Hopkins v Australia and New Zealand Banking Group Limited & Anor

Background facts and affidavit evidence

1. The parties were in substantial agreement as to the background facts as set out in ANZ's written submissions in reply. Mr Hall, solicitor, who appears for Mrs Hopkins, confirms those background facts are common ground with two qualifications which I will address below. I now set out those background facts, but also extend the narrative by reference to the affidavit evidence and documents on which the parties relied in the proceedings. ANZ did not allege that there was conscious wrongdoing on the part of Mrs Hopkins or a lack of good faith on her part in the events to which I refer below and I proceed on the basis that no such allegation is made.
2. By way of background, ANZ advanced funds to Mr and Mrs Hopkins, including a home loan for $980,000 and other funds to entities associated with Mr Hopkins, in April 2013, and Mrs Hopkins provided guarantees in respect of the relevant facilities. It appears that Mrs Hopkins had the benefit of both independent legal advice and independent financial advice in relation to those arrangements.
3. There is a significant amount of evidence as to the value of the property, albeit obtained some time prior to the sale process, but broadly consistent with offers made in the course of the sale process to which I refer below. A letter dated 22 February 2016 from Newton Real Estate, which was ultimately retained to conduct the sale of the property, provided a market appraisal of the property in the vicinity of $3,300,000 to $3,600,000 (Ex A1, 479). A letter from another real estate agent dated 18 February 2016 estimated the market value of the property as $3,300,000 to $3,500,000 (Ex A1, 478). By a valuation dated 1 March 2016 (Ex A1, 480), Herron Todd White Residential valued the land at $2,100,000 and the improvements at $1,100,000 for a total value of $3,200,000 for the property. That valuation noted that: "We note that on the day of inspection there were extensive damage [sic] to seawall (advised repairs in the vicinity of $150,000 to $250,000). We are not qualified building inspectors and the exact cause of this is unknown. We recommend a building inspection be carried out. Should there be any detrimental findings we reserve the right to review our valuation. As instructed this valuation has been conducted on an "as is" basis."
4. On 6 June 2016, Mrs Hopkins commenced proceedings against ANZ and other parties regarding a mortgage held over the property. On 14 September 2016, ANZ filed a Cross-Claim in the proceedings seeking, inter alia, orders for possession of the property. On 28 April 2017 the parties, with their legal advisers, attended a mediation. That mediation was successful and the parties executed the Settlement Terms (Wells 19.9.17, Annexure F). Paragraph 1 of the Settlement Terms provided that, ANZ, without admission, was to pay Mrs Hopkins three amounts in settlement of the proceedings. The first amount of $30,000 was payable within 14 days and it appears that amount was paid by ANZ. Paragraph 1(ii) of the Settlement Terms provided for a second amount of $120,000 to be payable to Mrs Hopkins on exchange of contracts for the sale of the property "on terms reasonably acceptable to ANZ and in accordance with paragraph [4] below" of the Settlement Terms. A third amount of $150,000 was payable on completion of the sale of the property which has not occurred.
5. Paragraph 4 of the Settlement Terms in turn provided that: "[Mrs Hopkins] agrees to exchange contracts for the sale of the [p]roperty in accordance with paragraph 1(ii) above on or before 1 September 2017 and that if she has failed to do so by that time to grant vacant possession of the [p]roperty to ANZ and hereby consents to a writ of possession being granted to ANZ at that time for the purposes of ANZ selling the [p]roperty as mortgagee in possession."
6. The combined effect of paragraphs 1(ii) and 4 of the Settlement Terms was therefore that Mrs Hopkins agreed to sell the property on terms reasonably acceptable to ANZ by the specified date and, if she did not do so, agreed to grant vacant possession of the property to ANZ and consented to a writ of possession. On its face, those paragraphs operated sensibly, so that Mrs Hopkins would have a first opportunity to sell the property for herself and avoid any discount associated with a mortgagee sale, and assumed the risk of achieving a sale of the property on terms that were reasonably acceptable to ANZ by the specified date, and ANZ was permitted to sell the property as mortgagee in possession, if Mrs Hopkins failed to achieve any sale or failed to achieve a sale on terms that were reasonably acceptable to ANZ by the specified date.
7. By paragraph 5 of the Settlement Terms, Mrs Hopkins agreed not to dispute ANZ's entitlement to $3,309,156.05 plus interest out of the proceeds of sale of the property. That amount, together with the payments totalling $300,000 to Mrs Hopkins contemplated by paragraph 1 of the Settlement Terms, would likely exhaust the value of the property, on the most optimistic of the valuations and market appraisals obtained for it. Paragraph 6 of the Settlement Terms provided that any sale contract for the property would require the purchaser to lodge a 10% deposit with ANZ's solicitors and permitted ANZ to retain that deposit if the sale did not proceed unless the purchaser validly rescinded or terminated the contract, in partial payment of the debt owed to ANZ. Mrs Hopkins relies on that paragraph, so far as one potential purchaser, Mr Stubbs, had made an offer contemplating a smaller deposit. It is not necessary to address that matter given the conclusions that I reach on other grounds below.
8. By email dated 12 July 2017, an offer was made on behalf of Mrs Sio to purchase the property at a price of $3.2 million with a settlement period of six weeks, on the basis that the contract would be signed before Friday as Mrs Sio was leaving the country then, and she could not stand by the offer if she could not sign by then (Ex A2, 47). It appears to be common ground that that offer by Mrs Sio was subsequently increased to $3,250,000. By a text message sent on 13 July 2017, Mr Stubbs confirmed an offer of $3.3 million to purchase the property with an eight week settlement (Ex A2, 48). A sales advice dated 19 July 2017 (Ex A2, 49) recorded a sale of the property from Mrs Hopkins to Mr Stubbs and his partner for the amount of $3,300,000, with an eight week settlement (Ex A2, 49). It appears that, despite that sales advice, the auction was nonetheless scheduled to proceed on 27 July 2017, until it was cancelled by the real estate agent and auctioneer in the circumstances to which I refer below.
9. Correspondence between Mr Hall, who had then commenced to act for Mrs Hopkins, and ANZ's solicitors took place prior to the auction, which did not proceed, and the sale of the property to Mr Beckett. By email dated 21 July 2017 (Ex A1, 456), Mr Hall advised ANZ's solicitors that: "I understand the terms provide for auction sale under contract acceptable to [ANZ]. The property is to be sold at auction and [ANZ] is required to be satisfied with the contract of sale under the terms of the orders. Your firm is to then hold the deposit." That email requested ANZ's solicitor to review the annexed contract and noted that the auction was to be held on 29 July 2017. That email proceeded on the basis that the sale was by auction. A further email dated 22 July 2017 corrected the auction date to 27 July 2017 (Ex A1, 455), but did not raise any possibility of sale other than by auction.
10. On 22 July 2017, Mr Hall also sent an email to the real estate agent handling the sale of the property which required that a disclosure statement be issued to prospective purchasers (Ex A2, 55). That document is headed "Notification" and stated, inter alia, that the seawall separating the property from the nearby seabed owned by Sylvania Waters Limited ("SWL") had failed; that Mrs Hopkins intended to sell the property "with the benefit of a contract to replace and rebuild the [s]eawall" (although, I interpolate, the evidence as to any such contract is, at best, incomplete); that approval of the seawall contract was conditional on SWL issuing its consent; that the successful bidder for the property must acquire shares in SWL in order to obtain the benefits pertaining to the use or construction of a pontoon or other ancillary devices upon the adjacent waterway; and that: "[Mrs Hopkins] and at the request of SWL whose solicitors are [named firm], and who also act for [named person], (the owner of [adjoining property] and a director of SWL), have advised [Mrs Hopkins] [sic] to disclose to intending purchasers that: ● As at 31 [M]arch 2017, SWL is owed $66,000 with an ongoing accrual of $11,000 per month penalty fees for encroachment of [Mrs Hopkins'] seawall following its collapse into the sea bed; ● SWL will approve of structural replacement of the seawall by a contractor whose fees are approximately $500,000; ● [the neighbour] seeks to bring claims against the registered proprietor concerning allegations of damages to his lands in the sum of $329,238 plus GST and $493,061 plus GST, a total of $822,299.82 plus GST. [Mrs Hopkins] states that she denies these claims. Aspects of these claims may limit opportunity to acquire or exercise rights in respect of the SWL share capital and immediate commencement of reconstruction works concerning the seawall will be required. Intending purchasers will be required to sign an acknowledgement of receipt of this form."
11. I asked Mr Hall, in the course of his submissions, to identify the basis on which a purchaser of the property would assume any liabilities of Mrs Hopkins referred to in that disclosure statement, for example in respect of claims relating to the prior encroachment of the seawall, or for damage to the neighbour's property occurring while the property had been owned by Mrs Hopkins. Mr Hall was unable to do so, although he referred to the possibility that SWL would seek to impose conditions upon the transfer of a share to the purchaser of the property. Mr Hall also referred, later in submissions, to the fact that, contrary to the information provided in the disclosure document, SWL and the neighbour had subsequently accepted that no liability would be assumed by a purchaser of the property. It is ultimately not necessary to determine the accuracy or otherwise of this document for the purposes of this application, since ANZ and its solicitors had not approved a sale going forward on the basis of a disclosure in that form.
12. By letter dated 24 July 2017, Mr Stubbs' solicitors asked whether the vendor would accept a 5% deposit on exchange of contracts and requested certain information in respect of the property and legal proceedings in respect of it (Ex R3, 20).
13. A further email from Mr Hall dated 26 July 2017 to ANZ's solicitors followed up on comments on the sale contract from ANZ's solicitors and confirmed that: "we will proceed with the auction in the normal course, at the advertised time."
14. An email dated 27 July 2017 from ANZ's solicitors attached amendments required by ANZ to the special conditions of the contract for sale, indicated that ANZ's solicitors were preparing an additional special condition that would allow ANZ to complete a sale if Mrs Hopkins was unable to do so and stated that: "We note that the damage to the seawall as identified in the attached letter from RMB Lawyers which was provided to ANZ by [Mrs Hopkins' previous lawyers] should also be specifically disclosed in the contract for sale." That email refers to a letter dated 9 October 2015 from RMB Lawyers, who acted for SWL, which referred to the collapse of the seawall in respect of the property; noted that SWL understood that it would be an "expensive process to repair and reinstate the seawall to a satisfactory condition"; noted that SWL had made suggestions for temporary works pending permanent rectification works; and threatened the commencement of proceedings in the Supreme Court of New South Wales for orders that works be undertaken. That letter did not identify the particular claims referred to in the disclosure made by Mrs Hopkins to which I refer in paragraph 13. That email also requested, inter alia, confirmation of the reserve price for the auction and the number of registered bidders and requested that Mr Hall let ANZ's solicitors know if there had been any expressions of interest or offers received by Mrs Hopkins to date (Ex A1, 454).
15. Mr Hall responded, by email dated 27 July 2017, that he had the letter of RMB Lawyers which he would "raise with the agent to disclose in the contract". At that point, Mr Hall had previously provided the disclosure statement noted above to the real estate agent to be provided to purchasers. I note, for completeness, that Mr Hall refers in his written submissions to a subsequent letter dated 26 May 2016 from another firm of solicitors acting for SWL and the owner of the neighbouring property; however, disclosure by reference to that letter does not seem to have been discussed between the parties at the relevant time and I need not address whether it could have been made, had that letter been drawn to ANZ's solicitors' attention. By that email, Mr Hall also reconfirmed that "[t]he sale is intended to proceed at the auction" and stated that "[t]here is buyer interest from what I am told"; stated that disclosure was made of the claims by SWL and the owners of the neighbouring property on 22 July 2017, although he did not provide ANZ's solicitors with the form of that disclosure; and stated that, since he had been retained, "no specific offers have been made". That statement was perhaps strictly correct, but significantly incomplete, so far as offers had been made by both Mr Stubbs and Mrs Sio prior to Mr Hall's engagement; it appears that a sales advice had previously been issued to Mr Stubbs; and Mr Hall had been advised by the estate agent at least by 3pm on 27 July 2017 of the two previous offers (Ex A2, 66), prior to his response to ANZ's solicitors that did not refer to those offers.
16. By a further email sent on 27 July 2017, ANZ's solicitors requested a complete copy of the amended contract of sale for their records. Mr Hall submits that that correspondence amounted to consent to the terms of the sale. I do not accept that submission, where that correspondence is silent as to price, which was an essential term of the sale. Even if, contrary to my view, that correspondence amounted to consent, that consent was plainly given on the basis that, first, the property would be sold at auction and, second, disclosure would be made in the form of the letter from RMB Lawyers, and did not amount to ANZ's consent to a sale price achieved by a "straw poll" conducted without the assistance of a real estate agent, from which at least one potential buyer was excluded, and on the basis of a different form of disclosure that had not been made available to ANZ or its solicitors.
17. On the afternoon of 27 July 2017, the real estate agent acting on the sale of the property advised Mr Hall that he expected two buyers to potentially bid for the property at the auction, being Mr Stubbs who had made the offer in the amount of $3,300,000 and Mrs Sio who had made an offer of $3,250,000. Later that afternoon, Mr Hall advised the real estate agent that Mrs Hopkins was concerned that Mr Stubbs was "colluding with the neighbour to reduce the price of the property" and that Mrs Hopkins required that only buyers approved by her should be able to bid at the auction. The real estate agent responded, sensibly enough, that a reserve price could be put in place at the auction to stop the property being sold for a price that Mrs Hopkins was not happy with and, if the property was not sold at auction, the agent could negotiate with interested buyers afterwards to come to a mutually acceptable price. Mr Hall instead pressed Mrs Hopkins' requirement that only buyers approved by Mrs Hopkins would be able to bid at the auction. Neither the real estate agent nor the auctioneer was prepared to proceed with an auction on that basis and the auction did not proceed.
18. ANZ describes those events in its written reply submissions as follows: "On 27 July 2017 the property was due to be auctioned however shortly before the auction was due to commence Mrs Hopkins['] solicitor advised the estate agents that certain parties would not be permitted to bid at the auction and that the agents were not to allow any bidders to be registered unless approved by Mrs Hopkins." Mr Hall takes issue with that formulation of those events and submits that, although that advice was given, Mrs Hopkins took that position on account of persons seeking to acquire the property at undervalue. I do not accept that submission, and it seems to me that ANZ's account of the facts is correct. So far as Mrs Hopkins sought to exclude a particular bidder, Mr Stubbs, from purchasing the property, his offer was not at "undervalue", although he sought to impose particular terms as to the discharge of a claim to which I will refer below, and exceeded the amount offered by Mr Beckett by a substantial margin.
19. In its written reply submissions, ANZ then refers to the auctioneer having refused to conduct the auction under the conditions required by Mrs Hopkins and cancelled the auction. Mr Hall seeks to correct that submission, on the basis that the auctioneer refused to conduct the auction where parties were seeking to acquire the property at undervalue. It seems to me that ANZ's submission is correct, so far as the auctioneer in fact refused to conduct the auction because of his concern as to the conditions required by Mrs Hopkins, although it is also correct that the auctioneer appears to have been concerned that those conditions were calculated to create a position where the property was sold at a lower rather than a higher price. There is therefore some force in Mr Hall's submission, but only if it is understood as referring to a risk that persons approved by Mrs Hopkins might acquire the property at undervalue, in circumstances that persons not approved by Mrs Hopkins and prepared to pay a higher price for it had not been permitted to bid for it.
20. It is common ground that, after the auction was cancelled, Mrs Hopkins exchanged contracts for the sale of the property to her son-in-law, Mr Beckett, for a sale price of $1,008,000 and that that amount was more than $2 million less than appraisals and valuations for the property obtained by Mrs Hopkins and ANZ prior to the exchange of contracts.
21. It is also common ground that, on 28 July 2017, Mr Hall (who acted for Mrs Hopkins in the sale of the property, as well as in this application) sent a copy of the contract for sale of the property between Mrs Hopkins and Mr Beckett to ANZ's solicitors. By letter dated 2 August 2017 (Ex A1, 460) ANZ's solicitors advised Mr Hall that the terms of the sale contract with Mr Beckett were not "reasonably acceptable" to ANZ on the basis, inter alia, that the price was more than $2 million less than Mrs Hopkins' estimate of the value of the property as communicated by her and/or on her behalf to ANZ and its solicitors, what ANZ understands the value of the property to be and the agent's estimate of the value of the property; referred to advice previously given by Mrs Hopkins that she had received an offer to purchase the property for $2,600,000; and noted that ANZ was not provided with a copy of the suggested "vendor disclosure statement", which made disclosures about the property that were not disclosed to ANZ, and which would not have been approved by ANZ had it been provided to it. That letter indicated that ANZ was not prepared to discharge the mortgage over the property upon receipt of the surplus proceeds of sale it would receive from a sale of the property at the specified price.
22. The parties relied on several affidavits. By agreement between the parties, no objection was taken to those affidavits; no witnesses were cross-examined; and no point was taken in respect of any failure to put a matter to a witness in cross-examination, by reference to the principle in Browne v Dunn (1893) 6 R 67. It was common ground that the parties retained the ability to make submissions as to the weight to be given to the affidavit evidence.
23. ANZ relied on the affidavit dated 4 September 2017 of Mr Ian Marsden, who is a solicitor employed by ANZ's solicitors. Mr Marsden set out the history of the proceedings and also referred to the loan and guarantee facilities arrangements between ANZ, Mrs Hopkins and her former husband which gave rise to the proceedings. Mr Marsden also referred to the mediation between the parties on 28 April 2017, the execution of the Settlement Terms and subsequent communications with Mrs Hopkins' legal representatives, initially another firm and subsequently Mr Hall. Mr Marsden also gave evidence of valuations and market appraisals of the property, in the range of $3.2 million-$3.6 million, by contrast with the amount of $1,008,000 for which it was sold to Mr Beckett.
24. ANZ also relies on the affidavit dated 19 September 2017 of Mr David Newton, who is a director of the real estate agency that was engaged by Mrs Hopkins to sell the property. I have referred to aspects of Mr Newton's evidence in setting out the factual background above. ANZ also relies on Mr Stubbs' affidavit dated 19 September 2017, which refers to his offer to purchase the property for $3.3 million; to initial advice that that offer would be accepted; to his attendance to register for the auction and bid for the property and to the real estate agent's advice that Mrs Hopkins would not permit him or other purchasers not approved by her to be registered and that the auction would not proceed and that negotiations would subsequently take place at the property. Mr Stubbs' evidence is that he then attended the property, knocked at the door for an extended period and could see and be seen by persons inside, but was not admitted. Mr Stubbs' evidence is that he is still interested in purchasing the property and will make an offer or bid to purchase the property if it is listed for sale again.
25. ANZ also relies on the affidavit dated 19 September 2017 of Mr Wells, a Manager in its Lending Services Division. Mr Wells' evidence, on information and belief from Mr Marsden, is that ANZ's solicitors were not informed of the disclosure statement that Mrs Hopkins proposed to attach to the contract for the sale of the property and ANZ would not have consented to that form of disclosure. Mr Wells' evidence is that Mrs Hopkins and her solicitor also did not advise ANZ of Mr Stubbs' offer to purchase the property, to which I have referred above. Mr Wells sets out reasons why the sale of the property to Mr Beckett for a price of $1,008,000 is not acceptable to ANZ namely that: "(a) The sale price of the [p]roperty ($1,008,000) was approximately $2,200,000 below the valuation obtained by ANZ for the [p]roperty on 1 March 2016; (b) The valuation report obtained by ANZ on 1 March 2016 took into account the damage to seawall at the [p]roperty; (c) The sale price of the [p]roperty was approximately $2,300,000 to $2,600,000 below the market appraisals for the [p]roperty obtained by Mrs Hopkins in February 2016 and provided to ANZ; (d) The purported sale was to Mrs Hopkins' son-in-law; (e) The Contract included the [disclosure statement as set out in paragraph 13 above]; and (f) ANZ was not informed of the offer by Mr Stubbs to purchase the [p]roperty for the sum of $3,300,000 or his request to pay a 5% deposit which would have been acceptable to ANZ."
26. ANZ also relies on a further affidavit dated 16 October 2017 of Mr Wells, which annexes a market appraisal dated 18 February 2016 for the property indicating a likely sale price of between $3,300,000 and $3,500,000; an affidavit of Mr Marsden dated 16 October 2017 which confirms that he was not advised by Mrs Hopkins, her solicitor or any other person on her behalf of the fact that she intended to attach the disclosure statement (referred to in paragraph 13 above) to the contract for sale or of Mr Stubbs' request to pay a 5% deposit on the purchase of the property; and an affidavit of Ms Kimberley Wells sworn 16 October 2017 which refers to the circumstances in which market appraisals for the property were previously provided by Mrs Hopkins to ANZ.
27. Mrs Hopkins in turn relies on several affidavits that she has sworn and on an affidavit of her son-in-law, Mr Beckett. By her first affidavit sworn 14 September 2017, Mrs Hopkins refers to the contract for the sale of the property to Mr Beckett; the circumstances of her and her former husband's dealings with ANZ; to Mr Stubbs' involvement with the business that carries on seawall construction within the Sylvania Waters Estate; to a special condition requested by Mr Stubbs, in response to the disclosure statement provided by Mrs Hopkins, seeking to require that amounts payable to SWL be paid on completion; to the circumstances of the auction; and to her having called an extraordinary general meeting of SWL in respect of matters relating to her share in that company.
28. By her second affidavit dated 9 October 2017, Mrs Hopkins refers to proceedings which she has commenced in the Corporations List against SWL and to the circumstances in which the disclosure statement referred to in paragraph 13 above was provided to intending purchasers of the property. Mrs Hopkins again refers to the special condition required by Mr Stubbs in respect of the sale of the property and indicates she would not have agreed to that condition and also refers to correspondence between Mr Stubbs' solicitors and Mr Hall, and gives evidence (by way of submission) that: "I say that if the issue of price is the issue that is unacceptable to [ANZ], then I seek that [Mr Beckett] be provided the opportunity to acquire the property under contract at the price as, in the opinion of the Court, is a price that in the circumstances should have been reasonably acceptable to the ANZ on the 27 July 2017."
29. Mrs Hopkins also refers to the fact that she has not been advised of a price that is acceptable to ANZ, below which the property was not to be sold. It seems to me that it is not necessary for ANZ to have determined the price that would be acceptable to it in order to determine that a proposed sale of the property to Mr Beckett at a price of $1,008,000, in the circumstances set out above, is not acceptable to it.
30. Mrs Hopkins also gives further evidence as to the circumstances as to the previous dealings between her, her former husband and ANZ. Mrs Hopkins' evidence is also that: "Alternatively to the orders that [ANZ] claims, I am content to have my statement of claim reinstated and to litigate my action which I commenced as plaintiff against [ANZ], and on the basis that I say that if the issue of price is now raised as the basis as to why the contract is not on terms acceptable to [ANZ], but in circumstances where [ANZ] has never specified a price acceptable to [ANZ], then there is and was no settlement because it would appear that [ANZ] was always free to avoid it." Mr Hall rightly accepted, in his oral submissions, that the reference to a price that is "reasonably acceptable" to ANZ in the Settlement Terms establishes an objective standard, and therefore does not have the consequence that ANZ was free to avoid the Settlement Terms by, for example, not reasonably accepting a price reasonably achieved on a sale of the property.
31. Mrs Hopkins also responds, at some length, to the affidavit evidence led in ANZ's case. Mrs Hopkins' evidence is, inter alia, that Mr Wells does not respond to the claims made in her Statement of Claim. It seems to me that it was not necessary for Mr Wells to do so, where the parties had settled the proceedings at mediation and, as matters developed in submissions before me, there is no contest between them as to the fact that the Settlement Terms are binding upon them.
32. Mrs Hopkins also relies on her further affidavit dated 16 October 2017 which refers to the annual general meeting of SWL held on 10 October 2017, where there was a change in the directors of SWL and SWL appears to have foreshadowed a different approach to repairs to seawalls within the Sylvania Waters Estate. It does not seem to me that a change in position by SWL, in October 2017, has any substantial relevance to the question whether the terms of the sale of the property to Mr Beckett for $1,008,000 were or were not reasonably acceptable to ANZ, either at the date of that sale or by 1 September 2017, the date by which Mrs Hopkins was obliged by the Settlement Terms to have achieved a sale on terms that were reasonably acceptable to ANZ.
33. Mrs Hopkins also relies on the affidavit of her son-in-law, Mr Beckett, sworn 14 September 2017. Mr Beckett's evidence is that the auction on 27 July 2017 did not proceed; that several people attended afterwards at the property and what he describes as "straw poll" was conducted among the persons present as to the price which they were prepared to pay to acquire the property; and that he put in a bid to purchase the property so as to secure the payment that would be made to Mrs Hopkins if the property was sold and avoid the sale by ANZ as mortgagee in possession. Mr Beckett also offers to acquire the property at a price determined by an expert. As I will note below, it seems to me that that offer is not to the point where the question here is of the rights of ANZ and Mrs Hopkins under the Settlement Terms, which both accept are binding upon them, and which did not contemplate such a process. Mr Beckett also refers to the issues in respect of the seawall of the property. It seems to me that those issues are also not to the point, if the price achieved was not reasonably acceptable to ANZ on the basis that, inter alia, other purchasers may have paid more to acquire the property than Mr Beckett, notwithstanding those issues, in a properly conducted sale process.

The relief sought by ANZ

1. As I noted above, ANZ seeks, first, a declaration under s 73 of the Civil Procedure Act that these proceedings were settled between ANZ and Mrs Hopkins pursuant to the Settlement Terms. That section provides that the Court may exercise its jurisdiction to determine any question in dispute between the parties as to, relevantly, the terms on which proceedings had been settled and make such orders as it considers appropriate to give effect to such a determination. The function of that section was noted by Slattery J in Ahmed v Chowdhury [2011] NSWSC 893 at [4] as follows: "Before the enactment of Civil Procedure Act, s 73 there were different judicial views as to whether an alleged settlement of proceedings could be enforced by motion in the proceedings or whether a separate action needed to be commenced: Phillips v Walsh (1990) 20 NSWLR 206 at 210 and Roberts v Gippsland Agriculture & Earth Moving Contracting Co Pty Ltd [1956] VLR 555 at 557-562-7 and Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510. Now Civil Procedure Act , s 73 resolves these different views and makes clear that the court has jurisdiction to determine any dispute between the parties to the proceedings as to whether and on what terms the proceedings have been compromised: Civil Procedure Act , s 73(1)(a)."
2. Mr Hall initially submitted that the Settlement Terms were not binding on Mrs Hopkins and ANZ, because they allowed ANZ an option to perform in respect of accepting a price at which the property was sold. In oral submissions, Mr Hall also initially pressed a submission that the Settlement Terms were not binding and Mrs Hall was free to continue with the earlier proceedings against ANZ (T16) and submitted that, if ANZ's position was right, then there was no agreement and ANZ was always free to avoid the settlement (T19). That submission seems to me to be untenable, where (as I will note below) the criterion of "reasonably acceptable" adopted in the Settlement Terms establishes an objective standard. Mr Hall ultimately accepted in oral submissions that the Settlement Terms were binding on the parties and the dispute related to what they required to be done (T19). ANZ is entitled to the declaration that it seeks in that respect, where that matter was previously in dispute, so far as Mrs Hopkins sought orders to the contrary.
3. Second, ANZ seeks judgment against Mrs Hopkins for possession of the property and for leave for the issue of a writ of possession forthwith in relation to the property. ANZ submits that Mrs Hopkins had failed to comply with her obligation to sell the property on terms reasonably acceptable to it by 1 September 2017 and the consequence is that, pursuant to paragraph 4 of the Settlement Terms, Mrs Hopkins has agreed to grant vacant possession of the property to ANZ and to a writ of possession being issued to ANZ in order to sell the property as mortgagee in possession. As I noted above, paragraphs 1(ii) and 4 of the Settlement Terms, have the result that ANZ is entitled to such orders, if Mrs Hopkins had not exchanged contracts for the property on terms "reasonably acceptable" to ANZ by 1 September 2017.
4. The first issue identified by the parties in respect of that question is whether ANZ had consented to the terms of the contract with Mr Beckett and thereby accepted those terms. ANZ submits that it was not asked to consent to the contract with Mr Beckett until after that contract was executed and that its request for special conditions in that contract did not constitute approval to any sale at any price on terms of a contract that included those special conditions. ANZ also submits that, even if its request that specified special conditions be included in the sale contract could have constituted consent to a sale, in advance of the exchange of contracts or determination of a sale price, any such consent was conditional on there being a public auction which did not occur.
5. Mr Hall places weight, in response, on the correspondence as to the terms of the sale contract to which I referred above and on the fact that ANZ did not specify a reserve price for the auction. In oral submissions, Mr Hall submitted that the correspondence between him and ANZ's solicitors indicated that the amount of the deposit of 10% was critical to ANZ and that it had to be paid to ANZ, but that the terms of that correspondence were silent as to price, with the consequence that the Settlement Terms either did not include price or, if they did include price, the price had to be a reasonable price that was not specified (T23); that any discretion as to price had to be exercised by ANZ having regard to the circumstances known to it at the date of sale on 27 July 2017 (T24); and that, by corresponding prior to the auction, ANZ had already set out the terms that were "reasonably acceptable to it" and there was no room for a further exercise of discretion under the Settlement Terms (T24).
6. ANZ also submits that it never consented to the disclosure statement that was appended to, or at least provided in connection with, the contract with Mr Beckett. In written submissions, Mr Hall submitted that the annexure of the disclosure statement to the contract with Mr Beckett did no more than accurately recount the nature of the claims raised by SWL; in oral submissions, he put a somewhat different position, that the disclosure statement was not annexed to the contract with Mr Beckett but was a separate document. It is not necessary to decide either question, because the difficulty with the disclosure statement is that it was not made available to or approved by ANZ, and that undermines any suggestion that ANZ had approved the terms of a sale conducted where that document was made available to potential purchasers.
7. I am satisfied that ANZ did not in fact accept the terms of the sale to Mr Beckett, before or after the contract with him was signed. It is trite, as a matter of law and as a matter of commercial practicality, that the sale price for the sale of a property is an essential term of a contract for sale, and the price of the sale to Mr Beckett was not accepted by ANZ either before, or after, the contract with Mr Beckett was signed. It is not to the point that ANZ did not request a reserve price at the auction, since no auction proceeded, and since paragraph 4 of the Settlement Terms would not be satisfied if the sale price achieved at the auction was not "reasonably acceptable" to ANZ. The correspondence between ANZ's solicitors and Mr Hall, as Mrs Hopkins' solicitor, as to the terms of the sale contract also plainly contemplated a sale at auction, and did not constitute acceptance of a sale other than by auction, or by a "straw poll" process from which at least one potential purchaser who had made a substantial offer was excluded, on the basis of a form of disclosure statement that had not been approved by ANZ.
8. The second issue identified by the parties is whether, if (as I have found) ANZ had not in fact accepted the terms of the sale contract with Mr Beckett, the terms of that contract were such that they objectively satisfied the requirement of being "reasonably acceptable" to ANZ, although ANZ had not accepted them. The parties did not address the content of the language "reasonably acceptable" in submissions. A somewhat similar, but not identical, concept of a claim made "acting reasonably" was considered by the Court of Appeal of the Supreme Court of Victoria in Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSC 498 where Osborn and Ferguson JJA observed (at [143]) that "[o]rdinarily, concepts of reasonableness are construed as importing an objective standard of conduct" and (at [144]) that that concept required that the claimant: "be acting reasonably, in an objective sense, based on the information and facts then known, or which reasonably ought to have been known, to the [claimant] at that time". It seems to me that the phrase "reasonably acceptable" is similarly directed to whether the relevant terms were acceptable to ANZ, acting reasonably, in an objective sense, based on the information known or which reasonably ought to have been known to it, when it determined its position as to the sale to Mr Beckett and whether to discharge its mortgage to permit that sale.
9. In its written outline of submissions, ANZ submitted that the Settlement Terms were not "reasonably acceptable" to ANZ, in an objective sense, because Mrs Hopkins purported to sell the property to her son-in-law at a price of around $1 million where ANZ had obtained valuations for well in excess of $3 million; two offers were made to purchase the property for more than $3 million; the offer was not the result of a concluded public auction; and Mrs Hopkins caused a term to be included in the contract (or, more precisely, a disclosure to be provided to potential purchasers) without providing ANZ with an opportunity to indicate whether the proposed term was acceptable. ANZ also submits that the sale of the property to a party related to Mrs Hopkins, for $2 million less than the market appraisals and valuation, not achieved at a public auction, was not such that it was "reasonably acceptable" to ANZ, on an objective standard.
10. Mr Hall submits, and I accept, that the fact that the sale was to Mrs Hopkins' son-in-law would not necessarily have had the result that it was not reasonably acceptable to ANZ, since a sale to Mr Beckett at a high price ought objectively to have been acceptable to ANZ. I accept that matter, taken alone, would not support a finding that the sale was not reasonably acceptable to ANZ. However, it can plainly support such a finding when combined with other matters, including a sale other than by auction, the exclusion of another potential buyer, Mr Stubbs, from the "straw poll" undertaken and the fact that the sale was at a price well below market appraisals for the property. Mr Hall also refers in oral submissions (T33) to Mr Beckett's evidence that he did not expect to acquire the property at the price at which it was sold to him and submits that Mr Beckett would like to be given the opportunity to buy the property at the price reasonably acceptable to ANZ. Mr Beckett's suggested surprise at the price at which he acquired the property seems to me to undermine any submission that the price or terms on which the property was sold to Mr Beckett were or should have been reasonably acceptable to ANZ.
11. In response to ANZ's criticism of the sale price for the sale to Mr Beckett, Mr Hall placed substantial weight, in written submissions, on the fact that ANZ does not identify a sale price that would be reasonably acceptable to it. Mr Hall accepted, in the course of oral submissions (T25) that cl 4 of the Settlement Terms left open the possibility that a position could arise that the terms of sale were not reasonably acceptable to ANZ because the price was too low and that the consequence would be that ANZ would then take control of the sale process (at Mrs Hopkins' and its risk as to the sale proceeds then obtained), but submitted that the Court could not conclude that the sale price was too low where ANZ gave no evidence of the minimum sale price that was acceptable to it (T25). It seems to me that ANZ did not logically need to identify a hypothetical sale or sale price that was reasonably acceptable to it, since it is not necessary to hypothesise a price for another sale that would be acceptable or reasonably acceptable, which did not occur, in order to determine whether the price in fact achieved on the sale to Mr Beckett was not reasonably acceptable.
12. So far as ANZ relies on the offers by Mrs Sio and Mr Stubbs, Mr Hall submits that Mrs Sio did not attend the auction. The evidence falls short of establishing whether Mrs Sio did or did not attend the auction, although Mrs Hopkins' evidence is that Mrs Sio did not attend the subsequent taking of a "straw poll" at the property. It seems to me that nothing turns on whether Mrs Sio was present at the auction, because it did not proceed, and the question is then whether the price obtained in the sale to Mr Beckett in the relevant circumstances was reasonably acceptable to ANZ. Mr Hall also submits that Mr Stubbs was seeking to acquire the property in circumstances where he had an arrangement with SWL by which he was permitted to carry out repairs to the property's seawall, the costs of which he had estimated at a sum exceeding $500,000. It is not necessary to determine whether that is the case since, even if it were the case, it has no impact upon the question whether the price offered by Mr Stubbs was a more favourable price than that offered by Mr Beckett or whether the price offered by Mr Beckett was acceptable or reasonably acceptable to ANZ.
13. I should add that there is no basis to assume, as aspects of Mr Hall's submissions appeared to, that ANZ was obliged to accept the highest price achieved on the day of that sale, whether it was $1,008,000 or any lower amount. If the price achieved on the day was not "reasonably acceptable" to ANZ, in an objective sense, then the Settlement Terms permitted ANZ to proceed to a mortgagee sale, with Mrs Hopkins delivering vacant possession of the property to allow that to occur, and it would then have the opportunity to seek to achieve a higher price.
14. In summary, even if the price offered by Mr Beckett was the best price that could be achieved in the relevant circumstances, after Mrs Hopkins sought to exclude bidders from the auction and after Mr Stubbs was excluded from any "straw poll" conducted at the property, I am comfortably satisfied that the terms of the sale were not reasonably acceptable to ANZ. The sale price achieved in the sale to Mr Beckett was substantially less than ANZ could have reasonably anticipated in the relevant circumstances; the sale did not proceed by public auction, as a result of the restrictions that Mrs Hopkins sought to impose, and advice given by the real estate agent and auctioneer as to the sale process to be adopted was rejected by Mrs Hopkins and her legal advisers; the form of disclosure provided to potential purchasers and Mr Beckett was not made available to ANZ's solicitors for review; and ANZ's view that the sale price was not an acceptable price was plainly an objectively reasonable view in those circumstances.
15. Mr Hall makes several other submissions which did not seem to me to be responsive to the case put by ANZ, including as to dishonesty against SWL and its officers who are not party to these proceedings. It is not necessary to address those submissions which do not advance the question whether the price achieved on the sale to Mr Beckett was reasonably acceptable to ANZ in the circumstances to which I have referred. Mr Hall also criticises ANZ for its failure to embark upon a discussion or invoke a mechanism to determine the price at which it was reasonably required to have consented to a discharge of the mortgage. It seems to me that that criticism is not properly founded, where the Settlement Terms contemplated that ANZ could proceed to a mortgagee sale of the property, if Mrs Hopkins had not achieved a sale on terms reasonably acceptable to it by the specified date.
16. Mr Hall also identifies prejudice to Mrs Hopkins if ANZ's application is granted, in that she will lose the benefit of the payments which she was entitled to receive under the Settlement Terms. That proposition does not seem to be correct as to the first payment, which Mrs Hopkins has already received, but is likely correct as to subsequent payments. It seems to me, however, that that is the consequence of the operation, first, of the Settlement Terms that were agreed between the parties, which had a commercially reasonable operation so far as they permitted a mortgagee sale of the property if Mrs Hopkins did not obtain a sale on terms reasonably acceptable to ANZ within the specified period and, second, of Mrs Hopkins' conduct of the sale process. It does not seem to me that this matter provides any reason not to enforce the Settlement Terms in accordance with their terms.
17. The requirement in paragraphs 1(ii) and 4 of the Settlement Terms that Mrs Hopkins had exchanged contracts for the property, on or before 1 September 2017, on terms "reasonably acceptable" to ANZ is therefore not satisfied, and ANZ is entitled to the relief which it seeks by an order for vacant possession and a writ of possession in accordance with the Settlement Terms.

The relief sought by Mrs Hopkins

1. Mrs Hopkins seeks an order, first, that ANZ specifically perform the settlement entered into between ANZ and Mrs Hopkins and that it attend upon settlement with respect to the sale of the property and produce an executed discharge of mortgage. In oral submissions, Mr Hall submitted that Mrs Hopkins' central argument was that the property was sold under an agreement with ANZ that was silent as to price or alternatively under an agreement that the price would be, in all the circumstances, a reasonable one and pressed Mrs Hopkins' "best position" that ANZ should give effect to the sale to Mr Beckett on its present terms (T16). The premise of that relief is that the Settlement Terms are binding upon ANZ and Mrs Hopkins, consistent with the position ultimately adopted by Mr Hall on Mrs Hopkins' behalf at the hearing. There is no basis for such an order on the findings that I have made above, since the sale of the property did not occur on terms that were "reasonably acceptable" to ANZ by 1 September 2017, and the Settlement Terms require Mrs Hopkins to give vacant possession of the premises to ANZ, so that it can proceed to a mortgagee sale, and do not require ANZ to facilitate a sale to Mr Beckett on terms that were not reasonably acceptable to it.
2. Alternatively, Mrs Hopkins seeks an elaborate order that the parties be directed specifically to perform the Settlement Terms by the appointment of a joint single expert to value the property and produce a report to guide the Court as to a suitable price that ANZ in the proper exercise of its discretion is obliged to have accepted. That further order contemplates that Mr Beckett would then have the option, but not the obligation, to proceed with a contract at the price determined on that basis. In oral submissions, Mr Hall pressed the appointment of a referee to determine the "reasonable price" at which ANZ should agree to exchange contracts with Mr Beckett, and at which price he should be given the option whether to complete the purchase of the property at that price (T16). There is no basis for such an order, because the Settlement Terms do not contemplate any such expert determination of the value of the property or any such option for a party which contracted to purchase the property on terms that were not reasonably acceptable to ANZ. As I have noted above, they simply require Mrs Hopkins to give vacant possession of the premises and for ANZ to have the ability to proceed to a mortgagee sale, if a sale did not occur on terms reasonably acceptable to ANZ by 1 September 2017. Where that position has arisen, the Settlement Terms should be enforced in accordance with their terms, rather than substituted by an agreement that the parties had not made between themselves.
3. Alternatively, Mrs Hopkins sought an order that the Settlement Terms be set aside. As I noted above, Mrs Hopkins did not press that order in the course of the hearing, and no basis for it was established in any event.
4. In the result, the orders sought by ANZ should be made. The Notice of Motion filed by Mrs Hopkins on 19 September 2017 should be dismissed with costs. I will hear the parties as to the basis on which costs should be ordered, if there is any dispute as to that question. I direct the parties to bring in agreed short minutes of order to give effect to this judgment within 2 business days and, if there is no agreement between them, their respective short submissions in respect of any dispute as to the terms of the orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 November 2017