First Plaintiff v First Defendant

1 This is an appeal of an Associate Justice's decision to refuse to summarily dismiss a proceeding pursuant to ss 62 and 63 of the Civil Procedure Act 2010 (Vic) (the CPA).

2 The proceeding involves two lots of vacant land in the City of Greater Bendigo, which have been zoned for residential purposes. The parties referred to these as Lot 6A[1] and Lot 7.[2] The first defendant, Huntly Property Holdings Pty Ltd, is the current registered proprietor of those two lots of land. Mr James Morrow is the sole director and shareholder of Huntly.

3 The first plaintiff, Bagshot Investments Pty Ltd, is the current trustee of the Re Consult Trust, and the second plaintiff, Mr Henry Kaye, is the former trustee (the plaintiffs). The plaintiffs claim that in or about July 2016, an oral agreement was entered into between Mr Kaye, Huntly and another company TPC (Vic) Pty Ltd (the July 2016 agreement). The plaintiffs claim that under this agreement**,** TPC agreed to sell, and Huntly agreed to purchase from TPC, a large parcel of land in Bendigo (the Bendigo land); Huntly agreed that after subdivision of the Bendigo land, Lot 6[3] and Lot 7 would be transferred to Mr Kaye as trustee of Consult; and that in consideration of that transfer, Mr Kaye agreed to release and discharge a $3 million debt owed by TPC to Mr Kaye, as trustee of Consult. The plaintiffs claim that solicitor Daniel Clarke acted for Mr Kaye, TPC and Huntly in negotiating the terms of this agreement. The plaintiffs seek declarations that Bagshot has a caveatable interest in Lot 6A and Lot 7, as well as orders that the defendants take various steps to facilitate Bagshot's registration as proprietor.

4 The second defendant is the Registrar of Titles. The third defendant is Abovo Investments Limited, and it holds a mortgage over Lot 6A. Neither of these defendants filed an appearance in the proceeding.

5 Huntly disputes the plaintiffs claim on multiple grounds, including a denial of the July 2016 agreement. In the alternative, Huntly contends that as an agreement in respect of land must be in writing,[4] the July 2016 agreement is not enforceable, in the absence of part performance.

6 On 14 November 2024, Irving AsJ heard an application by the plaintiffs for summary judgment, together with an application by Huntly for summary dismissal of the plaintiff's claims, and summary judgment on Huntly's counterclaim. On 30 January 2025, the Associate Justice delivered judgment, dismissing each of the applications (the Reasons).[5]

7 Huntly's appeal is made pursuant to r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015. In its amended notice of appeal, Huntly alleges eight errors by the Associate Justice. For the reasons that follow, Huntly has failed to satisfy me in respect of any of those grounds of appeal.

8 It is fair to observe that the factual background to this proceeding is complicated, and Huntly disputes much of what the plaintiffs plead.

9 The alleged dealings between the parties, and the entities and people alleged to be associated with the parties, together with a summary of the parties' pleadings, were detailed in paragraphs [9]-[29] of the Reasons. Neither party raised any issue with this background summary, so for convenience, it is replicated here:

The Re Consult Trust beneficially owned all shares in a company, Bourke & Queen Mortgages Pty Ltd (BQM). In July 2013, BQM lent money to Foscari Holdings Pty Ltd (Foscari) to enable it to acquire a property at 99 Palmers Road, Truganina (Truganina Land). Foscari became the registered proprietor of the Truganina Land. BQM's loan to Foscari was secured by a registered mortgage over the Truganina Land (BQM Mortgage). Over time the amount of BQM's loan facility increased. On 15 June 2015 Foscari acknowledged the debt was $5,163,224.95 (Foscari debt). The plaintiffs' case is that in late 2015 Kaye was looking to sell the BQM Mortgage and the Foscari debt. Daniel Clarke, a solicitor at the firm Clamenz Lawyers, introduced Eric Krecichwost (also known as Eric Kay) as a prospective purchaser. Mr Krecichwost agreed to purchase the BQM Mortgage and the Foscari debt for $3 million. Mr Krecichwost nominated TPC (Vic) Pty Ltd (TPC) as the purchaser. Daniel Kay, presumed by the plaintiff to be Mr Krecichwost's brother, was the sole director of TPC.

On 14 February 2016 BQM and TPC entered into a deed of assignment. The deed provided for the assignment of the BQM Mortgage and the Foscari debt to TPC in return for which TPC would pay Kaye, as the trustee of the Re Consult Trust, the sum of $3 million from the sale of the Truganina Land. TPC lodged a caveat on the title to the Truganina Land, which was registered on 4 March 2016. The transfer of the BQM Mortgage to TPC was registered on the title to the Truganina Land on 23 June 2016.

On 24 December 2013 two companies, Adelaide Properties Pty Ltd (Adelaide) and Lezak Nominees Pty Ltd (Lezak) became jointly registered as mortgagees of the Bendigo Land (Adelaide and Lezak Mortgage). At that time Bilkurra Investments Pty Ltd (Bilkurra) was the registered proprietor of the Bendigo Land.

The plaintiffs' case is that in around June or July 2016, Mr Clarke told Kaye that TPC was unable to pay the $3 million which it had agreed to pay to Kaye. According to the plaintiffs, Mr Clarke told Kaye that TPC, as mortgagee in possession, proposed to sell the Bendigo Land to Huntly, a related entity, and that Huntly would transfer two of the lots in the development, lots 6 and 7, to Kaye in lieu of paying the $3 million debt. Kaye agreed to accept the transfers of lots 6 and 7 to the Re Consult Trust in substitution for payment by TPC of its $3 million debt to BQM (July 2016 Agreement).

The caveat which TPC lodged on the title to the Truganina Land and which was registered on 4 March 2016 was also registered on the title to the Bendigo Land. On 1 August 2016 TPC removed its caveat from the Bendigo Land after TPC entered into a contract of sale with Huntly dated 18 July 2016 for $6,050,000. That contract of sale was conditional upon TPC obtaining an assignment of the Adelaide and Lezak Mortgage within 21 days of the sale. Huntly did not lodge a purchaser's caveat on the Bendigo Land titles.

On 29 July 2016 Adelaide and Lezak executed a transfer of the Adelaide and Lezak Mortgage to TPC for consideration of $8,502,472.13. TPC funded this acquisition from the proceeds of sale of the Truganina Land, which it sold as mortgagee in possession. The transfer of mortgage and Huntly's proprietorship of the Bendigo Land were not registered on the titles to the Bendigo Land until 31 January 2017. The plaintiffs' case is that settlement of the sale of the Bendigo Land to Huntly occurred without any money being transferred to TPC. The plaintiffs concede there is an accounting book entry in relation to the settlement funds.

On 20 June 2017 the Bendigo Land was subdivided into 8 super-lots, including lots 6 and 7. Lot 6 was subsequently further subdivided into lots 6A and 6B.

The plaintiffs allege that pursuant to the July 2016 Agreement:

(a) on 18 July 2016, TPC, as mortgagee in possession, entered into a contract of sale of the Bendigo Land to Huntly for $6,050,000, payable by deposit of $50,000 and the balance at settlement 21 days later; and

(b) in or around November 2017 (after the registration of the subdivision in June 2017), the certificates of title and executed transfers of land in registrable form for lots 6 and 7 were hand delivered to Kaye's solicitor's office (Mr Atzmon's office) by a Mr Grochowski.

At the time of their delivery to Mr Atzmon, the titles were encumbered by a mortgage to Corvus Investments Limited (Corvus). The Corvus mortgage had been registered on the titles on 9 February 2017.

The plaintiffs' case is that in late 2017 or early 2018 Kaye instructed Mr Atzmon to arrange for the Corvus mortgage to be removed from the lot 6 certificate of title and that in March 2019 Kaye asked Mr Clarke to procure the removal of the Corvus mortgage over lot 7.

The plaintiffs allege that in late 2017 or 2018 Kaye had instructed Mr Atzmon to arrange for the removal of the Corvus mortgage from the lot 6 certificate of title. Mr Atzmon returned the certificate of title for that purpose. It has not been returned to the plaintiffs.

Bransgroves Lawyers represented Corvus. On 6 March 2019 Erin Couper of Bransgroves Lawyers, on behalf of Corvus, sent an email to Mr Atzmon, stating that Bransgroves Lawyers understood the title to lot 7 had been transferred to Mr Atzmon's client and requested Mr Atzmon provide the title deed so that the Corvus mortgage could be discharged. In response to Bransgroves Lawyers' request Mr Atzmon arranged for delivery of the lot 7 title to Bransgroves Lawyers by post.

Ms Couper sent a further email to Mr Atzmon on 22 March 2019 confirming receipt of the lot 7 certificate of title. The Corvus Mortgage was removed from the lot 7 title on 4 April 2019. Ms Couper then sent the unencumbered title to lot 7 to Mr Atzmon on 10 April 2019.

The plaintiffs' case is that it is inconceivable that a reputable firm of solicitors acting reasonably and responsibly would deliver an unencumbered certificate of title on the instructions of the former discharged mortgagee to a third party without the knowledge, consent and actual or ostensible authority of Huntly, the registered proprietor, thereby exposing itself to a negligence claim.

The plaintiffs' case is that Bagshot as trustee of the Re Consult Trust is entitled to be registered as the proprietor of lots 6A and 7 of the Bendigo Land. The plaintiffs' seek orders for specific performance of the July 2016 Agreement, which the plaintiffs allege is evidenced by relevant acts of part performance, being the delivery of the titles and executed transfers for the titles to lots 6 and 7 and redelivery of the unencumbered title to lot 7.

During the course of the hearing I granted Huntly leave to amend its defence and counterclaim. By its amended defence and counterclaim, in summary, Huntly:

(a) denies TPC was indebted to Kaye as trustee of the Re Consult Trust in the amount of $3 million;

(b) pleads that the Adelaide and Lazek Mortgage transfer to TPC stated that the consideration for the transfer was, 'Pursuant to a Deed of Assignment of Security dated on or about the date of this Transfer for the sum $8,502,472.13';

(c) does not admit that TPC held an equitable mortgage over the Bendigo Land pursuant to the Adelaide and Lezak Mortgage or the transfer;

(d) denies the July 2016 Agreement;

(e) admits it entered into the contract of sale of the Bendigo Land with TPC but denies TPC was acting in pursuance of the July 2016 Agreement;

(f) admits it became the registered proprietor of the Bendigo Land and that the land was subsequently subdivided;

(g) pleads that from April 2016 to May 2016 Adelaide and Lezak and/or TPC engaged Sutherland Farrelly to market and sell the Bendigo Land by a mortgagee's tender campaign that closed around 19 May 2016 that did not procure a purchaser;

(h) pleads that on 18 July 2016 TPC and Huntly executed the contract of sale and Huntly paid $50,000 by way of deposit;

(i) pleads that Huntly never had any communication with TPC about a transfer of any part of the Bendigo Land by Huntly to the plaintiffs after settlement of the contract of sale;

(j) pleads that on 10 August 2016 Huntly entered into a loan agreement with Corvus Investments Limited BVI Company No 1922682 (Corvus Investments) for an advance of $6,500,000 to finance the purchase of the Bendigo Land;

(k) says that on 27 January 2017 the contract of sale settled and Daniel Kay, director of TPC, declared to the State Revenue Office of Victoria that the consideration stated in the contract of sale was $6,050,000;

(l) on settlement, Corvus advanced approximately $6,000,000 to Huntly which Huntly paid to TPC and took possession of the certificate of title for the Bendigo Land;

(m) on 31 January 2017 Astuto Lawyers, for Huntly paid $332,750 in stamp duty to the State Revenue Office for the transfer of all the Bendigo Land including lots 6 and 7.

Huntly's case is that if Huntly agreed to sell an interest in the Bendigo Land to either plaintiff as they allege, that agreement was not in writing and so pursuant to s 126(1) of the Instruments Act 1958 (Vic), an action against Huntly, including this proceeding, cannot be brought. Further Huntly pleads that the July 2016 Agreement as pleaded by the plaintiffs does not specify the terms of the agreement with sufficient certainty, nor identify the consideration payable by Huntly and is therefore void for uncertainty and unenforceable. Alternatively Huntly pleads that the terms of the July 2016 Agreement were inconsistent with the terms of the contract of sale of the Bendigo Land in that TPC would not be selling the whole of the Bendigo Land to Huntly for $6,050,000 as it excluded lots 6 and 7.

In relation to Huntly's delivery of the lot 6 and 7 certificates of title along with the executed transfers of those lots to Kaye as trustee of the Re Consult Trust, Huntly pleads:

(a) in January 2017 Eric Krecichwost of Corvus Investments requested Huntly execute transfers of land in respect of the Bendigo Land to provide Corvus Investments with additional security but Huntly did not execute any transfers at that time;

(b) when the plan of subdivision of the Bendigo Land was registered on 20 June 2017, Huntly became the registered proprietor of the eight lots;

(c) in mid to late 2017 Corvus Investments repeated its request for Huntly to execute transfers of land in respect of the eight lots as additional security for the loan;

(d) at the time of that request Corvus Investments was in possession of all eight certificates of title;

(e) in response to the request Mr James Morrow, Huntly's director signed the forms of transfer and left the transferee blank and in each case stated the consideration was $1 and returned the signed forms to Corvus Investments;

(f) on 15 November 2017 Corvus Investments asked Huntly to sign fresh transfers for all eight lots due to a mistake in the earlier documentation signed by Mr Morrow;

(g) Huntly signed the fresh transfers and returned them to Corvus Investments for the sole purpose of permitting Corvus Investments to hold them in escrow to be used in the event of an unremedied default by Huntly of their loan agreement;

(h) Huntly did not authorise possession and has no direct knowledge of how the plaintiffs came to be in possession of the certificates of title to lots 6 and 7 and the lot 6 and 7 transfers.

Huntly pleads that on 9 February 2017 a mortgage in favour of Corvus Investments was registered over the Bendigo Land, which as at 26 November 2017 encumbered lots 6 and 7. The Corvus mortgage over lot 7 was discharged on 14 April 2019. Huntly says that on 14 April 2019 Corvus Investments retained the certificate of title and signed transfers of land for all eight lots and Huntly did not authorise or instruct Corvus Investments to deliver the lots 6 and 7 certificates of title or transfers to the plaintiffs.

Huntly's counterclaim pleads that it is entitled as owner to immediate possession of the certificates of title for lots 6A and 7, which, since April 2019 have been in the possession of the plaintiffs, as has the lot 7 transfer document. Huntly seeks declarations that the plaintiffs have no caveatable interests in respect of the Bendigo Land and in particular lots 6A and 7. It asks the Court to make orders for the removal of the caveats and delivery of the lot 7 transfer.[6]

10 An appeal of an associate justice, is conducted by way of a rehearing.[7] This means that, in the absence of further evidence or a change in the law, an appellant is required to show error on the part of the associate justice before appellate power may be exercised.[8]

11 To determine whether the decision is infected by such error, the Court is required to conduct a 'real review'[9] of both the evidence and reasons of the associate justice, and determine whether the associate justice erred in fact or law.[10]

12 A decision to summarily dismiss a proceeding is discretionary.[11] Accordingly, an appellant is required to establish a material error of the House v King[12] type - that is, acting upon a wrong principle; allowing extraneous or irrelevant matters to guide or affect the decision; mistaken fact; not taking into account a material consideration; or making a decision which upon the facts, was unreasonable or plainly unjust.[13]

13 Caution should be exercised when reviewing a discretionary decision, and there is a strong presumption in favour of its correctness.[14]

14 The relevant test for determining whether to order summary dismissal of a proceeding under s 63 of the CPA, is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' prospect of success.[15] The power to terminate proceedings summarily should be exercised with caution,[16] especially when there are complex questions of fact.[17]

15 Further, under s 64 of the CPA, even if the Court is satisfied there is no prospect of success in a civil proceeding, the Court can order the proceeding still proceed to trial, if satisfied it is not in the interests of justice to dismiss it summarily,[18] or if the dispute is of such a nature that only a full hearing on the merits is appropriate.[19] The exercise of this power under s 64 is also discretionary.[20]

16 In the Reasons, the Associate Justice summarised the factual background.[21] Next, the Associate Justice outlined the statutory provisions and principles relevant to the exercise of his Honour's power to grant summary judgment,[22] and to order the removal of a caveat.[23] In relation to the power to grant summary judgment, his Honour noted that this was subject to the provision contained in s 64 of the CPA.

17 The Associate Justice then outlined the parties submissions. In relation to the plaintiff's claim being based upon part performance, the Associate Justice referred to the relevant authorities, including the High Court decision in Pipikos v Trayans.[24]

18 It was noted the plaintiffs alleged the following acts of part performance, which were said to be unequivocally referrable to the July 2016 agreement. These were:

(a) delivery to the plaintiffs of the executed transfers of land for lots 6 and 7, together with certificates of title;

(b) the discharge of the Corvus mortgage over lot 7; and

(c) the subsequent redelivery of the lot 7 unencumbered title to Mr Atzmon acting as solicitor for Kaye.[25]

19 His Honour noted Huntly's submission that such acts were not taken by the plaintiffs, and there was no evidence that upon receipt of the documents referred to in paragraph [18] above, the plaintiffs released the $3 million debt. [26] It was also noted that Huntly relied upon Mr Morrow's evidence that he released the certificates of title and transfers to Corvus as additional security for its loan, on the basis that Corvus would hold those documents in escrow, to be used in the event of default by Huntly.[27]

20 Having summarised the submissions, the Associate Justice stated that the power to terminate a proceeding summarily, should be exercised with caution, and should not be exercised unless there is no clear question to be tried.[28] Thereafter, the Associate Justice noted there were many inconsistencies in the evidence, including between the accounts contained in the affidavits of Mr Kaye and Mr Morrow.[29] His Honour also noted that some of the affidavit evidence was inconsistent with the documentary evidence. The Associate Justice stated that such inconsistencies should be tested at trial.[30]

21 The Associate Justice expressly held that 'neither party had established that in relation to their case, there is no real question to be tried.'[31]

22 In his conclusion, the Associate Justice stated:

...I have decided that the interests of justice require that both the plaintiffs' claim and Huntly's counterclaim proceed to a full trial on the merits.[32]

23 Accordingly, the Associate Justice dismissed the plaintiffs' summary judgment application and Huntly's summary dismissal application.

24 Huntly's amended notice of appeal alleges eight errors. I will briefly summarise the parties' submissions, and provide my analysis in respect of each ground in turn.

Ground 1 - The Associate Justice erred by holding the Court was not satisfied the plaintiffs claim had no real prospects of success. It was alleged the Court should have found that Huntly did not authorise Mr Clarke to enter into the July 2016 agreement on its behalf.

25 Huntly submitted there were inconsistencies between Mr Kaye's account as to Huntly's involvement in the July 2016 agreement, as was evident in his two affidavits. In Mr Kaye's first affidavit dated 16 November 2022 (the first Kaye affidavit) he did not attest to Mr Clarke acting for Huntly (which was consistent with what Mr Morrow deposed to in his affidavit dated 24 September 2024). Whereas in Mr Kaye's second affidavit dated 17 April 2024 (the second Kaye affidavit) he deposed to Mr Clarke informing him that he acted for both TPC and Huntly. In addition, it was submitted there were different iterations of this agreement as contained in the plaintiffs pleadings. Huntly submitted these inconsistencies were unexplained by the plaintiffs, and were so significant, that the Associate Justice erred for not finding the plaintiffs had no real prospect of success in establishing that Mr Clarke acted for Huntly in reaching the agreement.

26 The plaintiffs submitted that Mr Kaye can be cross-examined on what was in his affidavits. The factual dispute between the parties on this must be resolved at trial, and it cannot be said the plaintiffs have no real prospects of establishing Mr Clarke acted for Huntly in reaching the July 2016 agreement.

27 The degree to which there are variations in the accounts provided by Mr Kaye in his two affidavits is a matter which should be the subject of cross examination at trial. The differences between the affidavits are not so irreconcilable that it can be determined, in the absence of oral evidence, that the plaintiff has no real chance of establishing that Huntly authorised Mr Clarke to enter into the July 2016 agreement on its behalf. Accordingly, there was no error by the Associate Justice in the manner alleged.

Ground 2 - The Associate Justice erred by holding the Court was not satisfied the plaintiffs claim had no real prospects of success, in circumstances where the affidavits of Mr Kaye contained unequivocally contradictory evidence as to the July 2016 agreement

28 Huntly submitted in the first Kaye affidavit, that Mr Kaye described an agreement with Mr Krechichwost, exclusive to any other party, and there was no mention of Huntly. Whereas in the second Kaye affidavit, there is no mention of Mr Krechichwost's involvement. Huntly submitted that such evidence is unequivocally contradictory, and the Associate Justice erred for not holding this meant that the plaintiffs had no real prospect of establishing the July 2016 agreement.

29 The plaintiffs submitted there was no error by the Associate Justice in determining the factual disputes, which pertain to the making of the July 2016 agreement, were to be determined at trial.

30 From the material before me, it is clear that Huntly will have much to cross-examine Mr Kaye on at trial. It is also apparent that there is a vast amount of documentary evidence which the plaintiffs will seek to rely upon to establish an interconnection between Mr Krecichwost, TPC, Foscari, Bilkurra, Corvus and Huntly. The formation of the July 2016 agreement is a matter to be determined at trial, after all the evidence is before the Court, and able to be tested. I reject Huntly's submission that the evidence of Mr Kaye was so unequivocally contradictory, the Associate Justice erred for not finding the plaintiffs had no real prospects of success in establishing the agreement.

Ground 3 - The Associate Justice erred by admitting hearsay evidence from Mr Kaye, which should have been excluded, and further, erred by not finding the plaintiffs had no real prospect of success as they had not produced any admissible evidence of authority given by Huntly to Mr Clarke to negotiate and enter into any agreement on its behalf[33]

31 Huntly submitted the Associate Justice erred for admitting Mr Kaye's evidence (in the second Kaye affidavit) that Mr Clarke had informed Mr Kaye that he was acting for Huntly. Huntly conceded that in an application for summary judgment, pursuant to r 22.04(3), an affidavit in support, 'may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted.'[34] However, it was submitted that as Mr Kaye did not depose to believing the information allegedly provided to him by Mr Clarke, such evidence was not admissible under this rule. It was submitted, in circumstances where such evidence was not in regards to administrative steps relevant to service of the proceeding,[35] but rather was evidence critical to the plaintiffs' claim, the Associate Justice erred for admitting it.

32 Further, Huntly contended that the evidence from Mr Kaye was not admissible under s 62(1) of the Evidence Act 2008 (Vic), as he could not reasonably be supposed to have personal knowledge of how Mr Clarke came to have such authority. Further, as there was no evidence that Mr Clarke was not available to give evidence, the exception to hearsay contained in s 63(2) of the Evidence Act did not apply.

33 In view of the above, Huntly submitted that as the plaintiffs had not adduced admissible evidence from Mr Clarke that he had authority to act for Huntly, the plaintiffs had no real prospect of success in establishing Huntly was a party to the July 2016 agreement. It was alleged the Associate Justice erred in not finding this.

34 In support of this ground, Huntly referred me to the decision of Wheeler J in Westpoint Management Pty Ltd v Goakes,[36] where the rationale for the equivalent rule (within the Western Australia Supreme Court) was explained as follows:

The requirement is an important one for a number of reasons. It reveals the original source of the hearsay information and provides some opportunity to an opponent to counter or to challenge it and it enables prosecution for perjury in a proper case if necessary. Further, in a case such as the present, where a judge or a master hearing such an application may refuse to accept an assertion in an affidavit if it appears inherently incredible or inconsistent with contemporary documents or for a number of other reasons which are well understood, then sources of information and belief assist in the determination of whether the assertion should be accepted. It is not, therefore, a requirement of the Rules which may be ignored in the preparation of such an affidavit.[37]

35 Further, reliance was placed on the Court of Appeal decision in Stoney v A & S Boesley Pty Ltd,[38] where the Court of Appeal held that there had been no error in the consideration of hearsay material on a summary judgment, where the evidence pertained to 'administrative steps'[39] regarding service of the proceeding. It was held that such evidence could have easily been contradicted by evidence from the applicant.

36 The plaintiffs urged me to reject Huntly's attempt to rely upon hearsay rules in the application for summary dismissal, and relied upon s 75 of the Evidence Act. Further, the plaintiffs submitted that it was not necessary for them to lead positive evidence of Mr Clarke's relationship with Huntly. The plaintiffs may ask the Court to draw the necessary inferences of this, from the totality of the evidence following the conduct of the trial.

37 In an application for summary judgment, under r 22.04(3), a plaintiff is able to seek to rely upon a statement of fact contained in an affidavit which is based upon information and belief held by the deponent.

38 The decision in Stoney, is not to be read as stating that critical evidence cannot be admitted under r 22.04(3). Rather, as was expressly noted by the Court, this rule:

... confers a discretion upon a judge to receive hearsay evidence. Whether this discretion should be exercised depends on whether, having regard to all the circumstances, the judge considers that the evidence ought to be permitted. Contrary to the applicant's submission, those circumstances are not confined to evidence of formal matters or matters that are not reasonably in dispute. [40]

39 The second Kaye affidavit contains a statement from Mr Kaye as to the information he obtained following his discussion with Mr Clarke. Whilst Huntly disputes the representation, as a statement of fact, it is not inherently incredible. Further, it is a fact which the plaintiffs may subsequently prove through documents tendered at trial.

40 In addition, s 75 of the Evidence Act provides that, in an interlocutory proceeding, the hearsay rule does not apply if the party who adduces the evidence also adduces evidence of its source. Mr Kaye identified Mr Clarke as the source of this evidence.

41 The Associate Justice did not err for including this evidence in his Honour's consideration of the applications before him. Nor did the Associate Justice err for not finding the plaintiffs had no real prospect of establishing Mr Clarke was authorised to act on behalf of Huntly.

Ground 4 - The Associate Justice erred in not holding that the acts of part performance relied on by the plaintiffs, were:

(a) not acts of Huntly; and

(b) not acts that were unequivocally referable to the performance of the July 2016 agreement.

The Associate Justice should have held the acts relied upon by the plaintiffs did not satisfy the requirements of part performance, and therefore the plaintiffs had no real prospect of success

42 Huntly referred me to the High Court decision of McBride v Sandland,[41] where Isaacs and Rich JJ stated certain elements of part performance were essential to raise the equitable remedy. Relevant to this appeal, this included:

(i) the act relied upon must be unequivocally in its own nature, referrable to the alleged agreement. That is, it must be such that it was done with no other view than to perform that agreement; [42] and

(ii) the act must have been done by 'the party relying on the faith of the agreement, and further the other party must have permitted it to be done on that footing.'[43]

43 Huntly also relied upon the more recent High Court decision in Pipikos, and in particular statements by Gordon and Nettle JJ, that for a plaintiff to rely upon the doctrine of part performance, the plaintiff must establish that the acts of part performance 'are equivocally and in their own nature referrable to some such agreement as that alleged.'[44]

(a) There was no evidence that Huntly authorised the delivery of the certificates of title and signed transfers to the plaintiff's solicitor, Mr Atzmon.

(b) On 15 November 2017, Corvus wrote to Huntly, and requested Mr Morrow re-sign blank transfer forms for the lots of land created under the subdivision of the Bendigo land (as the previous ones had an error with the title reference) to be held in escrow, in the event of default on the loan.

(c) There is no evidence that the plaintiffs have released and discharged the debt owed to Consult by TPC.

45 Therefore, Huntly submitted that applying such matters to the principles stated in McBride and Pipikos, the Associate Justice erred in not holding the plaintiffs' claim based on part performance of the July 2016 agreement, had no real prospect of success.

46 The plaintiffs submitted there was no such error by the Associate Justice, and relied upon the following acts of part performance (and related correspondence):

(a) on 20 November 2017, the certificates of title for Lots 6 and 7, and signed transferred for those lots, were delivered by Mr Grochowski, to Mr Atzmon;

(b) on 6 March 2019, Corvus' solicitors Bransgroves, emailed Mr Atzmon and stated that the title for Lot 7 'has been transferred to your client' and the Corvus mortgage was to be discharged;

(c) on 18 March 2019, Mr Atzmon delivered the Lot 7 title to Bransgroves;

(d) on 4 April 2019, the Corvus mortgage over Lot 7 was discharged; and

(e) on 10 April 2019, Bransgroves delivered the unencumbered Lot 7 title to Mr Atzmon.

47 The plaintiffs submitted that, prior to the introduction of the PEXA system, such acts would have enabled the plaintiffs to have become registered proprietors. It was put that such acts were unequivocally referrable to the July 2016 agreement, and the Court should be satisfied that Mr Grochowski delivered the documents to Mr Atzmon as an agent of Huntly. Further, it was put that the failure by Huntly to complain about the delivery of such documents to Mr Atzmon, 'speaks volumes'.

48 The plaintiffs contended that, given the apparent close relationships between Mr Morrow, Mr Krecichwost and Mr Clarke, together with Huntly, Corvus and Abovo, it would be perverse to dismiss the plaintiffs' claim on the basis that the identified acts of part performance were not relevant acts of Huntly.

49 In closing submissions, Mr Galvin stated there was no need for the plaintiffs to execute a written document to evidence the discharge of the $3 million debt. It was stated that part of the July 2016 agreement was that the debt would be discharged, and Mr Galvin stated '[i]t is discharged.'

50 As the July 2016 agreement was an oral transaction involving land, it is not actionable, save under the equitable remedy of part performance. Whether or not there have been acts of part performance sufficient to justify equitable relief, involves findings of fact, which need to be applied to the relevant legal principles, as most recently outlined in Pipikos.

51 Huntly disputes it caused the certificates of title and blank transfer documents to be delivered to the plaintiffs' solicitor. However, if the plaintiffs are able to establish, that Mr Grochowski's act of delivering these documents in November 2017, was authorised by Huntly, it is open for the Court to find that this was an act of part performance by Huntly, that is unequivocally referrable to the July 2016 agreement.

52 In addition, the plaintiffs contend that pursuant to the July 2016 agreement, in March 2019 Mr Atzmon, sent the certificate of title for Lot 7 to Bransgroves. Then, after the Corvus mortgage was discharged, in April 2019, the unencumbered title was subsequently returned to Mr Atzmon. It is open for the trial judge to find this an act of part performance by the plaintiffs, that is unequivocally referrable to the July 2016 agreement.

53 It may also be open to the trial judge to consider whether the failure by Huntly to complain about, and not seek the return of the certificates of title and blank transfers, was an act of part performance by Huntly. Alternatively, whether Mr Atzmon holding such documents for an approximate 18 month period was an act of part performance by the plaintiffs.

54 The apparent unexplained delivery of certificates of title, and blank transfer documents to the plaintiffs' solicitor is most unusual. There are a multitude of people and corporate entities involved in what both counsel conceded was factually complicated dealings. Who was authorised to do what, and by whom, is presently unclear. Given the complex questions of fact and law relating to this aspect of the plaintiffs' claim, Huntly has failed to satisfy me that the Associate Justice erred in not concluding the plaintiffs' case in respect of part performance has no real prospects of success.

Ground 5 - The Associate Justice erred in not holding the inconsistency between the terms of the July 2016 agreement and the contract of sale for the Bendigo land between TPC and Huntly renders the July 2016 agreement unenforceable

55 Huntly submitted that that the July 2016 agreement is a collateral contract to the main contract - which was the sale of the entire parcel of Bendigo land (not just Lot 6A and Lot 7), with Huntly to pay TPC the sum of $6,050,000. When a collateral contract is made between parties who are parties to the main contract, the collateral contract must not be inconsistent with the main contract.[45]

56 In its pleading, the plaintiffs allege that a term of the July 2016 agreement was that Huntly agreed to purchase the Bendigo land. However, Huntly submitted that the additional alleged term that Huntly would transfer Lots 6 and 7 from the proposed plan of subdivision, was inconsistent with the term of the main contract that Huntly agreed to buy the whole of the Bendigo land. Further, it was noted that in terms of the contract of sale between TPC and Huntly, there was a clause in which TPC warranted that it would, at settlement, hold an unencumbered estate in fee simple in the Bendigo land, not just part of it.

57 The plaintiffs deny that the terms of the July 2016 agreement are inconsistent with the contract of sale between TPC and Huntly. The plaintiffs submitted the subject matter of the July 2016 agreement were two lots on a proposed plan of subdivision, whereas the contract of sale concerned the Bendigo land. Further, the plaintiffs contended the factual basis for Huntly's contention of alleged inconsistency was lost when the plan of subdivision was registered on 20 June 2017 and the Bendigo land therefore ceased to exist.

58 It is clear that there is a factual dispute between the parties as to the existence of the July 2016 agreement, and its terms. On the plaintiff's case, the subject matter of the July 2016 agreement is Lots 6 and 7, in anticipation of the proposed plan of subdivision. Therefore, if accepted, the terms of the July 2016 agreement are not inconsistent with the sale of the Bendigo land.

59 Given the complex questions of fact and law relating to this aspect of the defendant's defence, Huntly has failed to satisfy me that the Associate Justice erred in not concluding the July 2016 agreement was unenforceable as it was inconsistent with the contract of sale of the Bendigo land.

Ground 6 - The Associate Justice erred in not holding the failure to specify a price for Lots 6A and 7 renders the July 2016 agreement void for uncertainty

60 Huntly submitted the July 2016 agreement must also fail for uncertainty - alleging that it failed to include an essential term, being the price for Lots 6 and 7. That is, if the plaintiffs have no viable argument to deal with the lack of any term regarding the price of those lots, then they have no real prospects in respect of the claim.

61 The plaintiffs deny the July 2016 agreement is void for uncertainty. It was submitted that in the second Kaye affidavit, Mr Kaye deposed that after weeks of negotiations, he reached an agreement with Mr Krecichwost and/or his nominee to purchase the debt owed to BQM and take an assignment of its mortgage over the Truganina land, in consideration for payment of $3 million. It was further contended that as TPC could not pay that sum of money, it was agreed that Huntly would convey Lot 6 and Lot 7 once the Bendigo land was subdivided, in lieu of $3 million. Further, the plaintiff submitted there was no dispute that a sum of $6,050,000 was payable under the contract of sale. The plaintiffs contended that once again, Huntly had not identified any error by the Associate Justice in the exercise of his discretion, and this was simply a complaint that his Honour had not acceded to Huntly's submission.

62 On the plaintiffs' case, the Bendigo land was to be sold to Huntly for $6,050,000, and under the July 2016 agreement, upon completion of the subdivision, Huntly was to transfer Lots 6 and 7 to Consult, in lieu of the $3 million owed to Consult by TPC. As is apparent, Huntly disputes this.

63 Whether or not the July 2016 agreement exists, and if so, whether its terms, including the price of the land, are sufficiently certain, are matters to be determined on the whole of the evidence. Huntly has failed to satisfy me the Associate Justice erred in not holding the plaintiffs' claim had no real prospects of success on the basis that there was no term regarding the price of the lots the subject of the 2016 agreement.

Ground 7 - The Associate Justice erred by improperly invoking s 64 of the CPA, without first determining the plaintiffs' claim and defence to Huntly's counter claim had no real prospects of success

Ground 8 - The Associate Justice erred for exercising his powers under s 64 of the CPA without first hearing from the parties in respect of this section, and its operation in the application before him

64 Huntly submitted that the Associate Justice erred in holding that despite not being satisfied that the plaintiffs claim had no real prospect of success, it was in the interests of justice to require the claim to proceed to a full trial on the merits. It was submitted that his Honour erred by improperly invoking s 64 of the CPA without determining, first, that the claim and defence of the plaintiffs had no real prospect of success. It was put that the power to make any order under s 64, can only be exercised in circumstances where the Court first holds that the plaintiffs' claim has no real prospect of success. If so satisfied, the Court is then obliged to consider the discretion under s 64.[46] Further, the power should be exercised either where it is not in the interests of justice to dispose of the claim summarily, or the dispute is of such a nature that only a full hearing on the merits is appropriate, with reasons being given for adopting either view.

65 Huntly submitted that his Honour did not decide the matter under s 63 of the CPA, before invoking, and applying s 64. Reference was made to the following part of the Reasons:

... I am not satisfied that the plaintiffs' defence to Huntly's crossclaim has no real prospect of success. The plaintiffs' defence relies on its claim that the contract of sale of the Bendigo Land was entered into in pursuance of the July 2016 Agreement. The inconsistencies in the evidence referred to above, necessarily also apply to Huntly's crossclaim. Accordingly, the interests of justice require both the claim and crossclaim to proceed to a full trial on the merits.[47]

66 Further, Huntly submitted that before considering his Honour's discretion under s 64 of the CPA, the Associate Justice was obliged to accord the parties natural justice, and allow them to be heard on this. However, it was submitted that neither party had raised the operation of s 64 in the summonses filed, and neither party made submissions to the Associate Justice as to why, in the alternative, this section ought be invoked to require the proceeding to progress to trial.

67 These two grounds misconceive the Reasons. The Associate Justice made it clear, that Huntly had failed to satisfy his Honour that the plaintiffs' claim had no real prospects of success. Therefore, the Associate Justice was never required to, and did not, consider s 64 of the CPA. The phrase 'in the interests of justice' is not unique to s 64 of the CPA, and it was not erroneous of the Associate Justice to use this phrase in providing reasons for his discretionary decision.

68 When the Reasons are read as a whole, Huntly has failed to satisfy me that the Associate Justice erroneously exercised his Honour's powers under s 64. It follows from this that the Associate Justice did not deny the parties procedural fairness, as his Honour never came to consider this section of the CPA. For those reasons grounds of appeal 7 and 8 must also fail.

69 Huntly has failed to satisfy me there was any error on the part of the Associate Justice. I therefore dismiss the appeal.

70 In view of the above, it is not necessary for me to consider the plaintiffs' application to rely upon fresh evidence in this appeal.

71 I will hear from the parties as to the form of orders.

[1] Lot 1 on plan of subdivision 827028R, being the land referred to in certificate of title volume 12196 folio 081 (and formerly known as Lot 6 on PS730853W).

[2] Lot 7 on plan of subdivision 730853W, being the land referred to in certificate of title volume 11891 folio 026.

[3] On 24 March 2020, Lot 6 was further subdivided into 2 lots of land, which the parties referred to as Lot 6A and Lot 6B.

[4] Instruments Act 1958 (Vic) s 126(1). Further, no interest in land can be disposed of except by writing, see Property Law Act 1958 (Vic) s 53.

[5] Bagshot Investments Pty Ltd v Huntly Property Holdings Pty Ltd [2025] VSC 16 ('Reasons').

[6] Reasons (n 5) [9]-[29]. Defined terms, which I adopt in this judgment, are bolded.

[7] Pursuant to Supreme Court Act 1986 (Vic) s 17(3); and Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 77.06 ('Rules').

[8] Oswal v Carson [2013] VSC 355, [11], citing Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194, 203-4 [14].

[9] Fox v Percy (2003) 214 CLR 118, 126 [25].

[10] Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679, 686-7 [43]. See also Lee v Lee [2019] HCA 28; (2019) 266 CLR 129, [55].

[11] Yin v Wu (2023) 73 VR 21, [61] ('Yin').

[12] (1936) 55 CLR 499.

[14] Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513, 519-520, 537_; Australian Coal and Shale Employees' Federation v Commonwealth_ [1953] HCA 25; (1953) 94 CLR 621, 627-628_._

[15] Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27, [29], [35] ('Lysaght').

[17] Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118, 132 [26].

[18] Civil Procedure Act 2010 (Vic) s 64(a) ('CPA').

[19] Ibid s 64(b).

[20] De Saram v Brown [2015] VSCA 142, 37 [156]; Manderson M & F Consulting (A Firm) v Incitec Pivot Ltd [2011] VSCA 444; (2011) 35 VR 98, 108 [34].

[21] As set out at paragraph [9] above.

[22] Reasons (n 5) [30]-[36], citing CPA (n 18) ss 61, 62, 63; Lysaght (n 15) 40 [35].

[23] Reasons (n 5) [37], citing Transfer of Land Act 1958 (Vic) s 90(3); Giurina v Greater Geelong City Council [2023] VSCA 148, [15] (Osborn & Kaye JJA).

[24] [2018] HCA 39; (2018) 265 CLR 522.

[28] Ibid [68], citing Lysaght (n 15) 40 [35].

[33] On the first day of the appeal, Huntly was given leave to file an amended notice of appeal, dated 8 August 2025, which detailed these alleged errors.

[35] Stoney v A & S Boesley Pty Ltd [2014] VSCA 237 ('Stoney').

[36] [2002] WASCA 317.

[40] Ibid [67]. Noting that at the relevant time, the equivalent rule was r 22.03(3) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

[41] (1918) 25 CLR 69.

[45] Hoyt's Pty Ltd v Spencer [1919] HCA 64; (1919) 27 CLR 133.

[46] Yin (n 11_)_ 66 [136]-[137]; Attalla v YVAM Surrey Hills Ltd [2025] VSC 61, [19]-[20].