cassegrain filed written submissions dated 29 August 2003, the banks written submissions dated 3 September 2003 and Mr Cassegrain supplementary written submissions dated 4 September 2003. 44 A large part of Mr Cassegrain's written submissions attacked the trial Judge's findings about the reliability of witnesses. This attack went to the trial Judge's findings that from the bank's point of view the mediation was not a mere formality and that no threat was made by the bank officers to the effect that if Mr Cassegrain did not sign the Heads of Agreement, receivers would immediately be appointed. Mr Bell of counsel, who appeared for CDB and CBA, took us through the documentary evidence leading up to the appointment of the mediator. It is quite clear from this material that the bank in accordance with the provisions of Pt 2 of the FDM Act duly gave notice under s8 and the Cassegrain parties duly notified the banks that mediations in respect of both loan commitments were requested. That request having been given the banks could take no enforcement action unless there was a certificate in force under s11 (s10). That in turn required the mediation to be completed and the Authority to be satisfied that it was a satisfactory mediation. Against this background it seems highly unlikely that the bank officers would make a threat which as a matter of law the bank could not carry out. Indeed it seems probable that it would be some time, probably some weeks, before the Authority would issue a certificate under s11 that the mediation was satisfactory. The bank applied for s11 certificates on 1 December 1998. They were issued on 11 February 1999. 45 The trial Judge had the usual advantage of hearing and seeing the witnesses. He accepted the evidence of Mr Walsh and Mr Burgess. Nothing is advanced which suggests that it was not open to him to do so. 46 In dealing with the evidence about the threat of appointing receivers, his Honour, in par 201, mistakenly put the name "Mr Wilmott" where he meant "Mr Walsh". The appellant claimed in his written submission that this demonstrated either bias on the part of the Judge or in the alternative, that the Judge had made a fundamental mistake by confusing the evidence of Wilmott (who was not party to the mediation) with that of Walsh. In the most careful of judgments, such mistakes sometimes creep in. They demonstrate in this case neither of the matters suggested. 47 One of the grounds of appeal was that the attitude adopted by the trial Judge towards the case of the Cassegrain parties expressed from time to time during the hearing of the proceedings and the reasons for judgment given by his Honour amounted to ostensible or apprehension of bias. In his submissions, Mr Cassegrain asserted that at an early stage the trial Judge took an adverse view of the case brought by the Cassegrain parties and the case defended by them. Apparently, as part of this claim, it is said that the trial Judge put a time limit on counsel with respect to the cross-examination of Mr Wilmott and Mr Burgess. This assertion is not correct. As appears from the transcript, on 15 October 2002 Mr Wilmott was called at about 10.28 am. Not long after that, cross-examination by counsel for the Cassegrain parties began. It continued after the short adjournment. A little time before the luncheon adjournment the following interchange took place: "HIS HONOUR: Mr Cameron, quite a lot of time has been taken with this witness. What is the current estimate of your position? CAMERON [who at the hearing appeared for the Cassegrain parties]: Probably another hour, I think, your Honour, with this witness, and probably an hour with Mr Burgess. HIS HONOUR: Yes. Well, I think that it's appropriate in terms of the estimates and so forth for me to limit the cross-examination accordingly. If you say you will need another full hour with this witness, I will accept that estimate. If you say you are going to take an hour with the next witness, Mr Burgess, I will give you that period of time to cross-examine him. You can apply to extend the period of time as you see it becomes necessary and we do need to move through this case, and you have been moving in to and out of areas without copies of documents, and backwards and forwards considerably. Is there going to be a further witness beyond Mr Burgess? BELL: There's no other witnesses who have given statements, your Honour. HIS HONOUR: You move on then. I suggest you proceed ahead, because that's the period of time that you are allotted. You need to get to the burden of the case, to the extent that you are putting matters to the witnesses and it is a matter for how long you take, for you to get there." 48 Some time well into the afternoon hearing the following interchange took place: "HIS HONOUR: You now have something like 40 minutes to cross-examine Mr Burgess. BELL: We don't mind if he has to stay, we would just like to know now so we can make arrangements. HIS HONOUR: You do have to make your mind up, Mr Cameron, he will be here if you need him in the morning but you have said you won't. It is a matter for you. CAMERON: Yes, your Honour." 49 The cross-examination of Mr Willmot finished after two further questions and answers without any application by counsel for an extension. At 3.30 pm Mr Burgess was called and his cross-examination finished a little time before the adjournment without any application for it to be extended. 50 Clearly enough in intervening when he did his Honour was trying to ensure that witnesses were not unnecessarily inconvenienced and that the trial was not unnecessarily delayed. That he should do so was both appropriate and desirable. He left it open to counsel for the Cassegrain parties to ask for an extension of time. This was not done. There is nothing to suggest that counsel was denied the opportunity fully to cross-examine Mr Wilmott and Mr Burgess. 51 It is asserted that the trial Judge often interrupted the cross-examination of the three bank witnesses and administered a lengthy series of questions in many cases adducing evidence favourable to the banks' case. There were occasions when the trial Judge was said to have raised objections to questions not objected to by the opposing counsel. Mr Cassegrain submitted in writing that there was an indication that there was a strong leaning towards the case for the banks which demonstrated actual or apprehended bias. This was said to be re-inforced by the fact that shortly before the hearing date the trial Judge at a directions hearing put aside the consent orders entered into between the bank and the Cassegrain companies for the issue of damages to be excluded from the hearing. This was said to have had a serious disruptive effect on the preparation of the trial. 52 In Vakauta v Kelly (1989) 167 CLR 568 the High Court pointed out at 572 and 587 that a party who has legal representation is not entitled to stand by until the contents of the final judgment are known and then, if those contents prove unpalatable, attack the judgment on the ground that, by reason of earlier comments, there has been a failure to observe the requirement of the appearance of impartial judgment. "By standing by, such a party has waived the right subsequently to object. The reason why that is so is obvious. In such a case, if clear objection had been taken of the comments at the time when they were made or the judge had then been asked to refrain from further hearing the matter, the judge may have been able to correct the wrong impression of bias which had been given or alternatively may have refrained from further hearing." (572) 53 In the present case counsel appearing for the Cassegrain parties at no stage took any objection to the trial Judge's conduct of the case based on an apprehension of bias. To me it is clear enough why no such objection was taken. There is not a shred of material to support such a suggestion. But even if there were, the result of non-objection is that the point has been waived. 54 It is not at all clear on what jurisprudential basis it could be said that the Cassegrain parties were relieved from the admissions made or the obligations undertaken by them under the Heads of Agreement. The trial Judge discussed good faith and referred to the decisions in this Court in Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 and Burger King Corp v Hungry Jacks Pty Ltd [2001] NSWCA 187 and the decision of Barrett J in Overlook v Foxtel [2002] NSWSC 17. On unconscionable conduct his Honour referred to Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461. 55 To my mind it is clear enough that from the point of view of the Cassegrain parties it was important in November 1998 to extend the time to comply with their contractual obligations under the loans. The mediation resulted in an extension to 1 March 1999 and thereafter a further extension was obtained. At no time did the Cassegrain parties challenge the obligations imposed upon them or the quantification of the amounts that they owed. The Heads of Agreement in terms of the admissions made in it represented the position of the Cassegrain parties. The effect of the Agreement was to give them the benefit of an extension. The Heads of Agreement presents CDB and CBA a complete answer to the matters raised by the notices of appeal. The additional defences based upon the mistaken crediting of money to the GCC account with CBA and based upon ostensible bias fail.

Pre Heads of Agreement conduct 56 This conclusion makes it strictly unnecessary to deal with the claim by the Cassegrain parties that the banks behaved unconscionably in delaying during the period from March to June 1998 communication to the Cassegrain parties of the banks' decision to decline an application to re-schedule the loans. The Cassegrain parties had been advised as early as March 1998 that the application to re-schedule was or would be refused. The Cassegrain parties would not have been in a position to raise replacement finance during that period and hence suffered no loss. Having read and carefully considered Mr Cassegrain's submissions both in writing and oral I am not persuaded that any error has been shown in the reasons for judgment. I agree with Einstein J's reasons for judgment on the matters to which I have just referred and indeed generally with the reasons for judgment.

Order 57 The appeals should be dismissed with costs. 58 IPP JA: I agree with Sheller JA. 59 McCOLL JA: I agree with Sheller JA. **********

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