Martin v Dee-Tech Pty Ltd

The evidence

1. It was contested as to whether in late 2010 Gordon, unprompted, advised the Slatterys to appeal the judgment of Gzell J and offered to provide a loan to cover the legal costs and expenses. On the Slatterys' evidence, Gordon did so without even reading the judgment. I find that highly improbable, particularly as it is not in dispute that Gordon was a careful and successful businessman. I accept that Gordon agreed to lend the Slatterys money to conduct an appeal.

$100,000 loan and mortgage

1. In late January 2010, Gordon instructed his solicitor Peter Wood of Wood Marshall Williams Lawyers (Mr Wood), to prepare a mortgage over the Saratoga property as security for an advance of $100,000 to Rhonda and Ben Slattery. In a letter to Gordon dated 1 February 2010, Mr Wood noted: We understand that the mortgage is intended to assist the borrowers through a period in which they are incurring substantial expenses in relation to legal proceedings and that it is expected that the legal proceedings will be completed in about six months.
2. Gordon sent an email to Mr Wood on 3 February 2010 informing him that he had a discussion with the Slatterys the previous afternoon and listed various amendments requested by Rhonda Slattery to the proposed loan, including changing the borrower to Dee-Tech, with the Slatterys as the guarantors. .
3. Mr Wood prepared the draft mortgage and other security documents, which he forwarded to Gordon on 4 February 2010. Rhonda Slattery requested that Mr Wood provide her with the draft document in Word format on 12 February 2010, which he did. Rhonda Slattery proposed to Gordon certain amendments to the draft mortgage, including to the deletion of penalty interest, modification of the power of attorney and deletion of the provision for the appointment of a receiver in the event of default. Ultimately, on 1 March 2010, after further negotiations, Mr Wood sent Rhonda Slattery the draft mortgage - a version in mark-up and another clean copy - together with other documents for execution and signing by Dee-Tech and guarantors, including the declaration of receipt of independent legal advice. Rhonda Slattery signed the declaration on behalf of Dee-Tech confirming that she had received independent legal advice regarding the loan and security documents. She signed a similar declaration in her capacity as guarantor, as did Ben Slattery.
4. The mortgage is dated 2 March 2010 and was registered as a second-ranking mortgage over the Saratoga property with dealing number AF378586.
5. It is not in dispute that Gordon advanced the sum of $100,000 to Dee-Tech between 9 March 2010 and 27 July 2010.

First variation of mortgage

1. In August 2010, Rhonda Slattery had a conversation with Gordon in which she requested a further advance of money for Dee-Tech's legal costs. Gordon agreed to advance an additional $20,000. On 16 August 2010, Mr Wood sent a variation of mortgage to Dee-Tech in respect of the additional advance of $20,000. Mr Wood again suggested that the mortgagor and the guarantors should consider obtaining independent legal advice in relation to that document. It is not clear on the evidence whether they did so.
2. The variation of mortgage is dated 18 August 2010 and was executed as a deed by Rhonda Slattery as sole director and secretary of Dee-Tech and by Rhonda Slattery and Ben Slattery as guarantors. It was not registered. The variation of mortgage recorded on the front page: (G) 1. The rate of interest is N.A. to N.A. % per annum (subject to reductions to N.A. % per annum on payment within N.A. days of the date provided by the mortgage for payment of interest). 2. The principal sum is increased to $120,000.00. 3. The term is N.A. to N.A. 4. The provisions of the mortgage are varied as set out in annexure "A" hereto. DATE 18 August 2010
3. In cross-examination, Rhonda Slattery acknowledged that she understood that the only change to the mortgage terms was an increase in the principal sum from $100,000 to $120,000, and that there was no change to the rate of interest and no variation to the term of the mortgage. She also gave evidence that she did not retain a copy of the August 2010 variation of mortgage after signing it, nor received a copy after she returned it to Gordon, nor obtained legal advice prior to signing the variation of mortgage.
4. On 22 December 2010, the Court of Appeal allowed an appeal from the judgment of Gzell J and remitted the matter to the Equity Division for determination of any outstanding issues: Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2010] NSWCA 374.

April 2011 alleged representations

1. In April 2011, Gordon agreed to advance a further $30,000 to Dee-Tech, following a request by Rhonda Slattery to borrow additional funds. According to Rhonda Slattery, she had a conversation with Gordon, at which her husband was present, at the Erina premises in April 2011 during which, after she indicated to Gordon that she would like to start reducing the debt by making payments towards the principal sum, the following exchange occurred: … Gordon: "Well I was thinking the same thing and have a suggestion that I might be able to help a bit with that as well. You have always (sic) paid diligently and I value your friendship, I am glad I can help you and Ben. If you can continue making the same repayments I will reduce the interest rate to nought. Then your monthly payment will start to reduce the principal until it is paid off or you get a win or sell the property then you can pay it out. Can you do that? [Rhonda]: "Yes absolutely - I don't know what to say, that is a very generous offer. Thank you so much I am really overwhelmed." (I then gave Gordon a hug) Gordon" "Don't worry too much about it, the bank pays me almost nothing on my money and it gives me a lot of pleasure to be able to help you both. I wish all my borrowers paid as reliably as you do. I'll get my solicitor to draw up the documents." [Rhonda]: "Ok thank you so much, I really do appreciate your generosity and friendship."
2. After this conversation Rhonda Slattery made a file note in Microsoft Word. The file note, said to have been made on 18 April 2011, included: April '11 - we talked to Gordon … G happy and can provide more $$$ funds like discussed if I need more money and if will will (sic) help - Y would help a lot, need to start reducing debt to you - making payments to principle (sic). He was thinking the same thing - can help a bit with that. Always paid diligently - value friendship - glad I can help you and Ben. If can make same repay - will reduce the interest rate to naught (sic). Pay monthly - reduce the principle (sic) until paid off or you get win or sell then you can pay out. Can you do it? Yes absolutely - speechless don't know what to say, amazing generous offer. Thanks so much - I'm overwhelmed - gave him a hug. don't worry about it too much - the bank pays nearly nothing on the money. He has a lot of pleasure to be able to help us. Wish all my borrowers paid as reliable (sic) as you. I'll get my solicitor to draw up the documents. R - Yes, ok thank so much, really appreciate generosity and friendship.
3. Affidavit evidence was given by Mr Luke Moran, law graduate in the employ of Dee-Tech's former solicitors, that he had inspected the "properties" of various electronic file notes by Rhonda Slattery as to when they were created and last modified. Mr Moran accessed these file notes on 18 May 2020 and made a screenshot of the "info" tab for each document. With respect to the April 2011 file note, the screenshot recorded that the title of the document was "April '11 - Gordon", the file was created on 18 April 2011 at 9:59 am and last modified on that day at 10 am. The author was "Giga1" and the document was last modified by "Rhonda", with a total editing time of one minute.
4. In cross-examination, it was put to Rhonda Slattery that this file note was a fabrication and created after the event for the purposes of the litigation. It was also put to Rhonda Slattery that if the file note was created on or about 18 April 2011, it did not accurately record a conversation with Gordon. She denied both propositions.
5. Ben Slattery gave evidence that, in or around early April 2011, Gordon came to the business premises at Erina and had a conversation with Rhonda Slattery and himself during which Rhonda Slattery indicated that the legal costs had completely blown out and that she would like to borrow more funds. In response, Gordon offered further funds. Ben Slattery said that the conversation continued as follows: … Rhonda: Yes, that would help a lot but I worry about reducing the debt and paying you back, I think it would be better if we could start reducing the debt we owe you by making payments to the principal. Gordon: I had the same idea. You both have been so great to me and I truly value your friendship. I can reduce the interest rate to zero so you can make repayments to the principal? Then your monthly repayments will reduce the principal until it's paid off or you can sell the property later when the market gets better and pay it out. Would that work?. Rhonda: Yes, oh gosh. Absolutely. Thank you for your offer, it is so generous. [Rhonda gave Gordon a hug]
6. Ben Slattery said that after this exchange he walked Gordon to his car and thanked him for his generosity in reducing the interest rate to zero percent. The conversation included: … Gordon: I wish everyone I have dealings with acted as reliably and as diligently as you and Rhonda have … but I can't tell my son Peter about this, he will get angry. Ben: Oh, I don't think I will be talking to him anyway, but ok I won't say anything to anyone. Thank you once again.

Second variation of mortgage

1. On 15 April 2011, Mr Wood forwarded a draft variation of mortgage to Gordon increasing the principal sum to $150,000. The second variation of mortgage is dated 21 April 2011 and was executed as a deed by Rhonda Slattery as sole director and secretary of Dee-Tech and by Rhonda Slattery and Ben Slattery as guarantors. Again, the variation of mortgage recorded on the front page: (G) 1. The rate of interest is N.A. to N.A. % per annum (subject to reductions to N.A. % per annum on payment within N.A. days of the date provided by the mortgage for payment of interest). 2. The principal sum is increased to $150,000.00. 3. The term is N.A. to N.A. 4. The provisions of the mortgage are varied as set out in annexure "A" hereto. DATE 21 April 2011
2. Rhonda Slattery gave affidavit evidence that her understanding from the time of the April 2011 conversation with Gordon was that from that point on: … Gordon would loan further funds to Dee-Tech under the Deed of Loan and Mortgage; the interest rate in respect of all money advanced under the Deed of Loan and Mortgage would be reduced to zero; all monthly payments would be applied to reduce any principal outstanding under the Deed of Loan and Mortgage; any loans made under the Deed of Loan and Mortgage would be paid out if the Property was sold, or Dee-Tech received enough money in the Supreme Court proceedings to pay back the principal, or if the monthly payments reduced the principal to zero.
3. This evidence was admitted subject to a limitation order under s 136 of the Evidence Act 1995 (NSW) as evidence of the deponent's understanding in support of the estoppel claim.
4. In cross-examination, Rhonda Slattery gave evidence that at the time of signing the April 2011 variation of mortgage, it was her understanding following the conversation with Gordon that the reference in the April 2011 variation of mortgage to the words in item 1 of G, "the rate of interest is N.A. to N.A.", reduced the interest rate to nil (Tcpt 28 (7-9)). She also said that she believed that the April 2011 variation of mortgage "varied the terms as per the conversation that I had with Gordon" (Tcpt 41 (41-42).
5. For a period of time from 15 July 2011, the transaction message accompanying payments made by Dee-Tech to Gordon included the words and symbol "THANK U :)". Rhonda Slattery said that this was to acknowledge Gordon's generosity in reducing the interest rate to zero, changing the loan term so that it did not have a fixed repayment date and agreeing to convert interest payments to principal. She rejected the proposition in cross-examination that this message was simply an expression of gratitude to Gordon for making a further loan.

2012

1. On 22 March 2012, White J delivered judgment in Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2012] NSWSC 251 and concluded that the breaches of the lease that had been established were not of such seriousness as to warrant denial to Dee-Tech of its option of renewal, provided the amount due on the taking of the account was promptly paid.
2. On 18 May 2012, White J delivered judgment in Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (No 2) [2012] NSWSC 517, which recorded orders made on 3 May 2012 in the 2007 proceedings, including that Dee-Tech owed Neddam the sum of $51,912.09, and in the 2010 proceedings making orders including granting relief against forfeiture of the lease of the Erina premises conditional on Dee-Tech paying to Neddam by 31 May 2012 the sum of $51,912.09 and providing a copy of the business insurance policy in respect of the leased premises.
3. White J also ordered Neddam to pay half of Dee-Tech's costs of the 2010 proceedings, excluding certain costs of Neddam's notice of motion filed 6 May 2011. Rhonda Slattery gave evidence that the costs orders in favour of Dee-Tech were in the sum of roughly $93,000, however they were never assessed nor paid to Dee-Tech, Bright Star, her or Ben.

$40,000 loan

1. In May 2012, Rhonda Slattery approached Gordon for an additional loan. In a beseeching email dated 16 May 2012, Rhonda Slattery said she could prepare a loan agreement / promissory note "that will indicate these funds are to be repaid from any Sale of Assets or Cost Orders within seven days of receipt of those funds". Gordon forwarded this email to Mr Wood on 17 May 2012, noting that the judgment (being the orders made by White J on 3 May 2012) required the Slatterys to pay Neddam $51,912.09 by 31 May 2012, that they were asking for a further $40,000 to make this payment and requested comments on the extra security offered for the $40,000.
2. Peter Martin gave unchallenged affidavit evidence, which I accept in its entirety. He had a very close relationship with his father. In or around May 2012, Gordon told Peter Martin that he was thinking of increasing the loans to the Slatterys by $40,000 covered by a caveat only. Peter Martin expressed the view that this was risky and advised against it. Gordon replied that he understood that advice, but the higher risk meant more interest, ten per cent, which was far more interest than he could receive from any bank.
3. On 23 May 2012 at 8:55 pm, Gordon sent an email to Mr Wood informing him of a discussion with the Slatterys that day, giving certain details of proposed security over the Davistown property and noting that the Slatterys had prepared a loan agreement in respect of an advance of a further $40,000. The proposed loan was to be subject to the conditions that they would return all amounts received by way of costs within 30 days of receipt and "any extra money received would be applied to paying down the original loans totalling $150,000", and offering title over certain plant equipment and a caveat over the Davistown property. Gordon's email concluded: P.S. … I reasoned that if they did not comply with the court order & were forst (sic) out of the leased property most of their income would be cut off & chances of being repaid any of the funds advanced would be near zero! G.M.
4. On 23 May 2012 at 9:02 pm, Gordon sent a further email to Mr Wood attaching the draft loan agreement prepared by the Slatterys. Rhonda Slattery gave evidence that she did not prepare any such agreement. I do not accept her evidence in that regard. It was possible that she was mistaken, given that this occurred about nine years ago.
5. On 24 May 2012, Mr Wood provided legal advice to Gordon in relation to the draft loan agreement prepared by the Slatterys. He then prepared amended documents on 28 May 2012. The draft loan agreement did not include the repayment date that had been proposed by Rhonda Slattery in her 16 May 2012 email.
6. On 29 May 2012, Mr Wood sent a letter to Gordon referring to a telephone conversation with Gordon on 28 May 2012 which was conducted in part with Gordon while he was within hearing of Rhonda and Ben Slattery, and in part directly with Rhonda Slattery. Mr Wood provided advice in relation to matters raised by Rhonda Slattery in relation to the draft documents. Ultimately, after further negotiations between Gordon and the Slatterys, the following documents were executed on 29 May 2012: 1. loan agreement dated 29 May 2012 between Gordon as lender and Dee-Tech as borrower and Rhonda Slattery, Ben Slattery and Bright Star as guarantors; 2. deed of charge granted by Bright Star to Gordon with Rhonda Slattery, Ben Slattery and Dee-Tech as guarantors; 3. unregistered mortgage over the Davistown property granted by Rhonda Slattery.
7. The terms of the loan agreement included that Dee-Tech agreed to pay the advance of $40,000 one year after the date of the advance (cl 3.3.1). Clause 3.3.2 contained an acknowledgment by the parties that the advance was required by Dee-Tech to enable it to comply with the terms of the "Orders", which was defined in cl 12.1 to mean the orders of the Supreme Court of New South Wales, Equity Division, in matter number 2010/393169. (This was a reference to the orders made by White J in the Neddam proceedings: see [36]-[37] above.) Clause 3.3.3 provided: 3.3.3 The borrower will, regardless of any other provision of this Agreement, pay to the Lender the net proceeds of any payment pursuant to the Orders within thirty (30) days of receipt in reduction of receipt of the secured monies.
8. On 13 June 2012, Mr Wood sent a letter to Gordon, copied to Rhonda Slattery, noting that he was arranging lodgement of a caveat in respect of the Davistown property, and registration of the company charge over Bright Star. Mr Wood also forwarded scanned copies of the mortgage, loan agreement and deed of charge, among others.

March 2013 alleged representations

1. In about March 2013, Dee-Tech and Bright Star considered moving from the Erina premises, given further difficulties with the landlord. New premises were located at Yandina Road, West Gosford, and Dee-Tech and Bright Star moved their businesses to those premises in about May 2013.
2. In her 25 January 2019 affidavit filed in the Local Court proceedings, Rhonda Slattery gave evidence that in about mid-March 2013, she and Ben Slattery met Gordon at the new business premises at West Gosford. According to Rhonda Slattery, Gordon said words to the following effect: … I'm not worried about when you repay the [$40,000] loan. You can leave it go and pay it out when you get a costs order or sell your house. I'm happy to let it roll along. I'm getting good interest, if you keep paying the interest, you can pay back the principal whenever.
3. In her later affidavit of 18 May 2020, Rhonda Slattery deposed that when she and Ben Slattery found the relocation costs for the move to the premises at West Gosford would be quite significant, they had a conversation with Gordon in which he said words to the effect: Gordon: Don't worry about repaying the principal sum on that $40k loan. I don't need it back. It is more important that you start getting on with your lives. Ben: Gordon, are you sure mate? Gordon: Yes, definitely. I am happy for you to pay this loan back when you sell your home or get a costs order. Just keep up with the interest payment and move to West Gosford. Ben: Thank you so much. Me (Rhonda): I can't thank you enough. …
4. Rhonda Slattery also gave evidence that on 23 May 2013 she created a file note in Microsoft Word which included the following: Spoke with Gordon re Yandina Meet on site for inspection - … Still very expensive but must do - Gordon not worried about repay loan - leave it go pay it out when you get costs order or sell house - happy to let roll along - good interest - keep paying - pay out whenever. Gordon want to help with move will call in to help out removal. some things sooner but main part wont (sic) be ready until July.
5. Plainly, the file note was not contemporaneous. On Rhonda Slattery's evidence, it was made about six weeks after the alleged conversation. No explanation was given for the delay in making this file note. The screenshot of the "info" tab for this file note recorded under the heading "properties" that the title of this document was "Spoke with Gordon re Yan …", the total editing time was 4,291,985,145 minutes, the document was created on 23 May 2013 at 5:34 pm and last modified on that day at 5:35 pm. The author was "Giga1" and the document was last modified by "Giga1". The stated editing time is extraordinary; it gives rise to some doubt as to the reliability of this document in terms of the date of its creation.
6. Ben Slattery gave evidence that Gordon visited the new premises at West Gosford in 2013 and had a conversation with Rhonda Slattery and himself to the following effect: Gordon: Don't worry about repaying the $40,000.00, you are going to have to use it to move, I don't need it back, I'd rather help you get out of Erina and away from that landlord. Me (Ben): Gordon, are you sure? We owe you a lot of money. Gordon: Yes, I'm sure. I'm happy for the loan to continue, I know you will pay me back as soon as you can. How about you just pay the interest on the $40,000 loan until you get back on your feet and pick up new customers. Rhonda: Thank you so much. Gordon: I know we have discussed selling your house, so if you do I would like the loan repaid after settlement, can you agree to that? Me (Ben): Yes, absolutely. Thanks you are a gentleman.

2014-2015

1. From about 2014, Gordon discussed with Peter Martin the loans with the Slatterys from time to time on a regular basis. Gordon told Peter Martin that he was finding it really hard to organise a meeting with the Slatterys, that the Slatterys always paid their monthly interest repayments on time, and that the Slatterys were reliable and he was earning ten per cent interest on this loan, which was better than interest rates on the market, which was why he was happy to let the loan drag out.
2. In or around July 2015, Peter Martin had a conversation with Gordon in which Gordon said that he was struggling to finalise the Slatterys' repayment of the loans, that while the interest rate of ten per cent was exceptional compared to the banks (which offered less than 2.6 per cent), the Slatterys were very hard to pin down to have a face-to-face meeting to discuss the delays in repaying the principal and that they kept coming up with excuses as to why the principal could not be repaid. Gordon told Peter Martin that he had visited the Saratoga property and that even in a strong market the price of $1,400,000 is very ambitious. Peter asked Gordon to send him a link to the website for the listing of the property, which he did.

2016

1. On about 15 January 2016, Mr Wood had a conversation with Gordon regarding the possibility of Gordon, as second mortgagee, paying out the first mortgagee on the Saratoga property. Mr Wood's file note of that conversation includes: … Attendance in office with Gordon Martin. (1) Has been pressing for payments. (2) Saratoga on the market. … … (8) ? Gordon to payout Bank's Mtge and have first Mtge security. …
2. On 18 January 2016, Mr Wood sent a letter to Dee-Tech, Bright Star and Rhonda Slattery concerning payment of the mortgage debt. The letter included: As you will recall we act for Gordon Carlyle Martin. Gordon has asked us to communicate with you regarding the Mortgage Debt. As you will appreciate it has been outstanding for a significantly longer period than originally contemplated. Gordon is considering what should be done in the matter. He is contemplating the possibility of arranging to pay out the first mortgage over the Saratoga property so that he will then become the first mortgagee for the aggregate of the amount paid to the bank and the existing debt, together with interest and charges. … If our client is to pay out the first Mortgage he would be seeking payment of interest at the same rate as would otherwise have been payable to the bank. It will be necessary to fix a date for final payment of the principal and your views on this question are invited. …
3. There was no written response to this letter from Dee-Tech, Bright Star or Rhonda Slattery.
4. In her 18 May 2020 affidavit, Rhonda Slattery deposed that prior to the second variation of mortgage she and Ben Slattery were contemplating refinancing the Saratoga property with a 3.5 per cent loan and that they saw a broker at East Gosford but didn't proceed because Gordon's offer was too good. This evidence was qualified in cross-examination: Rhonda said that she and Ben were contemplating refinancing Gordon's loan with a different loan of 3.5 per cent in about July 2016 (Tcpt 48 (44-46)). She said that she presumed that refinancing would be "with security from me and my other property" (Tcpt 49 (14)). She deposed in her affidavit that in June or July 2016 she and Ben discussed discharging their liabilities to St George Bank, the first mortgagee, however they decided not to. Rhonda Slattery sent an email to Gibbins Law Firm on 12 July 2016 which included: Hi Mark, I will not be going ahead with the discharge and refinance with Gordon Martin. His terms are too rich with a pretty high interest rate so it is not financially viable. I may look to refinance with another lender but will leave the loan with St George until I find a better option. …
5. In response to the cross-examiner's proposition that Dee-Tech was never in any position to refinance the loan and pay out Gordon the $150,000 mortgage loan at any time since 2013 or subsequent, Rhonda Slattery said: Not until the property sold. Correct. (Tcpt 49 (28-31))
6. Ben Slattery gave affidavit evidence that because of the April 2011 conversation with Gordon, Rhonda Slattery and he did not sell the Saratoga property, did not refinance the $150,000 loan and kept making the repayments. He also deposed that in about June or July 2016, Rhonda and he were considering their financial situation and whether it was time to discharge their liabilities with St George Bank, however, they decided against it.
7. In cross-examination, Ben Slattery accepted that Dee-Tech did not have any financial statements after 2009, and could not have refinanced the $150,000 mortgage loan. He said that "we would have borrowed the money against our other property" (Tcpt 71 (25, 35-37; 72 (12-14)). This seems to be a reference to the Davistown property. He also said that "we [Rhonda and himself] saw a mortgage broker at East Gosford who said he could obtain the money for us at 5%". (Tcpt 72 (23-24)). He said that he didn't put this evidence in his affidavit because "I didn't think about it" (Tcpt 72 (31-32)).
8. As to the Slatterys' equity in the Davistown property, Gordon recorded in his email to Mr Wood dated 23 May 2012 that he had been told by the Slatterys that Mr Fordyce, a solicitor, had lodged a caveat against the Davistown property for an account of $53,000 and there was a loan to the bank for $330,000. Gordon also noted in his email that "a real estate agent had advised me in today's market it is worth $420,000".
9. In 2016, Peter Martin took over the task of managing Gordon's day-to-day affairs for him. In or around August 2016, he had a conversation with Gordon in which he recommended taking legal action to have the Slatterys' loans repaid. Gordon replied that he had kept putting it off because he did not like paying solicitors' fees as they are always too expensive and the ten per cent interest was much better than interest he could get anywhere else.

2017

1. Rhonda Slattery gave evidence that in mid to late August 2017, Gordon visited "our shop in West Gosford" and had a conversation with Ben Slattery and her which included Gordon saying words to the effect that he enjoyed helping both of them as they had been through so much. Rhonda Slattery responded that she was grateful and wished the property had sold so "we could clear our loans", to which Gordon responded: I don't want you to worry about your loans because they will continue on the same basis as we have previously agreed. I will have someone take over the loans until they are repaid. I have told Peter about it. We are still sorting out the details but he knows my wishes.
2. On or around 3 September 2017, shortly before Gordon passed away, Peter Martin had a conversation with Gordon during which Gordon said he was sorry to leave him with all the mess with the Slatterys. Peter replied, "Not to worry, [he] would sort out the Slattery loans".

Evidence which was unchallenged

1. I accept the following evidence given in support of the plaintiff's case which was not challenged.
2. First, on a couple of occasions around the end of financial years, Peter Martin had conversations with Gordon to the following effect: Gordon: I hate how I have to pay so much tax in my quarterly BAS return and again at financial year end. Me (Peter Martin): Because you are earning around $80,000 per annum you will be paying tax of approximately 30%. Gordon: Yes, I know that. All the repayments from the Slattery's (sic) are interest only payments and declared as such, and I am paying income tax on them.
3. Second, copies of Gordon's handwritten statements of his income and expenses for the financial years commencing 1 July 2012, 1 July 2013, 1 July 2014, and 1 July 2015 were adduced in evidence recording in each case interest income received from Dee-Tech.
4. Third, Mr Edward van Oort, Gordon's accountant, gave evidence that Gordon told him his two pet hates were paying tax and dealing with people who renege on agreements. Mr van Oort said that in or about October or November every year he had conversations with Gordon requesting confirmation that all interest payments listed on his (handwritten) notes were indeed interest-only and had actually been received in that year, and that Gordon responded: They are interest repayments, not repayments of the loan balance itself, I have noted those separately.
5. Fourth, Gordon's income tax returns declared as income the receipt of interest on loans to Dee-Tech as follows: Year ending 30 June: 2011 - $11,333 2012 - $15,510 2013 - $19,000 2014 - $19,000 2015 - $17,417 2016 - $19,243 2017 - $18,769

Issue 1: alleged representations - April 2011

1. In assessing the competing evidence as to whether Gordon made oral representations as alleged by the Slatterys in April 2011 that the interest payments would be converted to repayments of principal and the date for repayment of the principal sum would be extended, two matters need to be kept in mind.
2. First, Dee-Tech has the onus of proof of establishing the alleged oral representations made by Gordon to found a defence of estoppel or variation of the mortgage.
3. Second, the critical events occurred in April 2011, being ten years ago. The consequence of the passage of time may have exacerbated the general problem of the recollection of oral conversations subsequently given in the course of legal proceedings, which may be distorted, even innocently, by a desire to succeed. As McLelland CJ in Equity said in Watson v Foxman (1995) 49 NSWLR 315 at 319: … human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
4. In the present case, I find that it is highly improbable that Gordon would have agreed to convert interest payments to principal repayments and extend the date for repayment of the principal sum on two contingent conditions.
5. First, the alleged representations were inconsistent with Gordon's contemporaneous conduct when giving instructions to his solicitor, Mr Wood, to prepare the second variation of mortgage; his instructions to Mr Wood did not include reducing the interest rate to zero (provided Dee-Tech continue to make the monthly repayments) and to extend the date for repayment of the principal sum on the terms alleged by the Slatterys.
6. Second, the alleged representations were also inconsistent with Gordon's subsequent statements to his son, Peter Martin, in 2014 and 2015 that he was pleased to be receiving a ten per cent interest rate on the mortgage debt, which was a far better return than provided by banking deposits.
7. Third, it is inconceivable that Gordon would have made the alleged representations in circumstances where (a) he later told Peter Martin that he was content to allow the Slatterys time to repay the principal sum given the good rate of interest at 10 per cent per annum being paid by the Slatterys on the mortgage debt, (b) Gordon's handwritten notes of his income and expenses recorded the amounts paid by Dee-Tech as interest income, (c) Gordon expressly confirmed to his accountant, Mr van Oort, that these amounts were received from Dee-Tech as interest payments and not principal repayments, and (d) Gordon declared as income in his tax returns the payments received from Dee-Tech for the tax years ending 30 June 2011, 2012, 2013, 2014, 2015 and 2016, upon which he was assessed for tax. I note that Gordon had passed away prior to lodging his tax return for the year ending 30 June 2017.
8. I reject the evidence of Rhonda Slattery and Ben Slattery that Gordon made oral representations to them in April 2011 as alleged. I am not persuaded that their evidence on this topic is reliable, or in Rhonda Slattery's case, credible.
9. Rhonda Slattery presented in cross-examination as an intelligent witness, but her evidence suffered from the difficulties that at times she was evasive, at times she was not responsive to the cross-examiner's questions and resorted to self-serving statements, and at other times she was argumentative in advancing explanations she considered supported her case.
10. Among others, I do not accept Rhonda Slattery's evidence that she understood the words "the rate of interest is N.A. to N.A." in the second variation of mortgage to mean that the interest rate was reduced to zero, consistent with the alleged oral representations made to her by Gordon earlier in April 2011. When confronted in cross-examination with the inconsistency between that evidence and her understanding of the first variation of mortgage in August 2010, which contained the same words, but only involved an increase to the principal sum, Rhonda Slattery gave a self-serving explanation that she did not have a copy of the August 2010 variation of mortgage to compare with the April 2011 variation of mortgage, and if she had, she "may" have raised a query. Accepting her evidence that she did not keep or receive a copy of the August 2010 variation of mortgage, I do not accept her explanation for not raising a query in relation to the April 2011 variation of mortgage based on her asserted understanding of the words in item 1 of G of the second variation of mortgage.
11. There is a further difficulty with Rhonda Slattery's evidence. Notwithstanding her careful review and requests for amendments to the draft mortgage in 2010, she did not request any amendments to the draft second variation of mortgage, nor at any time confirm in writing to Gordon her alleged understanding of the second variation of mortgage. Plainly, on its face, the document she signed in April 2011 did not record the terms she claimed had been represented to her by Gordon. I do not accept as credible her claimed understanding of the second variation of mortgage as reflecting the alleged representations made by Gordon.
12. Insofar the plaintiff submitted that Rhonda Slattery's file note of the alleged April 2011 conversation was a fabrication created after the litigation commenced, I am not persuaded on the evidence, and in the absence of expert evidence, that this submission should be accepted. On the other hand, I am not satisfied that the file note accurately records a conversation with Gordon in April 2011. For the reasons already given, it is highly improbable that Gordon would have made any of the alleged representations to the Slatterys.
13. No weight can be given to Ben Slattery's evidence. He said that he generally left the sorting out of legal documents or loans to Rhonda to organise. His affidavit was sworn nine years after the alleged conversation with Gordon in April 2011. He did not consider the alleged conversation sufficiently important at the time to make a record or note of the conversation or to send any confirmatory note to Gordon. He did not give any evidence of reading the front page of the second variation of mortgage, although his signature appears on that and the other pages of the document as a guarantor. I do not accept his affidavit evidence that he had a recollection of the alleged conversation as set out in his affidavit.
14. Further, I reject as self-serving Ben Slattery's evidence that Gordon said he could not tell his son, Peter Martin, "about this, he will get angry". I find that Gordon had a close relationship with his son and trusted him; indeed, in 2016, he asked Peter Martin to manage his business affairs. Gordon discussed with Peter in 2014 and 2015 the advantageous interest rate being paid by Dee-Tech on the loans to Dee-Tech; he never mentioned to Peter Martin the representations he was alleged to have made to the Slatterys in April 2011. There is no evidence from which to infer that it is likely that Gordon would have told lies to his son (and also to his accountant) in order to keep secret the alleged arrangement with the Slatterys.

Issue 2: whether Dee-Tech established a conventional estoppel or promissory estoppel

Conventional estoppel

1. In Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [200], the Court of Appeal approved the restatement of principles by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [32], that the elements of conventional estoppel are: (a) the plaintiff has adopted an assumption as to the terms of its legal relationship with the defendant; (b) the defendant has adopted the same assumption; (c) both parties have conducted their relationship on the basis of that mutual assumption; (d) each party knows or intends that the other will act on that basis; and (e) departure from the assumption will cause detriment to one of them.
2. The elements (a), (b) and (c) above have been encapsulated by the High Court in the single requirement that the parties conduct their relations with each other on the basis of agreed or assumed facts: Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; [1986] HCA 14 at 244.
3. The doctrine of conventional estoppel precludes either party to a contract from denying an assumption which has formed the conventional basis of the relationship between them. It is for this reason that it is necessary to determine whether the parties have in fact adopted such an assumption as the conventional basis of their relationship. Here, the conventional estoppel was based on the terms of the alleged oral representations made by Gordon to the Slatterys in April 2011 to vary the terms of the mortgage. I have found that those representations were not made by Gordon to the Slatterys.
4. Even if it be assumed, contrary to my findings on Issue 1, that Gordon made oral representations to the Slatterys in April 2011, as alleged, Dee-Tech has not established that both parties adopted the same assumption as the basis of their legal relationship: Ryledar Pty Ltd v Euphoric Pty Ltd at [199]; Moratic Pty Ltd v Gordon at [32]-[33]. The alleged oral representations were inconsistent with the parties entering into the second variation of mortgage on 21 April 2011, which did not reduce the interest rate to zero, or extend the date for repayment of the principal sum.
5. There are further difficulties with the conventional estoppel claim. Gordon did not conduct his relations with Dee-Tech after April 2011 on the basis of agreed or assumed facts, as asserted by Dee-Tech. In 2015, Gordon sought to obtain a commitment from the Slatterys to repay the principal sum and, through Mr Wood's letter of 18 January 2016, again sought to fix a date for repayment of the principal sum.
6. It is unnecessary to address whether departure from the assumption would cause detriment to Dee-Tech. If it was necessary to do so, I am not satisfied that Dee-Tech has established that it suffered any relevant detriment. In its defence, Dee-Tech gave the following particulars of detriment: (a) Having to now pay the Principal Sum in a lump sum, rather than by way of instalments over time. (b) Having to now pay the whole of the Principal Sum, without the Monthly Payments having been attributed to reduce the amount said to be outstanding. (c) Having to now pay the Principal Sum out of revenue, without the benefit of the proceeds obtained under costs orders made in the Supreme Court Proceedings or upon sale of the Property.
7. No evidence was given by Rhonda Slattery supporting these particulars of alleged detriment. Her evidence on the issue of detriment was directed to alleged conduct of a different nature: that Dee-Tech did not proceed with the contemplated refinancing of the loan on the Saratoga property. However, on this issue Rhonda Slattery gave conflicting evidence of speaking to a mortgage broker in 2012 or 2016 about the possibility of refinancing the mortgage debt to Gordon, and no documentary evidence was tendered corroborating these alleged conversations with a broker or supporting the possibility that a refinancing would have occurred, had Dee-Tech pursued that course.
8. On the contrary, an inference should be drawn that there was no realistic possibility of Dee-Tech refinancing the loan, given that Dee-Tech ceased trading in 2013 and had not lodged any tax returns since 2009. In cross-examination, both Rhonda and Ben Slattery acknowledged that Dee-Tech was never in a position to refinance the $150,000 mortgage loan from Gordon. They both suggested that any refinancing would have been obtained by using other property as collateral security, which on the evidence must be taken to be the Davistown property. However, there was insufficient equity in this property to refinance the $150,000 loan: see [61] above. The possibility of refinancing using the Davistown property was even more remote in 2016, given the unregistered mortgage over that property for the $40,000 loan, in addition to the debt to the bank and the caveat lodged by Mr Fordyce.

Promissory estoppel

1. Alternatively, Dee-Tech contends that the alleged oral representations by Gordon in April 2011 had the consequence that he was bound by a promissory estoppel. This may be taken to be an estoppel of the type referred to by Brennan J in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 at 428-429; [1988] HCA 7.
2. Promissory estoppel is an equitable doctrine which provides a restraint on the enforcement of rights. In Waltons v Maher, Brennan J said at 428-429 that to establish an equitable estoppel, it is necessary for a plaintiff to prove that: (1) it has adopted an assumption as to the terms of a legal relationship with the defendant; (2) the defendant has induced or acquiesced in the plaintiff's adoption of that assumption; (3) the plaintiff has acted in reliance on its assumption; (4) the defendant knew or intended that the plaintiff so act; (5) it will occasion detriment to the plaintiff if the assumption is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
3. In TMA Australia Pty Ltd v Indect Electronics & Distribution GmbH [2015] NSWCA 343, Meagher JA (Macfarlan JA and Bergin CJ in Eq agreeing) said at [135]: The assumption or expectation necessary to establish an equitable estoppel must be as to a legal relationship which exists or is expected to exist and that expectation must be induced by a promise intended by the promisor and understood by the promisee to affect their legal relations with the result that it is treated between them as something which the party estopped is "bound to do or not to do": Waltons Stores at 421-422 (per Brennan J); DHJPM Pty Ltd v Blackthorn Resources Ltd [2011] NSWCA 348; 83 NSWLR 728 at [49]. The necessity that the expectation be one intended to affect legal relations between the parties was also emphasised by Mason CJ and Wilson J in Waltons Stores at 406: The foregoing review of the doctrine of promissory estoppel indicates that the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. [Attorney-General (Hong Kong) v Humphreys Estate (Queen's Gardens) Ltd [1987] 1 AC 114] suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party.
4. In the present case, I am not satisfied that Dee-Tech has established elements (1) or (2) as referred to by Brennan J in Waltons Stores. As to element (3), Dee-Tech gave the following particulars of reliance in its defence: (a) The Defendant refrained from paying the Principal Sum. (b) The Defendant paid, or caused to be paid on its behalf, the Monthly Payments. (c) The Defendant refrained from taking steps to realise, or cause to be realised, assets, for the purpose of obtaining funds to pay out the Principal Sum.
5. For the reasons given above at [90]-[91], I am not satisfied that Dee-Tech has established that it relied upon the asserted assumption.
6. As to element (4), the evidence of Gordon's conduct referred to at [75]-[77] above, is inconsistent with him knowing or intending that Dee-Tech rely on the asserted assumption.
7. As to element (5), the detriment or harm required to ground an estoppel can be any material disadvantage: Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14 at [150]. Such material disadvantage must be substantial, although it need not be quantifiable in the same way as an order for damages: Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 at [147]. I am not satisfied that Dee-Tech suffered any material disadvantage, let alone one which could be described as substantial. On the evidence, Dee-Tech could not repay the principal sum without selling the Saratoga property. Rhonda Slattery gave evidence that the property was listed for sale in 2015 for a number of years. It was withdrawn and relisted for sale in 2018, and again withdrawn and relisted for sale in 2020. The Slatterys made informed decisions not to sell the property at prices when offered, or any offers that were accepted fell through.

Issue 3: whether oral variation of mortgage - April 2011

1. The essential difficulty with the alleged oral variation of the mortgage in April 2011 is that, given the conclusion on Issue 1, there was no agreement in terms of the alleged oral representations made by Gordon.
2. The plaintiff also submitted that the alleged oral variation was inconsistent with the express terms of the mortgage which provided in cl 5.5.2 that a term of the mortgage or a right created under it may not be waived or varied except in writing signed by the parties or the parties to be bound. The only written document relevantly varying the mortgage was the 21 April 2011 variation of mortgage which did not contain the variation in terms alleged by Dee-Tech.
3. It is not necessary to address this submission other than to note that it overlooked the authorities that stand for the proposition that a "no-oral modification" clause cannot prevent the parties to a contract containing it from agreeing orally to vary it: see the authorities cited in Hawcroft General Trading Co Pty Ltd v Hawcroft [2017] NSWCA 91 at [35]; Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87; (2019) 373 ALR 591 at [122]; cf MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119; [2018] UKSC 24.

Issue 4: is the plaintiff entitled to enforce the mortgage

1. The plaintiff is the legal personal representative of Gordon's estate. As a registered second mortgagee, the plaintiff is entitled to an order for possession notwithstanding the prior mortgage on the title in favour of Westpac: Zanzoul v Westpac Banking Corporation Limited (1995) 6 BPR 14,142 at 14,145 (Handley JA, Sheller JA and Rolfe AJA agreeing).
2. The evidence establishes that the plaintiff has made demand for repayment of the principal sum of $150,000 due under the mortgage as varied, and this amount has not been paid by Dee-Tech or the guarantors. The evidence also establishes that the plaintiff has served notice on Dee-Tech pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum and Dee-Tech has failed to comply with that demand.
3. The demands referred to above related both to the initial principal sum of $100,000 due under the mortgage and the amounts totalling $50,000 advanced under the two variations of the mortgage. Given that Dee-Tech has failed to pay, relevantly, the principal sum of $100,000 due under the mortgage, the plaintiff is entitled to enforce the mortgage, including an entitlement to an order for possession of the Saratoga property, relying upon s 60 of the Real Property Act.

Limitation Act defence

1. With respect to the plaintiff's claim for a money judgment, Dee-Tech pleaded a defence under the Limitation Act 1969 (NSW), referring to s 42(1) which provides: 42 Action for principal, possession or foreclosure (1) An action on a cause of action: (a) to recover principal money secured by mortgage, (b) to recover possession of mortgaged property from a mortgagor, or (c) to foreclose the equity of redemption of mortgaged property, is not maintainable by a mortgagee under the mortgage if brought after the expiration of a limitation period of twelve years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims. …
2. The reference in the defence to s 42(1) seems to be an error. I assume that the defence intended to refer to s 14(1)(a) of the Limitation Act, which provides a 6-year limitation period for claims founded on a contract, not being a cause of action founded on a deed.
3. In any event, there is no merit in the limitation defence. The plaintiff's claim is founded on a deed with the consequence that a 12-year limitation period applies pursuant to s 16 of the Limitation Act and the limitation period has not expired. The same result is derived from s 42(1)(a), because the plaintiff's claim is to recovery of the principal sum secured by mortgage.
4. The plaintiff is entitled to judgment against Dee-Tech in the sum of $150,000.

Issue 5: construction of May 2012 loan agreement

1. The applicable principles of construction are well-established. The clause of a contract is to be construed objectively by reference to its text, context, and commercial purpose, asking what a reasonable person would have understood it to mean. This requires an examination of the language used, the surrounding circumstances known to the parties, and the commercial purposes or objects to be secured by the contract: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2014] HCA 37 at [46]-[49].
2. Further, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption that the parties intended to produce a commercial result. The court should construe the contract so as to avoid it making commercial nonsense or working commercial inconvenience: Electricity Generation at [35].
3. In its defence, Dee-Tech asserted that (a) on the proper construction of cl 3.3.3 of the loan agreement the principal sum was not due to be repaid until such time as Dee-Tech received proceeds of any payment pursuant to the Orders (as defined), and then within 30 days of receipt of the said net proceeds, (b) Dee-Tech has not received any proceeds pursuant to the Orders (as defined), and (c) accordingly the principal sum is not due to be repaid to the plaintiff by Dee-Tech. The full terms of cl 3.3.3 are set out at [44] above.
4. I reject this construction of cl 3.3.3 of the loan agreement.
5. Clause 3.3.3 imposes an obligation on Dee-Tech as borrower with respect to the time for repayment of the loan, in addition to the stipulation in cl 3.3.1 that the advance of $40,000 is to be repaid one year after the date of the advance. That cl 3.3.3 is an additional stipulation is made clear by the language "regardless of any other provision of this Agreement". Read in context, the effect of cl 3 of the loan agreement is as follows: the date for repayment of the advance of $40,000 is one year after the date of the advance, but regardless of this obligation, Dee-Tech is obliged to pay to the lender the net proceeds of any payment (to Dee-Tech) pursuant to the costs orders in the Neddam proceedings within 30 days of receipt of such monies.
6. The objective purpose of cl 3.3.3 is readily apparent. As the parties acknowledged in cl 3.3.2, Dee-Tech expected to receive funds as a result of the costs orders made in the Neddam proceedings. Notwithstanding that the loan advance of $40,000 was due one year after the date of the advance, in the event that Dee-Tech received the net proceeds of any payment pursuant to the costs orders, it was required to pay that amount to Gordon within 30 days of receipt in reduction of the loan advance of $40,000.

Issue 6: alleged representations - March 2013

1. The essential factual dispute in relation to the $40,000 loan relates to the time for, and the basis for repayment of, the principal sum of $40,000.
2. Dee-Tech, Rhonda Slattery and Bright Star asserted in their defences that Gordon represented to Dee-Tech before May 2013 that (a) he waived or would otherwise not enforce an entitlement to be repaid the principal sum by Dee-Tech on the date nominated in the loan agreement in Item 5, being one year after the date of the advance, (b) he would not call up or otherwise demand repayment of the principal sum from Dee-Tech, provided Dee-Tech continued to make interest payments on the loan, and (c) that the principal sum would be repayable by Dee-Tech upon Dee-Tech receiving monies pursuant to costs orders made in the Neddam proceedings, or upon the sale of the Davistown property.
3. In cross-examination, Rhonda Slattery said that the reference in the defence to the repayment of the $40,000 upon sale of the Davistown property was an error; she said this should have been a reference to the Saratoga property.
4. I find it highly implausible that Gordon would have made any such oral representations to the Slatterys making the date for repayment of the $40,000 loan subject to two contingent conditions. This is for four reasons.
5. First, as at March 2013, almost one year had elapsed since Dee-Tech had obtained the costs order against Neddam but the costs order had not been assessed. It is most unlikely that Gordon would have agreed to extend the date for repayment of the $40,000 loan until satisfaction of a contingent condition over which he had no control, and as to which, on the Slatterys' evidence, there was no discussion in March 2013 as to when the assessment of costs was likely to occur.
6. Second, I do not accept Rhonda Slattery's evidence that the multiple references in the defences filed by Dee-Tech, Bright Star and her to one of the contingent conditions being the sale of the Davistown property was an error. The suggested error reflected poorly on her credit. On her evidence, the defences were prepared by a barrister; and it may be inferred, prepared on her instructions. I reject her explanation that she signed the defences in "haste". Her practice in dealing with Gordon and his solicitor was to read documents she was asked to sign with care, and she was not shy in requesting amendments. By 2019, when signing the defences, she was well-experienced in litigation. The defence based on the contingent condition of the sale of the Davistown property was advantageous to Dee-Tech since, on Rhonda Slattery's evidence she was attempting to sell the Saratoga property in early 2019 when the defences were filed.
7. Third, the file note said to be created by Rhonda Slattery on 23 May 2013 is of little weight; it was not contemporaneous with the alleged conversation in March 2013. Further, it is inconsistent with what Gordon would have likely done in 2013 in relation to this loan: see [119] above.
8. Fourth, the evidence given by Ben Slattery of the alleged conversation with Gordon was materially different in an important respect to that given by Rhonda Slattery. Ben Slattery gave evidence that Gordon said words to the effect: "How about you just pay the interest on the $40k loan until you get back on your feet and pick up new customers". On his evidence, there was no discussion of extending the date for repayment of the $40,000 loan to the date of receipt of monies under the costs orders in the Neddam proceedings.

Issue 7: whether the plaintiff is bound by a promissory estoppel

1. In their defences, Dee-Tech, Bright Star and Rhonda Slattery each pleaded that they had changed their position to their detriment in reliance upon the alleged oral representation in March 2013 by refraining from repaying the principal sum, paying interest on the loan from May 2013 to date, and refraining from taking steps to realise, or cause to be realised, assets for the purpose of obtaining funds to repay the principal sum.
2. However, no evidence was given by Rhonda Slattery that she, Dee-Tech or Bright Star refrained from taking any of the steps which were pleaded as particulars of reliance on the alleged representations made in March 2013.
3. Even if it be assumed that the evidence of reliance given by Rhonda Slattery in relation to the earlier alleged representations by Gordon in April 2011 was relevant to the estoppel claim in relation to the $40,000 loan, that evidence would be insufficient to establish reliance on the alleged March 2013 representations for the reasons already given above.

Issue 8: whether oral variation of May 2012 loan agreement

1. Given the conclusion under Issue 6, I reject the defendants' contention that Gordon agreed to vary the May 2012 loan agreement on terms to a similar effect as the representations alleged to have been made by Gordon in March 2013.

Issue 9: is the plaintiff entitled to judgment in relation to $40,000 loan

1. I find that Dee-Tech and the guarantors have each failed to repay the loan of $40,000, despite demand made by the plaintiff. The plaintiff is entitled to judgment against the defendants in the sum of $40,000.

Conclusion and Orders

1. In summary, my conclusions are as follows: (a) the plaintiff is entitled to an order for possession of the Saratoga property and judgment for $150,000 against Dee-Tech, and (b) the plaintiff is entitled to judgment in the sum of $40,000 against Dee-Tech, Rhonda Slattery, Ben Slattery and Bright Star.
2. As to costs, subject to consideration of the position of Ben Slattery as a submitting party in the second proceedings, there is no reason why costs should not follow the event: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1.
3. It has been said that there is no overriding principle that a person who files a submitting appearance is immune from costs. In Highland v Labraga (No 3) [2006] NSWSC 871, Young CJ in Eq referred at [20] to the statement by Bignold J in Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [42] that: The effect of the respondent's submitting appearance in the present case, where that appearance has not been challenged or impugned, is that the submitting party is generally to be regarded as immune from any liability for costs in the proceedings after the filing of the submitting appearance.
4. Young CJ in Eq observed in Highland at [21] that the word "generally" must not be overlooked in the statement by Bignold J. The usual rule is stated in Ritchie's Uniform Civil Procedure (NSW) in note 6.11.5 that: … a submitting party will not ordinarily be liable for costs incurred after filing their submitting appearance.
5. The question is whether any conduct in which Ben Slattery engaged in after the filing of the submitting appearance exceeded the role of a submitting party. In my view, it did. On 29 April 2020, Mr Mark Webeck of HWL Ebsworth Lawyers filed a notice of appearance on behalf of all defendants in the second proceedings, including Ben Slattery. On or about 18 May 2020, the affidavit of Ben Slattery was filed in both proceedings on behalf, relevantly, of Ben Slattery, as a defendant in the second proceedings. Mr Webeck subsequently filed a notice of ceasing to act on 17 September 2020. At the hearing, the active defendants in the second proceedings relied upon Ben Slattery's affidavit and he was cross-examined. In all the circumstances, notwithstanding that he filed a submitting appearance, Ben Slattery's conduct was tantamount to trying to have the best of both worlds. He should not be immune from a costs order.
6. Accordingly, the Court makes the following orders: 2018/212253 1. Judgment for the plaintiff, Peter Edward Martin as executor of the deceased estate of Gordon Carlyle Martin, for possession of the land comprised in Certificate of Title Folio Identifier XX/XXXXX, situated at XXXXXX, Saratoga, New South Wales. 2. Grant leave to the plaintiff to issue a writ of possession to enforce the judgment forthwith. 3. Judgment for the plaintiff against the defendant in the sum of $150,000. 4. The defendant to pay the plaintiff's costs. 2018/308664 1. Judgment for the plaintiff, Peter Edward Martin as executor of the deceased estate of Gordon Carlyle Martin, against the first defendant, second defendant, third defendant and fourth defendant in the sum of $40,000. 2. The first defendant, second defendant, third defendant and fourth defendant to pay the plaintiff's costs. 3. The Exhibits may be returned after 28 days.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 April 2021