JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159

EQUITY - RELIEF AGAINST FORFEITURE - Termination of deed on defined insolvency event - Non-observance of statutory demand - Demand served by party to whom amount owed for legal costs under deed - Whether termination penal on account of default in reimbursing legal costs - Whether unconscionable to exercise right of termination - Refusal to provide detailed bill of legal costs under Legal Profession Uniform Law Application Act 2014 Sch 1 s 198(6) - Whether mistaken belief statutory demand complied with sufficient for relief against forfeiture - Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406, Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315, applied.

CONTRACT - PENALTY - Whether termination of deed for non-compliance with statutory demand under Corporations Act 2001 (Cth) s 459F(1) penal in operation - Whether failure of party to comply with statutory demand, or have it set aside, would have been foreseen at time of formation - Ringrow Pty Ltd v BP Australia Pty Ltd [2005] HCA 71; (2005) 224 CLR 656, Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525, Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd (2017) 18 BPR 36683, applied.

1 I have had the considerable advantage of reading the reasons for judgment of McLeish JA. I agree with the orders his Honour proposes, for the reasons given by him.

2 This application for leave to appeal concerns a purported termination of a call option deed. A judge in the Trial Division held that the applicant ('JPA') had not terminated the deed by giving written notice to the respondent ('GNPL') in accordance with the deed. In addition, the judge held that, in any event, the respondent should be relieved from forfeiture of its entitlement to exercise the option under the deed. JPA seeks leave to appeal against both findings.

3 The deed in question concerned units in the Travel Inn Motel Unit Trust, of which Queenfield Pty Ltd is the trustee. All 100 units in the trust were previously owned by GNPL. In July 2015, GNPL sold 50 units to TLP Nominees Pty Ltd ('TLP'), a company which, like JPA, is controlled by the Paolacci family.

4 As part of the acquisition by TLP, the parties executed a deed of loan under which TLP lent $2.1 million to GNPL for a term of two years at an interest rate of 10 per cent per annum. The deed of loan was secured by a personal guarantee from Mr Moishe Gordon (the principal of GNPL), a second-ranking registered mortgage over Queenfield's land and the grant of a general security interest over 20 units held by GNPL.

5 On 2 February 2017, the parties entered into a deed of cancellation and transfer. Under that deed, GNPL transferred to JPA 20 units in the trust as consideration for the cancellation of the $2.1 million loan and other obligations under the deed of loan.

6 On about 14 February 2017, the option deed that is the subject of this

proceeding was executed by GNPL and JPA and by Mr Gordon as guarantor. The deed entitled GNPL to purchase back the 20 units from JPA for the sum of $2.3 million plus the vendor's duty, during a period commencing 24 months from the date of the deed and expiring on 30 June 2020.

7 As a result of these transactions, the 100 units in the trust were held as follows:

Interests associated with the Paolacci family therefore held 70 of the 100 units.

8 The call option deed provided that JPA granted to GNPL, and GNPL accepted from JPA, an option to purchase 20 units in the trust for the stipulated price and on specified terms and conditions. GNPL was able to exercise the call option at any time during the 'Call Option Period', namely from 24 months after the date of the deed until 4pm on 30 June 2020. Clause 3.2 of the deed provided for the giving of notice, as well as the delivery of a bank cheque in favour of JPA in the amount of the agreed price and a signed contract of sale, if GNPL wished to exercise the option. Under cl 6, Mr Gordon was required, on demand from JPA, to cause GNPL to perform its obligations under the deed and any contract of sale, and to pay the 'Guaranteed Money'. The latter term was not defined in the deed.

7.1 Insolvency Event

If an Insolvency Event occurs in relation to GNPL or the Guarantor as the case may be, before GNPL exercises the Call Option in accordance with clause 3.2 this will constitute a breach of this Deed in an essential respect and JPA may at any time terminate this Deed by written notice to GNPL.

7.2 Consequences for insolvency

If JPA terminates this Deed under clause 7.1, JPA will be entitled to keep the Call Option Fee.

The term 'Insolvency Event' was defined in cl 1.1 of the Call Option Deed in terms that specifically included any failure by GNPL to comply with a statutory demand issued under s 459F(1) of the Corporations Act 2001 (Cth) ('the Act'). The Call Option Fee was $1,000.

10 Clause 9 dealt with stamp duty and, relevantly for present purposes, legal costs. It provided as follows:

9. Stamp duty and costs

(a) GNPL must reimburse JPA on demand for JPA's costs, on an indemnity basis, arising out of the negotiation, preparation and execution of this Deed.

(b) GNPL must pay all stamp duty payable in connection with this Deed and must indemnify JPA against any liability arising from any failure, delay or omission to make payment or proper disclosure to the State Revenue Office of Victoria. This obligation will not merge on completion of this Deed but will continue to have full force and effect.

11 Clause 10 dealt with notices, in the following terms:

10. Notices

Any notice, demand, consent or other communication (a Notice) given or made under this Deed:

(a) must be in writing and signed by the sender or person duly authorised by the sender;

(b) must be addressed and delivered to the intended recipient at the address or fax number below or the address or fax number last notified by the intended recipient to the sender after the date of this Deed:

i. to JPA JPA Nominees Pty Ltd

C/- Collins & Collins

Level 1, 737 High Street

Kew East, VIC, 3102

Facsimile: 03 9859 8688

ii. to GNPL Gordon Nominees Pty Ltd

C/- Efron & Associates

Address: Suite 10, Level 1

600 Lonsdale Street

Melbourne, VIC 3000

Facsimile: 03 8640 0777

C/- Efron & Associates

Address: Suite 10, Level 1

600 Lonsdale Street

Melbourne, VIC 3000

Facsimile: 03 8640 0777

12 A dispute arose between the parties in connection with the legal fees for which cl 9(a) provided. On 27 February 2017, JPA received from its solicitors a tax invoice in the amount of $26,836.70 for professional fees 'for the period commencing 15 November 2016 to the date of this invoice in connection with the Call Option Deed dated February 2017: 44.3 hours'. At some point, this amount was paid by JPA.

13 On 28 February 2017, TLP, as agent for JPA, sent GNPL an invoice for reimbursement of legal fees in the same amount.

14 Neither GNPL nor its solicitors, Efron & Associates, responded to this communication. On 8 March 2017, JPA's solicitors wrote to Efron & Associates demanding payment of the amount of $26,836.70 by no later than seven days from the date of the letter. The letter stated that the solicitors had instructions to commence legal proceedings to recover the debt without further notice if this deadline was not met.

15 Efron & Associates responded on 9 March 2017. The letter stated that the firm was 'astounded' that JPA's solicitors claimed that their fees in relation to preparing, negotiating and executing the Call Option Deed were in the sum stated. The letter stated that on 'a cursory examination', it appeared that the bill contained fees outside the scope of the agreed works. The letter requested a detailed itemised bill by return and stated that GNPL would not be making payment of 'this excessive sum' until the fees in question had been justified.

16 JPA's solicitors responded to Efron & Associates by letter dated 15 March 2017. The letter expressed curiosity as to the basis upon which Efron & Associates had asserted that the bill contained fees outside the scope of the agreed works, given that the firm had not been provided with, and was said not to be entitled to, any bill from JPA's solicitors in connection with the matter. The letter stated that, under cl 9(a) of the Call Option Deed, GNPL had indemnified JPA for its legal fees and did not have any basis to refuse or delay payment on the demand.

17 It appears that matters in relation to the legal fees rested there until 9 October 2017, when JPA's solicitors served a statutory demand on GNPL. Under the demand, JPA required GNPL, within 21 days after service, to either pay the amount of the debt or to 'secure or compound for the amount of the debt, to the creditor's reasonable satisfaction'. In a supporting affidavit, Mr John Paolacci deposed to his belief that there was no genuine dispute about the existence or amount of the debt.

18 Efron & Associates wrote to JPA's solicitors on 26 October 2017, referring to the statutory demand. The letter stated that GNPL accepted that JPA was entitled to be reimbursed for its legal costs of preparation, negotiation and execution of the deed, but disputed that those costs could amount to the sum that had been alleged. The letter stated that in the circumstances, GNPL required a detailed bill of costs and that it intended to have the matter listed for taxation. The letter concluded:

Accordingly, our client has this day deposited the sum of $26,836.70 into our trust account.

Subject to the matter being taxed, we propose that the sum be deposited into an independent solicitors trust account and released by mutual instructions of the parties following the taxation of this matter.

We await your urgent response.

19 JPA's solicitors responded on 27 October 2017, noting that the letter from Efron & Associates contained an admission on behalf of GNPL that it was indebted to JPA under the terms of the deed, while disputing the amount. It was suggested that this admission implied that GNPL acknowledged certain matters in respect of the deed which it was said were contradictory to affidavits and submissions placed before the Court in other proceedings concerning matters in dispute between the parties. The letter stated that JPA would not consider the proposal in the letter until GNPL had confirmed its position in relation to those matters.

20 On 30 October 2017, Efron & Associates responded stating, among other things, that GNPL was 'entitled to request a bill in taxable form and for the matter to go to a taxation of costs'. The letter continued:

Having served the statutory demand, the issue becomes one where your client needs to elect what it chooses to do next.

In the circumstances where a statutory demand has been served in respect to your firm's fees, our client requests the account be rendered in taxable form under protest and with no admissions as to liability.

21 On 1 November 2017, JPA's solicitors wrote to Efron & Associates stating that no clause of the Call Option Deed or any rule within the Supreme Court (General Civil Procedure) Rules 2015 entitled GNPL to request a bill in taxable form or to have the bill determined by taxation. The letter requested that Efron & Associates set out detailed reasons supporting the claims by GNPL that it was entitled to a detailed bill of costs and that it could 'have its contractual debt to JPA subjected to taxation'. The letter concluded by saying that if answers to these queries were provided, JPA would review its position in respect of releasing its costs bill in the matter to GNPL.

22 Efron & Associates did not respond to the letter dated 1 November 2017. Nor had GNPL taken any action to set aside the statutory demand.

23 On 6 November 2017, JPA's solicitors sent by facsimile to the offices of Efron & Associates the notice of termination which is the subject of the present application for leave to appeal. It is necessary to set out the notice in full:

Oren Polichtuk

Efron & Associates

03 8640 0777

By Facsimile Transmission

Copy by email to: oren@efronlaw.net

Dear Oren

Re: Notice of Termination

Call Option deed dated 14 February 2017 between Gordon Nominees Pty Ltd (GNPL) to JPA Finance Pty Ltd (JPA) (the Call Option Deed)

As you know, we are solicitors for JPA.

We refer to the statutory demand served by JPA on GNPL in connection with a debt owing under the Call Option Deed on 9 October 2017 (the Statutory Demand).

More than 21 days have now elapsed since the date the Statutory Demand was served on your client. GNPL has failed to pay any money owing to JPA as demanded under the Statutory Demand. Similarly, GNPL has not commenced any proceeding in any court of competent jurisdiction to have the Statutory Demand set aside.

As such, an 'Insolvency Event' has occurred in respect of GNPL for the purposes of the Call Option Deed.

JPA hereby terminates the Call Option Deed with immediate effect pursuant to section 7.1 of the Call Option Deed.

GNPL remains indebted to JPA as set out in the Statutory Demand.

Yours sincerely

Alex Collins

Principal

24 By originating motion dated 15 October 2018, JPA sought a declaration that the termination of the Call Option Deed on 6 November 2017 was valid and effective and that the obligations of the parties under that deed were now at an end.

25 GNPL claimed in response that the notice of termination was not served in accordance with cl 10 of the Call Option Deed and that the Call Option Deed had therefore not been terminated. GNPL also submitted that if the Call Option Deed had been terminated at law, then the Court should grant equitable relief against forfeiture.

26 The trial judge accepted the submissions of GNPL in respect of the above issues. The judge referred to Tricontinental Corporation Ltd v HDFI Ltd,[1] Bond v Hongkong Bank of Australia Ltd,[2] Pan Foods Co Importers & Distributors Pty Ltd v Australia & New Zealand Banking Group Ltd,[3] MLW Technology Pty Ltd v May,[4] Yan v Zhang[5] and Salta Constructions Pty Ltd v St George Bank.[6] The judge held that the last three cases just mentioned, upon which JPA relied, concerned the question whether information that was required under the contract to be given had in fact been given, having regard to the recipients' own knowledge about the contract. The judge held that the issue before him was different, namely 'whether a notice has been given in accordance with a contractual agreement where it was not addressed to the intended recipient but to a solicitor acting for the intended recipient'.[7] The judge continued:

Further, I am required to consider the principles adopted in Tricontinental v HDFI and Bond v HK, which deal with triggering sureties' obligations under a guarantee, and decide whether those principles should be extended to a notice which, if valid, has the effect of terminating GNPL's option to acquire units in the Trust.

The notice to terminate, if correctly given, resulted in the immediate loss by GNPL of a valuable right. In those circumstances, I consider the notice is more akin to a notice that enlivens a person's obligation to pay a guaranteed sum, than a notice where the question is one of whether the recipient had been informed of certain facts. Accordingly, I hold that the notice was not given in accordance with the Call Option Deed and the option under the Call Option Deed has not been lost to GNPL.[8]

27 The judge then turned to consider GNPL's alternative claim for the equitable remedy of relief against forfeiture. He recorded the submissions of the parties and made reference to a series of relevant authorities. The judge expressed the following conclusions as to the legal principles:

These cases demonstrate an acceptance of the general principle of equity that a court may relieve against the detriment caused by unconscionable conduct, particularly when it is associated with fraud, accident, surprise or mistake. Ultimately, a court of equity will relieve against forfeiture if there is an equity which justifies it doing so.

The essential question subsequently identified by the plurality in Tanwar Enterprises Pty Ltd v Cauchi ('Tanwar')[9] is whether the use of legal rights is, in all the circumstances, unconscientious, and whether that unconscientious use of legal rights, if unchecked, would forfeit an interest of the claimant for relief. What is involved is, therefore, (1) identification of the right or rights that would be forfeited; (2) identification of the legal rights, exercise of which would affect the forfeiture; and (3) identification of the reasons why the exercise of those legal rights would be unconscientious.[10]

28 The judge stated that the loss in the present case 'arose out of a provision that was intended to recover an outstanding debt'.[11] He continued:

In any event, the issue here facing the Court is whether it is unconscionable for GNPL to lose its option, as it has not paid the outstanding legal costs.

GNPL states that, in the event the Court is willing to provide relief against forfeiture, it is willing to undertake to the Court whatever the Court requires with respect to protecting JPA's rights under clause 9(a) of the Call Option Deed.[12]

29 The judge recorded that GNPL put its claim for relief against forfeiture on two bases as follows:

GNPL submits that the Court should grant relief against the termination of the Call Option Deed and the forfeiture of GNPL's right to repurchase the units, given the circumstances set out in the Gordon Affidavit and the mistake (if demonstrated) both in fact and law as to whether it had complied with the Statutory Demand. The only prejudice identified by JPA is its legal costs of making the present application. [13]

30 The 'circumstances set out in the Gordon affidavit' referred to above included the correspondence to which reference has already been made. In addition, Mr Gordon stated that he 'was shocked when Gordon Nominees was served with a purported termination notice on 6 November 2017'. Mr Gordon said:

Given the securing of the amount of the debt the subject of the JPA Statutory Demand as well as the proposal, Gordon Nominees formed the view that the statutory demand was complied with and so there was no 'Insolvency Event' as defined in clause 1.1 of the Call Option Deed.

In considering whether to grant relief, the Court will consider whether the penalty or consequence imposed through a breach is a genuine pre-estimate of the loss suffered as a result of the breach, or whether the penalty or consequence is imposed as an incentive to the other party to observe the contract.

In my opinion, the penalty of terminating the Call Option Deed falls into the category of a penalty designed to enforce compliance with the contract. The right to terminate was not a genuine pre-estimate of any expected loss to JPA.

In my opinion, it would be unconscientiousness for GNPL to lose the right to restore its shareholding to 50 per cent, in circumstances where it has shown its bona fides by paying the disputed sum into its solicitor's trust account. I shall grant relief against forfeiture on condition that the disputed sum is paid to JPA within seven days of this judgment.[14]

32 The applicant relies on five proposed grounds of appeal. Omitting particulars contained within those grounds, they are as follows:

1. The learned trial judge erred at [59] of the reasons for judgment in his construction of the contract (Call Option Deed) by finding that the notice requirements in clause 10 of the Call Option Deed required strict as opposed to substantial compliance at [59].
2. The learned trial judge erred by finding that the letter of termination was not given in strict compliance with clause 10 of the Call Option Deed. His Honour ought to have found that each of the relevant components of clause 10 of the Call Option Deed were contained in the letter of termination.
3. The learned trial judge failed to determine whether a non-proprietary option to purchase units in a trust could engage the jurisdiction of the Court to grant equitable relief from forfeiture. The learned trial judge ought to have found that relief from forfeiture was unavailable in the circumstances of this case.
4. The learned trial judge erred by finding that the termination of the Call Option Deed amounted to a penalty designed to enforce compliance with the contract at [93]-[94]. The learned trial judge took into account an irrelevant consideration which was not raised or contended for by either party. The learned trial judge ought to have held that whether or not the act of termination 'penalised' the respondent or was 'a penalty' was irrelevant to this case.
5. The learned trial judge erred by applying the wrong legal test when electing (in the alternative) to grant the respondent relief against forfeiture. The learned trial judge ought to have found that the conduct of the Applicant in terminating the Call Option Deed was not unconscionable or unconscientious and there had been no mistake by the respondent when electing to breach the express terms of the Call Option Deed.

33 These grounds resolve to two issues: was the letter of termination given in accordance with cl 10; and, if it was, did the judge err in granting relief against forfeiture?

34 The applicant submitted that the judge had erred by basing his conclusion that the notice requirement in cl 10 of the Call Option Deed had not been complied with on the fact that termination of the deed resulted in the 'immediate loss by GNPL of a valuable right'. On that basis, the judge had found that the notice was 'more akin to a notice that enlivens a person's obligation to pay a guaranteed sum'.[15] It was submitted that the judge had failed to construe cl 10 in the context of the contract as a whole and that the clear intent of the clause was to provide for notification and communication between the parties through their solicitors and not to a party directly.

35 The applicant submitted that the decisions upon which the judge relied, in particular Tricontinental and Bond, were distinguishable. First, they involved tripartite agreements of guarantee, rather than ordinary commercial contracts. It was submitted that guarantees and indemnities are designed to satisfy a liability owed by someone other than the guarantor or indemnifier to a third person and that these contracts are a species of financial accommodation to support the credit risk of the principal debtor and to hold the creditor harmless. In that context, notice to the surety of a breach by the principal was of greater significance. In particular, such notice was a condition precedent to the accrual of a cause of action against the surety. The applicant submitted that none of the cases relied upon by the judge involved a notice of termination such as cl 10, under which all communications were to occur through the solicitors for the party. There was no condition precedent required to be performed by one party to enliven the right to terminate. In the circumstances, it was submitted that the judge's finding that GNPL was losing a valuable right was irrelevant and should not have informed the question of construction.

36 The applicant submitted that the judge ought to have applied decisions such as MLW so as to hold that the notice complied with cl 10. Read in context, it was submitted that the notice was addressed to GNPL through its agent being the solicitor. The parties had chosen agents as the persons to receive notices on their behalf. The notice made it clear on whose behalf the communication was being received by referring to GNPL in the heading to the letter as well as in the body of the letter. It was clear from its content that the notice of termination was, as a matter of fact, addressed and delivered to GNPL. Moreover, the parties contemplated that notices would be addressed to their solicitors, by the express use of the words 'C/- Efron & Associates'.

37 In respect of relief against forfeiture, the applicant submitted that the judge had merged the question of relief against penalties with relief against forfeiture. It was submitted that the question of penalty had not been raised at trial. The case was based entirely on relief against forfeiture. In any event, it was submitted that the evidence did not support a finding of relief on either basis.

38 The applicant submitted that forfeiture involves the loss or determination of an estate or interest in property or a proprietary right.[16] It was submitted that the Court does not have general jurisdiction to relieve against the loss of benefit of a contract.[17] The applicant submitted that the relief in the present case involved a non-proprietary right and there was no authority for the proposition that a valid termination of a contract in reliance on an insolvency event would be subject to equitable relief from forfeiture.[18] The applicant submitted that the right to exercise the option had not yet arisen because the option period was yet to commence. As such, it was submitted that there was no proprietary interest involved in the case.

39 Alternatively, if relief against forfeiture was available in a case such as the present, it was submitted that the judge had misconstrued the distinction between penalty and forfeiture. The judge was incorrect, it was submitted, to have found that the act of termination was a penalty 'designed to enforce compliance with the contract', because the breach of cl 9(a) was not the basis upon which the deed was terminated. It was submitted that an insolvency clause is designed to allow termination in light of an insolvency event and has nothing to say about incentivising a party to perform the contract. In the circumstances, the judge's finding that the right to terminate was 'not a genuine pre-estimate of any expected loss to JPA' was erroneous. The judge had therefore erred in finding that the termination amounted to a penalty.

40 Moreover, the applicant submitted, the judge had wrongly applied the test of unconscionability in the context of relief against forfeiture. The test was not whether it would be unconscionable for GNPL to lose its option, but whether JPA had acted unconscionably or unconscientiously in relying on its strict legal rights.[19]

41 It was submitted that JPA had not acted unconscientiously in any way. The insolvency event had occurred because GNPL had refused to pay the amount due under cl 9(a) and had knowingly elected not to meet a statutory demand or to apply for it to be set aside, thereby allowing the insolvency event to occur which enlivened the right of termination.

42 The applicant submitted that there could be no finding of mistake on the part of GNPL. The 'shock' of Mr Gordon did not suffice to constitute a mistake and there was no evidence of any such mistake. It was clear from the evidence that GNPL had simply refused to pay the debt. It was submitted that GNPL never suggested that it did not realise that this would trigger an insolvency event. The applicant pointed out that the judge did not find that JPA had, by its conduct or otherwise, caused or contributed to the insolvency event.

43 The respondent submitted that cl 10 of the deed was intended to remove doubts about the validity of notices sent for the purposes of the deed. The word 'must' was said to prescribe a single method of giving notices for that purpose. The language was mandatory and imperative and there was no room for saying that 'near enough is good enough'.[20] It was submitted that the proper question was whether cl 10, properly interpreted, provided that the notice that was actually given met the requirements of the clause. The text of the clause should be given its ordinary and natural meaning, and the Court should only depart from that meaning so far as it was necessary to avoid an inconsistency or absurdity. It was submitted that the language was unambiguous. The respondent submitted that the decisions in Tricontinental and Bond involved the application of ordinary principles of construction of commercial contracts and were not based on the proposition that the contracts in question were ones of suretyship. The respondent referred to Greenclose Ltd v National Westminster Bank plc[21] as an example of a recent case where a notice clause was interpreted literally. It was submitted that it was not possible to construe cl 10 as having other than its literal meaning.

44 The respondent submitted that cases such as MLW concerned the content of the relevant notice rather than the construction of the contract. In the present case, it was submitted that the notice did not comply with cl 10 because it was not addressed to GNPL, and the notice was therefore ineffective.

45 In relation to the question of forfeiture, the respondent accepted that the question of penalties was not raised below but submitted that the trial judge was correct in his analysis in that regard in any event. The respondent submitted that the judge had treated the termination as having occurred on the basis of the breach of cl 9(a). The invocation of the right to terminate on the basis of failure to comply with that provision amounted to a penalty.

46 By notice of contention, the respondent also submitted that the decision of the judge should be upheld on the basis of the application of the equitable doctrine of relief against forfeiture. In that regard, it was submitted that relief may be awarded against forfeiture of rights which are not proprietary in nature.[22] In any event, it was submitted that an option to acquire units in a unit trust constitutes a proprietary interest sufficient to attract relief against forfeiture.[23]

47 The respondent submitted that JPA had engaged in unconscionable conduct in the context of the communications between the parties' solicitors. It was submitted that JPA's solicitors were under obligations pursuant to the Uniform Law applied by s 4 of the Legal Profession Uniform Law Application Act 2014 ('the Uniform Law'), because GNPL was a 'third party payer' in respect of the costs for which cl 9(a) provided. It was submitted that the solicitors had not provided sufficient information in relation to the legal expenses for the purposes of s 198(6) of the Uniform Law and that GNPL was entitled to a bill of costs and to the taxation of the amount in dispute. The solicitors had refused to provide GNPL with a bill of costs. Moreover, it was submitted, despite knowing that there was a dispute between the parties as to the amount that ought to be paid, JPA issued a statutory demand, supported by an affidavit which asserted that there was no genuine dispute between the parties. It had then terminated the option deed notwithstanding that GNPL had paid the disputed amount into its solicitors' trust account pending resolution of the dispute. This was also said to be unconscionable conduct enlivening the Court's discretion to relieve against forfeiture.

48 Alternatively, it was said that relief against forfeiture should be granted on the basis of GNPL's mistaken belief that it did not need to take steps to set aside the demand, as evidenced by Mr Gordon's evidence that GNPL had formed the view that the demand had been complied with by depositing the amount into the trust account of their solicitors.

49 In summary, the respondent submitted, based upon the 'more important' subsidiary questions set out in Legione v Hateley,[24] that: the relevant insolvency event was trivial and inadvertent; there were no adverse consequences for JPA as a result of GNPL's failure to comply with the demand other than not receiving immediate payment of the disputed sum; the magnitude of the loss suffered by GNPL and the gain achieved by JPA was significant and reflected in the vesting of control over 70 per cent of the units with the Paolacci interests; and restoration of the call option deed while securing the payment of the legal costs was an adequate safeguard for JPA. On that basis, it was submitted that the judge was correct to order relief against forfeiture on condition that the payment of legal costs under cl 9(a) was secured.

50 The first issue raises two related questions, namely the proper construction of the option deed and the proper construction of the notice of termination. The cases relied on by the parties assist in illuminating the approach to be taken to those issues but, as will become apparent, none of them is determinative of either issue in the present case. It is convenient to consider those cases briefly.

51 Tricontinental involved a suretyship agreement and, in particular, the question whether the appellant bank's demand on the respondent surety was effective. The agreement relevantly required the bank to give notice to the debtor that an event of default had occurred, requiring rectification of that default within 7 days, before making a demand for payment from the surety.[25] The notice was also required to be sent to the surety within 24 hours.[26] The agreement provided for all notices to the debtor to be sent to it at an address in Perth.[27] The bank did not give notice to the debtor enabling 7 days for rectification before it served its demand on the surety.[28] Moreover, the notice to the debtor, omitting that provision, was sent, not to the debtor in Perth, but to a Mr Chan in Sydney.[29] Mr Chan was an associate of the debtor in the commercial arrangements related to the agreement.[30]

52 In the New South Wales Court of Appeal, Waddell AJA held that the clear commercial purpose of the relevant provisions was to provide a mechanism where the liability of the surety could be established in a way which was unambiguous and certain. He held that it was 'essential in commercial dealings that provisions of this kind be applied strictly so that parties know exactly where they stand'.[31] As such, the specific provisions for notice to the debtor constituted conditions precedent to the liability of the surety.[32] Waddell AJA disposed of the appeal on that basis, without reliance on the fact that notice was sent, contrary to the general notice provision, to Mr Chan in Sydney. However, he went on to consider that issue and held that there was no evidence that Mr Chan had authority to accept notices on behalf of the debtor under the agreement. By implication, Waddell AJA appears not to have treated the sending of notice in the particular manner prescribed by the general notice provision in the agreement as essential to liability. But the point did not need to be decided.

53 Samuels JA generally agreed with Waddell AJA.[33] He regarded the agreement as laying down 'specific and detailed time provisions for notice' which required strict compliance.[34] Relying on Ankar Pty Ltd v National Westminster Finance (Aust) Ltd,[35] he held that the commercial utility of the specific notice provision was that it alerted the surety to the immediate risk and enabled it to seek to remedy the default so as to safeguard its interests.[36] Like Waddell AJA, Samuels JA went on to find that the notice failed to comply with the agreement because it was sent to Mr Chan, who did not have actual authority to receive it on behalf of the debtor.[37] Neither judge addressed the fact that the notice had been sent to an address in Sydney, rather than Perth.

54 Kirby P dissented, on the basis of principles particular to commercial contracts of suretyship.[38]

55 Two points emerge from this decision. The first is that the question whether strict compliance is required with notice provisions is one of construction of the contract, in particular by reference to the commercial purpose of the provisions in question. The second is that, although the notice in question was not sent in strict accordance with the requirements as to the manner and mode, as distinct from the content, of notices, it is not suggested in the judgments that this was itself fatal to the efficacy of the relevant notice. The focus of the majority judgments was instead on the specific contractual provision for advance notice of default, and the timing requirements of that provision.

56 The decision in Bond directly involved a failure to comply with requirements as to the manner and mode of notice. The appellant guarantor denied liability on the basis that the creditors' agent did not serve the demand for payment in accordance with the agreement. Clause 16.1(c) stated that a notice in connection with the agreement 'must be left at the address of the addressee ... specified in the schedule' or another address notified by the addressee.[39] The relevant notice was not sent to the specified address but was instead sent to the guarantor's home, his office and the new address of the company whose previous address had been the specified address for service.[40] The parties knew of the change in that company's address but it had not been notified under cl 16.1(c).[41]

57 The New South Wales Court of Appeal held that the notice was ineffective. Relevantly for present purposes, the guarantor had not notified the other parties of a change of address. Gleeson CJ explained:

There is no problem of the construction of the language of the guarantee. There is simply a question of fact, that is to say, whether, in the events that occurred, the appellant notified the other parties to the guarantee of another address for service. I am reluctantly driven to the conclusion that that question of fact ought to be resolved in favour of the appellant. The learned judge described what had occurred as 'constructive notification', and I am not sure that I understand the meaning of the word 'constructive' in that context. The result produced is very odd, and is, indeed, capable of working injustice against the appellant. Nevertheless, I am unable to conclude that, in the circumstances, the appellant notified another address for service of documents under cl 16. It was probably an oversight that he failed to do so, but that is beside the point. All that I can see is that there was something very close to notification of another address by the appellant. Provisions of this kind can sometimes produce apparently harsh results: Tricontinental Corporation Ltd v HDFI Ltd. However the language of cl 16.1(c) is mandatory. There is no room for saying that near enough is good enough.[42]

58 Kirby P agreed that the point taken was 'highly technical' but felt bound by Tricontinental to construe the clause strictly.[43] He noted that the requirement to give notice was expressed in imperative terms. The use of 'must', where 'may' was also used in the same clause, indicated that 'some consequence of invalidity must be attached to a failure to comply with the requirement'.[44] He continued:

The need for written notice is clear enough. The need for an undisputed address is equally clear, in principle. The amount guaranteed is extremely large. Doubts as to service should therefore be avoided. To avoid such doubts a particular address and alternative modes of telex or facsimile service are specified.[45]

Kirby P also relied upon 'the strict rules which govern compliance with the requirements of the agreement for guarantee before the surety will be rendered liable'.[46]

59 Mahoney JA agreed generally with the other members of the Court.[47] However, he was not prepared to read 'must' in cl 16.1(c) as requiring that the provision was exhaustive as to the modes of service of a demand for payment under the guarantee. Instead, the clause was 'to be construed according to its purpose and not exclusively by reference to its form'.[48] For example, a notice given personally to the guarantor would have sufficed. Mahoney JA held that it was 'arguable' that the notice was effective if it came to the guarantor's attention, but he did not dissent from the conclusions in this regard of the other members of the Court.[49]

60 Taken together, the judgments in Bond reaffirm that the question whether a contract requires strict compliance with provisions as to notice, in order for a notice given in connection with the contract to be effective, is one of construction of the contract.

61 Neither Tricontinental nor Bond stands for the proposition that notice requirements always require strict compliance. Both of them turned on the language of the relevant contract and, at least to some extent, on its nature as a contract of suretyship or guarantee.

62 The High Court's decision in Pan Foods is to the same effect. That case concerned a loan agreement under which the bank was entitled to declare the money owing due and payable upon the happening of an event of default (in this case, a material adverse change in the borrower's financial position).[50] The bank gave notice by delivery by its authorised representative to the borrower's directors at its office.[51] Clause 15.3 of the agreement stated that a notice from the bank to the borrower 'must be given by an Authorised Representative, in writing'.[52] It was argued that, although the notice was delivered by the authorised representative, it had not been 'given by' that person 'in writing' because the notice was signed, not by the authorised representative, but by the bank's solicitor.

63 This argument failed. Gleeson CJ, McHugh and Hayne stated simply that the notice was 'given' by its delivery and the fact that it was signed by the solicitor was immaterial.[53] Kirby J said that the strict approach in Tricontinental and other cases should not be extended beyond contracts of suretyship into ordinary loan agreements between financiers and business enterprises operating for profit.[54] He rejected the argument that the serious consequences for the company indicated that the agreement should be construed strictly, rather than practically:

It is true that potentially serious consequences for the company, its shareholders, employees, creditors and customers flowed from the giving of the notice. The bank was substantially in charge of its own documentation, including the General Conditions and notices. Few customers would have the power effectively to demand from the bank a modification of such documents. The requirements of the General Conditions would therefore have to be complied with, in the sense that events would have to occur which fairly answered to the description of a contested clause. But in a commercial setting, and in the context of the other provisions of cl 15.3 and of the General Conditions applicable to the case, it is impossible to deny that this notice sufficiently complied with cl 15.3.[55]

In my view, such documents should be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction. The law facilitates and upholds commercial contractual obligations and the expectations that derive from them. Statute and equity may sometimes come to the aid of parties where various forms of unfairness or inequality can be shown. None was invoked in this appeal. But as between a commercial enterprise and a finance provider, such as a bank, the law should be the upholder of agreements. It should eschew artificialities and excessive technicalities for these will not be imputed to the ordinary businessperson. Business is entitled to look to the law to keep people to their commercial promises.[56]

65 Callinan J held that 'given' in cl 15.3 meant 'physically handed over'.[57]

66 The question whether a contractual stipulation as to the mode of giving notice has been complied with may also involve a process of construction of the notice itself. The construction of the contract and the notice raises common issues, especially because both matters concern the same contractual and commercial context.

67 The principles of construction of notices are not relevantly different to those governing the construction of contracts. This Court has endorsed Lord Steyn's articulation of the principles in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd.[58] It is convenient to set out the analysis of Gillard AJA (with whom Winneke P and Buchanan JA agreed) in MLW Technology Pty Ltd v May,[59] which was also endorsed by Warren CJ, Tate and Beach JJA in Salta Constructions Pty Ltd v St George Bank:[60]

The law should strive to uphold a contract wherever possible to avoid the reproach of being the destroyer of bargains. The principle applies not only to contracts but also to the actions of businessmen. The point has been recently reinforced in the House of Lords in relation to a notice given pursuant to a contract by Lord Steyn in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd. That case concerned a lease and the validity of a notice to determine the lease. The notice wrongly stated the date of termination and the question arose whether it was effective. The Court of Appeal, adopting a strict approach, held that it was not. On appeal, the House of Lords by a majority held that it was sufficient. Lord Steyn formulated a number of propositions and stated with respect to proposition 2 the following:

(2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene.

His Lordship posed the question as follows:

... the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind. It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice.

His Lordship noted that the law had moved on from a strict technical approach and said:

Since then there has been a shift from strict construction of commercial instruments to what is sometimes called purposive construction of such documents. ... It is better to speak of a shift towards commercial interpretation. About the fact of the change in approach to construction there is no doubt.

His Lordship said:

In determining the meaning of the language of commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction.[61] The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.

... The approach also accords with authority in this Court.[62]

68 The trial judge in the present matter distinguished MLW and subsequent decisions on the basis that they concerned the question whether information required under the contract to be given had in fact been given, rather than whether a notice was addressed to the intended recipient. However, the two issues cannot readily be separated in that way. The question whether the notice was properly addressed requires both construction of the contract, to determine whether it requires specific words of address, and consideration of the notice itself, to ascertain whether it met the requirements of the contract. As already noted, both questions arise in the same contractual and commercial context.

69 The judge identified the critical question as being whether the principles in Tricontinental and Bond regarding sureties should be extended to the present case. He held that they should, because the notice to terminate would result in the immediate loss of a valuable right, making the case more akin to a notice enlivening an obligation to pay a guaranteed sum. But of itself, that conclusion does not resolve the present question of construction.

70 Clause 10(b) provided that a notice 'must be addressed and delivered to the intended recipient at the address or fax number' specified. In each case, the address is care of the party's solicitors. The specified address also contains the name of the party. The evident intention of this provision is to require that notices under the deed be sent to a party at the address or fax number specified. That requires that delivery take place at the address or to the fax number and that the notice be 'addressed' to the intended recipient. The only issue in the present case concerns this last requirement. It is not in doubt that the notice was delivered to the correct fax number.

71 The word 'must' suggests that the mode of giving notice is not intended to be optional. But it does not show what is intended by a notice being 'addressed' to the intended recipient. On a literal view, as adopted by the trial judge, it requires that the notice be formally addressed to the intended recipient as set out in the clause. An alternative position, advanced by the applicant, is that the notice may be 'addressed' to the intended recipient, in the sense of being directed to that person's attention, without formally stating as much or using the language in the clause. The language of cl 10 does not suggest an answer between these alternatives.

72 The only commercial purpose that was said by the respondent to be advanced by a literal construction of cl 10(b) was to ensure certainty in respect of the validity of notices. However, such a commercial purpose is not necessarily to be attributed to every notice provision. It will depend on the nature of the contract. Here, the deed concerns the grant of an option and provides for the manner of its exercise as well as the means of its termination. As the judge said, a valuable right is involved and the consequences of a properly given notice may be significant. Moreover, the deed also provides for a guarantee and so the notice provisions might also be applied in a context not dissimilar from Tricontinental and Bond. Those considerations might suggest that notice delivered to a place or fax number other than those specified in cl 10(b) might not be effective under the contract. But that is not this case. Neither the existence of valuable rights nor the potential application of cl 10(b) in the context of the guarantee suggests a reason why, as well as the notice being delivered to the specified place or fax number, the intended recipient must be addressed in the formal manner set out, rather than being 'addressed' as a matter of substance. Even the surety cases considered above do not adopt so literal a construction. They concern the place to which notice is sent, not the manner of its address. And even then, there are suggestions in both Tricontinental and Bond that the requirement as to place did not demand strict compliance.

73 The evident commercial purpose of the 'addressed to' requirement of cl 10(b) is to ensure that notices are directed to the attention of the parties through their respective solicitors. A notice is required to be delivered to a solicitor's address or fax number on behalf of the intended recipient. No commercial purpose is advanced by requiring that the client party be formally named by way of address, rather than being otherwise apparent as the intended recipient on the face of the notice, and cl 10(b) should not be construed to have that operation. For example, a notice not formally addressed to the intended recipient could state in its text that it is a notice to the intended recipient. It would be highly technical and merely destructive of the parties' bargain, if such a notice were to be treated as ineffective.[63]

74 In my opinion, the present notice is in no different position. Although formally addressed to the solicitor rather than to GNPL, the notice is headed 'Re: Notice of Termination' followed by a description of the deed which names GNPL and JPA as parties. The notice refers to GNPL as 'your client'. It is quite clear that the notice, and in particular the statement that JPA terminates the deed with immediate effect, is directed to the attention of GNPL, through its solicitors. That is what a reasonable commercial person would understand, and it is all that cl 10(b) required.

75 The first two proposed grounds of appeal should be upheld.

Analysis - relief against forfeiture/penalty

76 It is necessary, in order to address the remaining proposed grounds of appeal, to refer to the leading cases in the area of equitable relief against forfeiture. A convenient starting point is the speech of Lord Wilberforce in Shiloh Spinners Ltd v Harding, quoted with approval in Legione v Hateley by Gibbs CJ and Murphy J:

There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copyholds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self-limitation to be imposed or accepted on this power. There has not been much difficulty as regards two heads of jurisdiction. First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs. ... Secondly, there were the heads of fraud, accident, mistake or surprise, always a ground for equity's intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults.

But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result.[64]

77 Gibbs CJ and Murphy J went on to elaborate on the use of the word 'penal' in this context:

It is true that in some cases concerning relief against forfeiture the courts have spoken of relief against penalty. That may have been because 'penalty' and 'forfeiture' were regarded as synonymous or because a forfeiture for breach of a covenant or condition may be regarded as a penalty for the breach. But except in the sense that a provision for forfeiture can be described as a penalty it is unnecessary that the condition which provides for forfeiture should be a penal one before the jurisdiction of equity can be invoked. From early times the courts of equity granted relief against forfeiture of a lease where the breach was by non-payment of rent. No additional penal element was required.[65]

78 Mason and Deane JJ held that equity looks to unconscionable conduct, especially when it is associated with fraud, mistake, accident or surprise, when its jurisdiction to relieve against forfeiture not in the nature of a penalty is invoked.[66] They explained the difference between relief against penalties and against forfeiture as follows:

A penalty, as its name suggests, is in the nature of a punishment for non-observance of a contractual stipulation; it consists of the imposition of an additional or different liability upon breach of the contractual stipulation. On the other hand, forfeiture involves the loss or determination of an estate or interest in property or a proprietary right, eg, a lease, in consequence of a failure to perform a covenant. When non-payment of rent or a fine is made the occasion for forfeiture of an estate or interest in property it may be proper to treat the forfeiture as being similar in character to a penalty because it is designed to ensure payment of the rent or fine. There is, however, a real distinction between 'penalty' and 'forfeiture' and it is unfortunate that the terms have been frequently used in a way which blurs it. The claims made by the purchasers in Steedman v Drinkle and Brickles v Snell were for relief against the 'forfeiture' of instalments of purchase money. The relevant contracts, like the modern contract of sale, permitted the vendor to 'forfeit' instalments of purchase money. In this situation, despite the use of the word 'forfeit', relief is granted on the footing that the contractual provision entitling the vendor to retain the instalments is in substance a penalty, or in the nature of a penalty, because it is designed to ensure payment of the entire purchase price and it exceeds the damage which he suffers by reason of the purchaser's default.

The respondent's claim here is of a different kind to that involved in Steedman v Drinkle and Brickles v Snell. She seeks relief against forfeiture of her equitable interest as purchaser under a binding contract for sale. Forfeiture of the purchaser's interest, usually the consequence of the vendor's rescission for breach of an essential term, occurs under the general law regulating the rights of vendor and purchaser. Such a forfeiture is to be distinguished from a contractual forfeiture which is designed to ensure performance of a principal obligation.[67]

79 It will be necessary to return to the question of penalties later. For present purposes, what matters is that the above passages show that equity, when relieving against forfeiture, is concerned either with the penal consequences of non-observance of a contractual stipulation, or with the conscientiousness or otherwise of the non-defaulting party's reliance on its legal rights in all the circumstances. In the latter regard, Mason and Deane JJ went on to say, consistently with the passage from Shiloh Spinners set out earlier:

If parties expressly or impliedly stipulate that performance of a term is essential to their bargain then it would ordinarily be unjust to the innocent party to require him to complete notwithstanding a breach of that term. Generally speaking equity expects men to carry out their bargains and 'will not let them buy their way out by uncovenanted payment'. Nor will it remake the parties' contract simply because it transpires that as things have happened one party has made a bad bargain.

But if there be fraud, mistake, accident, surprise or some other element which would make it unconscionable or inequitable to insist on forfeiture of the purchaser's interest under the contract because he has not performed in strict accordance with its terms there is no injustice to the innocent party in granting relief against forfeiture by means of specific performance with or without compensation.[68]

80 Mason and Deane JJ later identified five 'subsidiary questions' relevant to the identification of unconscionable conduct in this context:

In the ultimate analysis the result in a given case will depend upon the resolution of subsidiary questions which inevitably arise. The more important of these are: (1) Did the conduct of the vendor contribute to the purchaser's breach? (2) Was the purchaser's breach (a) trivial or slight, and (b) inadvertent and not wilful? (3) What damage or other adverse consequences did the vendor suffer by reason of the purchaser's breach? (4) What is the magnitude of the purchaser's loss and the vendor's gain if the

forfeiture is to stand? (5) Is specific performance with or without compensation an adequate safeguard for the vendor?[69]

The respondent, it will be recalled, sought to apply the above questions, in adapted form, to the present case.

81 The principles set out in the passages above, to the extent that they are framed in terms of the forfeiture of proprietary rights and interests, raise a threshold issue which I have not so far addressed, namely whether equitable relief against forfeiture is even available as a remedy in a case such as the present. The applicant argues, under proposed ground 3, that it is not, because the respondent had only a non-proprietary option to purchase units in a trust, which did not yet exist because the period for exercise of the option had not arrived. The respondent answered this contention in two ways. First, it was said that the deed gave it a (future) proprietary interest on the basis that an option to acquire property creates an equitable interest in property. That property was said to be the proprietary interest in the assets of the trust constituted by the units. Secondly, it was submitted that relief against forfeiture can be available even where the rights that are lost are not proprietary in nature.

82 Neither point was the subject of detailed submissions and each involves questions of considerable complexity.[70] It is sufficient, for present purposes, to assume that equitable relief against forfeiture may be available where the benefit of a contract is lost, even if that benefit is non-proprietary in nature.

83 The next decision to which reference must be made is Stern v McArthur.[71] In that case, purchasers of land under a long term instalment contract defaulted in payment after 8 years of monthly payments; they resumed monthly payments some time afterwards. The contract provided that, on default, the balance of the purchase price became due and payable. The vendors gave notice to complete which was not complied with, and the contract came to an end. The purchasers had been allowed by the vendors to go into possession, although the contract provided for possession to be given only upon completion. The purchasers had, with the vendors' knowledge, built a house on the land. The vendors offered to allow the purchasers the value of the improvements. The purchasers sought relief against forfeiture.

84 A majority of the High Court upheld the purchasers' claim (Deane, Dawson and Gaudron JJ, with Mason CJ and Brennan J dissenting). Deane and Dawson JJ addressed the role of unconscionability, which they termed 'unconscientious conduct', and repeated the distinction between two kinds of case drawn by Lord Wilberforce in Shiloh Spinners. They said:

In Legione v Hateley it was said that it is only in exceptional circumstances that orders for relief against forfeiture and specific performance will be made at the instance of a purchaser who is in breach of an essential term. Gibbs CJ and Murphy J expressed the view that it was nevertheless open to a court to grant relief to prevent injustice. Mason and Deane JJ said that whether exceptional circumstances exist to justify granting relief will hinge upon the existence of unconscionable conduct. We do not understand there to be any significant difference between these two approaches. Moreover, in referring to unconscionable conduct, Mason and Deane JJ were not saying that there must be unconscionable conduct of an exceptional kind before a case for relief can be made out. Rather, what was being said was that a court will be reluctant to interfere with the contractual rights of parties who have chosen to make time of the essence of the contract. The circumstances must be such as to make it plain that it is necessary to intervene to avoid injustice or, what is the same thing, to relieve against unconscionable - or, more accurately, unconscientious - conduct.

In considering whether such intervention is justified, great weight will be given to the bargain which the parties have made for themselves. 'Generally speaking equity expects men to carry out their bargains and "will not let them buy their way out by uncovenanted payment". Nor will it remake the parties' contract simply because it transpires that as things have happened one party has made a bad bargain.' It is in that sense that it is said that the circumstances must be exceptional to warrant relief in favour of a purchaser who is in breach of an essential term and that there must ordinarily be something such as fraud, mistake, accident or surprise before relief will be granted. These elements do not, however, exhaust the scope of unconscionable or unconscientious behaviour; they are referred to in this context to emphasize that a strong case must be made out to warrant departure from the general approach, which is to hold the parties to their bargain. The general underlying notion is that which has long been

identified as underlying much of equity's traditional jurisdiction to grant relief against unconscientious conduct, namely, that a person should not be permitted to use or insist upon his legal rights to take advantage of another's special vulnerability or misadventure for the unjust enrichment of himself.

One situation in which equity has traditionally granted relief is where provision for forfeiture has been made to secure the payment of money and the party in default seeks relief upon the basis of payment of the amount owing together with the appropriate compensation. In that situation the object of the provision is achieved and it would be unconscientious for the other party to seek to take advantage of the forfeiture.[72]

85 Deane and Dawson JJ regarded relief against forfeiture as being available because the forfeiture provision was by way of security of payment of the purchase moneys, and closely analogous to a mortgage arrangement.[73] They described the equity of redemption in the case of a mortgage as an obvious instance of relief against forfeiture.[74]

86 The other member of the majority, Gaudron J, decided in favour of the purchasers on a wider basis. She identified unconscionable conduct in the vendors exercising their strict contractual rights over a relatively insignificant amount in circumstances where the purchasers would lose their home and the benefit of the appreciation in value of the land and specific performance would have secured all that for which the vendors had contracted.[75]

87 The judges in the minority took a different view of the facts of the case but not necessarily of the law. Mason CJ referred to the High Court's unanimous decision in Ciavarella v Balmer,[76] and continued_:_

Ciavarella, following hard on the heels of Legione, established (a) that only in exceptional circumstances will the court relieve against forfeiture of the purchaser's interest in land under a contract for sale which has been validly rescinded by the vendor for breach of a term which is an essential condition and (b) that in order to make out exceptional circumstances the purchaser must show conduct amounting to unconscionable conduct on the part of the vendor. This approach to the exercise of the jurisdiction is quite opposed to the notion that lies at the heart of the respondents' broad submission that, as the object of an instalment contract, in conjunction with a forfeiture provision, is to secure the payment of money, if specific performance with compensation will adequately protect the vendor then relief should be granted. If this were all that mattered, the Court in Legione and Ciavarella would not have asserted that relief would only be granted in exceptional circumstances. And it would have been unnecessary for the Court in Legione to have considered, as it did, whether the breach was wilful and serious or trivial and inadvertent.

Furthermore, to accept the respondents' submission and extend relief against forfeiture to instances in which no exceptional circumstances are established would be to eviscerate unconscionability of its meaning. The doctrine is a limited one that operates only where the vendor has, by his conduct, caused or contributed to a situation in which it would be unconscionable on the vendor's part to insist on the forfeiture of the purchaser's interest. ... [T]he jurisdiction to grant relief against forfeiture does not authorize a court to reshape contractual relations into a form the court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable.[77]

88 Mason CJ was unable to identify unconscionable conduct on the part of the vendors because they had offered to pay the value of improvements and had not induced the breach. He accepted that the vendors' apparent lack of concern about non-payment, for a period, played a part in what occurred, but they had also allowed the purchasers time to try to find the balance of the purchase price, meaning that their conduct was not oppressive or harsh. The circumstances could not be described as 'exceptional' so as to warrant equity's intervention.[78]

89 Brennan J also dissented. Unlike Deane and Dawson JJ, he detected a difference between the two joint judgments in Legione v Hateley, namely that the judgment of Gibbs CJ and Murphy J appeared to rest on 'broad notions of where justice lies between vendor and purchaser', which he considered insufficiently specific.[79] Instead, he said:

The only warrant for equity's intervention to restrain the exercise of rights which equity and law recognize is that the exercise is unconscionable. That approach is not inconsistent with what Gibbs CJ and Murphy J said and it is

explicit in the judgment of Mason and Deane JJ. It is, in my opinion, the only legitimate warrant for equity's intervention.[80]

Although the categories of unconscionable conduct are not closed, the concept of unconscionability is not a charter for judicial reformation of contracts 'for the Chancery mends no man's bargain'. The courts have not sought a power to destroy the rights and obligations which the parties to a contract create. If unconscionability were regarded as synonymous with the judge's sense of what is fair between the parties, the beneficial administration of the broad principles of equity would degenerate into an idiosyncratic intervention in conveyancing transactions.[81]

91 Brennan J then endorsed the categories of unconscionability described by Lord Wilberforce in Shiloh Spinners. In relation to stipulations for forfeiture, inserted in a contract so as to secure the primary object of the contract, he said:

The usual purpose of such a stipulation is to furnish the sanction of forfeiture for breaches of covenant even though the breaches be minor. If the purpose of such a stipulation in a contract of sale is to secure performance of the purchaser's covenants and if relief can be granted to the purchaser on terms which compensate the vendor for any loss he has sustained by reason of the breach which enlivened the vendor's right to rescind, a clause which authorizes the vendor to take back the beneficial ownership of the land may be seen as exacting a penalty against which equity will relieve in accordance with the principle stated by Lord Macclesfield in Peachy v Duke of Somerset:

The true ground of relief against penalties is from the original intent of the case, where the penalty is designed only to secure money, and the Court gives him all that he expected or desired.[82]

92 Brennan J distinguished that case from the present, where the vendors were rescinding for repudiation of the contract constituted by the purchasers' failure to pay the balance of the purchase price, rather than in reliance on a contractual right to terminate for non-payment of instalments. The purpose of the general law right of rescission was not to secure performance of the contract but to secure its termination.[83]

93 Stern v McArthur served to reaffirm that unconscionable, or unconscientious, conduct is the touchstone for relief against forfeiture, at least in those cases where the forfeiture is not brought about by reliance on a contractual term whose object is to secure performance of the contract. In the latter kind of case, relief is available where the effect of the contractual term is penal, either for that reason alone or because insistence on a penalty is itself unconscientious. The difference between the members of the High Court arose largely in the application of these principles to the particular case.

94 The High Court returned to Stern v McArthur in Tanwar. That case concerned contracts for the sale of land in respect of which time was made of the essence after the completion date was extended several times. Due to a delay in obtaining finance, the purchaser was unable to complete on the new date. On the following day, finance had become available and the vendors were aware that the purchaser then wished to complete the contracts, but the vendors issued notices of termination in reliance on a contractual term permitting termination if the purchaser did not comply with the contract in an essential respect.

95 The Court held that it was not unconscientious for the vendors to exercise their contractual right to terminate the contracts. Gleeson CJ, McHugh, Gummow, Hayne and Heydon wrote a joint judgment.[84] They endorsed the use of the term 'unconscientious' in preference to 'unconscionable', because the question was what, in conscience, should be allowed as between the parties.[85] At the same time, they cautioned against the potential for the word 'conduct' to mislead, including by suggesting that equity may intervene where only hardship or unfairness in the terms of a transaction, or in the manner if its performance, has been shown.[86]

96 The joint judgment stated that the case turned on which of the views of Mason CJ and Gaudron J in Stern v McArthur as to the nature of the equitable jurisdiction should be preferred. It will be recalled that Mason CJ refused relief on the basis that the conduct of the vendors had not led to or contributed to the purchasers' breach, whereas Gaudron J granted relief on the basis that specific performance would secure the vendors' bargain and forfeiture would prejudice the purchasers. The joint judgment held that the view of Mason CJ was to be preferred. They explained:

In Legione, Mason and Deane JJ instanced 'fraud, mistake, accident, [and] surprise' as elements which may make it inequitable to insist on termination of a contract for failure to observe its strict terms. Subsequently, in Stern, Mason CJ took Legione and Ciavarella as establishing that the court will not readily relieve against loss of a contract for sale validly rescinded by the vendor for breach of an essential condition; and, in particular, equity was not authorised 'to reshape contractual relations into a form the court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable'. That latter proposition is at odds with the approach by Gaudron J in Stern ... but, nevertheless, it should be accepted as an accurate statement of the law. ...

Mason CJ dissented as to the outcome in Stern, but this was to a significant degree because of the view he took of the nature of the particular contract in question and the denial of an analogy drawn, particularly by Deane and Dawson JJ, to a mortgage transaction. To the extent that what Mason CJ said in Stern represented a development (or, perhaps, a contraction) of what had been put in the earlier cases, then it is to be preferred.

In Stern, Mason CJ also stated that equity intervenes only where the vendor has, by the vendor's conduct, caused or contributed to a circumstance rendering it unconscionable for the vendor to insist upon its legal rights. That helps explain why mere supervening events and changes in the relevant circumstances are insufficient. But it should be noted that cases falling within the heads of mistake or accident will not necessarily be the result of activity by the vendor. In addition, his Honour spoke in Stern of the circumstances being 'exceptional' to attract equitable intervention. That also emphasised the insufficiency of subsequent events which are adverse to the interests of one side. However, the term 'exceptional' is apt to be misunderstood ...[87]

97 The joint judgment went on to endorse the five 'subsidiary questions' identified by Mason and Deane JJ in Legione. However, their Honours cautioned that the questions were 'subsidiary' to the 'basic issue' whether there should be relief against forfeiture, based on an unconscientious use of the legal right to terminate.[88] The appeal was ultimately dismissed because the purchaser had not shown that it was against conscience for the vendors to terminate the contract: the purchaser had not laboured under any mistake, there was no accident or surprise attracting relief against forfeiture, and the conduct of the vendors had not in some significant respect caused or contributed to the breach of the essential time stipulation.[89]

98 The following principles, relevant for present purposes, emerge from these authorities. First, equitable relief against forfeiture may be available in two kinds of situation. The first situation is where there is a contractual stipulation for forfeiture which is directed at securing an object of the transaction, where that object can be attained by means other than forfeiture, such that insistence on forfeiture would constitute a penalty.[90] The second situation is where a party is entitled at law to terminate a contract and forfeit the relevant interest but it would be unconscientious to do so, whether because of fraud, mistake, accident or surprise or because of other unconscientious conduct such as taking advantage of a special vulnerability in order to derive an unjust enrichment.[91] Both kinds of case may be characterised as 'unconscientious', on the basis that it is unconscientious to take advantage of a penal forfeiture,[92] but the two are often treated separately, keeping the label 'unconscientious' for the latter situation.

99 Secondly, the Court should not intervene so as to interfere with the contractual rights of the parties merely because it thinks it would be fair or reasonable to do so because subsequent events have rendered one party's situation more favourable.[93]

100 Thirdly, equity will not intervene if forfeiture has resulted simply from one party's inadvertence, or that party's wilful default.[94]

101 Fourthly, the question of unconscientious conduct may be addressed by reference to the five 'subsidiary questions' identified by Mason and Deane JJ in Legione and set out at [80] above.

102 In the present case, the judge held that the 'penalty of terminating the Call Option Deed falls into the category of a penalty designed to enforce compliance with the contract' and that the right to terminate 'was not a genuine pre-estimate of any expected loss to JPA'.[95] He held that 'it would be unconscientious for GNPL to lose the right to restore its shareholding to 50 per cent' where it had shown its good faith by paying the disputed sum into its solicitors' trust account.[96]

103 In approaching the matter in this way, the judge appears to have treated the case as falling within the first kind of case referred to above, rather than as a case of unconscientious conduct on the part of JPA. That depended on showing that the provision allowing for termination was intended to secure a contractual benefit which could be attained by means short of forfeiture. The respondent argued that the benefit in question was the payment of legal costs as required under cl 9(a), and that the benefit had been secured by payment into GNPL's trust account rather than by forfeiture of the benefit of the deed.

104 However, the right of termination under cl 7 arose, not upon non-payment of the legal costs under cl 9(a), but upon the occurrence of an Insolvency Event, namely failure by GNPL to comply with a statutory demand in accordance with s 459F(1) of the Act. Under s 459F(2), the period for such compliance is 21 days or a later date in cases where the company applies for an order setting aside the demand. GNPL neither satisfied the demand nor applied to have it set aside. The right of JPA to terminate arose for that reason, and not because of non-compliance with cl 9(a). Put differently, the stipulation for termination did not secure JPA's entitlement to legal costs. It secured JPA's entitlement to deal with a party that was not liable to be wound up in insolvency for failure to comply with a statutory demand, under s 459Q of the Act.

105 For these reasons, in my opinion, the judge erred in ordering relief against forfeiture on the above basis.

106 GNPL also sought to advance the penalties argument in a slightly different way, by relying on the penalties doctrine applicable to contracts more generally, rather than treating the case as one of forfeiture. That involves identifying a contractual provision as having a penal operation which need not entail forfeiture.[97] Counsel accepted that the question whether a provision in a contract is a penalty is to be answered as at the time of formation of the contract.[98] However, it was said that it could readily be seen at the time of the execution of the option deed that, if a party was to achieve termination of the contract as a result of failure to comply with cl 9(a), by means of serving a statutory demand and then relying on the insolvency event provisions, this would constitute a penalty.

107 Accepting for present purposes the potential operation of the penalty doctrine in the context of contractual terms taking effect upon the occurrence of a defined

107 event of default,[99] the doctrine is not attracted in this case. The argument relying on the connection between termination of the contract and breach of cl 9(a) leaves out of account the supervening conduct of GNPL in choosing not to satisfy the statutory demand or seek to have it set aside. It cannot be said that such conduct would have been envisaged by the parties at the time of formation of the contract. It therefore could not be said that, in making allowance for termination in circumstances where JPA serves a statutory demand for breach of the deed, the parties were stipulating for a penal consequence of such a breach.

108 It is then necessary to turn to GNPL's notice of contention, by which it argues that it is entitled to relief against forfeiture based on the second kind of case referred to in the cases, namely as a result of unconscientious conduct on the part of JPA.

109 In that context, GNPL asserted that JPA's solicitors had failed to provide sufficient information in relation to JPA's legal expenses as required under s 198(6) of the Uniform Law to enable GNPL, as a 'third party payer' to seek a costs assessment. In addition, JPA served a statutory demand and asserted that there was no genuine dispute, and then terminated the option deed even though GNPL had paid the disputed amount into its solicitors' trust account.

110 These matters fall well short of establishing unconscientious conduct on the part of JPA. Reliance on the ability of a 'third party payer' to seek a costs assessment, even assuming that GNPL falls within that description, at best suggests that GNPL might have a basis for disputing with JPA's solicitors the amount of the legal costs. But GNPL's obligation under cl 9(a) was to reimburse JPA, on an indemnity basis, for the costs it actually paid, not to pay JPA's legal costs directly to its solicitors. Any issue under the Uniform Law about the proper amount of the costs was therefore a matter between GNPL and JPA's solicitors, independently of the obligation for reimbursement of JPA which arose upon the demand by JPA for payment. That being so, there was no reason why JPA could not serve a statutory demand, upon GNPL breaching its obligation under cl 9(a). As to whether there was a 'genuine dispute', it has not been shown that there was anything unconscientious in JPA taking the view that GNPL's refusal to pay on JPA's demand had no genuine basis. It fell to GNPL, on receipt of the statutory demand, to raise a genuine dispute if it wished to have the demand set aside, but it did not do so.

111 Finally, GNPL seeks to invoke the notion of mistake, relying on the argument that Mr Gordon thought that the arrangement involving the solicitors' trust account satisfied the statutory demand because the amount in issue had been secured. Even if that were so, mistake alone is not a basis for relief against forfeiture, in the absence of unconscientious conduct.[100] Moreover, it is hard to credit the proposition that a party could think that unilaterally depositing money in their own trust account, on terms proposed to be agreed, could amount to securing that money if terms were not in fact agreed. In the absence of JPA's agreement to its proposal, there was nothing to stop GNPL withdrawing the money and using it for other purposes. It adds nothing to rely on Mr Gordon's subsequent 'shock' when the notice of termination was issued. Again, nothing has been shown by way of unconscientious conduct on the part of JPA.

112 In the absence of unconscientious conduct on the part of JPA, the case becomes one of no more than perceived unfairness in the contractual bargain which allowed for termination on the occurrence of clearly defined insolvency-related events. Relief against forfeiture is not available just because events have rendered one side's situation more favourable than the other's, or by reference to notions of what might be a fair and reasonable bargain between the parties.[101]

113 In truth, the forfeiture took place because GNPL chose not to comply with, or to apply to set aside, the statutory demand and not because of any unconscientious conduct on the part of JPA. GNPL's course was not induced by any conduct of JPA. Nor has it been shown that anything said or done, or not said or done, by JPA induced GNPL's non-compliance. The case falls into the category of mere inadvertence, or wilful default, which lies well outside the bounds of relief against forfeiture.

114 For these reasons, the relief granted by the judge should be set aside.

115 Leave to appeal should be granted in respect of all grounds (proposed ground 3 clearly being arguable). The appeal should be allowed and the orders of the trial judge should be set aside. In their place, it should be ordered that the plaintiff's termination of the call option deed on 6 November 2017 was valid and effective.

116 JPA also sought a declaration that the obligations of the parties under the deed are at an end. It is unnecessary to make this further declaration. It is also undesirable, as it might extend to matters not the subject of the present dispute, including any rights the parties might have subsisting as a result of any other breaches of the deed.

117 I have had the advantage of reading in draft the reasons for judgment of McLeish JA. I agree, for the reasons his Honour gives, that the appeal should be allowed and that the orders he proposes should be made.

[1] (1990) 21 NSWLR 689 ('Tricontinental').

[2] (1991) 25 NSWLR 286 ('Bond').

[3] (2000) 170 ALR 579; [2000] HCA 20 ('Pan Foods').

[4] [2005] VSCA 29 ('MLW').

[5] [2018] VSC 694.

[6] [2014] VSCA 289; (2014) 45 VR 245 ('Salta').

[7] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSC 171 [58] (Croft J) ('Reasons').

[9] [2003] HCA 57; (2003) 217 CLR 315, 320 [5], 324 [19] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ) ('Tanwar').

[10] Reasons [67]-[68] (footnotes partly omitted).

[16] Legione v Hately [1983] HCA 11; (1983) 152 CLR 406, 444-5 ('Legione').

[17] Westminster Properties Pty Ltd v Comco Constructions Pty Ltd (1991) 5 WAR 191.

[19] Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd (2018) 19 BPR 38569, 38577-8 [23]-[30]; [2018] NSWCA 114 (Bathurst CJ, with Beazley P and Payne JA agreeing) ('Auburn Shopping Village'); O'Shea v Anthanasakis [2009] NSWSC 1150 [63]-[87] (Forster J).

[20] Bond (1991) 25 NSWLR 286, 293 (Gleeson CJ), see also 312-3 (Kirby P).

[21] [2014] EWHC (Ch) 1156 ('Greenclose').

[22] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] FCA 825; (2016) 329 ALR 1, 156-8 [981]-[990]; [2015] FCA 825 (Edelman J); Auburn Shopping Village (2018) 19 BPR 38569, 38577 [25]; [2018] NSWCA 114 (Bathurst CJ, with Beazley P and Payne JA agreeing).

[23] Commissioner of Taxes (Qld) v Camphin [1937] HCA 30; (1937) 57 CLR 127; Costa & Duppe Properties Pty Ltd v Duppe [1986] VicRp 9; [1986] VR 90.

[24] [1983] HCA 11; (1983) 152 CLR 406, 449 (Mason and Deane JJ) ('Legione').

[25] (1990) 21 NSWLR 689, 711-2 (Waddell AJA).

[35] [1987] HCA 15; (1987) 162 CLR 549, 557 (Mason ACJ, Wilson, Brennan and Dawson JJ).

[36] Tricontinental (1990) 21 NSWLR 689, 706.

[39] Bond (1991) 25 NSWLR 286, 291-2.

[42] Ibid 293 (citation partly omitted).

[50] Pan Foods [2000] HCA 20; (2000) 170 ALR 579, 580-1 [4]-[5].

[54] Ibid 582-3 [14], 584-5 [23]-[25].

[57] Ibid 589-90 [52], 590-1 [54], 593 [64].

[58] [1997] UKHL 19; [1997] AC 749, 767-771.

[59] [2005] VSCA 29 [78]-[82].

[60] [2014] VSCA 289; (2014) 45 VR 245, 253-4 [28]; see also Yan v Zhang [2018] VSC 694 [111] (Kennedy J).

[62] MLW [2005] VSCA 29 [78]-[82] (citations omitted).

[63] Strict conformity with the requirements for addressing a notice was also held not to be required in Greenclose [2014] EWHC (Ch) 1156 (Andrews J), the English case upon which GNPL relied: see at [123].

[64] [1983] HCA 11; (1983) 152 CLR 406, 424, quoting Shiloh Spinners Ltd v Harding [1973] AC 691, 772-3 (citations omitted).

[70] See Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] FCA 825; (2016) 329 ALR 1, 156-8 [981]-[990]; [2015] FCA 825 (Edelman J); Tanwar [2003] HCA 57; (2003) 217 CLR 315, 330-3 [47]-[53] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); Auburn Shopping Village (2018) 19 BPR 38569, 38581-2 [49]-[51], 38582-3 [56]; [2018] NSWCA 114 (Bathurst CJ, with Beazley P and Payne JA agreeing).

[71] [1988] HCA 51; (1988) 165 CLR 489.

[76] [1983] HCA 26; (1983) 153 CLR 438.

[77] Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 502-3 (citations omitted).

[84] In the interests of shortening the present judgment, it is not necessary to refer to the judgment of Kirby J and Callinan J, who reached the same conclusion.

[85] Tanwar [2003] HCA 57; (2003) 217 CLR 315, 324 [20]-[21].

[87] Ibid 328-9 [37]-[39] (footnotes omitted).

[88] Ibid 320 [5], 324 [19], 330 [44].

[90] Legione [1983] HCA 11; (1983) 152 CLR 406, 424, 445 (Gibbs CJ and Murphy J), 445 (Mason and Deane JJ); Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 514-6 (Brennan J), 527 (Deane and Dawson JJ).

[91] Legione [1983] HCA 11; (1983) 152 CLR 406, 424 (Gibbs CJ and Murphy J), 444-5, 447 (Mason and Deane JJ); Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 503 (Mason CJ), 513-4 (Brennan J), 526-8 (Deane and Dawson JJ); Tanwar [2003] HCA 57; (2003) 217 CLR 315, 328-9 [37]-[39] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ). See also Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392, 439-40 [161] (the Court); Thorne v Kennedy [2017] HCA 49; (2017) 91 ALJR 1260, 1272 [38]; [2017] HCA 49 (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ) and, in the context of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth), Australian Securities and Investments Commission v Kobelt [2019] HCA 18 [15] (Kiefel CJ and Bell J), [81] (Gageler J), [118] (Keane J), [145]-[153] (Nettle and Gordon JJ), [267], [280] (Edelman J).

[92] Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 527 (Deane and Dawson JJ).

[93] Legione [1983] HCA 11; (1983) 152 CLR 406, 447 (Mason and Deane JJ); Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 503 (Mason CJ), 514 (Brennan J), 526-7 (Deane and Dawson JJ); Tanwar [2003] HCA 57; (2003) 217 CLR 315, 328-9 [37]-[39] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).

[94] Legione [1983] HCA 11; (1983) 152 CLR 406, 424 (Gibbs CJ and Murphy J), 449 (Mason and Deane JJ); Stern v McArthur, 503 (Mason CJ), 512 (Brennan J), 527 (Deane and Dawson JJ); Tanwar [2003] HCA 57; (2003) 217 CLR 315, 329 [40], 330 [44] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).

[97] See, eg, Ringrow Pty Ltd v BP Australia Pty Ltd [2005] HCA 71; (2005) 224 CLR 656, 662 [9], 665-6 [21]-[22].

[98] Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525, 556 [62] (Kiefel J), 582 [169] (Gageler J); Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd (2017) 18 BPR 36683; [2017] NSWCA 99 [329] (Ward JA, with McColl and Gleeson JJA agreeing).

[99] See, eg, Interstar Wholesale Finance Pty Ltd v Integral Home Loans Pty Ltd [2008] NSWCA 310; (2008) 257 ALR 292, 334 [157]-[158] (Allsop P, with Giles and Ipp JJA agreeing); [2008] NSWCA 310; Legal Practice Management (Vic) Pty Ltd (in liq) v Simms Corp Hotels & Leisure Pty Ltd [2013] VSC 734 [7]-[8], [87]-[89] (Sloss J).

[100] See, eg, Auburn Shopping Village (2018) 19 BPR 38569, 38584 [62]; [2018] NSWCA 114 (Bathurst CJ, with Beazley P and Payne JA agreeing).

[101] Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 503 (Mason CJ), 514 (Brennan J), 526-7 (Deane and Dawson JJ); Tanwar [2003] HCA 57; (2003) 217 CLR 315, 328-9 [37]-[39] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).