Knight v Mayart Pty Ltd [2022] VSCA 36

EVIDENCE - Whether undiscovered documents tendered during trial were admitted contrary to Evidence Act 2008 - Authenticity of documents - Whether authenticity must be proven by extrinsic evidence - National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309, not followed - Evidence Act 2008 s 58.

PRACTICE AND PROCEDURE - Natural justice - Self-represented litigant - Whether breach of Civil Procedure Act 2010 or procedural unfairness where new evidence admitted during trial - Evidence relevant to issue only raised by applicant during trial, and applicant had notice of substance of evidence - No breach.

1 This is an application for leave to appeal an order of a judge of the County Court which required the applicant ('Mr Knight') to pay the first respondent ('Mayart'), and the second and third respondents ('Mr Daley' and 'Ms Daley', or 'the Daleys') various sums of money exceeding $900,000.[1] These sums were owed under two loan agreements, wherein Mr Knight had guaranteed his then-wife's repayment obligations to Mayart and the Daleys.

2 The loans arose in circumstances where Mr Knight and his wife were intending to develop a property located at Parkdale, of which Mrs Knight was the registered proprietor, into a number of apartments. They engaged a builder for that purpose. When a dispute arose with the builder concerning outstanding invoices, the loans were entered into and monies were advanced to Mrs Knight. It was anticipated that the loans would be repaid upon settlement of contracts for the sale of two of the apartments once the property was developed. When the contracts of sale were terminated, the loans remained unpaid.

3 Both loan agreements included reference to the 'Lender' providing a copy of a 'Building Contract' to the 'Builder' (Dalle Projects Pty Ltd ('Dalle Projects'), of which Mr Daley was the sole director) for execution by the Builder. During the course of the proceeding below, Mr Knight alleged that there was a breach of these 'terms'. In particular, he alleged (in a mid-trial pleading amendment) that these terms were a precondition to his liability as a guarantor, and (on the last day of evidence) that these terms were 'absolutely essential'. He alleged that no building contract was provided. He submitted that the judge should therefore have found that he was discharged from liability as a guarantor, relying on Ankar Pty Ltd v National Westminster Finance (Australia) Ltd[2] (proposed ground 4).

4 During trial, the respondents' counsel produced a number of documents in response to Mr Knight's claims based on Ankar, intended to demonstrate that there was no breach of the alleged terms. Mr Knight claims that two of these documents (to be referred to as 'the new evidence') were admitted in breach of the Evidence Act 2008 (proposed ground 1). He also claims that their admission constituted a breach of the Civil Procedure Act 2010 ('the CPA'), resulting in procedural unfairness (proposed ground 3).[3]

5 In the result, the following three proposed grounds of appeal were pursued:

1. The Court admitted evidence contrary to the Evidence Act 2008 (Vic) and the common law.

...

3. The Judge erred by failing to ensure the requirements of the Civil Procedure Act 2010 were adhered to resulting in procedural unfairness to the [applicant].

4. The Judge erred by failing to apply the common law as set down by the High Court of Australia Re: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549 (7 May 1987).

6 For the following reasons, we have determined that leave to appeal will be refused. Even if there was a breach of the alleged terms to provide and execute a Building Contract, such terms do not constitute conditions the breach of which would give rise to a defence based on Ankar. It is therefore unnecessary to consider Mr Knight's submissions that the judge also erred in finding that there was no breach, nor Mr Knight's complaints about the new evidence (which relate to whether there was a breach). However, we also consider those claims to be unsustainable.

7 Mr Knight informed the Court that he holds the degree of Bachelor of Laws with First Class Honours, together with a bachelor's degree of business and property, and that he is also studying for a master's degree in construction law at the University of Melbourne. He appeared for himself before the judge at trial and before the Court on this application, although he was given leave to be assisted by an administrative assistant, Ms Philippe,[4] who sat with him at the bar table. Mr Knight presented as articulate and capable.

8 Mr Knight married Mrs Philippa Knight in 1990 - though they are now divorced. Mr and Mrs Knight ('the Knights') bought and sold a succession of houses from 1990 to 2009.

9 On 16 April 2009, Mrs Knight became the sole registered proprietor of a property at 39 Parkers Road, Parkdale ('the Property'). Mr Knight arranged for the preparation of plans for a 12-apartment development on the Property ('the Development'). This was the first property that the Knights had acquired as a development site. There were three registered mortgages over the Property, the second ranking of which was held by Residential Villages (Aust) Pty Ltd ('RVA').

10 The builder appointed to carry out the works for the Development was J G King Projects Pty Ltd ('J G King'), and Mrs Knight entered into a contract with that company accordingly.

11 At some point thereafter, the Knights and J G King fell into dispute. Mrs Knight subsequently consented to a judgment in favour of the builder for $491,000. The judgment remained unsatisfied and, by August 2014, Mrs Knight had been served with a bankruptcy notice. It became essential for the Knights to raise money to settle the bankruptcy proceeding to avoid losing control of the Property and the Development.

12 To meet this emergency, Mr Knight decided to raise funds by selling one or two of the apartments in the (uncompleted) Development, and made contact with a 'broker', Mr Robert Cleary, who introduced Mr Knight to Mr Daley (the second respondent). Mr Cleary had told Mr Daley about 'an opportunity for two off-market apartments at a discount' but it needed to be 'paid now' so that the old builder could be made to 'p... off'.

13 Mr Daley, who described himself as an experienced builder, agreed to have his company's family trust purchase an apartment in the Development ('Apartment 11'), as part of the money-raising process. Mr Daley's father-in-law, Mr Cox, had a family trustee company, Mayart (the first respondent) which would purchase 'Apartment 10' (Apartments 10 and 11 will be referred to as 'the Apartments'). Mr Daley said that Mr Knight had assured him that the existing lenders, including RVA, agreed to the discounted sales. However, there was some delay in the preparation of the sale contracts for the Apartments. Mr Knight therefore approached Macpherson & Kelley Lawyers ('M&K') to have a loan agreement prepared, to ensure that the funds were available for satisfaction of the judgment debt.

14 Two agreements (both designated as 'Loan Agreements') were then prepared by M&K and executed, dated 18 August 2014.

15 On the first operative page of one of the agreements ('the first Loan Agreement'), the Lender is shown as 'Lincoln and Leanne Daley/Dalle Projects'. However, the execution pages show execution by Mrs Knight as Borrower, the Daleys as Lender, and Mr Knight as Guarantor. According to the schedule, the loan amount is $225,000 (item 2). The interest rate is shown as '0.0% per annum on the basis that the Borrower shall not be in default' (item 4). The security is shown as 'Nil' (item 5), and the loan term is stated to be as follows (item 3):

From the Commencement Date ending on the earlier of:

(a) date on which settlement of the Contract of Sale is effected;

(b) fourteen (14) days after any valid rescission of the Contract of Sale; and

(c) twenty four (24) months after the Commencement Date.

16 'Commencement Date' means the date of the agreement (item 1), while the expression 'Contract of Sale' is defined to mean 'the contract of sale for the Apartment between the Borrower as vendor and Lender as purchaser' (cl 1.1(e)). 'Apartment' is defined to mean 'Lot 11' (cl 1.1(a)).

17 Clause 3.1 provides that 'the Borrower must only use the Loan for the Purpose', where the Purpose is 'to assist in the discharge of existing debts in relation to the Property and develop the Property' (schedule item 6). As in these reasons, 'the Property' is 39 Parkers Road, Parkdale (cl 1.1(u)).

2. Loan

2.1 The Loan is made by the Lender to the Borrower on the following terms: -

(a) the Borrower must give the Lender any documents the Lender requires which may be relevant to the Loan or the Security;

(b) the Lender must provide the Building Contract to Dalle Projects Pty Ltd (ACN 147 573 948) ('the Builder') within fourteen (14) days of this Agreement, noting that the Builder has agreed to execute and return within twenty-one (21) days of this Agreement the Building Contract; and

(c) the Borrower must enter into a Contract of Sale for the Apartment concurrently with this Loan.

2.2 The Lender hereby lends to the Borrower and the Borrower hereby borrows the amount of the Loan. The Loan shall be advanced on the Commencement Date for the amount set out in Item 2 of the Schedule.

2.3 Unless otherwise determined or varied according to any power given to the Lender by law, the Borrower will repay to the Lender the amount of the Loan together with Interest thereon at the times and in the manner set out in Clause 5 of this Agreement.

2.4 The Borrower acknowledges and confirms that the Loan made herein shall be a separate and distinctive loan to any other loans secured by or registered or unregistered on the Security Property.

19 Clause 2.1(b) took on some significance in this proceeding. As above, the 'Builder' referred to in cl 2.1(b) of the first Loan Agreement (and cl 2.5 of the second Loan Agreement discussed below), is Dalle Projects, a company of which Mr Daley is the sole director. The 'Building Contract' is defined to mean 'a building contract for the construction of twelve (12) apartments and basement carpark on the Property' (cl 1.1(c)).

5. Repayment of the Loan

5.1 The Borrower must repay all of the Loan and Interest outstanding to the Lender in clear funds on or before the Due Date.

5.2 The Borrower must make any repayment of the Loan by bank cheque, direct deposit or in such other manner reasonably requested by the Lender (for example repayment anticipated pursuant to Settlement in accordance with clause 5.3 below), from time to time.

5.3 For the purposes of repayment of the Loan as specified in clause 5.1 above, and upon the Borrower as vendor and the Lender as Purchaser entering into a legally binding Contract of Sale for the consideration as defined therein, the Loan is deemed to have been repaid upon Settlement. The Lender acknowledges that any amounts in addition to the Purchase Price that are owing from the Lender (as purchaser) to the Borrower (as vendor) pursuant to the Contract of Sale must be paid by the Lender (as purchaser) to the Borrower (as vendor) at Settlement.

21 Thus, pursuant to cl 5.3, and schedule item 3, the loan is deemed to be repaid upon settlement of the Contract of Sale for Apartment 11. If there is no settlement, repayment is still necessary.

22 Clause 7 contains a standard default clause which provides that the 'Outstanding Liability'[5] shall become immediately payable at the option of the Lender in certain circumstances, including where the Borrower defaults in due and punctual payments, and such default is not remedied within 7 days of receipt of a written notice of default (cl 7.1(a)).

23 Mr Knight's guarantee is then contained in cl 8 which provides for an irrevocable guarantee and indemnity in relation to the Outstanding Liability.

24 The other agreement ('the second Loan Agreement') is substantially similar, except that the Lender is Mayart, the amount of the loan is $400,000 (schedule item 2), and the 'Contract of Sale' to be entered into concerns Apartment 10 (cl 1.1(a)). The reference to the Building Contract is also contained in cl 2.5 (not 2.1(b)) and reads:

2.5 The parties acknowledge that the Lender will provide the Building Contract to Dalle Projects Pty Ltd (ACN 147 573 948) ('the Builder') for execution by the Builder.

25 Contracts of Sale for both of the Apartments were executed in the period 18 to 20 August 2014. The Contract of Sale for Apartment 11 was executed by the Daleys as purchaser, and Mrs Knight as vendor. The contract for Apartment 10 was signed on behalf of Mayart as purchaser and by Mrs Knight as vendor. Both contracts identified that the price ($225,000 in the case of Apartment 11, and $400,000 in the case of Apartment 10) had been 'paid in full'.

26 It appears that the loan funds were used to pay out the former builder.

27 As will appear below, there was evidence that a Building Contract was then entered into between Dalle Projects and Mrs Knight, in about September 2014.[6] However, it also appears that RVA attempted to sell the Property by auction in October 2014, which the respondents suggested frustrated the implementation of that contract. In this period, RVA's precise rights were unclear,[7] and the judge found that any attempt to have another builder step in to undertake the Development during the second half of 2014 was 'fraught with difficulty'.[8] Ultimately, after RVA's attempted sale fell through, it appears that Dalle Projects was re-engaged to work on the Development in 2015.

28 The Daleys and Mayart never acquired the Apartments, in a context where the Development was delayed and costs blew out. On 20 September 2018, the Daleys received a document entitled Termination/Rescission Notice which purported to cancel their contract to purchase Apartment 11 based on a 'sunset' clause in the Contract of Sale (which entitled either party, in the event of completion of the building and registration of the plan of strata subdivision not being completed within a stipulated time, to cancel the contract).[9] The notice was given in the name of Mrs Knight, but by a Mr Sheppard (the principal of RVA) as her attorney, and also as a director of RVA.

29 On 31 October 2018, the respondents (hereafter referred to as 'the plaintiffs') commenced the proceeding below. The defendants to the proceeding were Mrs Knight, RVA, and Mr Knight. The claim included a claim for failing to make title under the relevant contracts of sale. Mr Knight emphasised that it was a complex claim which sought orders for equitable remedies. However, it also contained a claim under the Loan Agreements.

30 The judge observed that Mr Knight's position as to his defences seemed to evolve in the course of trial, and that he ultimately raised a different set of defences from that pleaded. Thus, in his original defence filed 1 April 2019 there was no reference to the Building Contract. Rather, there was only a generalised claim that the plaintiffs had failed to comply with unspecified 'implied obligations' to do all things necessary to enable them to become the registered proprietors of the Apartments.[10]

31 At hearings on 21 June 2019 and 31 July 2019, RVA sought orders for summary judgment. As noted by the judge, it appears that, at this time, Mr Knight's interests were to some degree aligned with those of the plaintiffs.[11] In fact, the evidence relied upon by the plaintiffs included an affidavit of Mr Knight sworn 21 June 2019 ('the Knight affidavit'), as well as an affidavit of Mr Daley sworn 10 July 2019 ('the Daley affidavit').

32 The Knight affidavit contains the following statement:

Mr Daley agreed to buy two apartments in the development if he was appointed as the head Contractor to build the project so he could have some control. The first defendant agreed to the arrangement, the loan was made, contracts entered into and a building contract signed between the first defendant and Mr Daley's building company.[12]

I next refer to Mr Knight's affidavit at paragraphs 12 and 13 and say that, in the days following the 20 August 2019 [apparently a reference to 2014], I agreed with Philippa and Michael Knight to become the 'builder' for the project. Now produced, shown to me, and marked as 'DS-4' are copies of emails dated 2 September 2014 between me and Alex McKellar, the lawyer for Ms Knight. Now also produced, shown to me, and marked as 'DS-5' are copies of emails dated 22 August 2014 between me and Mr Knight.

... In the weeks between 20 August 2014 and 29 September 2014, I visited the project site on many occasions (often accompanied by Peter Walsh, the senior project manager for the project) as part of my duty to establish and supervise the work site. For instance, I supervised the establishment of fencing, the provision of temporary power supply, and the performance of preliminary groundworks such as site-clean up, installing capping beams. and other tasks. On no occasion before 29 September 2014 did I see any evidence whatsoever that anyone but the registered owner, Ms Knight, was in possession of the site. Before 29 September 2014, there were no notices or signs displayed on the site that referred to Residential Villages (AUST) Pty Ltd (RVA) in any way.

I signed the original building contract with Ms Knight in September 2014. After the failed auction sale that took place on 18 October 2014, Dalle Projects proceeded as builder for the project.[13]

34 Exhibit DS-4 is an email dated 2 September 2014 from Mr McKellar (of M&K) to Mr Daley, copied to Mr Knight, which contains the following statement:

On a related note Rob Cleary advised you would send a copy of the building contract through. I have not seen it. It may be that I do not need to but I thought I would mention that it hasn't come through.

35 Both the Daley affidavit and the Knight affidavit were part of the evidence at trial.[14]

36 On 30 August 2019, Judge Woodward granted RVA's application for summary judgment, and dismissed the plaintiffs' claim against it. On 9 October 2019, he also ordered that the defendants file and serve a defence to the plaintiffs' further amended statement of claim by 29 October 2019. Mr Knight did not file an amended defence by that date.

37 However, on 11 June 2020, Mr Knight applied for leave to file an amended defence. This application was dismissed by orders of Judge Cosgrave made on 13 August 2020. Mr Knight made another application to file an amended defence in October 2020, which was 'very similar in substance' and which was also refused by orders of Judge Cosgrave made on 12 October 2020.

38 On 15 October 2020, Mr Knight was ordered by a judicial registrar to file and serve an administratively amended defence by 30 October 2020. This administratively amended defence was to line up the paragraphs of the further amended statement of claim with the paragraphs of the defence.

39 Mr Knight's 'administratively amended defence' was filed on 26 October 2020. This pleading went further than realigning the paragraphs, however it still did not raise any concerns about a failure to provide a Building Contract. In fact it says:

Further, he says the original building contract required by the Loan Agreements between the Second and Third plaintiffs and the First Defendant was in the sum of $2,980,000 only.[15]

40 Mr Knight also filed a witness statement dated 2 November 2020 which did not refer to the Building Contract or allege any failure to provide it.

41 The trial had been listed to commence on 16 November 2020. On 13 November 2020, the plaintiffs sought to challenge Mr Knight's administratively amended defence as being non-compliant with the judicial registrar's orders. However, the judge allowed the administratively amended defence to serve as Mr Knight's defence in the proceeding_._

42 Shortly prior to trial, Mrs Knight went bankrupt by way of a debtor's petition, leaving Mr Knight as the sole defendant.

43 The trial then commenced on Tuesday 17 November 2020 and lasted six days.

44 On the first day of trial, the plaintiffs indicated that, given the disappearance of RVA from the proceeding and the bankruptcy of Mrs Knight, the only relief sought was the recovery of liquidated sums owing under the guarantees, with the result that there was no longer any claim for equitable relief. In such circumstances, the judge indicated a concern that Mr Knight's defences of laches and acquiescence could not succeed against a purely common law claim. The judge told Mr Knight that he was at liberty to rely upon the same matters (the subject of his pre-existing laches and acquiescence defence) by way of the common law defence of abandonment.[16]

45 The following day (18 November 2020), Mr Knight provided the Court with a revised version of his 'administratively amended defence', substituting the allegations related to laches and acquiescence with allegations related to abandonment. In particular, this revised version included the following unnumbered paragraph (appearing on pp 17-19 of the document):

By reason of the following matters, any rights the Plaintiffs might have had pursuant to these Agreements should be considered Abandoned:

...

e) Upon execution of the Contracts of Sale, neither party to the Loan Agreements pursued their rights nor satisfied their obligations outlined in the Loan Agreement, including conjunctive obligations provided at clause 2.1 b) and c) in the Agreement (CB 151-152) considered pre-conditions to the enforceability of the Loan Agreement and in particular to the formation of any contract of guarantee.

The rights and obligations not enforced or satisfied included rights and obligations accruing to both the lender and borrower. Conjunctive obligations including the execution of a building contract were left unperformed and not enforced by the borrower, despite substantial benefit which would arise to both parties upon its execution and implementation. ...[17]

46 There was some extensive exchange between counsel for the plaintiffs and the bench about this pleading. However, the approach of counsel for the plaintiffs appeared to be that he would 'register' an objection, although he agreed to proceed on the assumption that the amended defence was 'in', subject to addressing the matter further in closing submissions. Counsel noted that he had not had time to examine the changes made to the pleading, and reserved his right to object to any identified discrepancies (going beyond the permitted changes) in closing submissions.

47 From 18 November 2020 to 20 November 2020 the plaintiffs then called five witnesses, including Mr Daley. Mr Daley was not cross-examined about the statements contained in the Daley affidavit set out above, and the plaintiffs closed their case on (Friday) 20 November 2020. Mr Knight then called a witness (Mr Cleary) and commenced giving evidence himself.

48 The weekend then intervened and the trial resumed on 23 November 2020.

49 Mr Knight continued to give evidence in chief on 23 November 2020. During this evidence he stated that he believed it was 'common ground that a building contract wasn't entered into between Mrs Knight and Dalle Projects under the various loan agreements'. Counsel for the plaintiffs denied that this was common ground.

50 Under cross-examination, Mr Knight was then asked whether his evidence was that no contract (referred to at cl 2.1(b)) was even 'provided'. Mr Knight confirmed that this was his evidence.

51 After having reviewed Mr Knight's revised pleading over the weekend, counsel for the plaintiffs then queried whether Mr Knight's amendments had also inserted a new defence by alleging the existence of an unfulfilled precondition. The following exchange subsequently took place:

MR KNIGHT: Your Honour, this was a matter that I was going to deal with in closing submissions. However, now that your Honour has asked, there is a legal premise here and the evidence I'll give now is that there is no way I would have signed a contract of guarantee with these lenders unless that building contract between Dalle Projects and my wife that I was to be the superintendent of would have had control of time, cost and money, would have - would I have executed - it was an absolutely essential term as far as I was concerned.

HIS HONOUR: Now, is that mentioned in your witness statement, the proposition that you've just put? --- No, I don't believe it is, your Honour.

MR KNIGHT: And so is it articulated in any document that has been filed in the proceeding? --- Not in exactly those words.

HIS HONOUR: Well, you can understand why Dr Wolff and I, and I think we're on the same page there, are dismayed to see this new issue arise so late. Was it a point that you were holding back for a bit of fireworks at the end, or why haven't you given utterance to it until now? ---

MR KNIGHT: Your Honour, every document I put on file up until this trial started last Tuesday was in response to the way the plaintiffs had framed their case. ...

52 The plaintiffs' counsel put to Mr Knight that he was knowingly telling an untruth in his evidence that no Building Contract had ever been sent or executed. Mr Knight maintained that 'there was no document provided or executed'.

53 Counsel for the plaintiffs then produced a number of documents for tender. First, he sought to tender the Knight affidavit, which the judge ultimately admitted as Exhibit J. Mr Knight was cross-examined about this affidavit. He denied that the affidavit was in direct contradiction of his evidence and claimed that, in the affidavit, he was referring to a building contract entered into in April 2015 between a company named Parkers 39 Pty Ltd (a company incorporated by him of which he was the sole director and Mrs Knight the sole shareholder) and Dalle Projects. Secondly, counsel also tendered the email dated 2 September 2014, already cited as 'DS-4' to the Daley affidavit (admitted as Exhibit K). Mr Knight accepted before us that he was not objecting to Exhibit K (which was already in the Court Book).

54 However, there were two further documents also tendered ('the new evidence') as follows:

• an email dated 18 September 2014, from Mr Daley to Mr Knight (admitted as Exhibit L), wherein Mr Daley (shown as managing director for Dalle Projects) states that he attaches 'contract docs for the [Development] signed by myself in preparation of [Mrs Knight] also signing the docs'; and
• the first 10 pages of a document, said to be extracts of the Building Contract between Mrs Knight and Dalle Projects (which was said to be over 100 pages in total). The extracted pages comprise the 'Formal Instrument of Agreement' and were admitted as Exhibit M. The exhibit includes the execution page which contains a signature next to the name of the director for Dalle Projects, given as Lincoln Daley, with a date given of 18 September 2014. It also contains the name of Mrs Knight (though it contains no signature of Mrs Knight). It provides for a contract sum of $2,980,000.

55 Counsel for the plaintiffs indicated at trial that extracts from the contract were sufficient from his perspective, but said that he had copies of the (full) original document and had provided them to the Court in electronic version. He proposed to also send the electronic version to Mr Knight afterwards. However, counsel did not do so, and Mr Knight did not ask for it.

56 On the production of these documents, Mr Knight purported to 'lodge [a] formal objection' to the authenticity of the documents. He accepted (on this application) that he saw the documents (but said it was after they were tendered), which was consistent with the fact that he raised concerns about different fonts in respect of the emails. He focused on Exhibit M, and highlighted that it was not executed by Mrs Knight, and that he had never seen the document before. He suggested that both Exhibits L and M were forged, and questioned why they were never included in the Court Book .

57 Following Mr Knight's objection, the judge considered that relevance was established.

58 In respect of the objection as to forgery, the judge asked the plaintiffs' counsel where the documents came from. Counsel accepted that Exhibits L and M were not in the Court Book. However, he cited the sworn testimony in the Daley affidavit and the Knight affidavit which 'all fits' with the signing of the Building Contract. He submitted that no allegation of a condition precedent was raised until the mid-trial pleading amendment.

59 The judge thereafter suggested that any further issues were to be the subject of closing submissions (and, as will be seen below, did not accept the suggestion that the documents were 'forgeries'). Mr Knight was then cross-examined about the new evidence (especially Exhibit M) and addressed the matter of the Building Contract in final submissions.

60 The judge reserved, and later delivered the Reasons on 8 December 2020.

61 His Honour regarded the plaintiffs' primary case as having been made out. Thereafter, his Honour turned to consider Mr Knight's defences. The judge rejected, in turn, the various defences raised[18] and ultimately gave judgment in favour of the plaintiffs.

62 For current purposes, only one of Mr Knight's defences is relevant, being to the effect that the provision and execution of a Building Contract is a 'precondition', such that Mr Knight is discharged from liability based on the Ankar principles if that condition is not met.

Proposed ground 4 - alleged failure to apply Ankar

63 His Honour referred to matters surrounding the Building Contract in the Background section of his Reasons:

As to the Building Agreement referred to in both loan agreements and referred to in clause 2.1(b) of the agreement between Mr and Mrs Daley and Mrs Knight, Mr Knight said no such agreement was ever provided. (T527, L22-24) As will appear, Mr Knight as the third defendant, relied upon this alleged contravention of the terms of the loan agreements as a vital part of his defence to the plaintiffs' claims against him - perhaps as the centrepiece. It will be necessary to make a finding as to whether, as Mr Knight alleged, no such building agreement was provided or, as the plaintiffs contended, it was provided but its implementation was frustrated (not necessarily in the legal sense) by actions taken by registered mortgagee RVA. The plaintiffs produced a construction contract for 39 Parkers Road, Parkdale naming Mrs Knight as principal and Dalle Projects Pty Ltd as the contractor. (Exhibit M) The title and preliminary pages and the execution clause were put into evidence as Exhibit M and the 'bulk' of the contract was displayed by Dr Wolff but not tendered. Exhibit M shows the agreement execution page with execution dated 18 September 2014 on behalf of Dalle Projects by Mr Daley as director. Exhibit L was what purported to be a copy of an email from Mr Daley to Mr Knight on 18 September 2014 where Mr Daley said, 'Please see attached the contract docs for Parkers Road project signed by myself in preparation of Phillipa [sic, scil, Mrs Knight] also signing the docs.' Also relied on by the plaintiffs in this regard was an email exchange between Mr Daley and Mr Alex McKellar of M+K Lawyers dated 2 September, where Mr McKellar inquired as to the whereabouts of the contract. Mrs Knight said that these documents were a fraud and forgery. (T542, L31 to T543, L7) It will be necessary later to make findings as to the genuineness or otherwise of these documents.[19]

64 His Honour considered these matters further under the heading 'Loan agreements conditional on building contract'. In so doing, he recorded Mr Knight's closing submission that the plaintiffs failed to either provide or execute the required Building Contract within the requisite time provided in the Loan Agreement. In so doing, they were said to have breached an essential term, such that his obligations as a guarantor were discharged. Counsel for the plaintiffs relied upon Exhibits K, L and M, and further suggested that the Daley affidavit and the Knight affidavit supported the conclusion that the agreement had been executed, at least by Dalle Projects. The judge stated:

Mr Knight's contention that Exhibits K, L and M are forgeries is implausible. Particularly when, in 2019, when it seems that the plaintiffs and Mr Knight were to some degree aligned with one another in resisting RVA's summary judgment application, he swore that the agreement had been entered into and, by necessary implication, 'provided'.

With RVA removed from the scene, in June this year the Knights were the sole defendants. At trial, Mr Knight had become the sole defendant. He had an obvious interest then in asserting that what he swore happened in 2019 occurred, when it might have been in his strategic interest to say that these matters had not in fact occurred. I am satisfied that, as required by the loan agreements, the building contract was 'provided' by the Daleys, executed by the 'Builder' and returned to Mr Knight on behalf of Mrs Knight.[20]

65 His Honour also rejected the contention that a failure to enter into the Building Contract would have represented a breach of an essential term or non-fulfilment of a condition precedent such that Mr Knight would not be liable as guarantor. He referred to the proper approach to the construction of commercial contracts as restated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd,[21] and found:

A reasonable business person would not think it an appropriate construction of contractual arrangements that the liability of a borrower or a guarantor for monies already outlaid should be defeasible based on a failure of the lender to 'provide' an agreement with another corporation not a party to the loan arrangement, much less based on an alleged failure of that other party to execute such agreement.[22]

66 His Honour also considered the case of Ankar, noting Mr Knight's submission that he had a legitimate interest in the relevant contracts being entered into and performed because it would place him in the role of superintendent, which is a powerful, almost quasi-judicial role in the administration of building contracts.[23] His Honour continued:

There is of course an element of unreality in all this. The narrative so far indicates that the problem in 2014 and 2015 was that RVA was asserting overriding powers as mortgagee in possession. I was told that whilst the Knights commenced proceedings to 'oust' RVA and reassert control over the development site, ultimately those proceedings were compromised on terms that RVA was neither ousted from control of the site nor restrained from exercising a mortgagee's power of sale over the apartments in the development.

According to Mr Knight, the settlement entailed his former wife walking 'out of that court that day with a very, very, very large sum of money that she wouldn't have otherwise - so I won't call it an abject failure'. (T563, L28 - T564, L2).

If the objective of the building contract referred to in the loan agreements was to place Mr Knight in the saddle as superintendent within the meaning of that contract, this could never have happened. Mr Knight might have been appointed 'superintendent' by Mrs Knight but this in itself would not have enabled him to seize control of the development from RVA. It must be admitted, however, that the strictness of the rule stated by their Honours in Ankar's case would appear to be supportive of Mr Knight's contentions here. Nevertheless, they fail based upon the evidence because the Daleys, on the facts which I have found, provided the agreement and Dalle Projects Pty Ltd entered into the contract in the sense that it executed it and made it available to the Knights. The alleged breach of condition did not occur.

This defence therefore fails.[24]

67 In respect of proposed ground 4, Mr Knight relies upon Ankar, and submits that it is an express condition of the Loan Agreements that the Lender would procure a Building Contract and provide it to the Builder for execution by the parties, in the case of the first Loan Agreement within 21 days of the date of the agreement. He says that the plaintiffs failed to satisfy that condition within the requisite time period, or at all. He submits that Exhibit M was not complete (as a Building Contract), was not what it purported to be, was a forgery and a fake, and that the judge erred by admitting the new evidence while he was being cross-examined.

68 Mr Knight also submits that there is an 'implied term' that the building works would be completed pursuant to the Building Contract with Mr Knight as project superintendent pursuant to an AS4300 building contract. In oral submissions, he submitted that the guarantees were premised on Mrs Knight and Mr Daley entering into a Building Contract under an AS4300 contract such that his wife would have the right to elect him as superintendent so he had control. This would protect the guarantees (by reason of the ability of Mrs Knight to provide the Apartments or repay the monies). The Building Contract was to have a price of $2,900,000, and a 12 month term.

69 Mr Knight claims that, as guarantor, he was materially affected by the breach of these contractual terms and is thereby no longer liable under the guarantees.

70 The case of Ankar concerns a guarantee[25] of the obligations of a hirer under a contract for the hire of machinery. By cl 8 of the relevant agreement, the owner agreed to notify the surety if the hirer proposed to sell or assign its interest in the machinery. By cl 9, the owner agreed to notify the surety if the hirer was in default under the contract, whereupon the surety and the owner would confer about the course of action the owner would take pursuant to the default.

71 The owner committed breaches of both clauses, and the High Court found that the surety was discharged from liability.

72 The judgment of the plurality begins by dealing with the submission of the owner that there was not a special rule applicable to contracts of suretyship. Their Honours observed that the general rules of contract provide that breach of an essential term or condition, or a breach going to the root of the contract, will discharge the surety from future liability, at least if the surety elects to rescind for breach.[26]

73 Their Honours then embarked on a consideration of the 'special principle' said to apply to surety contracts, and observed that the issue arises not so much in cases dealing with a breach, as in cases in which conduct on the part of the creditor materially alters the surety's obligations.[27] The liability of the surety is seen to be strictissimi juris and the suretyship contract is construed strictly in the surety's favour.[28] They then addressed the question whether this rule of strict construction is subsumed in the general principles of the law of contract (where there is a breach), so that the surety may treat itself as discharged from liability only if the breach is such as to entitle it at law to rescind the contract. Their Honours concluded that there is no difference between law and equity in this context, before making the following critical statement:

At law, as in equity, the traditional view is that the liability of the surety is strictissimi juris and that ambiguous contractual provisions should be construed in favour of the surety. The doctrine of strictissimi juris provides a counterpoise to the law's preference for a construction that reads a provision otherwise than as a condition. A doubt as to the status of a provision in a guarantee should therefore be resolved in favour of the surety and so the provision should be interpreted as a condition, or perhaps as an innominate term, instead of a mere warranty. If the surety is to be discharged for breach of a promissory term in the suretyship contract, the justification for the discharge must be that the creditor has failed to comply with a provision that, as a matter of interpretation, requires strict performance as a condition precedent to the surety's obligation or at least requires substantial performance of the promise such that the surety would not have entered into the contract if it had not been assured that there would not be a breach such as the breach which in fact occurred. If on its true interpretation the term is not intended so to operate, it is not easy to understand why the surety should be discharged by its breach.[29]

74 Their Honours went on to give recognition to the notion of an intermediate or innominate term, which Diplock LJ had articulated in Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd.[30] Their Honours did not, however, apply that notion in Ankar, because they concluded that cls 8 and 9 should be analysed 'as conditions, breach of which, at Ankar's option, discharged it from performance of its obligations under the Security Deposit Agreement_'_.[31]

75 The critical issue is therefore whether the relevant clauses require strict performance as a condition precedent, or at least require substantial performance of the promise, such that the surety would not have entered into the contract in each case if it had not been assured that there would not be a breach.

76 The meaning of the terms of a contractual document is to be determined by what a reasonable business person would have understood those terms to mean. This requires consideration of the language used by the parties, the surrounding circumstances known to them, and the commercial purpose or objects to be secured by the contract.[32]

78 First, cl 2.5, contained in the second Loan Agreement, does not give rise to the sort of condition, a breach of which would discharge the liability of the guarantor. That clause provides that the parties merely 'acknowledge' that the Lender will provide the Building Contract to the Builder for execution by the Builder. Such language is inconsistent with the notion that the provision of the Building Contract was intended to be a fundamental obligation, or with the notion that the guarantor would not have entered the contract unless he was assured that the contract would be provided. In such circumstances, proposed ground 4 cannot succeed in respect of the second Loan Agreement.

79 Secondly, we consider that the obligations contained in cl 2.1(b) of the first Loan Agreement do not operate as a condition 'precedent' as Mr Knight appears to suggest. Clause 2.2 makes this clear, since it provides that the advance of funds occurs immediately. Thus, the Lender 'hereby lends' and the Borrower 'hereby borrows' the amount of the loan. The loan is also to be advanced on the 'Commencement Date' - which is immediately on the date of the agreement. The agreement is thereby clearly intended to have effect prior to the provision and execution of the Building Contract (which can post-date the date of the agreement by 14 days, and 21 days, respectively).

80 Thirdly, no actual 'implied term' is pleaded, nor was any attempt made to satisfy the conditions for an implied term.[33] Rather, we have understood the 'implied term' reference as providing an explanation as to why entry into a Building Contract was important to Mr Knight.

81 Fourthly, although the obligation to execute might be thought to be important to the parties (since the actual entry into the Building Contract might enable the sale of the Apartments to help fund the repayment of the loan), the obligation to execute and return is not imposed on the Lender at all, but on the Builder. The Ankar principles only apply where there is a breach by the lender/creditor (rather than a default by a third party). Apart from this, the parties have also chosen to use language which clearly reduces the significance of any obligation to execute and return a Building Contract. Thus, the word 'noting' is more in the nature of an acknowledgment (consistent with the approach utilised in the second Loan Agreement, and the fact that the Building Contract is to be executed and returned by the third party). It does not impose an obligation at all, and certainly not a fundamental obligation. It follows that Ankar does not assist Mr Knight in respect of any 'obligation' to execute and return the Building Contract.

82 Rather, the key issue which arises is whether the Lender's obligation to 'provide' the Building Contract in the first Loan Agreement constitutes a condition subsequent.

83 It will be recalled that the judge found that a reasonable business person would not think that 'the liability of a ... guarantor for monies already outlaid should be defeasible based on a failure of the lender to "provide" an agreement with another corporation not a party to the loan arrangement, much less based on an alleged failure of that other party to execute such agreement'.[34]

84 We consider that the judge was correct to make this finding.

85 It is true that there are some indicia which may suggest that the obligation to 'provide' is intended to constitute a condition. Thus the loan is made 'on the following terms' (which include those set out at cl 2.1(b)). The word 'must' (in cl 2.1(b)) also suggests that the obligation to provide the Building Contract is of some importance.

86 Against this, however, there are a number of other matters which suggest that the obligation to 'provide' does not give rise to a condition. First, given the identity of the Lender (one of whom is the sole director of the Builder), the Builder (Dalle Projects) is, as a matter of practical reality, the alter-ego of the Lender (Mr Daley). In such circumstances, the obligation as framed is a relatively inconsequential one which, in practical terms, amounts to an obligation for Mr Daley to provide the contract to himself. Secondly, the obligation is so broadly defined as to be almost meaningless. Thus the definition of a 'Building Contract' means 'a building contract for the construction of 12 apartments and basement carpark on the property'.[35] No terms are specified as necessary. More particularly, there is nothing to suggest that Mr Knight is to be the superintendent, nor that the Building Contract will be an AS4300 building contract (as Mr Knight claimed was so important to him). Finally, the precise terms of the Building Contract will ultimately depend on the acquiescence of someone who is not a party to the Loan, namely, the Builder. It can hardly be supposed that Mr Knight would not have given the guarantee absent an assurance that a Building Contract with unknown and unspecified terms would be provided to a non-party, so that that person can choose whether to agree to it or not (as the judge correctly highlighted). This again indicates that the obligation to provide was relatively inconsequential.

87 We therefore do not consider that any 'obligations' to provide, execute and return the Building Contract were intended to be conditions, even allowing for the special rules applying to guarantees. More particularly, we are not satisfied that Mr Knight would not have entered into the first Loan Agreement if he had not been assured that there would not be a breach of the Lenders' obligation to provide a Building Contract (as defined) to the Builder.

88 The above reasoning does not deal expressly with the time limits contained in cl 2.1(b) of the first Loan Agreement. However, since the provisions that the contract be provided, executed and returned do not constitute essential terms or conditions, the associated time limits cannot do so either. Even taking the (revised) administratively amended defence generously, there is no reference in it to a failure based solely on time limits. This is consistent with the approach taken by Mr Knight, who does not focus on the delay in execution. Rather, his complaint is that the Building Contract was not provided, nor executed, at all.

89 In the light of our finding, Mr Knight cannot succeed in respect of proposed ground 4, since Ankar does not assist him. Leave to appeal will therefore be refused.

90 It is unnecessary to consider whether the judge also erred in finding that the alleged breach of the 'condition' did not occur (in any event) ('the judge's additional finding').[36] However, even if the Loan Agreements do contain conditions that the Building Contract was to be provided, executed, and returned, there were clearly two critical pieces of evidence which supported the judge's additional finding.

91 First, Mr Knight's own affidavit (the Knight affidavit) contains the clear statement that 'a building contract [was] signed between [Mrs Knight] and Mr Daley's building company'. The judge clearly rejected Mr Knight's explanation that this related to a different company, finding instead that he had a 'strategic interest' to alter his story once he became the sole defendant.[37] We see no error in that finding. Secondly, the Daley affidavit contains the clear statement that Mr Daley 'signed the original building contract with Ms Knight in September 2014'.

92 In oral submissions, Mr Knight cited other parts of the evidence, and statements made by the judge, which he suggested were contrary to the judge's additional finding (principally in support of his other proposed grounds).[38] However, these matters are generally explicable on the basis that both the judge and counsel for the plaintiffs appear to be at cross-purposes as to the ambit of Mr Knight's defence. The most noteworthy of these matters is oral evidence of Mr Daley that the Building Contract 'could never have been produced because (indistinct)'. However, this evidence (at its highest) goes to the different question of whether the Building Contract could be 'produced'. The sworn evidence of Mr Daley otherwise remains unchallenged.

93 Mr Knight accepts that he bears the onus to prove that the 'conditions' were not met.[39] However, regardless of who bears that onus, both the Knight affidavit and the Daley affidavit provide ample support for the judge's additional finding that the Daleys provided the agreement, and that the Builder entered into the contract (in that it executed it and made it available to the Knights). No error is demonstrated, and, for this additional reason, proposed ground 4 is unsustainable.

94 The other two proposed grounds concern the new evidence relevant to the judge's additional finding that the Building Contract was provided to, and entered into by, Dalle Projects. It is, again, strictly unnecessary to consider these grounds given that Ankar does not apply to release Mr Knight from his guarantor obligations in any event. However, we will record a brief summary of our views.

95 In terms of admissibility (the subject of proposed ground 1), Mr Knight raises questions of authenticity. In particular, he relies upon a decision of National Australia Bank Ltd v Rusu,[40] where Bryson J found that there should be an evidentiary basis for finding that a document tendered is the document which it purports to be.[41] His Honour also considered that inferences as to the authenticity of a document cannot be drawn from its form and contents.[42]

96 The decision of Rusu is regarded as controversial, and Odgers suggests that the 'clear weight of authority' is that Rusu was incorrectly decided.[43] In particular, various decisions have highlighted that a tribunal of law is explicitly authorised by s 58 of the Evidence Act 2008 to ask what inferences as to authenticity are available from the document itself.[44]

97 For present purposes we agree that, whatever the precise position is as to 'authenticity', s 58 clearly permits the drawing of inferences as to authenticity from the document itself. It also expressly does not limit the other matters from which inferences can be drawn.[45] At the very least, then, a reasonable inference of authenticity may be drawn from the form and content of Exhibits L and M, particularly when considered along with the consistent evidence contained in both the Knight affidavit and the Daley affidavit, that a Building Contract was indeed signed.

98 Both exhibits are clearly relevant[46] and thereby admissible, subject to any exclusionary provision of the Evidence Act 2008,[47] including those concerning hearsay.

99 Turning, first, to Exhibit L, it could be used for an objectionable hearsay purpose if reliance were sought to be placed on the truth of the statement that there were attached contract documents that were 'signed by myself' (ie Mr Daley). However, the mere fact that Mr Daley has sent an email from a Dalle Projects account about a building contract for the Development is relevant to the question of whether Mr Daley provided Dalle Projects with the Building Contract. The email tends to confirm the obvious connection between Mr Daley and the Builder, and shows that the Builder had knowledge of a building contract for the Development by, at least, 18 September 2014. Given the email is an electronic communication, the hearsay rule also does not apply to the date and time stated on the document recording the email, nor the identities of the sender and recipient.[48] Further, once the email is admitted for the purpose of proving that a Building Contract was provided to Dalle Projects, it can also be used for a hearsay purpose.[49]

100 There is also no reason to exclude Exhibit L by reason of s 135, or limit its use under s 136 (as Mr Knight suggests).[50] The document is probative, particularly given that it (more contemporaneously) confirms the two affidavit accounts that a Building Contract existed, and was in circulation in the relevant period (September 2014, consistent with Mr Daley's affidavit). Mr Knight does not point to any legitimate reason to find the document to be unfairly prejudicial, or misleading.

101 Exhibit M may contain hearsay if the signature of Mr Daley is characterised as a previous representation that he signed the contract on 18 September 2014.[51] However, it is unnecessary to consider this further given that there was already direct evidence from Mr Daley that he signed the contract in September 2014 (in the Daley affidavit).

102 Mr Knight's complaints about breaches of the CPA and unfairness (the subject of proposed ground 3) are without merit. Such complaints should be considered in the light of the matters actually pleaded. As Mr Knight himself accepts, the only way that the Ankar 'precondition' issue was raised 'on the documentation' was as a particular of an abandonment defence. It was never articulated as an 'independent precondition point' in its own right, and was only pleaded (as part of an abandonment point) in the revised defence delivered on the first day of evidence at trial. Consistent with this unsatisfactory situation, neither the judge nor plaintiffs' counsel appeared to appreciate that the 'precondition' argument was being run as an independent Ankar defence until the last day of evidence. This is apparent from the judge's immediate response on 23 November 2020 that both he and the plaintiffs' counsel were 'dismayed' that Mr Knight was seeking to raise a 'new issue'.

103 The judge may have been unduly generous in permitting the Ankar point to be run at all given the state of the pleadings. However, given the way the defence was raised, Mr Knight can hardly be heard to complain about the absence of discovery and notice. In any event, the Daley affidavit (of July 2019) provided ample notice about the existence of the Building Contract. There was also no need for the plaintiffs to ask further questions of Mr Daley (as Mr Knight suggests) in the light of the statements contained in that affidavit.

104 Insofar as Mr Knight complains that witnesses were not 'made available' for cross-examination in relation to the new evidence (which appears to be raised in relation to proposed ground 1 in any event), there are a number of answers. First, notwithstanding that there was some containment of Mr Knight's cross-examination,[52] he never directly challenged Mr Daley about the terms of the Daley affidavit. Secondly, he never asked for witnesses to be recalled. Even when the issue was raised with him on this application he was unclear about precisely who should have been called (although he mentioned both Mrs Knight as well as Mr Daley). Thirdly, although Mr Knight had been in possession of the Daley affidavit since July 2019, and could have called for the production of the Building Contract, he chose not to do so. He did not even pursue counsel for an electronic copy of the contract when it was produced. Finally, and most importantly, for reasons already given, the new evidence, especially Exhibit M, added little in any event.

105 Although Mr Knight is self-represented, he was well able to object, cross-examine witnesses, and make legal submissions, consistent with his legal qualifications. In all of the circumstances, we are not satisfied that any breach of the CPA took place, nor was there any breach of procedural fairness by reason of the admission of the new evidence (the subject of proposed ground 3). If anything, the judge went further than was required in allowing Mr Knight to run his Ankar defence at all.

[1] See Mayart Pty Ltd v Knight [2020] VCC 1929 ('Reasons').

[2] (1987) 162 CLR 549; [1987] HCA 15 ('Ankar').

[3] An earlier ground (proposed ground 2) concerning the role of the fourth plaintiff (the fourth respondent) was not pursued.

[4] Ms Philippe was said to be a court officer employed at the Children's Court.

[5] 'Outstanding Liability' means the amount determined on any day by the Lender to be the aggregate of the unrepaid Loan and Interest and all money owing or remaining unpaid by the Borrower to the Lender on that day under this Agreement, whether the liability is actual or contingent (cl 1.1(r)).

[7] It does appear that later, in July 2015, the first ranking mortgage over the Property was transferred to RVA, such that it held the overriding freehold mortgage rights over the land.

[9] Presumably a similar notice was given to Mayart relating to Apartment 10.

[10] Defence filed on behalf of the third defendant (Mr Knight), 30 March 2019, [17], [43].

[12] Affidavit of Michael Scott Knight sworn 21 June 2019, [13].

[13] Affidavit of Lincoln Daley sworn 10 July 2019, [7]-[9].

[14] The Knight affidavit became Exhibit J. The Daley affidavit was in the Court Book and Mr Knight accepted that we could proceed on the basis that the judge thereby treated it as part of the evidence.

[15] Administratively amended defence of Michael Scott Knight to the plaintiffs' further amended statement of claim, 26 October 2020, p 16.

[18] These defences included that the Loan Agreements were temporary only; that the Loan Agreements were conditional on the building contract; abandonment; commercial breach of loan agreement; and the requirements of s 134 of the Property Law Act 1958.

[21] (2015) 256 CLR 104; [2015] HCA 37.

[25] The case actually involved a security deposit agreement whereby Ankar Pty Ltd deposited a sum of $125,000 as a loan and gave security over it by way of charge for the performance by General Energy (Manufacturing) Pty Ltd of its obligations under the hire contract. It was common ground that this operated as a contract of guarantee: Ankar [1987] HCA 15; (1987) 162 CLR 549, 555 (Mason ACJ, Wilson, Brennan and Dawson JJ); [1987] HCA 15.

[26] Ankar [1987] HCA 15; (1987) 162 CLR 549, 555 (Mason ACJ, Wilson, Brennan and Dawson JJ); [1987] HCA 15.

[30] [1961] EWCA Civ 7; [1962] 2 QB 26.

[31] As to discharge 'at Ankar's option', Deane J expressed a different view that where a surety agrees to be liable for the default of another upon the terms of the contract of suretyship, a significant departure by the creditor from the terms of that contract operates to preclude the existence of the circumstances of his liability. Therefore, there is no need to rescind the contract for repudiation or breach: Ankar [1987] HCA 15; (1987) 162 CLR 549, 570; [1987] HCA 15.

[32] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 656-7 [35] (French CJ, Hayne, Crennan and Kiefel JJ); [2014] HCA 7. See also Rinehart v Hancock [2019] HCA 13; (2019) 267 CLR 514, 534 [44] (Kiefel CJ, Gageler, Nettle and Gordon JJ); [2019] HCA 13; Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544, 551 [16] (Kiefel, Bell and Gordon JJ); [2017] HCA 12; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ); [2015] HCA 37.

[33] For a term to be implied, it must be: reasonable and equitable, necessary to give business efficacy to the contract, so obvious that 'it goes without saying', and capable of clear expression; and it must not contradict any express terms of the contract: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 282-3.

[38] These included: a statement of counsel in opening that '[the Building Contract] is not relevant because it never happened anyway'; a statement that 'I have no knowledge [of a Building Contract]' made by Ms J Cox (a director of Mayart and Ms Daley's mother); and a statement made by the judge (during Mr Daley's cross-examination) that he was going to find that no such contract 'was entered into'.

[39] This is consistent with the general approach at common law: see, eg, J Kitchen & Sons Pty Ltd v Stewart's Cash & Carry Stores [1942] HCA 18; (1942) 66 CLR 116, 126 (Latham CJ and McTiernan J); [1942] HCA 18.

[40] (1999) 47 NSWLR 309; [1999] NSWSC 539 ('Rusu').

[42] Ibid 313, [19]. This was despite the terms of s 58(1) of the Evidence Act 1995 (NSW) which stated: 'If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.' Section 58(1) of the Evidence Act 2008 (Vic) is in the same terms.

[43] Stephen Odgers SC, Uniform Evidence Law (Thomson Reuters, 16th ed, 2021) [58.60], citing, inter alia, Federal Commissioner of Taxation v Cassaniti [2018] FCAFC 212; (2018) 266 FCR 385, 404 [65] (Steward J); [2018] FCAFC 212; Gregg v The Queen [2020] NSWCCA 245, [368] (Bathurst CJ), [712] (Hoeben CJ at CL), [714]-[716] (Leeming JA).

[44] Matthews v SPI Electricity Pty Ltd (No 35) [2014] VSC 59, [27] (J Forrest J), citing ACCC v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; [2012] FCA 1355.

[45] Evidence Act 2008 s 58(2).

[46] Ibid s 55.

[47] Ibid s 56.

[48] Ibid s 71.

[49] Ibid s 60.

[50] It does not appear that the judge was asked to do so.

[51] See Evidence Act 2008 s 59.

[52] The judge was clearly seeking to contain the issues as he understood them at the time.