Commonwealth Bank of Australia v Love & Anor [2015] VCC 1653

1. did Mrs Love have an equitable interest in 275 O'Herns Road? If so, what duty (if any) did the CBA owe to Mrs Love in its sale of 275 O'Herns Road? 2. what duty did the CBA owe Mr Love in its sale of 275 O'Herns Road?

1. did the CBA breach its duty to Mr Love and/or Mrs Love in the sale of 275 O'Herns Road?

1. even if the CBA breached its duty to Mr Love and/or Mrs Love, did that breach cause any loss by reason of the sale of 275 O'Herns Road being at an undervalue? 2. if the sale of 275 O'Herns Road was at an undervalue, what was the quantum of that loss and would the correct value have satisfied Mr Love's outstanding liability to the CBA at that time?

1. From 1915 onwards, Mr Love's grandfather and father acquired farm land in Epping including properties known as 275 O'Herns Road (275), 315 O'Herns Road (also referred to as Lot 1, 410 Cooper Street) (315), Lot 3, 410 Cooper Street (410), and 460 Cooper Street (460).
2. In January 1997 Mr Love bought out his brothers and became the registered proprietor of the land at Epping.
3. On 30 September 2000 Mr Love and Mrs Love married. The properties at Epping were unencumbered by any debt at this time.
4. Between 2002 and 2006 VicRoads sought to acquire parts of Mr Love's property. He thereafter fell into dispute with VicRoads and extensive litigation followed.
5. In 2006 Mr Love borrowed $4,790,364 from the CBA to assist with his legal costs in relation to this litigation (which was ongoing).
6. During 2006 - 2009 Mr Love's indebtedness increased and advances by the CBA were secured by mortgages registered over 275, 315, 410 and 460. The indebtedness was constituted by a Better Business Loan and bank guarantee.
7. As at March 2009 Mr Love's facilities were in default. As at 30 March 2009, Mr Love was indebted to the CBA in the amount of $12,601,901.
8. The CBA then agreed to extend the date for repayment for 5 months until 31 August 2009.
9. However, by 31 August no repayment had taken place with the result that all facilities were in default.
10. From about late 2009 until the time of sale in 2011 the CBA obtained various valuations (from Mr Bradley Papworth and Mr Claudio Petrocco of Charter Keck Cramer; Mr Christopher Dupen and Mr Julian Vautin of Colliers International Consultancy and Valuation Pty Limited; and Mr Mark Murray of O'Briens Valuers & Property Consultants). They are based on the "direct comparison" approach[3] and summarised in Annexure A to these reasons.
11. By correspondence of 10 December the CBA issued a demand for payment of $9,948,889.87 (in respect of the expired Better Business Loan) with interest running at $3,936.24 per day.
12. On 29 December 2009 the CBA agreed to release the title to 410 in exchange for $2,850,000 paid (by way of refinancing).
13. However, the remaining debt which was still owing and unpaid was $7,059,858.99 together with $3 million in respect of the bank guarantee. Interest was also running on the debt at 14.74%.
14. On 3 February 2010 Mr Love asked the CBA to defer enforcement proceedings until 28 February 2010 when he expected a favourable decision in one of his legal proceedings. He also wanted the bank to consider allowing him to refinance.
15. By correspondence of 4 February 2010 the CBA responded, stating that it was:
    • Not prepared to release any of its security unless it receives payment equal to or greater than the valuation of each property;

• Prepared to agree to defer security enforcement proceedings until 28 February 2010 by which time you expect a favourable verdict to be handed down by Justice Osborn in the matter of Love versus Roads Corporation. Any further deferment beyond this time will depend on whether the verdict incorporates a compensation payment of greater than $10m, awarded in favour of Mr Love.

1. The correspondence further stated that, if the compensation was insufficient, the property at 275 would be sold in accordance with Mr Love's preference as to which property should be realised first.
2. On 23 February Osborn J awarded $444,344.92 on Mr Love's claim (of $16,267,000).[4] Mr Love appealed this decision.[5]
3. The bank thereafter took possession and on 22 March 2010 CBA appointed Jones Lang LaSalle (JLL) and Sutherland Farrelly (SF) as the conjunctional agents to sell 275 (JLL was appointed at Mr Love's request).

1. On 29 March 2010, the agents issued their joint report (including marketing recommendations). The report included recommendations that a plan of subdivision and flora and fauna report be obtained to assist with the marketing of the property. The report further recommended that the expression of interest method be utilised (closing mid June 2010) noting that the property would most likely appeal to only a "limited number of buyers." It further recommended that terms be available of up to 3 years although it would be suggested in marketing that the Vendor would favour a cash settlement of 60 - 90 days. The report noted that there had been limited sales of en globo industrial parcels since 2007 due to absence of funding and financial difficulty. It was "extremely difficult to assess the likely realisable value of the subject property."
2. On 8 April 2010 CBA instructed the agents to proceed with the marketing recommendations save that the indicative terms suggested would not be acceptable; rather terms would be in line "with paying down our debt ASAP."
3. On 20 April the CBA clarified whether the flora and fauna reports were mandatory/necessary in gaining the best possible price for the property and was advised by Mr Sutherland (the same day):

"We consider that these reports increase the saleability of the property and that potential purchasers would not make unconditional offers without the reports. These reports are considered to be necessary to obtain the best possible price for the property."

1. The CBA then arranged for the obtaining of a flora and fauna report from Golder Associates (Golder).
2. On 17 May 2010 Golder provided their report which will be discussed in detail below. The Loves place great emphasis on a statement included in that report to the effect that: "A large proportion of the site (the stony areas - approximately 60-70% of the site) is covered in substantially native, unimproved pasture, which is a subset of the Plains Grassland EVC." (the "EVC" being a listed ecological vegetation class).
3. As will be seen below, the presence of protected grassland under State or Commonwealth legislation could have two possible effects: it could mean that a certain part of the land needed to be set aside for conservation; it could also mean that payments needed to be made for the purchase of hectares elsewhere to be put aside for conservation as "Offsets."
4. On 19 May 2010 Mr Montgomery of CBA wrote to the agents stating that his "gut feel" was that the "current native grass issue" would affect the value of 275.
5. Mr Sutherland recommended that a further report be obtained from Golder and, on 20 May, sought a fee proposal from Golder, noting the potential native grasses on the land and seeking advice as to solutions and costs to enable an industrial subdivision of the site.
6. On 27 May 2010 Golder wrote to the agents as follows:

"As we described in our report dated 17 May 2010 (107613050-001-L-RevA), a substantial part of the land is covered in native pasture. The actual extent and quality of the native pasture, and whether it satisfies the criteria for description as native vegetation and 'Plains Grassland' under Victorian legislation and planning schemes, and/or 'Natural Temperate Grassland of the Victorian Volcanic Plain' under Commonwealth legislation is currently unknown due to seasonal factors

The status and quality of the native pasture as native vegetation would need to be assessed during the optimum field season; which is Spring. Such an assessment will not form part of this scope of works

That at least a proportion of the native pasture present does conform to one or both of the above categories...."

1. By email of 27 May 2010 11.37am Mr Montgomery then suspended the marketing campaign suggesting they should hold off "until we are fully informed about the native grass issue". He also asked Mr Sutherland to go back to Golder and clarify further what solutions the report would provide (which he did). He expressed concern as to whether the current scope would provide further beneficial information.
2. By email from Dr Conole of Golder to Mr Sutherland of 31 May (forwarded to Mr Montgomery) he explained that the scope of the further report would be to outline what would happen to carry out required assessments; go through approval processes and estimate costs associated with those steps (explaining the legislative/policy context of what neighbours had been through). He confirmed that, until spring, no further useful diagnosis of the field conditions could be made.
3. By email of 1 June Mr Montgomery asked Mr Sutherland to proceed in obtaining a further report from Golder.
4. On 17 June 2010 Mr Love sent an email to Mr Montgomery at the CBA listing factors against the existence of native grass on 275 (and seeking reconsideration by the CBA of an earlier request that there be a partial refinance and release of its security).
5. On 21 June 2010 Golder's further flora and fauna report was provided to the agent. Again, this will be considered further below. The CBA, however, emphasises that it included the following statement:

_"_If vegetation on the site were to include native grassland and/or any threatened flora species, the expectation should be planned for that between 10 - 20% of the site may need to be set aside in dedicated conservation reserves and/or passive open space. This is likely to be in the stony raised areas near Edgars Creek, and may be co-located at least in part with a stream or drainage reserve."

1. By email of 22 June Mr Sutherland refers to recent telephone conversations and the further Golder report and "recommends that marketing of the property proceed."
2. Mr Sutherland also said he had contacted Breese Pitt Dixon (surveyors) requesting an updated concept subdivision plan in accordance with the latest report prepared by Golder.
3. On 22 June 2010 Mr Montgomery wrote to the agents saying that, after receipt of the final Golder report, review of its contents, and conversations with the agents, the bank "confirms it wishes for the sales campaign of 275 to commence on 30 June" (with an EOI close date of 4 August).
4. On 30 June 2010 the CBA sought advice from valuers, Mr Dupen and Mr Papworth, as to what further information they would require in order to accurately determine what effect the native grass issue may have on the value of 275.
5. Mr Papworth did not recall whether he responded to this email (there is no record of a response).
6. However, Mr Dupen's response (also of 30 June) will be detailed below. In substance, he suggested that, although the only way to provide a "definitive comment" as to the native grassland effect would be to get an assessment in spring, that it was "unrealistic" to do so.
7. At this point the CBA facility had been in default since (at least) 31 August 2009 based on the (extended) expiration time of the term.
8. As Mr Sutherland confirmed, the marketing campaign then commenced on 30 June with a closing date for Expressions of Interest of 4 August 2010.
9. In June/July 2010 an Information Memorandum was prepared by JLL and SF, which attached the Golder reports dated 17 May 2010 and 21 June 2010. It recorded that expressions of interest were to close on 4 August. Preferred terms were given as 90 days but it also stated that the "Vendor may consider extended settlement terms."

1. On 27 July 2010 the agents reported that the Information Memorandum had been issued to 21 parties with 19 direct enquiries. Mr Sutherland further reported, given the difficult industrial real estate market and more particularly significant difficulties associated with securing funding for broadacre land, that the level of interest was, and would continue to be "somewhat limited".
2. Breese Pitt Dixon had also prepared a plan of subdivision for the agents which was made available to potential purchasers.
3. The plan provided for 48.05 hectares of net developable area out of the total area of 62 (ie some 80%).
4. On 4 August 2010 expressions of interest had closed with 4 parties submitting expressions of interest as follows:

Banco Group (Banco) ($10,000,000, 10% deposit and balance in 60 days)

Australand/CIP ($20,250,000 conditional as described below)

MAB Corporation (MAB) (submitted a letter expressing interest)

Murdesk Investments Pty Ltd (submitted a letter expressing an interest and indicating an estimated price of $20,000,000 as being "achievable")

1. In terms of Banco, the evidence of Mr LoGiudice (director) was that it obtained its own cost estimate for the development based on the Breese Pitt Dixon subdivisional layout in formulating its offer.
2. In terms of Australand, its offer was made conditional subject to exclusive due diligence and board approval and requiring that the vendor agreed that it would not negotiate with, or enter into dealings with, any third party directly or indirectly during the 60 day due diligence period. The offer expired on 12 August 2010.
3. There was no request from any party that the period be extended in the light of the Golder reports.
4. By correspondence of 11 August the agents invited Banco and Australand to submit a formal tender by 18 August suggesting they revise their tender price and asking Australand to identify "no or as limited conditions as is possible."
5. On 17 August Banco confirmed its offer of $10 million and enclosed costings of its civil engineers, DCE, "upon which we base our offer." No reference is made to Golder.
6. Australand did not submit any offer by 18 August, but on 19 August 2010, advised that its offer was withdrawn, stating:

This is primarily due to the DD time referred to in our original offer (60 days) not being sufficient in light of recent discoveries we have made re timing needed to resolve the significant flora and fauna values effecting [sic] the said land.

We are currently reviewing our position in this regard and will come back to you shortly.

Our understanding is that for us to obtain certainty around exactly how much land can be develop [sic], a period of 6 - 12 months maybe even longer could be needed. i.e. we would need a conditional purchase or DD period for this amount of time.

1. It is noteworthy that nothing had changed in relation to the Golder reports between the time of Australand's first offer (4 August) and this 19 August position 2010 letter. Notwithstanding reference to flora and fauna issues this change in attitude from Australand therefore appears to have come about irrespective of the content and timing of the Golder reports.
2. On 23 August 2010, Mr Sutherland spoke to Mr Shane Robb of Australand. They discussed issues surrounding the native grasses and:

"Shane indicated that their expert had inspected the site on the Friday before the second close of tender[6] and indicated that there are issues in relation to flora and fauna and that testing would be required between September and January to determine the true extent of the land that may be required to be set aside"

1. They discussed the Golder reports and he reiterated that, in their expert's opinion, there were still issues in this regard.
2. Australand thereby appears to have taken, and were having regard to, its own expert advice.
3. On 7 September 2010, Mr Reynolds (of Jones Lang LaSalle) also reported a conversation with Mr Robb who said he was still interested in acquiring the site but they were "working through some internal issues."
4. By this time it was spring.
5. By correspondence dated 21 September addressed to both Banco and Australand the CBA then requested final offers by 27 September noting that the vendor was looking for unconditional offers.
6. On 27 September two offers were received as follows:
   • from Banco (now $12,000,000; 180 days) and
   • from Australand /CIP ($16,000,000 conditional, as below)
7. The Australand $16 million offer was now conditional on 12 months' exclusive "due diligence" and subject to board approval. Settlement was also only to occur 60 days after an approved planning permit.
8. The offer notes that advice had been taken from a flora and fauna consultant and contains the following note:

Please ensure your client is aware of the narrow timeframe to undertake Flora and Fauna studies which need to be carried out in early spring (i.e September or October). There is therefore only a circa 4 week window (opportunity) to complete these investigations to ensure a valid study in 2010. If this tight study period is not secured the next opportunity to complete the study may not be for 12 months.

1. However, the "4 week window" appeared to be unrelated to the other (extensive) substantive conditions.
2. On 22 October 2010 Mr and Mrs Love asked the CBA not to sell 275, but to await the judgment in another compensation proceeding involving VicRoads (in which Mr Love advised a $35,000,000 plus interest verdict may result).
3. On 5 November 2010 CBA wrote to Mr Love stating that two offers had been received: one from Australand ($16 million) and one from Banco ($12 million). Further, that "the Bank had decided to accede to your request" not to accept either offer and to await the outcome of the Court's verdict.
4. Accordingly the property was withdrawn from the market.
5. On 26 November 2010 Vickery J handed down his reasons for judgment in the compensation proceeding, awarding Mr Love total compensation of $2,822,042.32 before any adverse costs order.[7]
6. On 9 December 2010 CBA advised Mr Love that it intended to execute on its securities.
7. On 9 December 2010 Mr Love asked the CBA, inter alia, for further time to allow Australand to undertake an environmental assessment.
8. By correspondence of 16 December 2010 CBA rejected Mr Love's "insinuation that only a small section of the property contains native grass". The bank stated that it considered that "the substantial coverage of native grass on the property has affected its saleability throughout the campaign which was highlighted by the offers received."
9. Then by correspondence of 29 December 2010 the CBA offered (on a without prejudice basis) to stay the security enforcement until 31 March 2011 so as to give Mr Love time to sell 275 for an amount in excess of $12 million plus GST on terms acceptable to the bank which were to include the execution of an unconditional contract of sale and a 120 day settlement.

1. During late 2010 until March 2011, Mr Love attempted to sell 275 with the assistance of Jones Lang LaSalle.
2. In February 2011 Mr Love obtained a flora and fauna assessment from Biosis Research (Biosis) following a site inspection undertaken on 24 January 2011. Although the survey was conducted during mid-summer the site had not been grazed for a number of months and unseasonal wet conditions had provided good ground cover growth. For this reason "the survey effort was sufficient to assess the general value of the site" (although additional studies were still recommended to further inform at a total estimated cost of $83,000).
3. In its report, Biosis observed only small remnant patches of endangered vegetation communities. However, it also stated that the site supported a large population of a fauna species of national significance, the Golden Sun Moth (GSM). Based on 52 hectares of GSM habitat, "an offset payment equating to $44,000 per hectare would be imposed [which would]... amount to a payment of $2,288,000."
4. On 3 February 2011 the CBA urged Mr Love to sell privately or arrange a full refinance: "It seems that you are concentrating your efforts on appealing the recent Supreme Court decision and once again expecting the Bank to await the outcome of yet another trial".
5. On 2 March 2011 the CBA again urged Mr Love to sell privately prior to 31 March 2011.
6. On 29 March Mr Love advised the bank that "the issue with Australand is that their corporate structure is such that their staff cannot outlay more than 5 million unconditionally without board approval."
7. On 31 March 2011 Mr Love wrote to the CBA noting that a meeting had been arranged by Mr Reynolds on 1 April 2011 for Mr Love to negotiate the sale of the eastern block and that he had been told that the price would be in excess of $14 million. He asked what authority he had to negotiate and consummate the sale.
8. In oral evidence Mr Love claimed that this was what Mr Reynolds had told him that he believed that Banco would offer.
9. On 1 April 2011 the CBA advised Mr Love that it would hold off taking any enforcement action until 7 April 2011 to allow Mr Love time to negotiate an acceptable contract of sale.
10. On 7 April Mr Love wrote to the CBA advising:

• Banco has increased its offer to $13 million;
• I have made a counter proposal of $15.5 million.

Would you please contact Lincoln Reynolds of JLL regarding the state of negotiations.

1. However, in oral evidence Mr Love claimed that when the discussions happened with Banco face to face, that Banco retreated from $13 million down to $12 million and asked for extended terms.
2. In any event, the CBA then gave Mr Love until close of business on 8 April.
3. By email of 13 April Mr Reynolds advised the bank:

Following the Expressions of Interest campaign we conducted last year, I have again been working on selling 275 O'Herns Road, Epping.

Over the past 2 weeks I have received 3 unconditional offers ranging from $12,100,000 to $14,000,000 with varying settlements (180 days to 24 months).

Today the vendor has advised they are unable to accept any of the offers we have submitted (note contracts had been signed with deposit cheque attached).

Given the current market climate we felt these were reasonable offers to purchase, especially as they were unconditional.

1. However, Mr Love claimed that he did not know where Mr Reynolds got this information from as when "push came to shove" there was only one firm prepared to negotiate which was Banco (who had retreated in the way he described previously).
2. In relation to Australand, he further gave evidence of a meeting with Mr Robb alleging that "the first thing he slapped in front of him" was figure 2 of the first Golder report (showing a large shaded area of native grasses). His evidence did not detail what Mr Robb actually said but he claimed that Mr Robb "was most concerned" about the uncertainty associated with being able to develop at all let alone at cost.
3. However, he also conceded:
   • that Australand never asked him to have (further) access to the property for their flora expert;
   • that he provided Mr Robb with the Biosis report;
   • that (although Australand had been looking at the property for many months) "they had to go through their own assessment process and they were very risk averse."
4. In the result, no further offer came from Australand.
5. In circumstances where the attempts by Mr Love were unsuccessful, the CBA thereafter took over the marketing process again.

1. On 15 May 2011 the CBA issued Notices of Demand to Mr Love for $9,040,564.42 and $2,990,364.00: a total of $12,030,928.42 with interest running at $3,898.58 on the Better Business Loan.
2. In July 2011 a fresh Information Memorandum was prepared by the agents which attached the Golder reports dated 17 May 2010 and 21 June 2010 and the Biosis report dated February 2011. It also sought expressions of interest to close on 10 August.
3. On 22 July 2011 MAB (the ultimate purchaser) wrote to JLL setting out its estimates of the financial contributions it would need to make. It further said: "Based on this [the Biosis] Report and advice now taken, we are of the opinion that there are a number of flora and Fauna issues that may adversely affect the Property's underlying value from that which was evident during the August 2010 campaign." MAB thereby allowed $2,288,000 on account of the Golden Sun Moth, $500,000 on account of Matted Flax Lily and $150,000 on account of plains grassland, but made no reference to the Golder reports.
4. On 2 August Banco also obtained its own draft due diligence assessment from Biosis.
5. On 5 August 2011 SF reported to the CBA that the Information Memorandum had been issued to 7 parties. It further advised that "significant negative feedback" had been received in relation to the implications of the Biosis report and that its conclusions were "significantly more adverse than the Golder Report." The letter also cites concerns relating to "current world economic conditions."
6. On 10 August 2011 expressions of interest closed. Three offers were submitted as follows:

1. The offer of CIP was a 12 month offer made subject to Board approval and also subject to receipt of unconditional planning approval. It was regarded as non-conforming by the CBA.
2. On 11 August 2011 Banco wrote to Mr Grant Sutherland of SF explaining how Banco arrived at its offer. No mention is made at all of Golder in this correspondence; rather the author notes that the previous (higher) offer was submitted "prior to receiving the Biosis report and subsequent advice." The letter then highlights that an offset contribution of $1,713,360 would be required in respect of the GSM.
3. The CBA then engaged in further negotiations with bidders (independently of each other). As confirmed by Mr Johnston, bidders did not know who they were bidding against, if anyone.
4. In the result, on 23 August 2011 MAB increased its offer to $10,270,000, and then again to $10,370,000.
5. On 23 August Banco varied its offer to $10,150,000.
6. The two bidders were now at $10.15M and $10.37M.
7. In the result, on 24 August 2011 the CBA accepted MAB's offer of $10,370,000 with settlement on 9 February 2012.

1. On 8 May 2012 Mrs Love lodged a caveat claiming an interest in land in respect of 315.
2. By August 2012 it appeared that Mr Love faced cost liabilities in respect of his various court proceedings in an amount of some $16 million comprised of:
   • to VicRoads of $10.8 million;
   • to the State of Victoria of $1.65 million;
   • to McCluskys (his former solicitors) of $3.575 million.[8]
3. Mr Love accepted the VicRoads amount but said that he is paying off the State of Victoria and that McCluskys are currently owed $2 million.
4. Properties 315 and 410 have also now been sold by persons from whom money was borrowed to fund this litigation.
5. Subsequent to obtaining a further assessment by Biosis, MAB (as Alliance Business Parks Pty Ltd) entered into various agreements for offset arrangements. The evidence of Mr Johnston of MAB was that the total paid was close to $2 million.
6. Further, he adduced evidence of the plan of subdivision ultimately prepared for MAB by Biosis. This left set aside some 12.8 hectares as not developable (being some 20% of the total of 62 hectares).
7. On 20 January 2014 CBA initiated this proceeding seeking removal of the caveat lodged by Mrs Love against the title to 315.
8. On 27 June 2014, this Court ordered the removal of the caveat lodged by Mrs Love.
9. On 11 February 2015 this Court dismissed a counterclaim by Mr and Mrs Love in relation to the sale of 315.

1. The Loves called Mr Love and Mrs Love as well as Mr Brennan (an ecologist) and Mr Holland (a valuer).
2. The evidence of Mr Brennan and Mr Holland will be discussed below.
3. Mr Love presented as somewhat opinionated and critical in approach. For example, he offered critiques about the Golder and Biosis reports and the impact of each; proffered opinions about the motivations of purchasers; and made criticisms of the conduct of lawyers and judges. This despite the fact that his qualifications were in engineering and business administration and that he was not a qualified ecologist, valuer, agent, or lawyer. I also did not consider his generalised evidence as to his "on the job" experience to be sufficient.
4. His answers were also unresponsive at times, and he appeared intent on giving evidence to support his central belief that the Golder reports had tainted the market.
5. Mrs Love was not an impressive witness and presented as argumentative and unresponsive with an inability to make any appropriate concessions.
6. Her evidence will be further dealt with below.
7. The CBA called two bank officers: Mr Salvatore Barbagallo (Executive Manager Corporate, Group Credit Structuring) as well as Mr Darren Mitchell (Senior Manager Group Credit Structuring Department Credit Risk)
8. They both presented as competent, responsive and considered witnesses though, consistent with the passage of time, their memories were limited.
9. The bank also called the successful bidder, Mr Johnston of MAB; and the under-bidder, Mr LoGiudice of Banco. They presented as straightforward witnesses.
10. The bank also called Mr Sutherland who marketed the property and was also a straightforward witness.
11. Dr Conole, the author of the Golder reports, was also called. His evidence will be discussed below.
12. The CBA further called the various valuers it had retained over the course of the marketing process: Mr Papworth (of Charter Keck Cramer), Mr Dupen (at the relevant time of Colliers International Consultancy Valuation) and Mr Murray (of O'Brien's Valuers and Property Consultants) . Their evidence will be further referred to below though two observations might be made.
13. Firstly, although all the valuers (including Mr Holland) generally presented as competent and straightforward, Mr Murray presented as somewhat eager to agree with any proposition put to him which detracted, to some extent, from his general reliability.
14. Second, there appeared to be some criticism of Mr Papworth with a suggestion that he was "attempting to bring the valuations down" to please the bank. He rejected this suggestion and I accept his rejection. Thus, his valuation actually went up at one stage.
15. Overall, the case was largely run on the basis of objective bank business records which were adduced into evidence by consent. In such circumstances, and given the issues to be determined, the oral evidence (which was mainly by way of witness statement) was of limited significance.
16. However, given the difficulties with the testimony of Mr and Mrs Love I have been cautious in accepting their testimony where it is unsupported by other evidence. I have also not accepted Mr Love's evidence to the extent it constituted evidence of opinion only.

Did Mrs Love have an equitable interest in 275 O'Herns Road?

1. Mrs Love contended that she has an equitable interest in 275 arising from her contributions to a "joint marital endeavour" to improve 275 during the course of her marriage to Mr Love.[9]
2. In closing counsel for the Loves made clear that the sole basis for the allegation was that there was a constructive trust pursuant to the principles in Baumgartner v Baumgartner[10] (the Baumgartner principles). No other basis was asserted or pleaded.[11]
3. In her pleading, Mrs Love gave the following particulars of these contributions:[12]

1. constructing and repairing fencing on several occasions including replacing fence posts and wiring and the repair of 300 metres of the eastern boundary fence of 275 following damage done by an unknown party; 2. checking and repairing electric fencing on 275;

1. assisting in construction and installation of new windmills, water pipes and cattle yards and troughs on 275, including digging trenches;

1. spraying weeds on 275; 2. hand-feeding cattle, drenching and dipping cattle, administering injections and pregnancy testing to cattle and pulling a calf on 275; 3. identifying damage by a neighbour to a dry-stone wall on 275 over 90 metres' length, preventing further damage by obstructing earth moving equipment, securing the site and assisting in ensuring that the neighbour reinstated the wall; 4. planting trees on 275; 5. preventing damage by Vicroads contractors to fencing and trees on or adjacent to the eastern boundary of 275.
2. In her evidence Mrs Love also asserted that she had made contributions to the joint marital endeavour by assisting Mr Love in the conduct of the litigation concerning the land.
3. I turn first to consider whether the alleged work said to constitute her contributions was actually done by Mrs Love.

1. In her witness statement, Mrs Love stated that she had "spent virtually all my holidays and weekends working to improve the properties including 275 O'Herns Road" and that during the "extensive time" during which Mr Love was engaged in litigation she "had to attend to much of the management and day to day chores relating to the properties maintenance and improvement and farming operations." Mrs Love also stated that she had "also taken time off from my employment to assist my husband with his conduct of the trials."
2. In paragraph 3 of her witness statement, Mrs Love further stated:

a. Assisted with rebuilding water troughs, tanks, fencing and electric fencing which had to be re-established after the acquisition of land by Vic Roads in 2003

b. Assisted in the re-establishment of cattle yards on 315 O'Herns Road and also the cattle yards at 275 O'Herns Road after the Vic Roads acquisition including concreting, post hole digging and erecting fence components for the yard;

d. Assisted in rebuilding the cattle yard after fire in February 2013;

e. Assisted in rebuilding fences after the fire in February 2013;

f. Contributed over $200,000 of my own money acquired before marriage, spending it on wire, fence posts, machinery repairs used on the properties

g. Spent my own money servicing interest on CBA loans and other bills."

1. Three things should be immediately noted about these alleged contributions. First, many of these items are preceded by the word

"assisted". There is little in the way of independent work carried out by Mrs Love alone. Second, Mrs Love had other employment. Third, the contributions are described in relatively general terms. It is not stated for example, how many trees Mrs Love planted, or the extent of her involvement in repairing water troughs, tanks or fencing.

2. Mr Love made similar assertions in his witness statement. He said that Mrs Love "assisted in physical improvement works by labouring and other contributions" and was "primarily responsible for managing the VicRoads contractors during their occupation of the properties and looking after stock and so on". He also said that she was "heavily involved in assisting me with the litigation".
3. In cross-examination, Mrs Love conceded that the rebuilding of the cattle yard and fences after the fire in February 2013 did not relate to 275 but to neighbouring properties, 315 and 410. Mr Love made the same concession.
4. In relation to Mrs Love's alleged assistance with rebuilding water troughs, tanks, fencing, electric fencing and cattle yards after the VicRoads acquisition, it was put to both Mr Love and Mrs Love in cross-examination that Mr Love had made claims for compensation for this work in previous litigation. In response, both Mr Love and Mrs Love stated that the work was done across multiple properties including 275 by both of them and that compensation was refused in the previous litigation because they had done the work themselves rather than paid a contractor. Mrs Love stated that in the previous litigation, they had "put a claim in for my labour because I had to take leave from work to do this." Mr Love said that in the prior litigation, the judge only awarded him the cost of the materials for this work and not labour.
5. In relation to Mrs Love's alleged contribution of $200,000 of her own money acquired before her marriage, Mrs Love stated during cross-examination that "we bought a lot of infrastructure that we put in" and "we were out of pocket hundreds of thousands of dollars". Apart from that assertion, no evidence was adduced as to either Mrs Love's financial position prior to her marriage or of any specific expenditure by Mrs Love on wire, fence posts or machinery repairs.
6. In relation to the alleged servicing of interest on CBA loans and other bills, no evidence was adduced as to Mrs Love having made payments of interest on any debt. Several bank statements were tendered in evidence, none of which showed any payment by Mrs Love.
7. The assertion that Mrs Love planted trees across the properties was not the subject of any further evidence.
8. In relation to Mrs Love's contributions to litigation, Mrs Love gave evidence that she took eleven weeks off work to assist Mr Love in the "court case". Mr Love also gave evidence that, finding himself unrepresented, he was left "to do that ten-week trial on my own with the assistance of my wife, Helen." Cross-examination on this issue was directed towards the outcome of the litigation. Mr Love conceded that as a result of the litigation, 275 (as well as other properties) had been sold by persons from whom money had been borrowed to fund the litigation. Mrs Love did not accept the proposition that the money borrowed to fund the litigation had substantially eroded the equity in all the properties but conceded that Mr Love was not ultimately "awarded" enough to repay the bank.
9. In relation to Mrs Love's alleged $200,000 contribution on various items related to the property and alleged payments servicing interest on CBA loans I am not satisfied that they are proved on the balance of probabilities in the absence of a single document supporting these allegations.
10. However, I am prepared to accept that Mrs Love did some work on the property and assisted Mr Love during the litigation given that both Mr Love and Mrs Love gave evidence on oath that she did so and it is unremarkable that there is no further documentary evidence in support.
11. The evidence therefore establishes that, on the balance of probabilities, Mrs Love did the following things in relation to 275:

1. assisted with rebuilding water troughs, tanks, fencing, electric fencing and cattle yards following acquisitions by VicRoads in 2003 and took leave from work to do so; 2. planted trees on 275; and

1. assisted Mr Love for eleven weeks to conduct litigation and took leave from work to do so.

1. One further issue arose in the course of Mrs Love's oral evidence. In response to a question during cross-examination asking her to confirm that it was true that Mr Love had to borrow extensively from the bank to conduct various litigation, Mrs Love stated:

He borrowed one loan that I authorised, that I attended a meeting for. Any other loans which the bank had advanced and took all of the titles for - the bank should've discussed with me. But they didn't.

Because when we went into the very first meeting, we said it was a partnership and that we agreed on one title with the bank - one only.

1. In cross-examination, Mr Love conceded that before they were married Mrs Love had no interest in any of the properties at Epping. He claimed that forms he had signed for VicRoads regarding who had an interest in the properties were completed by him without legal advice and he was therefore unaware he could "do that", which I take to mean he was unaware that he could have included an alleged equitable interest on the part of Mrs Love in forms he filled out and submitted to VicRoads. He conceded that the first time Mrs Love lodged any caveat over the land was after the bank sold one of the neighbouring properties.
2. Simply by stating that there "was a partnership" does not, without more establish one.
3. In any event, Mrs Love's evidence about these representations to the bank (that is, that there was a partnership between her and Mr Love) was given long after the alleged "very first meeting". It is self-serving in the current proceeding and not confirmed by any contemporaneous document.
4. In the light of my difficulties with Mrs Love's evidence generally, I am not satisfied that I can rely on her assertion that any such representations were made to the bank. However, in my analysis of the relevant law below, I consider what effect this evidence would have if it were accepted.

1. Mrs Love claimed that the constructive trust arose in accordance with the principles in Muschinski v Dodds[13] and Baumgartner v Baumgartner.[14]
2. In Mushinski v Dodds, Deane J stated that principle as follows:[15]

"....the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do..." (emphasis added)

1. The need for the substratum of the relationship to be removed has also been applied in other cases.[16]
2. Given, then that the joint relationship in this case is marriage and, further, that the marriage continues, there is no room for the operation of these principles of constructive trust even presuming such principles to be engaged.
3. Mr and Mrs Love however then submitted that there was more than a marriage here; there was a "joint enterprise" involving the farm. Further, that the alleged failure of this enterprise operated in a similar way to a bankruptcy under the Baumgartner principles, citing Australian Building & Technical solutions Pty Ltd v Boumelhem [17] i.e. that "the parallel is Tom Love's indebtedness alienates the land, the bank takes it. Not far different to bankruptcy effect. Instead of being invested in the trustee, the bank sells it. So the land is alienated."[18]
4. However, even if there was a "joint enterprise" I am unable to be satisfied that it has prematurely ended.
5. Thus in NAB v Maher[19] a similar situation arose wherein a bank obtained a default judgment and the mortgagor's wife, Mrs Maher, claimed that various properties mortgaged to the bank were held in trust for herself. Ultimately she was (partly) successful under the doctrine of resulting trust. However, her claims under a constructive trust were rejected, given there was no evidence of a breakdown of relationship or of any unconscionable conduct.
6. In dealing with this issue Fullagar J, in the leading judgment, stated:[20]

"The important thing to my mind is that the.....mortgage....[was] entered into for the very purposes of the joint business ventures (assuming there were any joint business ventures) and for the very purpose - as investments - of the marriage venture...The enforcement of the mortgage naturally ended the ability of the couple to use the lands for business purposes, but their business purposes generally did not come to an end. As they shouldered for business purposes the risk of enforcement of the mortgage, that enforcement was simply an incident of what was part and parcel of their business purposes." (emphasis added)

1. Thus, even if there was a joint enterprise here, the indebtedness arose for the very purpose of that enterprise (ie Mrs Love alleges that the litigation was somehow directed to the maintenance or improvement of the property). Enforcement of the mortgage was then simply an incident of what was part of this alleged "business purpose."
2. In any event, as highlighted by Hargrave J in Director of Public Prosecutions v Ali (No 2)[21], the case of Australian Building & Technical Solutions Pty Ltd v Boumelham[22] concerned a complex joint relationship or endeavour between parents and their son with the parents contributing to the acquisition of a property by the son as registered proprietor. In such circumstances, Ward J found that, because of the bankruptcy, "any joint endeavour for the development of the [relevant] property is no longer capable of completion."[23]
3. This is to be distinguished from the present case where the work done by Mrs Love was intermittent throughout her marriage to date, frequently involved "assistance" rather than her own independent work, and was not her primary occupation. The work is in the nature of ad hoc assistance to a spouse, common in any marriage. It simply does not rise to the level of a joint endeavour for the purposes of the Baumgartner principles.
4. The evidence in relation to Mrs Love's representation to the bank that they were a "partnership" and that she "authorised" a loan over one title only, if it were to be accepted, would also not in my view take the relationship between Mr Love and Mrs Love outside the usual affection between spouses. Nothing in the evidence established a joint endeavour separate to the marriage.
5. The Baumgartner principles are therefore not engaged.
6. Even if the principles operate, Mrs Loves' ad hoc assistance was relatively insignificant and undefined. As such, I am not persuaded that it would be unconscionable for Mr Love to retain the benefits resulting from Mrs Love's contributions in any event.
7. Moreover, if the above analysis is incorrect and there is the unconscionability required for the imposition of a constructive trust under the Baumgartner principle, there would be considerable difficulties in valuing any interest in circumstances where much of the evidence was constituted by conclusory assertion. Thus:

1. the extent of Mrs Love's involvement in the repair of water troughs, tanks, fencing, electric fencing and cattle yards is unknown; 2. the number and the locations of the trees planted by Mrs Love is unknown; and

1. the precise extent of Mrs Love's litigation "assistance" is unknown.
2. I am mindful of the submission of Mr and Mrs Love that the Court should take a "broad-brush" approach without concern to adjust small amounts "here and there". However, the state of the evidence in this case would make it almost impossible to ascribe some actual value to the work allegedly undertaken.
3. In the light of my above findings however it is unnecessary to go further as I am not satisfied that Mrs Love has any equitable interest in 275 O'Herns Road.

If so, what duty (if any) did the CBA owe to Mrs Love in its sale of 275 O'Herns Road?

1. The bank accepted that it would owe a duty to Mrs Love if she had an equitable interest. However, given she did not, no duty arises and her Counterclaim must be dismissed.

What duty did the CBA owe Mr Love in its sale of 275 O'Herns Road?

1. The duty of a mortgagee in selling mortgaged land is set out in s77 of the Transfer of Land Act 1958 as follows:

(1) If within one month after the service of such notice or demand or such other period as is fixed in such mortgage or charge the mortgagor grantor or other persons do not comply with the notice or demand the mortgagee or annuitant may, in good faith and having regard to the interests of the mortgagor grantor or other persons, sell or concur with any other person in selling the mortgaged or charged land or any part thereof, together or in lots, by public auction or by private contract, at one or several times, and for a sum payable in one amount or by instalments, subject to such terms and conditions as the mortgagee or annuitant thinks fit, with power to vary any contract for sale and to buy in at any auction or to rescind any contract for sale and to resell without being answerable for any loss occasioned thereby and with power to make such roads streets and passages and grant and reserve such easements as the circumstances of the case require and the mortgagee or annuitant thinks fit, and may make and sign such transfers and do such acts and things as are necessary for effectuating any such sale.

1. Both parties also accepted that the principles summarised by the Court of Appeal in MBF Investments Pty Ltd v Nolan (Nolan) are applicable as follows: [24]

(a) a mortgagee is not a trustee of the power of sale, which is given to the mortgagee to enable the realisation of the security interest;

(b) a mortgagee must act in good faith, that is conscionably, and cannot sell for a purpose other than that for which the power of sale is conferred;

(c) a mortgagee is not required to place the interests of the mortgagor above the mortgagee's interests in recovering the debt. For example, the mortgagee can sell the property at a time of the mortgagee's choice, even though the property might realise a higher price if the sale were postponed;

(d) the mortgagee cannot disregard the interests of the mortgagor by simply selling for a price which will cover the amount of the loan. The mortgagee must take reasonable steps to obtain the best price consistently with its right to enforce its security interest. This requires the mortgagee to consider how the property should be advertised and to allow an appropriate time between the advertisement and the sale;

(e) the mortgagee must also have regard to the interests of subsequent security holders; and

(f) if there is no doubt that the sale of the lots preferred by the mortgagor would be sufficient to discharge the debt owed to the relevant mortgagee and of any other security holders whose interest the mortgagee is required to consider, a failure to sell the preferred lots may breach the mortgagee's duty to sell in good faith.

1. However, the Loves emphasized that the Nolan summary is not exhaustive of the ways the duty may impact on the sale and made some further submissions which will be referred to below.

Did the CBA breach its duty to Mr Love and/or Mrs Love in the sale of 275 O'Herns Road?

1. Mr Love pleads that the CBA breached its duty:
   • By releasing the Golder reports to the market;[25]
   • Releasing the reports without ascertaining whether there was a reasonable basis in fact for the assertion in the Golder Reports as to the presence of native grasses on 275;[26]
   • Not commissioning any further ecological report on 275, whether in spring of 2010 or at any other time.[27]
2. In closing this was described as "claim 1" which was confined to the proposition that it was "unreasonable to release [the] Golders reports in July 2010."
3. He further pleased a second broad claim that by reason of the "manner of its conduct in the marketing and sale of 275 in 2010 and /or 2011 and the acceptance of the sale price obtained for 275" the CBA breached its duty.[28] A number of "allegations" contained under this heading appear to be more like references to surrounding circumstances and also appear to overlap substantially with the "Golder" complaint.
4. Thus, insofar as Golder is concerned again there is an allegation that there was a breach in :
   • Marketing and offering to sell 275 in 2010 without first obtaining a Spring report from Golder;[29]
   • Withdrawing 275 from sale in late 2010 and returning it to the market in 2011 without obtaining a further report from Golder;[30]
   • not seeking any information from Tom Love as to the existence of reported areas of native grasses on 275 prior to commencing marketing of 275 and releasing the said Golder reports to the market.[31]
5. There are however a number of other miscellaneous complaints which related more to the whole selling period as follows:
   • CBA knew or ought to have known that conducting an abortive marketing campaign for 275 would have a negative effect on its market value;[32]
   • Failing and refusing to consider offers for 275 which were conditional upon prospective purchasers undertaking reasonable ecological assessment of 275 in response to the 2010 marketing campaign;[33]
   • Returning 275 to market too soon in 2011 after the abortive campaign of 2010;[34]
   • Selling 275 for the price obtained despite CBA having various valuation assessments and advice from Colliers, O'Briens and Charter Keck Cramer respectively obtained between 2008 and 2011 that the value of 275 was significantly greater than the sale price whether on market value or on forced sale value.[35]
6. The complaints about Golder appeared to be the primary case for Mr Love. Thus, in closing, counsel for the Loves said "If they didn't have to get a spring survey, or if it was reasonable to release the Golder reports in the state they were in, then that's the trigger for all other issues in this case. If you found that that was reasonable, I think all the other complaints have to fall away with it."[36]
7. Counsel further submitted:

It is a central proposition to the Love case that the Golders reports of 17 May 2010 and 21 June 2010 were unnecessarily damaging to the market perception of the prospects for development of 275 and as a consequence, its value.

1. However, given the other grounds were not formally abandoned they will be dealt with below. This will be done as best as can be done in circumstances where the written submissions did not always identify the relevant particulars in the pleading.
2. The allegations of Mrs Love were substantially identical to those made by Mr Love, and will also be dealt with below.[37]
3. Before resolving the primary complaint, it is necessary to consider and construe the Golder reports

1. As indicated already, on 17 May 2010 Golder's first report was provided to the agent.
2. The first report is described as a factual report with an assessment that included a desktop review and a walk-over site visit (on 6 May 2010).
3. The results from the desktop review then follow. Firstly no threatened species had been recorded from the site since record keeping commenced (though records existed from areas immediately to the north). The plan then shown on page 2 shows a (relatively small) area of "FFG [under the Flora and Fauna Guarantee Act] listed plains grasslands located in the extreme NW corner of the site (figure 1)". However, Dr Conole explained that this was prepared from predictive mapping carried out by the State following a 2005 survey and shows what the mapping "suggests is there" (rather than what was actually there).
4. Page 3 then contains the results of the field visit and notes that the condition of vegetation was influenced by the rainfall patterns, grazing pressure and the autumn timing which was outside the optimum survey period. "A more definitive seasonal survey may be required."
5. The report then contains the following statement:

"Most of the stony parts of the property were found to support unimproved 'native' pasture (a subset of the FFG-listed Plains Grassland EVC), and had relatively high levels of cover of native grassland species (see Table 2 Figure 2)."

1. The report then includes a figure 1 which showed that some flora species were "indicative" of a threatened community or species. However, consistent with his desktop review, there was no suggestion that any threatened community or species was actually found.
2. Figure 2 then shows a picture of the site with a large shaded red area accompanied by the statement: "Shaded red area shows approximate boundaries of a zone within which vegetation is predominantly unimproved 'native pasture.' "
3. The report then contained the following key findings:
   • Locally occurring species of flora and fauna which are listed either under the Victorian Flora and Fauna Guarantee Act 1988 (FFG Act) or Commonwealth Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) were not detected as present within the site.
   • Locally occurring species of flora and fauna which are listed either under the FFG or EPBC have been recorded in similar habitat immediately north of O'Herns Road;
   • A large proportion of the site (the stony areas - approximately 60-70% of the site) is covered in substantially native, unimproved pasture, which is a subset of the Plains Grassland EVC; and
   • Scattered old native trees (5 River Red Gum, 1 Swamp Gum, 1 Yellow Box) are distributed across the site.
4. Dr Conole explained that there was a distinction to be drawn between "native grasses/ native pasture" and "plains grassland" protected under legislation. In order for grassland to be considered "EVC number 132" you would need to have 25% cover of the species which characterised that community. By referring to a "subset of the plains grassland EVC" that is a short hand way of suggesting that the unimproved native pasture could "possibly" meet that criteria; he would not have said "likely"; just that there was a possibility that needed to be investigated.
5. He went on:

"Within the 60 or 70 per cent of the site that I said that there may be - that the grassland may - well, there are enough species here to consider that the grassland unit may occur. Yeah, that's the area that I would make the assumption about, not that it necessarily occupied the entire 60 or 70 per cent. But if it did occur, that's where it would most likely be."

1. The second Golder report (of 21 June 2010) contained an introduction which read:
   • As we described in our report dated 17 May 2010 (107613050-001-L-RevA), a substantial part of the land is covered in native pasture. The actual extent and quality of the native pasture, and whether it satisfies the criteria for description as native vegetation and 'Plains Grassland' under Victorian legislation and planning schemes, and/or 'Natural Temperate Grassland of the Victorian Volcanic Plain' under Commonwealth legislation, is currently unknown due to seasonal factors.
   • The status and quality of the native pasture as native vegetation would need to be assessed during the optimum field season; which is Spring. Such an assessment does not form part of this scope of works.
2. The report goes on to set out the legislative and policy framework as well as some case studies.
3. In relation to a heading then dealing with "likely approvals required" the report included the following statement:

If vegetation on the site were to include native grassland and/or any threatened flora species, the expectation should be planned for that between 10 - 20% of the site may need to be set aside in dedicated conservation reserves and/or passive open space. This is likely to be in the stony raised areas near Edgars Creek, and may be co-located at least in part with a stream or drainage reserve.

1. The conclusions are then set out on page 7:
   • Vegetation on the site may include patches that meet the criteria for native grassland, listed under both national and state legislation.
     • A referral under the EPBC Act would be required prior to commencing an action which may have a significant impact on a MoNES (such as a threatened species or community listed under the EPBC Act). This would engage the referral, assessment and approval provisions of the EPBC Act.
     • A planning permit from the City of Whittlesea would be required for any action which necessitated the removal of native vegetation or scattered native trees. This would engage the 'Net Gain' process of assessment and approval.
   • In keeping with decisions made under national legislation regarding adjacent developments, native vegetation values may need to be protected in reserves.
   • Retention of grassland would obviate the need for finding and making offsets.
   • Also in keeping with decisions made under national legislation regarding adjacent developments, the Growling Grass Frog is likely to be regarded as a significant issue in the study area, and whether approval is given or deemed 'Approval Not Required - particular manner' conditions requiring the construction and management of frog habitat are likely to set by DEWHA.
   • Constraints imposed by ecological values on the site at 275 O'Herns Road, Epping, may require an allocation of between 10 - 20% of suitable land to be set aside for conservation reserve and/or passive open space.
   • The approval process may take 6 - 12 months if the issues are capable of being dealt with in a straightforward manner. Any complications would lengthen this process.
   • Estimated costs associated with preparation of assessment and referral documentation, and associated works, is likely to be in the region of $60,000 - $110,000 (ex GST).
   • The additional recurrent cost of managing a constructed wetland for Growling Grass Frog habitat is likely to be in the region of $10,000 per annum for 5 - 10 years (subject to arrangements agreed with Melbourne Water or the City of Whittlesea).

1. Counsel for the Loves submitted that the Golder reports did not resolve the potential extent of the problem but "clouded it" and left it "at large."
2. They further emphasized that Dr Conole accepted it could possibly be that as much as 60-70% of the site was covered in native (protected) grass. Reference was then made to evidence of Mr Brennan (ecologist called by the Loves) that if coverage was that much one would have to contemplate both open spaces and offsets in order to develop the site with offset costs running as high as $6 million.
3. Counsel then provided a table (Exhibit J) which was said to demonstrate the potential high costs involved (depending on what various hypothetical values were inserted, e.g. for "habitat hectare" scores and other offset costs). It was emphasised that Dr Conole did not disagree with the offset formula and further that Golder justified such speculation since a potential developer would have had to "run the numbers" when evaluating the Golder report without the benefit of a spring assessment.
4. The Golder reports did leave some uncertainty over the issue of native grass which could not be defined determinatively absent a spring survey.
5. However, although Dr Conole acknowledged that it was "possible" that 60-70% of the site might be affected, this was as high as he got. As will be recalled, he had not actually found any listed species at all.
6. Mr Brennan did suggest that the first report gave the implication that up to 70% of the property was covered by remnant patch vegetation and further suggests that this might involve offsets of $3 to $6 million. However, he accepted that the second report provided some clarification. He was also of the view that the Biosis report "resolved the uncertainty" in relation to native vegetation. Further he agreed that, after potential purchasers had all the reports these suggested that if there was native grass or threatened species, they would need to plan for between 10 -20% of the site (though you can probably co-locate at least part of that into the stream or drain reserve).
7. It is also important to note that those reading the Golder reports together at the time appear to give the "60-70%" reference little weight.
8. Thus, in referring to the Golder reports, Mr Dupen noted "their conclusion" at page 7 that constraints "may require an allocation of between 10-20% of suitable land be set aside". In oral evidence he stated as follows:

I took that as being 60 to 70 per cent of the site could contain native grasses but at the end of the day it would be 10 to 20 per cent of the site that you'd be giving up to accommodate the saving of that and that could, by and large, be accommodated within what we've already set aside bordering the creek.

1. He went on to say that it did not "strike him" that 60 or 70% would not be able to be developed.
2. Mr Papworth simply stated that the Golder report said that 10 to 20% of the land may need to be set aside.
3. Mr Holland also refers to the "likely requirement to set aside 10-20% of the site" in construing the second Golder report.
4. The plans prepared by Breese Pitt Dixon also appeared to allow some 20% for reserves, consistent with this reading of the reports.
5. These statements were consistent with the valuations given by both Mr Dupen and Mr Papworth at the time, which were not reduced dramatically as would be the case if 60-70% was really required to be set aside.
6. In terms of what potential purchasers did in response to the reports, any suggestion that they "ran the numbers" suggested by the Loves was simply speculation and without foundation. Indeed, the hypothetical table prepared by counsel for the Loves was not even not put to the purchaser or under bidder.
7. Thus, the evidence of Mr Johnston (of MAB) was that he did not even rely on the Golder reports. Rather the reason MAB did not submit an offer in 2010 was due to uncertainty arising out of the GFC. Although he made some reference to a difference between the two Golder reports and did ask whether they would receive a spring survey, he ultimately stated:

"some properties come with a spring survey, some don't - and that's the risk involved in some transactions, and the timing of transactions and when vendors put property on the market is the better action, so if we can get that information it helps, but we'd still rely on our own investigation to make our own conclusions."

1. Mr LoGiudice's evidence was that the price offered in August 2010 reflected high development costs with the retarding basin and site geology. He made reference to "ecological issues" which needed to be factored in but it was not suggested by or to him that he would need to set aside 60-70% of the site.

1. Consistent with the contemporaneous evidence, the first Golder report suggested that approximately 60-70% of the site was covered in "unimproved native pasture." However, the statements in the second report clarified the position, noting that If vegetation on the site were to include protected "native grassland" the expectation should be planned for that between 10 - 20% of the site may need to be set aside though this may be co-located at least in part with a stream or drainage reserve.
2. It is true that this was not determinative in the absence of a spring survey. Further that the 60-70% remained "possible" as Dr Conole observed.
3. However, there was no evidence that anyone planned for, or read the reports at the time, as actually likely to mean that 60-70% of the site was covered in native protected grass which would involve offsets as high as $3 - $6 million.

1. In written submissions the Loves submitted that it was "unreasonable to release [the] Golders reports in July 2010." Further, that while the pleading proposed that the CBA could reasonably have gone to market without releasing the reports, or only released the Golder reports after the spring assessment had been obtained, that it was not incumbent on the Loves to prescribe what course the CBA ought to have taken.
2. However, in closing oral submissions Counsel appeared to accept that the most reasonable proposition would have been to wait to release in spring.[38]
3. The Loves also made legal submissions:

(a) that there were qualifications on the "rule" that a mortgagee can sell the property at a time of the mortgagee's choice (citing in particular Dimmick v Pearce Investments Pty Ltd[39] and Bank of Cyprus (London) Ltd v Gill[40]) and noting that it was not long to wait ;

(b) that hiring a competent agent or relying on professional consultants will not discharge the duty per se (citing Pendlebury v The Colonial Mutual Life Assurance Society Limited[41] and Commercial & General Acceptance Ltd v Nixon[42]).

1. In terms of the evidence a wide number of factors were relied upon in both written submissions and in oral submissions.
2. It will obviously be necessary to consider the full range of circumstances. However, the matters highlighted by the Loves included that:
   • The Golder reports contained speculation as to the possible existence of native grass which would significantly reduce the developable area and reduce value though in fact there were not extensive native grass which would have been revealed if a further spring investigation had taken place;[43]
   • The CBA had various advices which suggested they should not have released the report/ they should have waited as follows: from Golder (that further inspection and inspection would establish whether there were extensive native grasses); from Mr Dupen (that the only way to conclusively determine the issue was to conduct a further spring assessment); from Mr Papworth (that extensive grasses would negatively impact value)[44]
   • That the CBA's own officer (Montgomery) held the view that the potential extensive areas of native grasses would have a significant impact on value[45]
3. In closing the Loves emphasized that the release of the reports presented a risk which purchasers could not identify with precision given the season and timing of the sale (i.e. prior to spring). It was further alleged that they would therefore price the property conservatively and [the bank would] "deter some altogether."

1. It is true that the CBA was under no positive legal obligation to obtain the Golder reports, nor necessarily to disclose them.[46]
2. However, the CBA was advised (twice) by its agents that it was necessary to obtain the Golder report. Moreover, that potential purchasers would not make offers without such reports and that they were "necessary" to obtain the best possible price.
3. Given such advice, it appeared appropriate to release the reports.
4. To withhold them would also risk exposure to a claim for misleading conduct. Thus, silence is to be assessed as a circumstances like any other in determining whether there is misleading or deceptive conduct.[47] The withholding of relevant reports on the possible impact of flora and fauna issues might well constitute such conduct in context of an industrial property likely to be subdivided. This is particularly so given the agent appears to have released the Breese Pitt Dixon plans which were prepared in consultation with Golder.
5. Overall, I therefore do not consider that it was a realistic option for the bank to effectively keep the Golder reports "to themselves."
6. More relevantly, the decision to release would certainly not constitute any breach of the duty within the principles cited earlier from Nolan.
7. The real alternative is, then, whether the CBA should have deferred the release (and marketing campaign) to allow time for a spring assessment to be undertaken by the bank and/or the potential purchasers.
8. However, when considered in this light the complaint fails at the first hurdle.
9. Thus the essence of the Love case is that the property was sold at an undervalue in 2011. Even if the bank should have allowed time for a spring assessment, this is exactly what, in the result, occurred prior to the 2011 sale.
10. Indeed, although expressions of interest closed in August, by the time the final offers were made (on 27 September 2010) spring had actually arrived. By the time the sale took place in 2011 potential purchasers had had ample opportunity both to conduct a spring survey themselves; and to assess the Biosis "springlike" report.
11. Thus, as the Biosis report notes the survey was "sufficient to assess the general values of the site" given the above average rainfall and rest from grazing. Dr Conole also states:

"I note that Biosis carried out a site inspection on 24 January 2011. The particular seasonal and site conditions had the consequence that, at that time, whilst not typically an optimal time for survey, the combination of summer rainfall and spelling of grazing, enabled a survey "sufficient to assess the general values of the site". I note the survey was able to observe 140 male Golden Sun Moths"

1. Mr Brennan also accepts that the survey effort was sufficient and that it was a cool and wet spring. Further, that the Biosis report "resolved the uncertainty in relation to the extent of native vegetation present."
2. The Loves however appear to be complaining that the promulgation of the Golder reports (earlier) in June "tainted" the market in some way. For reasons set out below, there is no evidence of this. In any event, I do not consider it was a breach of duty for the CBA to commence marketing "earlier" than spring in all the circumstances of this case. Such circumstances included that the debt had been outstanding for a considerable period of time; that interest was running at 14.74%; that there was advice to proceed from Mr Dupen and Mr Sutherland (see below); and that there was a "thin pool" of potential purchasers who were likely to be relatively sophisticated.
3. The various specific Love complaints will be dealt with further below.

1. I do not consider that the Golder reports contained "speculation" though I do accept that they were not definitive as to the extent of the protected native grasses.
2. The Loves submit that this (unspecified) uncertainty meant that purchasers would price conservatively and/or that the reports might deter people citing evidence from Mr Papworth and Mr Murray.
3. This issue of risk then, will be assessed in the context of all the expert evidence in the case including that of Mr Holland.

1. As highlighted by the bank, Mr Holland said that the first Golder report would have encouraged interested parties to make their own further inquiries. However, he also says:

The second report raises specific concerns and recommends target surveys. This would, in my opinion, have reduced a prospective purchaser's view of value. The likely requirement to set aside 10 - 20% of the site for conservation reserves and passive open space along the Edgars Creek would have added to concerns and a developer/purchaser would, with this knowledge, have factored in the likely total off-set requirements for both the creek reserve and other public open space requirements in order to make an assessment of value based on its view of the likely 'developable area'.

1. As highlighted already, Mr Holland does not suggest that the 60-70% figure and/or the massive costs suggested by the Loves were appropriate.
2. Mr Holland does attempt to identify the impact of the Golder reports on the market in his report though conceding that he "was not aware of any sales that clearly demonstrate the discount which might apply for a sale of land which has no ecological issues compared to a sale where there are unknown ecological issues but these have not been quantified."
3. In any event, once it is accepted that the Golder reports should be released, it is not to the point that they may have some impact. The real issue is whether there should have been some further delay in going to market (with these reports).
4. In this respect, Mr Holland does suggest that "a prudent vendor" would have delayed marketing until a further investigation was undertaken, so as to remove as much "doubt" as possible given "in his experience" the removal of doubt adds to the value of a property (suggesting that many developers would dismiss a property from consideration in preference to others where comprehensive information was not provided).
5. It was unclear what "experience" Mr Holland was drawing on (his experience was mainly as a valuer). In particular, it was not clear whether such experience involved the sophisticated market 275 was likely to attract. His statement also appeared, on its face, to be a highly generalised one. Thus, there must be circumstances where the removal of doubt actually detracts from value which is exemplified by the present case where offers actually decreased following the Biosis report (despite the fact that the report offered greater certainty).
6. In oral evidence Mr Holland also agreed that he was not really in a position to comment on the reasonableness of the CBA's actions in not delaying. He also said it depends on what is meant by "prudent." He accepted that it would be relevant to consider weighing up the 14.74% accumulating on the debt if the vendor was in a flat market with the property mortgaged to the hilt. He agreed that you would not want to wait too long unless you had the capacity to hold the property.

1. Mr Dupen did give some generalised evidence that an "unreasonably short sale period" would have an impact and also that it was generally unreasonable to provide incomplete information.
2. However, he also said that "for that sort of property native grasses, flora and fauna issues are just things that are part and parcel of any acquisition." Further, that it was up to the purchaser to do their own due diligence for those sorts of things.
3. He did ultimately accept that purchasers were unable to make "the definitive judgment" based on an additional spring growing season. However, that most of them were sophisticated enough to be able to price in the risk.
4. It is also important to look at what Mr Dupen's advice was to the bank at the time. Thus, when asked at the critical time on 30 June (as marketing was to commence) about the effect the native grass might have on value he responded as follows:

The only way that a definitive comment as to the effect of native grasslands on the value of the subject property can be provided is to go through the process described in the Golder Associates report of 21 June 2010; that is, an assessment during the optimum Spring growing season. I think this is unrealistic given the circumstances of the property and, as discussed previously, our valuation does already make a deduction for loss of developable land area along the alignment of Edgars Creek. I understand that a proposed plan of subdivision is being prepared which factors in a slightly lower developable area than allowed in our report and would appreciate the opportunity to comment further once you receive this plan. (emphasis added)

1. In oral evidence Mr Dupen maintained that it was unrealistic to stop the sale process effectively for a year over something like this on the vendor's side given "we're only informing ourselves." Further that the market would make "their own judgment" based on their own due diligence while "we're racking up substantial interest on behalf of the mortgagor."
2. Upon being queried as to whether a year needed to pass Mr Dupen's evidence continued:

Mr Dupen: Possibly not, it might be six months but even so it just occurred to me the report isn't going to change the mind of the purchasers. They're doing their own due diligence and at the same time they're racking up additional interest cost.

Mr Minahan: But what the report would do is define the extent of the problem and remove uncertainty about this problem?

Mr Dupen: The uncertainty shouldn't exist in the mind of the purchasers. I don't think on the vendor's side us doing consultants' reports should inform the whole of the market.

1. Mr Murray gave evidence that the information in Golder was of interest to someone trying to assess the risk or price of the property. Further, that a spring assessment would be "desirable" to clarify the extent of the problem. He also agreed that if he accepted that there may be costs in the order of $4-6 million that a purchaser would be "conservative" and that putting out information which was inaccurate but suggested a higher level of cost would be disadvantageous. Further that, on the hypothetical basis discussed (i.e. with costs in the order of millions) that some "might be deterred".
2. As indicated from the above extracts, much of the evidence of Mr Murray was given in the context of a hypothetical context that the Golder reports suggested costs could be in the order of $4-6 million. As I have found above, there was no evidence that purchasers were likely to (or did) calculate costs pursuant to the Golder reports this way.

1. The Loves sought to rely on a statement from Mr Papworth on 17 August.
2. By an email of 17 August Mr Montgomery asked Mr Papworth to clarify the valuation, making mention of the proposed plan of subdivision. In this context Mr Papworth provides a generalised response that "the preparation of a development plan and identification of native grasses will impact upon the value of the property."
3. After then receiving the plan of subdivision, and being asked about how the plan would affect value, Mr Papworth then provides an updated assessment of 17 August. In accordance with Annexure A, this value is revised slightly down. However, the evidence of Mr Papworth was that this was solely on the basis of the change in developable area in the Breese Pitt Dixon plans (with no mention of Golder at all).
4. In oral evidence, Mr Papworth was taken to the Golder reports.
5. He agreed that "if" there was to be some offsets for costs "in addition" to the 20% for reserves that would be "relevant" to a valuation. He was then later again taken to the first Golder report and asked to consider the possibility that the report was taken to mean that the shaded area had protected native grass. He was also asked to accept that there was a live issue on the basis of those reports, that you may have offsets. The evidence continued:

Mr Minahan: You'd accept that there's an "if" there, there's a suggestion it could be widespread but you'd need to do an assessment?

Mr Papworth: It could be either/or, it could be widespread, it could be minimal, nothing's clearly defined, unfortunately.

Mr Minahan: But you'd agree that in the hands of the market, they're going to probably value that at an upper end at least in framing an offer?

Mr Papworth: You would need to speak to the marketing agent about that about how they negotiated those issues but, yeah, it's an evaluation point of view.

1. His general position therefore was that the likely behaviour of purchasers was outside his area of expertise.
2. Given the effects he perceived could be widespread or minimal his evidence also left open the possibility that the issue could actually get worse.

1. The Loves cited no evidence from Mr Sutherland as to what, if any effect, the release of the reports was likely to, or did have, on a purchaser, nor whether it was appropriate to defer such release in the light of the risks cited therein.
2. More significantly, as highlighted already, the advice of Mr Sutherland at the time was that the marketing campaign should actually proceed. He was not challenged in any way as to the appropriateness of this advice.

1. Even if it is accepted that the Golder reports raised issues which might be of concern to a purchaser, any decision to wait was also risky.
2. In terms of waiting, the evidence of Mr Murray was of limited value given it was given in the context of a hypothetical.
3. The strongest witness in support of waiting was Mr Holland. However, his evidence was highly generalised. He also conceded that he was not in a position to say that the bank's approach was unreasonable. Other factors were relevant including the state of the account and the ongoing interest.
4. The evidence of Mr Dupen (given at the time) was firmly against waiting. There was also no evidence from Mr Dupen or Mr Papworth which suggested that the commencement of the campaign (prior to spring) would deter anyone or affect the ultimate sale price.
5. Critically, there was also no evidence from the marketing agent, Mr Sutherland, to suggest that it was appropriate to defer the campaign, nor that the release of the Golder reports (prior to spring) would have any particular effect on sophisticated purchasers in this market (who would conduct their own surveys in any event). To the contrary, he advised the bank to proceed.
6. No breach of duty is established by the bank's decision to proceed with the Golder reports notwithstanding that those reports were not definitive in scope.

1. At one point the Loves appeared to suggest that the CBA ignored relevant advices from Golder, Mr Dupen and Mr Papworth. However, at other points they appear to suggest that the CBA effectively abdicated its function in following advice.
2. It is true that the Golder reports made clear that the issue of native grasses could not be determined definitively until spring. However, this did not resolve the issue for the bank.
3. In terms of Mr Dupen, his advice has already been set out. It supported the bank's action.
4. In terms of Mr Papworth, although he appears to have suggested that native grasses would have an impact, his August valuation (post-Golder reports) did not identify any material impact arising from the contents of the Golder reports. He also gave no advice to the effect that the bank should await a spring survey.
5. As mentioned earlier, the advice of the marketing agent, Mr Sutherland, was also that the bank should proceed.
6. Overall, then, the CBA had advice from Mr Dupen and also from Mr Sutherland to proceed at the time with no-one saying not to.
7. I accept that a mortgagee does not discharge the duty simply by choosing a competent agent and then delegating the conduct of the sale "entirely to him" (as was stated in Commercial & General Acceptance Ltd v Nixon [48]). It is also unexceptionable that any acts or omissions of agents are to be attributed to the mortgagee.[49]
8. However, in overseeing the sale process, the bank was entitled to both take, and consider, advice.[50] This is particularly so given the unique nature of the property which raised unusual issues concerning flora and fauna issues as well as marketing and valuation issues.
9. There is no evidence of "delegation." Moreover, the advices taken support the action of the CBA.

1. It is true that Mr Montgomery stated that his "gut feel" was that the native grasses issue would affect value and further that he suspended the marketing campaign in May while awaiting a further report. He further raised issues as to whether the further report would provide beneficial information (in late May).
2. However, although he sought further advice from the valuers, there is nothing to suggest that he was of the view that the marketing campaign should be further suspended following receipt of the second report. Rather, on 22 June 2010, Mr Montgomery instructed Mr Sutherland to proceed with marketing on the new schedule (with expressions of interest to close on 4 August).
3. The view of one officer is also not determinative of the content of the bank's duty; in particular on the issue of whether a further deferral should have been extended.

1. The position of the Loves was that spring was not far away. They further relied on evidence from Dr Conole (in September) that the assessment could be done after the spring equinox (on 21 September).
2. They also cited Dimmick v Pearce Investments Pty Ltd[51] and Bank of Cyprus (London) Ltd v Gill.[52] They alleged that adopting a course which will permit the best price conditions the "rule" that a bank is entitled to sell the property at a time of the mortgagee's choice.
3. However, the advice of Dr Conole as to the spring equinox was contained in an email of 14 September and was not even in front of the bank in late June. Even if it was, the email goes on to say that the work "could happen from the first week of October up until early November if this weather persists." There would then have needed to be a further report and further marketing.
4. The evidence also showed that there were different levels of flora and fauna reporting which was also accepted by Mr Brennan. Thus, the first Golder report was described as a "factual report". The second Golder report was described as an "Advisory framework." The Biosis report also suggested that further surveys would be required to confirm or dismiss the potential presence of other species which was also confirmed by Mr Brennan. It also suggested that additional tasks could be undertaken at a cost of $83,000. Banco also engaged Biosis who prepared a separate "draft due diligence assessment of flora and fauna". MAB also engaged Biosis to provide further advice stating that even the 2011 Biosis report did not provide enough information.
5. It could not be expected that a mortgagee would continue to endlessly commission further reports in such circumstances. As Mr Dupen also highlighted, the decision as to whether to obtain further evidence was being made in a context wherein purchasers were likely to be sufficiently sophisticated that they would be commissioning reports for themselves (as Mr Johnston of MAB and Mr LoGiudice of Banco both did).
6. The CBA, as mortgagee, also needed to have an eye to the mortgagor's position. At the time that the 2010 Information Memorandum was released, Mr Love's facilities had been in default for almost a year. He was paying 14.74% on moneys advanced. Given the interest rate, the longer it waited, the higher the price it would need to obtain in order for Mr Love to clear the debt.
7. The complaint is also artificial in the circumstances of this case since the sale process actually allowed for a spring survey for reasons given already.
8. Further, although Mr Holland suggested that "in his experience" the removal of uncertainty generally "added to value", no-one else suggested that the commencement of the campaign in this case (prior to spring) would necessarily impact price and/or deter potential purchasers.
9. The reality is that there was simply no evidence as to what spring would have shown, nor whether it would necessarily positively impact on the price. In fact, as indicated already, offers actually decreased after the Biosis "spring-like" survey notwithstanding that this report actually provided certainty (as Mr Brennan confirmed).
10. In relation to Dimmick v Pearce Investments Pty Ltd [53] (Dimmick) and Bank of Cyprus (London) Ltd v Gill[54] (Bank of Cyprus) in neither case was the mortgagor successful in submitting that the mortgagor had breached its duty.
11. In Dimmick, the defendant mortgagee took steps to exercise its power of sale while the mortgagor attempted to sell the premises. He obtained an offer from the second defendant which was withdrawn prior to acceptance. Some days later the premises were auctioned with the second defendant successfully purchasing the property at a price well below the price offered earlier.
12. No breach of duty was found. Moreover, in relation to timing Kelly J states:[55]

"Unless there are very clear signs that the market is improving rapidly and substantially, I do not think that a mortgagee displays lack of good faith in not postponing a sale otherwise regularly conducted on the chance that the market may improve."

1. There was no evidence that the market was "improving rapidly and substantially" in this case. To the contrary, the highest the evidence got in this case was that of Mr Holland who said that the market was generally flat with some tendency to increase "slightly" in the period 2009-2011.
2. In Bank of Cyprus, the mortgagor was similarly unsuccessful in challenging a mortgagee sale in circumstances where the successful bidder subsequently re-sold the property for substantially more (by which time the market had improved).
3. In considering the question of duty, Lloyd J stated that a mortgagee was entitled to sell at any time "but at the same time he cannot sell without taking proper steps to secure the best available price at the time in question. That in itself may take some time to do, depending of course on all the circumstances."[56]
4. Thus although some time might be needed, the steps to secure the best price are still taken "at the time in question." This is consistent with the statements of principle in Nolan, above, that "a mortgagee can sell the property at a time of the mortgagee's choice" albeit the mortgagee "must take reasonable steps to obtain the best price consistently with its right to enforce its security."
5. Lloyd J goes on to say that the bank was not obliged to test the market if that would mean postponing the sale for any length of time. In coming to this view he refers to evidence from the relevant bank officer (with which he agreed) to the effect that the bank wanted a prompt sale because "interest on the loan was accumulating at a far faster rate than any foreseeable increase in price."[57] On appeal the Court of Appeal also observed that the fact that money was outstanding and that there were "heavy interest charges" were not irrelevant considerations.[58]
6. Such remarks are apposite here wherein interest was continuing to increase at 14.74% in circumstances where the market was flat.
7. The Loves also cited a decision of Standard Chartered Bank Ltd v Walker[59]. However this case was concerned with an application for summary judgment with no final position determined. In this context Lord Denning states that is it "at least arguable that, in choosing the time, [the mortgagee] must exercise a reasonable degree of care".[60]
8. There is no such limitation cited in Nolan above. In any event, it was perfectly reasonable for the bank to choose mid 2010 in all the circumstances of this case. Such circumstances not only include the rate of interest but the history of the account. Thus, though the facilities went into default in March 2009, the bank had extended time until August 2009 and had then waited again until mid-2010 to commence marketing. There was nothing unreasonable about the timing in such circumstances, and certainly no breach of duty.

Releasing the reports without ascertaining whether there was a reasonable basis in fact for the assertion in the Golder reports as to the presence of native grasses on 275

1. It is unclear what "assertion" is the subject of complaint. As appeared to be accepted by the Loves, the reports did not finally determine the issue as to the extent of native grasses.
2. In any event, the CBA engaged the services of Dr Conole who was a highly qualified and very experienced ecologist as is conceded by Mr Brennan. Dr Conole also presented as competent, considered and professional in giving his evidence. I am not satisfied that there was anything more the bank should have done to ascertain whether any conclusions were "reasonably based" in these circumstances.
3. This is sufficient to dispose of this allegation. However, for the sake of completeness, the alleged criticisms made by Mr Brennan of the Golder reports (which were not before the bank), were as follows:

1. It failed to use standard definitions of native vegetation used in 2010 2. It failed to explicitly state that the condition of the vegetation made detailed assessment impossible

1. It failed to explicitly state that another field visit was required to make a definitive assessment and Conole should have explicitly said so

1. The report definition of the unimproved 'native' pasture as a "subset of the FFG Act listed Plains Grassland EVC" lacked definition and was confusing. He provides a model version of the type of technical assessment and information he believes should have been provided. 2. He concludes there was a multi-million dollar issue with the Golder report and that the spring report should have been commissioned.
2. In relation to a and d, the evidence of Dr Conole (consistent with his reports) was that the scope of his work was to undertake a "factual report" only based on a desktop review and site visit rather than a flora and fauna net gain assessment which would require him to apply technical definitions. His explanation about the "subset" has already been explained above.
3. In relation to b, c and e, Mr Brennan expressed a view that the first Golder report should have included a conclusion that a survey in spring was required to determine the true nature of the vegetation. However, in his further report he acknowledges that this was addressed by the second Golder report which explicitly stated that a survey in spring was required to determine the nature of the vegetation present. His oral evidence about the high costings (explained above) is given on the hypothetical basis that 60-70% of the site was native protected vegetation.
4. Critically, Mr Brennan generally accepts that Dr Conole adopted an appropriate methodology. Further, that the estimate that 10-20% of the property may be required to be set aside was reasonable provided that listed species or communities were present. He ultimately accepts there was no difference between that and what was said in the second Golder report to the effect that "if" the site were to include relevant grasslands and species, 10-20% may need to be set aside.
5. To the extent it is necessary I generally accept the evidence of Dr Conole and prefer it over Mr Brennan given Mr Brennan appears to misunderstand the scope of what Dr Conole was doing.
6. In any event, I am not satisfied that the bank breached its duty by failing to "ascertain whether there was a reasonable basis in fact for the assertion in the Golder Reports."

Not commissioning any further ecological report on 275, whether in spring of 2010 or at any other time

1. For reasons expressed above, I am not satisfied that the bank needed to await spring prior to the commencement of marketing.
2. I am further not satisfied that this needed to occur so that the bank itself took on the responsibility of commissioning a further report.
3. As indicated above, there were many different levels of reporting which could involve a series of delays.
4. The market was also constituted by sophisticated purchasers who could be expected to undertake their own inquiries and obtain their own reports as the purchaser and under-bidder ultimately did.
5. There is no breach of duty by reason of the non-commissioning of any further reports.

Marketing and offering to sell 275 in 2010 without first obtaining a Spring report from Golder

1. Again, this does not constitute a breach of duty for reasons already given.

Withdrawing 275 from sale in late 2010 and returning it to the market in 2011 without obtaining a further report from Golder

1. By 2011 potential purchasers had been given ample opportunity to obtain a spring report themselves. The market was also provided with the report from Biosis in spring conditions.
2. It is also informative that not one potential purchaser asked for more time for the specific purpose of undertaking a spring survey. Thus, both MAB and Banco were perfectly capable of retaining their own experts. Australand had also had its own expert on site.
3. The reasons above are otherwise apposite and no breach of duty is established.

The CBA did not seek any information from Tom Love as to the existence of reported areas of native grasses on 275 prior to commencing marketing of 275 and releasing the said Golder reports to the market

1. Mr Love's own expert, Mr Brennan, gave evidence that it would not be standard practice for an ecologist to consult the land owner when preparing a flora and fauna report regarding a property. He went further to say that the factors referred to by Mr Love in his email of 17 June are unlikely to have altered the results of the Golder reports.
2. Dr Conole further agreed that the Landowner would not necessarily provide information that he needed to do his job.
3. The evidence did not establish that it was appropriate to seek information from Mr Love. In any event, he was able to, and did, provide his opinions prior to the finalisation of the campaign.

Summary (release of Golder reports to market)

1. There was no breach of duty in "not withholding" the Golder reports in circumstances where the bank had been advised that they were necessary to be disseminated, and in circumstances where the bank might have otherwise been exposed to a claim for misleading conduct.
2. Insofar as the main complaint made is that the bank should not have commenced the sale process without a spring report/the opportunity to assess the property in spring, the complaint is misconceived. Thus, a spring report (in substance) was, in the result, obtained prior to sale. There was also an opportunity available to assess the property in spring.
3. Pursuant to Nolan, the bank was entitled to sell the property at a time of the bank's choice even if the property might realise a higher price if the sale were postponed.
4. In any event, although Mr Holland opined that it was generally desirable to remove doubt, the preponderance of the evidence did not establish that the commencement of the campaign prior to spring would deter anyone or have any adverse impact on the price in this case. In particular, the evidence did not establish that a spring survey would lead to a higher price (in the result, offers decreased after Biosis).
5. Although the bank was obliged (and did) take reasonable steps to obtain the best price this was also co-existent with its rights to enforce its security interest. In this setting it was entitled to consider, inter alia: (a) the long standing debt; (b) the high interest rate; (c) the state of the market (flat but informed); and (d) professional advice.
6. In all the circumstances, no breach of duty is established by the release of the Golder reports. In particular, I am not satisfied that the bank failed to act in good faith. I am also satisfied that it took reasonable steps to obtain the best price consistently with its rights to enforce its security interest.

CBA knew or ought to have known that conducting an abortive marketing campaign for 275 would have a negative effect on its market value

1. At the time the campaign was launched, there was no reason for the CBA to consider it might be conducting an "abortive" campaign. The CBA had strong valuation evidence and advice to proceed.

Failing and refusing to consider offers for 275 which were conditional upon prospective purchasers undertaking reasonable ecological assessment of 275 in response to the 2010 marketing campaign

1. The Loves complained about the limited opportunity given to Mr Love over summer highlighting that he had to try to sell the property on terms which only allowed for a short period of settlement (120 days).
2. The evidence did not establish any failure to consider offers which were conditional. The evidence of Mr Barbagallo was that, although the preference was 60-90 days, this did not mean the bank would not consider terms if the right offer came along.
3. The only conditional offer brought to the attention of the bank was Australand. However, the bank engaged in negotiations with Australand despite the fact that its offers were conditional. Its ultimate offer was not only conditional on 12 months' exclusive "due diligence" but was subject to board approval. Settlement was also only to occur 60 days after an approved planning permit. The extensive conditions associated with that offer therefore meant it was tantamount to no offer at all. It was also an offer that Mr Love himself rejected.
4. It is true that by the end of 2010 the bank requested an unconditional offer with a 120 day settlement. However, there is no breach demonstrated in this position which was perfectly reasonable given, by this stage, Mr Love's account had been in default for over a year.
5. In the result, Mr Love was given until April 2011 to sell the property himself which extended well beyond the Christmas period.
6. I am not satisfied that any breach of duty is established by reason of any failure to consider conditional offers. To the contrary, I am satisfied that the bank took reasonable steps to obtain the best price it could having regard to the general state of the account.

Returning 275 to market "too soon" in 2011 after the abortive campaign of 2010

1. The Loves complained that the cessation of the campaign in 2010 and subsequent returns to market were "negative" citing evidence of Mr Murray and Mr Dupen.
2. This is different to the complaint pleaded for. However, for the sake of completeness both will be dealt with.
3. Firstly, I do not accept that the property was returned "too soon" in 2011 given the state of the account and the ongoing interest costs. No witness gave evidence which suggested that there should have been a longer gap between the first campaign (in June 2010) and the second campaign (in July 2011).
4. Insofar as the suggestion that taking the property "on and off" was "negative" this was not established on the evidence (as will be seen below). In any event, even if it was, this was not due to any breach of duty by the bank.
5. Instead, to the extent it is necessary to resolve, the failure of the first campaign appears attributable to market forces beyond the control of the bank. Mr Love himself was also dissatisfied with the prices offered at this time and had rejected the 2010 offers. The interposition of the "summer campaign" was also at the request of Mr Love who wanted the opportunity to sell the property himself.
6. In any event, no failure of the bank was identified as contributing to the series of campaigns (beyond the "wrongful release" of the Golder reports) and no breach of duty is thereby established.

Selling 275 for the price obtained despite CBA having various valuation assessments and advice from Colliers, O'Briens and Charter Keck Cramer respectively obtained between 2008 and 2011 that the value of 275 was significantly greater than the sale price whether on market value or on forced sale value

1. As fairly conceded by the Loves in this case, if it was reasonable to release the Golder reports, other complaints "fell away."
2. This complaint is a good example. Thus, if, as I have determined, there was no breach in releasing the Golder reports, there also appears to have been no other failures identified, for example, in advertising or marketing the property.
3. In such circumstances, the mere fact that the property was sold at an undervalue (if this was the case) is not sufficient of itself to evidence a breach of duty.[61]
4. This is sufficient to dispose of this complaint (which was not developed in submissions).
5. However, the evidence did not disclose that the sale was sold at an undervalue in any event.
6. It is true that the ultimate price was lower than the valuations indicated and that Mr Murray suggested the purchase might have been opportunistic.
7. However, in closing the Loves themselves were critical of the valuations closest in time to the ultimate sale and were unclear as to which valuation should be preferred. They ultimately relied on the valuation of Mr Murray in July 2011 and the May 2011 valuation of Mr Papworth. However, the valuation of Mr Murray (though nearest in time), was said to be infected by the fact that he had been told of the price range. The most recent valuation of Mr Papworth was also criticised as being done with the benefit of hindsight and because "he was keen to keep accommodating the bank."
8. The "forced sale" valuation of Mr Murray of $13 million in July 2011 was the closest to the ultimate sale price up to that point. His own evidence was also to the effect that his forced sale value was appropriate for a sale by a mortgagee in possession.
9. To the extent it is necessary to identify a preferred valuation, the valuation of Mr Papworth for August, 2011, though done with hindsight, was evidence-based and timely. I also saw no evidence that he was "keen to accommodate" the bank, nor any reason to reject his most recent valuation in favour of a valuation given earlier in May. This is particularly so given his evidence was that the market was continuing to soften at that time with an increase in supply expected "to further depress the market outlook."
10. In any event, any disparity between the valuations and the price obtained appears explicable given the preponderance of the evidence suggesting that the market was very thin and the property difficult to value.
11. The chronology above also suggests that the market was well and truly tested bearing in mind that valuation "cannot be an exact science"[62] and, as Mr Murray said, the "market was the market."
12. The following factors also suggest that, ultimately, the sale was for a market price:
    • Although he gave generalised evidence that the market remained fairly static Mr Holland conceded that the sales to which he had referred to (which were thin) did not enable him to work out whether there was really a change in value in relation to land such as 275 between August 2009 and August 2011. He was also not asked, and does not say, that the sale was actually an undervalue. In fact he relied on the sale;
    • Mr Papworth gave evidence that the sale was for a fair and reasonable price which was based on some further sales evidence and was maintained under cross examination;
    • It was not put to Mr Sutherland, nor did he give evidence, that the price was at an undervalue;
    • Mr Love did not call Mr Reynolds or anyone else to say the price obtained was at an undervalue;
    • The two ultimate bidders (who negotiated independently of each other) were very close to each other in value ($10.15M and $10.37M);
    • the price actually obtained is evidence of the true value of the property in current circumstances where no general complaint is made about the advertising or sale process.[63]
13. There was no breach of duty by the bank in selling at the price it did when it did.
14. Moreover, I am satisfied that the sale was at a market price.

1. As apparently conceded by the Loves, none of the miscellaneous complaints establish a breach of duty in circumstances where there was also no breach in releasing the Golder reports. In particular, none establish any breach of good faith within the Nolan principles.
2. It follows that the CBA did not breach its duty to Mr Love (nor Mrs Love if there was one) with the result that the Counterclaims must be dismissed.

Even if the CBA breached its duty to Mr Love and/or Mrs Love, did that breach cause any loss by reason of the sale of 275 O'Herns Road being at an undervalue?

1. Given there is no breach established it is unnecessary to consider this issue.
2. However, out of deference to the parties, I will deal with this issue presuming (contrary to what I have found) that the CBA breached its duty in releasing the Golder reports and/or failing to defer the commencement of the campaign until spring.
3. Counsel for the Loves accepted that causation was a necessary element of the claim which was pleaded as a damages claim.[64]
4. The Loves further submitted that the court should infer causation and particularly relied upon the following matters:
   • The high valuations;
   • The offer range, including the pattern of the offers, which diminished following Golder;
   • The attitude of Australand from which the court should also infer that the flora issue was a concern to others as well;
   • Various passages in the valuers' evidence to the effect that there were risks which would be a concern
   • That the remarketing of the property (taking it "on and off the market") suggested a weakened bargaining position;
   • The change in the position of MAB, namely that it was more interested post Biosis;
   • Given the more sophisticated market, potential purchasers were more likely to see the problem and move on absent a spring survey.
5. Further that Biosis only had effect as a contributor to quantum and did not eradicate the effect of Golder.

1. Firstly the higher valuations say nothing about whether the Golder reports/timing of the campaign played any part in the ultimate sale price.
2. In terms of Mr Holland, as indicated already, he stated that he was not aware of any sale that clearly demonstrated the discount which might apply for a sale of land which has no ecological issues compared to a sale where there are unknown ecological issues but these have not been quantified. He also opined that the provision of both Golder and Biosis together was more likely to be a positive than a negative impact because they quantified some of the likely costs and removed some of the elements of uncertainty.
3. There was nothing in the evidence of Mr Dupen to suggest that the statements in the Golder report played any part. Thus, his lower value in October was based on the developable area set out in the Breese Pitt Dixon proposed plan of subdivision rather than anything contained in the Golder reports. In his email of 26 October he further explicitly states that "there is nothing in the Golder report that indicates that an area less than that adopted in our report should be used."
4. Similarly Mr Papworth's reduced valuation in August was based on the change to developable area contained in the Breese Pitt Dixon plan rather than the contents of the Golder reports.
5. Significantly, none of the experts, including Mr Sutherland, gave any evidence to the effect that the release of the reports in June 2010 somehow "tainted" the market and resulted in a reduced sale price in August 2011.

1. The offers were explained by Banco and MAB as having nothing to do with Golder, nor anything to do with the initial absence of a spring survey.
2. Thus Mr LoGiudice explained that he was aware from his previous experience in purchasing land in the area that there were ecological issues such as the existence of the habitat for the Golden Sun Moth and native grasslands which he needed to factor into the price offered. His expression of interest form referred to the high development cost with the retarding basin and site geology. He made no reference at all to Golder.
3. In making the further offer in 2011 (after retaining Biosis independently), Banco wrote a letter explaining how it had arrived at its offer. The most significant cost highlighted is the offset for the Golden Sun Moth with no mention at all of Golder.
4. Mr Johnston said that he did not rely on either of the Golder reports in making the offers and in determining the offer price.

1. In the absence of any witness being called from Australand, any impact of the Golder reports should be determined in the light of the available objective evidence.
2. At the time of Australand's first offer (at $20,250,000 with conditions) on 4 August it was in possession of the Golder reports. Its price reduction to $16 million (with more extensive conditions) on 27 September cannot be attributable to Golder.
3. By the time of the second offer it was also spring (27 September). However, though Australand was given access to the land, it never asked to be able to do a survey. Nor did it limit/request conditions so as to enable it to undertake a spring survey. Instead, it proposed an offer involving a 12 months due diligence period that was not only unviable, it was not explicable on the basis of the Golder reports.
4. The Loves sought to rely on the evidence from Mr Love about his meeting with Mr Robb (which he placed in December 2010). However, as highlighted already, this evidence was unsatisfactory being hearsay and also conclusory in nature. There is further no contemporaneous record of this meeting which also appears to have occurred prior to the provision of the Biosis report.
5. In any event, whatever was said, Australand's actual conduct is inconsistent with any causal link with Golder.
6. Australand also made no bid when dealing with Mr Love in late March 2011 even though it was in possession of the Biosis report by that time.
7. It is unnecessary to say what was motivating Australand. Counsel for the bank used the term "tyre kicker" which might be apt. On the basis of Mr Love's own evidence it also appeared that its difficulties were associated with bureaucratic "internal factors."
8. In any event, the Australand dealing provides no evidence that the Golder reports/absence of a spring survey influenced or caused Australand to make offers/ fail to make offers as they did.
9. No causation is demonstrated based on Australand's involvement.

1. As indicated already, there was some generalised evidence that risks would be a concern.
2. Thus, in closing counsel for the Loves highlighted evidence from Mr Dupen to the effect that purchasers could not "definitively" inform themselves of the risk if the season did not permit it. Further, that Mr Papworth suggested that offsets would be relevant to a valuation.
3. In terms of causation, however, there was nothing to suggest offers were actually priced because of anything to do with Golder/the decision to release it prior to spring.
4. There was also evidence that prospective purchasers engaged their own experts in this market, as each of MAB, Banco and Australand, the only bidders for the property, did in this case.
5. The case for the Loves appears to be that the Court should infer that some unspecified person was "put off" by the Golder reports in circumstances where that person would otherwise have made an offer (for more than what MAB offered).
6. Such a proposition is speculative and is not supported by any probative evidence. In particular, Mr Sutherland did not identify anyone in such a category. This, notwithstanding his intimate knowledge of the campaign in circumstances where he was likely to know if someone like this existed (given the relatively small number of potential purchasers).

1. The issue of the impact of putting the property on and taking if off the market was the subject of some mixed evidence from the valuers.
2. Mr Holland said that where any property remains on the market for a lengthy period of time the market "may" perceive it as tainted, but this does not necessarily translate to a reduction in value. "It is a difficult task to demonstrate that a property was sold for less than a fair value."
3. Mr Dupen also says that the impact of repeated attempts to sell was "far more complicated" in this market where it was more likely to find something that causes the sale process to go on hold than with a standard sort of property though he ultimately appears to accept that it may be construed as a weakened selling position.
4. Mr Papworth says the issue was appropriate for a marketing professional not a valuer but disagreed that it was relevant.
5. Mr Murray agreed as a general position that serial unsuccessful marketing campaigns would not assist pricing.
6. The evidence of the valuers was therefore mixed. In such circumstances, however, it is important to consider the actual campaign in this case and the evidence of the marketing professional closest to the case, Mr Sutherland (as highlighted by Mr Papworth).
7. It was suggested to Mr Sutherland that the history of the marketing campaign in this case was less than ideal. He disagreed with this proposition and said that it was not necessarily the case with purchasers who are as sophisticated as the ones we are dealing with.
8. When it was put to Mr Johnston that the bank was back in the market in 2011 reasonably soon after its first failed campaign his evidence was:

"I wouldn't [say] a year was relatively soon. I think if that's - you know, if a property doesn't sell it's not going to be generally two months later, it might be 12 months, we didn't think necessarily too much of that."

1. When it was also put to Mr LoGiudice that when the property was put back on the market in 2011 he must have thought this could be a good opportunity, they're having trouble selling it he disagreed with that proposition, saying "it's normal- it was a property that was on the market, I looked at it again, I was interested at the beginning and I was still interested in it."
2. To the extent necessary I prefer the evidence of the under bidder, purchaser and marketing agent given their close connection with this particular campaign.
3. In any event, the point is misconceived. Thus, as I have highlighted already, the Loves have not established that the taking on and off the market had anything to do with Golder and/or the decision to release Golder prior to spring.

1. The evidence did not establish that the change in MAB was attributable to Golder.
2. Rather the evidence of Mr Johnston was that the reason he did not bid in 2010 was due to the uncertainty in the market arising out of the GFC rather than the particular property i.e. the reasons were "not so much about the property but of the general market."
3. As indicated already, his evidence was also that MAB did not rely on either of the Golder reports.

1. There was simply no evidence that a sophisticated buyer (likely to obtain his/her own reports) would, or did, move on in absence of a spring survey.

1. None of the factors cited above, individually or cumulatively, establish that the release of the Golder reports and/or the failure to await a spring survey contributed to a reduction in sale price in 2011 (even presuming it was an undervalue).
2. In particular, I am not satisfied that Australand's offers/lack of offers were actually affected by the release of Golder/nor the earlier absence of a spring survey when consideration is given to its actual conduct.
3. The evidence of both the successful bidder and under bidder also failed to establish any causation.
4. There was also no evidence that anyone else was affected in the context of this (thin) market and I am unable to infer that some unknown person was affected.
5. Even if the CBA breached its duty to Mr Love (and/or Mrs Love) that breach did not cause any loss by reason of the sale of 275 being at an undervalue.

If the sale of 275 O'Herns Road was at an undervalue, what was the quantum of that loss and would the correct value have satisfied Mr Love's outstanding liability to the CBA at that time?

1. It is unnecessary to consider this issue.
2. However, for reasons expressed already,[65] I am not satisfied that the sale was at an undervalue.

1. Given there was no breach of duty, and further that any breach did not cause any loss, the Counterclaim of Mr Love must be dismissed.
2. Given Mrs Love had no equitable interest her Counterclaim is to be dismissed. However, her Counterclaim should also be dismissed given it contains the same allegations of breach as made by Mr Love.
3. The following orders are therefore appropriate:
   • No further order be made on the plaintiff's claim;
   • The Counterclaim of Mr Love should be dismissed.
   • The Counterclaim of Mrs Love should be dismissed.
4. However, I will hear from the parties as to the precise form of final orders.

Re-evaluation is based on the change in developable area.

Re-evaluation is based on the change in developable area.

Slight increase in developable land because it became apparent that part of the land would attract compensation

Mr Papworth considers the sale price to be "fair and reasonable"

Mr Bradley Papworth and Mr Claudio Petrocco - Charter Keck Cramer

Mr Chris Dupen and Mr Julian Vautin - Colliers International

[1] See Commonwealth Bank of Australia v Love & Anor [2015] VCC 1531.

[2] This section is largely based on an agreed chronology provided by the parties at the commencement of the trial though it has been varied/supplemented with evidence adduced and in the light of the issues for determination.

[3] For example, in his report dated 30 January 2008 Mr Papworth describes the direct comparison method as "the analysis of sales evidence in varying degrees comparable, having particular regard to locational aspects, proximity to major arterials, topography and positive and negative externalities relating to industrial uses", Exhibit A, page 244.25.

[4] Roads Corporation v Love [2010] VSC 32 at para 16

[5] Love v Roads Corporation [2011] VSCA 434.

[6] The second round of tenders is a reference to the letter of 11 August 2010 that invited a formal tender by Wednesday, 18 August 2010. The inspection by the Australand ecologist must have taken place on Friday, 13 August 2010.

[7] See Roads Corporation v Love [2010] VSC 537.

[8] Love v Thwaites & Anor (No 5) [2012] VSC 636 at para [13].

[9] Amended Defence and Further Amended Counterclaim of the First Defendant filed 19 October 2015, para 31.

[10] [1987] HCA 59; (1987) 164 CLR 137.

[11] Trial Transcript, 29 October 2015, page 784.

[12] Amended Defence and Further Amended Counterclaim of the First Defendant filed 19 October 2015, para 31.

[13] [1985] HCA 78; (1985) 160 CLR 583.

[14] [1987] HCA 59; (1987) 164 CLR 137.

[15] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at page 620.

[16] NAB v Maher [1995] VicRp 23; [1995] 1 VR 318 at page 326; Director of Public Prosecutions v Ali (No 2) [2010] VSC 503 at para 85.

[17] [2009] NSWSC 460 as referred to in Director of Public Prosecutions v Ali (No 2) [2010] VSC 503 at para 86.

[18] Trial Transcript, 30 October 2015, page 834.

[19] [1995] VicRp 23; [1995] 1 VR 318.

[20] NAB v Maher [1995] VicRp 23; [1995] 1 VR 318 at page 326.

[21] [2010] VSC 503.

[22] [2009] NSWSC 460.

[23] Australian Building & Technical Solutions Pty Ltd v Boumelham [2009] NSWSC 460 at para 94.

[24] (2011) 37 VR 116 at para 100.

[25] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 40.

[26] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 41.

[27] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 42.

[28] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A.

[29] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(b).

[30] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(d).

[31] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(a)(vi).

[32] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(a)(viii).

[33] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(c).

[34] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(e).

[35] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(f).

[36] Trial Transcript, 30 October 2015, pages 792-793.

[37] Amended Defence and Further Amended Counterclaim of the First Defendant filed 19 October 2015 at paras 45-49 and 48A.

[38] Trial Transcript, 30 October 2015, page 815.

[39] (1980) 43 FLR 235.

[41] [1912] HCA 9; (1912) 13 CLR 676.

[42] [1981] HCA 70; (1981) 152 CLR 491.

[43] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(a)(i) and (vii).

[44] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(a)(ii),(iv) and (v).

[45] Defence and Further Amended Counterclaim of the Second Defendant by Counterclaim against the First Defendant by Counterclaim filed 19 October 2015, para 44A(a)(iii).

[46] Lam v Ausintel Investments Pty Ltd (1990) 97 FLR 458 at page 475.

[47] Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31 at page 32.

[48] [1981] HCA 70; (1981) 152 CLR 491 at page 495.

[49] Commercial & General Acceptance Ltd v Nixon [1981] HCA 70; (1981) 152 CLR 491 at page 503; Pendlebury v The Colonial Mutual Life Assurance Society Limited [1912] HCA 9; (1912) 13 CLR 676.

[50] See MBF Investments Pty Ltd v Nolan [2011] VSCA 114 at paras 154 - 155

[51] (1980) 43 FLR 235.

[53] (1980) 43 FLR 235.

[55] Dimmick v Pearce Investments Pty Ltd (1980) 43 FLR 235 at page 243.

[56] Bank of Cyprus (London) Ltd v Gill [1979] 2 Lloyd's Rep 508 at page 511.

[57] Bank of Cyprus (London) Ltd v Gill [1979] 2 Lloyd's Rep 508 at page 512.

[58] Bank of Cyprus (London) Ltd v Gill (English Court of Appeal, 13 November 1979), page 4.

[59] [1982] 3 All ER 938.

[60] Standard Chartered Bank Ltd v Walker [1982] 3 All ER 938 at page 942.

[61] MBF Investments Pty Ltd v Nolan [2011] VSCA 114 at paras 65 and 84; Investec Bank (Australia) Ltd v Glodale [2009] VSCA 97; (2009) 24 VR 617 at para 46; Tyler, Young and Croft, Fisher & Lightwood's Law of Mortgage (2005 2nd Australian ed.), page 502.

[62] Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 167 ALR 575 at para 277; See also Dimmick v Pearce Investments Pty Ltd (1980) 43 FLR 235 at page 241.

[63] Investec Bank (Australia) Ltd v Glodale [2009] VSCA 97; (2009) 24 VR 617 at para 83.

[64] Trial Transcript, 29 October 2015, pages 763.