MIS Funding No 1 Pty Limited v N W Truskett; In the matter of Willmott Forests Limited

The nature of the two proceedings in issue

1. By Statement of Claim filed in proceedings 2013/258692 in the District Court of New South Wales on 26 August 2013 ("District Court proceedings"), the Plaintiff, MIS Funding No 1 Pty Ltd ("MIS") sought a money judgment against the Defendant, Mr Neil Truskett, in the amount of $119,969.63, comprising a principal claim of $117,971.63, filing fees and costs. That claim was brought on the basis of a loan relationship that was alleged to have arisen from dealings between Willmott Forests Ltd ("WFL") and Mr Truskett, including a Terms Agreement dated 30 June 2006, and a Loan Transfer Deed dated 30 June 2006 between MIS, WFL and Willmott Finance Pty Ltd ("WFPL"). MIS also relied on a letter from WFL to Mr Truskett dated 26 July 2006 confirming acceptance of his application to participate in a forestry project and a notice of assignment of the loan given by letter dated 13 October 2010 from MIS to Mr Truskett. The Statement of Claim pleaded the terms of the loan documents, WFL's acceptance of Mr Truskett's application for a loan and its entry into the Terms Agreement with Mr Truskett, and set out the terms of that agreement and the assignment of the relevant debt from WFL to MIS. MIS pleaded, and it is common ground, that Mr Truskett made payments under the loan until 31 January 2012 but has not made such payments since that date.
2. Mr Truskett relies on an Amended Defence and Amended Cross-Claim filed in the District Court proceedings, significant aspects of which were not pressed in this hearing. By paragraph 9 of his Amended Defence to the Statement of Claim in the District Court proceedings, Mr Truskett "agree[d]" to paragraphs 12-15 of the Statement of Claim, including that, pursuant to clause 6 of the Terms Agreement, he was obliged to make monthly payments until all monies owing under the Terms Agreement were repaid; he had made repayments until 31 January 2012 and had failed to pay monthly instalments and remained in breach of the Terms Agreement since 29 February 2012, and that MIS had sent a letter of demand for repayment on 28 June 2013. The parties did not seek to have me proceed, and I do not proceed, on the basis that that admission of liability to make the payments under the Terms Agreement, or of breach of the Terms Agreement, is determinative of any substantive issue in the proceedings.
3. The Amended Cross-Claim in the District Court proceedings sought, as against MIS, an order for refund of all monies paid by Mr Truskett to MIS, costs and interest. A claim for damages for contravention of the Trade Practices Act 1974 (Cth) was not pursued. By its Reply to the Amended Defence and its Amended Defence to Amended Cross-Claim filed in the District Court proceedings, MIS took issue with many of the matters raised in them, some of which are not now pressed as I noted above.
4. The matters in issue between the parties were squarely raised by the pleadings in the District Court proceedings. Nonetheless, Mr Truskett brought proceedings 2016/42689 in this Court ("Supreme Court proceedings") against Mr Derham, a director of WFL who had executed relevant documents under power of attorney, and WFL. Mr Truskett sought declaratory relief in those proceedings as to the validity of a power of attorney, dated 22 June 2006 to which I refer below and an order that the appointment of WFL as Mr Truskett's attorney be declared void as and from the date it occurred, and also sought further relief under s 28 of the Powers of Attorney Act 2003 (NSW). Leave was granted to Mr Truskett to proceed against WFL in the Supreme Court proceedings on 2 May 2016 on the basis that his claim against it did not include a claim for damages. MIS was initially not joined by Mr Truskett as party to the Supreme Court proceedings, but was later joined in those proceedings on its application. The Court ordered Points of Claim and a Defence to Points of Claim in respect of the Supreme Court proceedings, which substantially raised the same issues as the proceedings in the District Court. The District Court proceedings were subsequently transferred to this Court to be heard together with the Supreme Court proceedings.

The affidavit evidence and chronology of events

1. MIS relies on the affidavits of Mr Mohammed Fahad dated 15 February 2017, 28 April 2017 and 26 June 2017 and the exhibits to those affidavits. Those affidavits were primarily relevant so far as they exhibited documents applicable to the relevant scheme. Mr Truskett relied on his affidavits dated 1 June 2015, 14 April 2016 and 7 March 2017. Large parts of those affidavits were not admissible and, predictably, were not admitted. Mr Truskett also relied on the affidavit of his solicitor, Mr Ishkhanian dated 30 June 2016, which was read without objection.
2. I now turn to the chronology of events and the terms of a number of the relevant project documents. There was little dispute as to the terms of those documents, although there was a substantial dispute as to whether Mr Truskett was bound by those documents to which I will refer below.
3. WFL issued a product disclosure statement ("PDS") headed "Willmott Forests Project - 2006 Product Disclosure Statement" on or about 6 July 2005 (Ex P1, CB 145). The PDS described the relevant project and provided that payment for participation in it could be made by cash or by taking out a loan offered by WFL as described in the PDS. The "Investment Summary" contained in the PDS stated that WFL: "[I]s offering an investment in a softwood plantation where Growers will be carrying on a business of forestry operations. The investment offers the potential for sound returns combined with a high level of investor safe guards [sic]." That Investment Summary also referred to the structure of the project, which included the entry into a Forestry Management Agreement and a Lease Agreement, and to the costs and fees payable by Growers. The Investment Summary also referred to the availability of payment options at interest rates over different periods and cross-referred to a summary of the Terms Agreement in the PDS, to which I will refer below.
4. The PDS also referred, under the heading "Key Features", to tax deductibility but noted that deductions were subject to the project operating as described and a product ruling remaining in force. A description under the heading "The Process" provided that: "The Grower appoints the Manager as their attorney to execute on their behalf the Forestry Management Agreement, the Lease Agreement, Sublease Agreement or Pre-Lease Agreement (as applicable) and the Terms Agreement (if applicable). Following execution the Manager will forward an executed copy of documents, together with the allocation plan delineating the Growers [sic] leased area, to the Grower. The Manager or the registered proprietor of the land (as applicable) will grant or procure the grant (as applicable) of a Forestry Right, in respect of the Project Land to be held on trust, to Willmott Forests Investment Management Pty Ltd ["WFIPL"] as agent of the Growers. … The Manager will enter details of the Woodlots issued into the Growers' register. The Manager shall maintain the Growers' register until expiration of the Project."
5. Paragraph 1.1.1 under the heading "Further Information" in the PDS provided for applications for "Woodlots" (as defined) to be made on the 2006 application form; that Woodlots were "taken to be issued" when WFL accepted an application, and WFL must notify an applicant within 30 days that the Woodlots had been issued; and, where an application was not accepted, WFL would return the application documents and refund any application monies to the applicant. Paragraph 1.1.3 provided that, following acceptance by WFL of an application for Woodlots, WFL would execute on behalf of the Grower the Lease Agreement, Sub-Lease Agreement or Pre-Lease Agreement (as applicable) and the Forestry Management Agreement and paragraph 1.1.4 provided for entry of the name of the "Grower" (as defined) on the Growers' register together with the date of issue of the Woodlots. Paragraph 5.2 also under the heading "Further Information", provides that WFL undertook to take all reasonable steps to grant a lease in respect of the Grower's Woodlots by no later than nine months from the date on which the Grower's application was accepted by WFL.
6. Part 6 of the "Further Information" provided a summary of the Lease Agreement; Part 7 a summary of the Forestry Management Agreement and Part 8 a summary of the Terms Agreement. The summary of the terms Agreement recorded (paragraph 8.2) that the Grower was required to pay an amount equal to the total purchase price for their Woodlots plus interest over the period agreed between the Grower and WFL and referred (paragraph 8.3) to applicable interest rates and to the Grower's obligation to repay the principal and any interest due in respect of the Woodlots on payment dates agreed between WFL and the Grower. That summary also noted (paragraph 8.13) that: "In consideration of the terms of payment, a Grower mortgages all their interest in the Woodlots (including the Trees) in favour of WFL for securing payment of all Monies Owing and the performance of their obligations under the Agreements, the terms of the 2006 Application Form and the Terms Agreement." That summary of the Terms Agreement also identified consequences of an event of default by the Grower; noted that WFL may assign, create any interest in or otherwise deal with any or all of its rights at any time as it saw fit; and noted (paragraph 8.25) that: "A Grower appoints WFL to be their Attorney to execute any deed, assignment, contract or document or do any other act in connection with the Mortgaged Property or the 2006 Application Form as set out in the Terms Agreement or to do any other act required of the Grower under the 2006 Application Form as set out in the Terms Agreement. … A Grower agrees to ratify anything done by WFL as Attorney pursuant to this clause."
7. Mr Truskett received the PDS (Truskett 1.6.15 [5]) and signed an application form dated 22 June 2006 in respect of the project, after consulting with his then accountant or investment adviser, and elected to take out finance in respect of his participation in the project on a 10 years interest only option. By the terms of that application form, Mr Truskett, inter alia, agreed to be bound by the Terms Agreement (Ex P1, CB 229), acknowledged that he had read the PDS and agreed to be bound by the terms and conditions contained in it, promised to pay the amount of $350 per Woodlot within 90 days, and irrevocably appointed a director of WFL to be his attorney from the date of the power of attorney to the expiration of the Project Documents (as defined) (Ex P1, CB 230) and authorised the execution and delivery of the Project Documents, the completion of blanks and making of amendments to them, the execution and delivery of documents and other acts referred to in the Project Documents, and provided that he declared all acts, matters and things done by the attorney in exercising powers under it to be as good and valid as if they had been done by him (Ex P1, CB 230, cll 6.1-6.3).
8. Mr Truskett's application to participate in the project and for finance was approved by, and I infer accepted by, WFL on or about 30 June 2006 (Ex P1, CB 237).
9. By a Pre-Lease Agreement dated 30 June 2006, executed (or, Mr Truskett contends, purportedly executed) by a director of WFL, Mr Derham, as attorney for Mr Truskett, Mr Truskett was granted (or purportedly granted) an entitlement to a lease of land in the Bombala region (Ex P1, CB 254). That lease was subsequently granted (or purportedly granted) as I will note below.
10. A Terms Agreement 10 Year IO ("Terms Agreement") (Ex P1, CB 240) between WFL and Mr Truskett was executed (or, Mr Truskett contends, purportedly executed) by Mr Derham as attorney for Mr Truskett under the power of attorney dated 22 June 2006 on 30 June 2006 and also executed by WFL. The Terms Agreement contained an acknowledgement, in cl 3, that: "I/We acknowledge and declare that the terms for payment of Monies Owing have been extended to me/us pursuant to the Application in carrying on the business of primary production being the forestry operations relating to the Woodlots and the Relevant Agreements and that this Terms Agreement is supplementary to the Application so as to detail the terms of payments of the Financed Amount due hereunder." The term "Financed Amount" in that clause referred to the Principal Amount (as defined) and the term "Woodlots" was defined as: "The Number of Woodlots for which I/We have applied pursuant to the Application and includes my/our right, title and interest in the Forestry Management Agreement and Lease Agreement, Sub-Lease Agreement or Pre-Lease Agreement (as applicable) (together the "Relevant Agreements" between my/us and [WFL], and all our rights to or in connection therewith including the exercise of any option thereunder."
11. Clause 4 of the Terms Agreement in turn provided, inter alia, that Mr Truskett agreed to pay the Monies Owing (as defined) by the Monthly Payments (as defined) on each payment date in the manner indicated in the application. The term "Monies Owing" was defined as the Principal Amount ($115,500), interest and other monies owing under the Application (being the application attached to the PDS and accepted by WFL on 30 June 2006). The term "Monthly Payments" referred to $962.40 for the first 60 monthly instalments and $2,283.30 for the remaining 60 monthly instalments.
12. Mr Freeman, who appeared for Mr Truskett, relied, in his oral opening, on cl 5 of the Terms Agreement (T16). That clause deals with the grant of a mortgage by Mr Truskett to WFL and provides, inter alia, that: "In consideration of the terms of payment I/we, as mortgagor and as beneficial owner, hereby convey to WFL as mortgagee all my/our right, title and interests in the Mortgaged Property (including the Trees) to hold for the purpose of securing the payment of all Monies Owing and the performance of my/our obligations herein. I/we agree to comply on time with the terms of the Application, Relevant Agreements and this Terms Agreement." The term "Mortgaged Property" was defined to mean the "Woodlots (and any part thereof) and includes the Trees and any additional associated rights such as carbon credits." I pause to note that, as at 30 June 2006 when the Terms Agreement and Loan Transfer Deed were executed, the "Mortgaged Property" did not include the land on which Mr Truskett's Woodlots would be situated, because it had not yet been acquired. I will return to the significance of that matter below.
13. Mr Truskett also executed (or purportedly executed) a Forestry Management Agreement and Pre-Lease Agreement on 30 June 2006, in each case by an attorney appointed (or purportedly appointed) under the relevant arrangements. By cl 2.1 of the Forestry Management Agreement (Ex P1, CB 246), WFL agreed "to carry out the works and services set out in [the attached schedule] in respect of the Leasehold Property in accordance with the terms and conditions of this agreement". The "Leasehold Property" was defined to mean: "the Grower's Woodlot(s) located in the land drawn from within the Bombala region or other regions with similar suitable attributes that meet the land selection criteria as specified in the Lease Agreement/Pre-Lease Agreement (as applicable) between the Grower and [WFL]." Clause 3.1 of the Forestry Management Agreement provided: "[WFL] shall use all reasonable endeavours to complete the works and services under Part 1 - Preparation & Planting and Part 2 - Maintenance in accordance with good forestry practices in respect of the Leasehold Property." Clause 4 provided for payment of Fees (as defined) and other specified amounts by the Grower to WFL at the times and in the manner specified in the Schedule.
14. By operation of those arrangements, Mr Truskett paid, from the Financed Amount, $105,000 plus GST on 30 June 2006 for preparation and planning under the Forestry Management Agreement in respect of 30 Woodlots (Ex P1, CB 245).
15. Also on 30 June 2006, WFL, WFPL and MIS entered into a Loan Transfer Deed ("Loan Transfer Deed") providing for the assignment of the right, title and interest in the Terms Agreement from WFL to MIS (Ex P1, CB 260). The "Background" to that Deed provides that it sets out, among other things, the terms upon which WFL or WFPL will sell "Loans" and "Loan Rights" to MIS. The term "Loan" is defined as a debt or part of a debt owed by a "Debtor" (as defined) to, relevantly, WFL under loans identified in a Settlement Report (as defined) and the term "Loan Rights" is defined as items referred to in cl 2.1 of the Loan Transfer Deed.
16. Clause 2.1 of the Loan Transfer Deed, under the heading ""Assignment by Seller" provided that: "Subject to the terms of this Deed, the Purchaser offers to purchase the Seller's entire right, title and interest in, to and under the following: (a) (Loans): each Loan identified in the Settlement Report Part 1; (b) (Payment Rights): all moneys, present and future, actual or contingent, owing at any time in respect of or in connection with each Loan referred to in clause 2.1(a) under the corresponding Loan Documents, including all principal, interest, reimbursable costs and expenses and any other amounts incurred by or payable to the Seller (including any payments made by the Seller on behalf of the Debtor in relation to the Loan) irrespective of whether: (i) such amounts become due and payable before or after the Assignment Date; and (ii) such amounts relate to advances made or other financial accommodation provided by the Seller to the Debtor before or after the Assignment Date; (c) (Related Securities): all Related Securities in existence from time to time in relation to each Loan referred to in clause 2.1(a); and (d) (Loan Documents): all Loan Documents in existence from time to time in relation to each Loan referred to in clause 2.1(a). The Sellers may accept this offer by and only by paying an acceptance fee of $10 to the Purchaser." I have referred to the definition of the term "Loan" above and the term "Related Security" was defined to mean: "in respect of a Loan, any guarantee, indemnity or other assurance, any policy of insurance or any Encumbrance granted in respect of or in connection with the corresponding Loan which secures or otherwise provides for the repayment or payment of that Loan. A Related Security may be given under the Loan Agreement that evidences the corresponding Loan."
17. Clause 2.4 of the Loan Transfer Deed, under the heading "Limit of Purchaser's rights" provided that: "(a) (Assignment in equity): An assignment of Loan Rights in accordance with this Deed takes effect initially in equity only unless and until the Purchaser perfects legal title to those Loan Rights in accordance with clause 6. (b) (Purchaser must not communicate, disclose or perfect title): The Purchaser must not: (i) take any steps to perfect the Purchaser's title to any Loans or the corresponding Loan Rights; (ii) give any notice to, or communicate in any other way with, a Debtor in relation to a Loan; or (iii) disseminate or disclose any information in respect of the assignment of the Loans or the corresponding Loan Rights, except in accordance with the terms of this Deed. Clause 6.1(e) of the Loan Transfer Deed permitted MIS to perfect its title by giving notice of the assignment to borrowers if, inter alia, an "Insolvency Event" (as defined) occurred, as later took place. I put aside the fact that the governing law of the Loan Transfer Deed, under cl 12.1, was the law of Victoria since no party made substantive submissions as to any significance of that matter.
18. On 14 July 2006, MIS paid WFL an amount of $8,750,000 in respect of loans assigned to it, including the loan to Mr Truskett (Ex P1, CB 336).
19. A letter dated 26 July 2006 from WFL to Mr Truskett, addressed to his then residential address, confirmed that his application for 30 woodlots was accepted on 30 June 2006 and enclosed copies of the Forestry Management Agreement, a tax invoice for the amount payable for preparation and planning to which I referred above, the Pre-Lease Agreement, the Terms Agreement and also stated that a copy of those documents had been provided to Mr Truskett's financial adviser. There is a dispute as to whether Mr Truskett received that letter and its attachments, to which I refer below. By late July 2006, Mr Truskett had received a tax invoice for the cost of 30 Woodlots and he claimed a tax deduction in respect of that amount. Although that tax invoice was enclosed with the letter dated 26 July 2006, a copy of which Mr Truskett denies receiving, I accept that it is possible that he may have received that tax invoice, even if he had not received that letter, so far as the documents had also been sent to his advisor. Mr Truskett made a first monthly payment of $980.96 on 31 July 2006 (Ex P1, CB 348) by direct debit and continued to make such payments until January 2012 when he appears to have closed the account against which such payments were debited.
20. WFL subsequently acquired the land which was the subject of the relevant scheme and a Lease Agreement in respect of the 30 Woodlots was purportedly executed, again by attorney for Mr Truskett, on 29 March 2007 (Ex P1, CB 256), within the nine month period contemplated by the PDS and Pre-Lease Agreement. The Lease Agreement stated a commencement date of 30 June 2006, in respect of land known as the Bombala 6 Plantation. The term of the lease was 25 years with a further term of "5 years or until such time as the Trees have been harvested and the land made good, whichever is the sooner". Clause 1 provided, inter alia, for the use of the land "only as part of a managed investment scheme ("Project") by which investors including the lessee ("Growers") participate in the establishment and maintenance of trees ("Trees"), which scheme is managed by the lessor".
21. As I noted above, the PDS provided for the grant of a Forestry Right in favour of WFIPL as agent for the Growers and WFL subsequently created a profit à prendre forestry right in favour of WFIPL which, it appears to be common ground, was referrable to Mr Truskett's and other Growers' participation in the project (Ex P3, CB 522). On 21 August 2008, that profit à prendre forestry right was registered on the title of the relevant land (Ex P3, CB 520). That profit à prendre forestry right granted WFIPL the right to enter the relevant property and establish, maintain and harvest crops of trees and associated rights, for a term of 26 years commencing 1 July 2007, on the terms of an annexed Forestry Right Agreement dated 1 July 2007.
22. By letter dated 13 October 2010 (Ex P1, CB 346), MIS advised Mr Truskett of the appointment of receivers and managers and an administrator to WFL and advised that: "We hereby give notice that in June 2006 WFL or WFIN assigned (sold) the loan to MIS Funding No 1 Pty Limited, a wholly owned subsidiary of the Commonwealth Bank of Australia (that is, they assigned all of their rights and benefits under the loan agreement including the benefit of all security held by them). The management of the loan however remained with WFL. By this notice to you, the assignment takes effect in both law and equity. All of the obligations you owe under the loan agreement are therefore owed to MIS Funding No 1 Pty Limited." There is no dispute that Mr Truskett received that notice, perfecting any assignment of WFL's rights under the loan to MIS (if otherwise effective) at law.
23. It appears that the Lease Agreement and profit à prendre forestry right in respect of Mr Truskett (and other investors in the project) were subsequently extinguished or terminated in the course of the liquidation of WFL.
24. As I noted above, Mr Truskett ceased making payments to MIS in January 2012. It appears that Mr Truskett continued to claim tax deductions for interest paid in his tax return for the year ended 30 June 2012, for the period beyond which he had ceased making payments, and again for the year ended 30 June 2013 (Ex P8). That matter requires correction in the management of his tax affairs, but I do not consider that it is otherwise material for the purposes of the proceedings, given the conclusions that I reach on other grounds.
25. MIS subsequently demanded repayment of principal and interest from Mr Truskett and the proceedings to which I have referred above were commenced. By a Certificate of Debt dated 9 June 2007, MIS certified that the amount payable by Mr Truskett as at 9 June 2007 was $201,743.55, together with interest to the date of judgment (Ex P3, CB 604). No submissions were made as to any dispute as to the amount of the debt owing by Mr Truskett, if other issues raised by Mr Truskett by way of defence and cross-claim are not determined in his favour.

Notification of acceptance of Mr Truskett's offer

1. As I noted above, there is a dispute as to whether Mr Truskett received the letter dated 26 July 2006 from WFL confirming that his application for 30 woodlots was accepted on 30 June 2006 and enclosing copies of the Forestry Management Agreement, a tax invoice for the amount payable for preparation and planning, the Pre-Lease Agreement and the Terms Agreement.
2. MIS led no affirmative evidence that the 26 July letter had been sent to Mr Truskett, whether by reference to that letter specifically, or by reference to any practice of sending such correspondence to borrowers at the relevant time. It was put to Mr Fahad, in cross-examination, that the original documents to which he had access, when he assumed responsibility for the matter in 2013, included the original letter dated 26 July 2006 addressed to Mr Truskett. Plainly, if MIS retained the original of that letter, then it was less likely that it would have been sent to Mr Truskett. However, Mr Fahad's evidence was that he did not "completely recall" the documents then held by MIS, although he acknowledged that there "must be" the original of that document in that file. It seems to me that that acknowledgement was not based on any actual recollection of the content of that file and I give it little weight. Mr Fahad accepted that, subsequently, original documents including the original application signed by Mr Truskett had been lost from that file, but his evidence was that he was not aware of any such loss of an original signed letter of 26 July 2006 addressed to Mr Truskett (T36).
3. Mr Truskett's affidavit evidence was initially, plausibly, that he did not recall receiving that letter and its attachments, which would be unsurprising where the relevant events occurred over 10 years ago. By his affidavit dated 7 March 2017, Mr Truskett's evidence had strengthened to an assertion that he did not receive any further written or other communications with WFL with respect to his application, apart from automatic deductions from his account as monthly payments, after his application dated 22 June 2006 (Truskett 7.3.2017 [7]). In cross-examination, Mr Truskett initially conceded that he did not know whether he received a tax invoice in respect of the project under cover of the letter dated 26 July 2006 (T47), leaving open the possibility that he had received that tax invoice under the cover of that letter. Mr Truskett's evidence as to whether he received that letter was then, variously, that he was "saying no at this point", that he did not believe he received it, and that he did not receive it (T48-T49).
4. Mr Cassimatis, who appeared for MIS, put to Mr Truskett in cross-examination that he must have received that letter and its attachments in order to know the amount of monthly interest that had to be paid to MIS. Mr Truskett did not accept that proposition and information provided to him, including a payment schedule, would have allowed him to know that amount, even if he had not received that letter and its attachments. Mr Cassimatis also submits that Mr Truskett's evidence, including as to the receipt of the 26 July letter, has been "contaminated" by input from his lawyers. It was apparent from Mr Truskett's cross-examination that the language of his affidavit, and particularly the use of terms such as a "total consideration contract", was likely to have reflected the language of his solicitor, rather than Mr Truskett's initial thinking. It is not necessary for me to reach a wider finding as to Mr Truskett's credit, or to determine whether the 26 July letter was received, given the findings which I have reached on other grounds. I will assume, without deciding, that Mr Truskett did not receive that letter, in addressing the relevant legal issues.
5. Mr Truskett contended that the Terms Agreement did not "crystallise" until acceptance of the terms by WFL was communicated to him and that he did not receive notice of acceptance of the Terms Agreement by the letter dated 26 July 2006 attaching that agreement and other project documents, other than the Lease Agreement which was not executed until a later date. Mr Freeman put that submission, in opening, on the basis that the application that Mr Truskett executed on 22 June 2006 was merely an offer which had no effect unless it was accepted, and that offer was not accepted since he did not receive the letter dated 26 July 2006 (T17). Mr Cassimatis responded that Mr Truskett accepted the terms of the Terms Agreement and other project documents when he signed the application form attached to the PDS and applied for 30 Woodlots, and that WFL complied with the method for accepting that offer as set out in the PDS. MIS also relies on the direction given by Mr Truskett, in the application form, to the attorney to execute the Terms Agreement and submits that the attorney acted in accordance with that direction in executing the Terms Agreement. Mr Cassimatis also submits that Mr Truskett's claim that the Terms Agreement was not assignable because he was not notified of acceptance of his offer cannot succeed, because the formation of the Terms Agreement did not depend on such notification.
6. I do not accept Mr Truskett's submission that the arrangements between him and WFL, or MIS, could not take effect if he did not receive the 26 July letter. It seems to me that the legal relationship between Mr Truskett and WFL arose on the terms of the PDS and the application form on 30 June 2006, when WFL accepted Mr Truskett's application, irrespective of whether Mr Truskett subsequently received the letter dated 26 July 2006. On the findings that I have reached, the Terms Agreement took effect when it was executed by an attorney authorised to do so under the PDS and application form. Mr Truskett also knew of the substantive terms of the relevant agreements, since they were summarised at length in the PDS that he acknowledged he had received, and the question whether he was bound to those agreements, by their execution under the power of attorney granted under the PDS and application form that he signed, does not depend on whether he was subsequently provided with a further copy of them. I note, for completeness, that, even if the application form was an offer by Mr Truskett, it was plainly accepted by WFL by conduct where the parties proceeded, for a substantial time, on the basis that the relevant arrangements were on foot, with Mr Truskett paying and WFL receiving the relevant interest and Mr Truskett claiming tax deductions in respect of the interest that he had paid.

The lack of registration of the powers of attorney

1. Mr Truskett pleads, by paragraph 12 of the Amended Defence in the District Court proceedings and paragraph C.14 of the Points of Claim in the Supreme Court proceedings, that MIS was aware and on notice of limitations imposed on the use of any power of attorney provided to a director of WFL under the relevant arrangements. That allegation is supported by complex particulars, and particulars to particulars, although a substantial part of that allegation appears to turn upon the proposition that the relevant power of attorney and documents, including the Pre-Lease Agreement, Terms Agreement, lease and Loan Transfer Deed were not valid, operative or enforceable because the power of attorney was not registered. The particulars to that paragraph also allege that MIS was aware that the power of attorney was not irrevocable, a matter that I will address below. Paragraph 13 of the Amended Defence in the District Court proceedings and paragraph C.15 of the Points of Claim in the Supreme Court proceedings also plead an allegation that MIS had not registered the power of attorney in respect of the Loan Transfer Deed from WFL to MIS and challenge the assignment of the rights to MIS on that basis. Paragraph 19 of the Amended Defence and paragraph C.21 of the Points of Claim in the Supreme Court proceedings allege MIS's knowledge of the failure to register the power of attorney.
2. Paragraph 9 of the Amended Cross-Claim in the District Court proceedings and paragraph C.9 of the Points of Claim in the Supreme Court proceedings repeat the allegation that WFL and MIS did not enter a Pre-Lease Agreement or lease of an identifiable parcel of land with Mr Truskett, due to a failure to register the relevant power of attorney. Paragraphs 13-14 of the Amended Cross-Claim in the District Court proceedings and paragraph C.14 of the Points of Claim in the Supreme Court proceedings plead that MIS did not acquire any rights in Mr Truskett's application, on the basis that the power of attorney under which the Loan Transfer Deed was executed was not registered. Paragraph 15 of the Amended Cross-Claim pleads a claim for loss or damage by Mr Truskett, but that that claim was deleted in the relief sought.
3. In opening written submissions, Mr Truskett pointed out that the Terms Agreement and the Loan Transfer Deed were each executed under powers of attorney and that neither of those powers of attorney was registered. Mr Truskett submitted that that gave rise to invalidity of the relevant documents under s 52 of the Powers of Attorney Act. In oral opening submissions, Mr Freeman contended that the failure to register the powers of attorney affected the operative character of the Terms Agreement and lease and the standing of MIS to pursue a claim under the loan against Mr Truskett (T14). Mr Freeman also submitted that the execution of the Loan Transfer Deed under power of attorney for MIS also required that that power of attorney be registered and it was not (T15).
4. Mr Cassimatis responded by reference to the relevant definitions under the Powers of Attorney Act and submitted that the Terms Agreement does not fall within the definition of a "conveyance" in s 3 of the Powers of Attorney Act or within the definition of "deed" under that Act; and that the Terms Agreement was relevantly executed on 30 June 2006 and was not vitiated for lack of registration. In oral submissions, Mr Cassimatis also submitted that, notwithstanding cl 5 of the Terms Agreement is directed to a mortgage clause, and would affect land (putting aside, for the moment, the fact that the relevant land had not been acquired when the Terms Agreement was executed), the Terms Agreement was an agreement not a deed and was not within the definition of "conveyance" in s 3 of the Powers of Attorney Act (T86) or within s 52 of the Powers of Attorney Act. Mr Cassimatis also refers to the terms of the Loan Transfer Deed and submits that there was no requirement for registration of the power of attorney to give effect to the Loan Transfer Deed where the assignment was of the rights, title and interest in the loan.
5. Section 52 of the Powers of Attorney Act relevantly provides that: 52 Powers of attorney to be registered for dealings affecting land (cf 1919 No 6, s 163 (2) and (4)) (1) A conveyance or other deed affecting land executed on or after 1 July 1920 under a power of attorney has no effect unless the instrument creating the power has been registered. Note. 1 July 1920 is the day on which the Conveyancing Act 1919 commenced. (2) If the instrument is registered after the time when the conveyance or other deed was executed, the conveyance or other deed has effect as if the instrument had been registered before that time. (3) In this section, deed includes any memorandum, dealing or other instrument affecting land that is deemed by an Act to have effect as a deed. (4) This section does not apply to a lease for a term of 3 years or less.
6. Mr Freeman drew attention to several definitions in respect of that section, including the definition of conveyance which provides that "conveyance" includes any assignment, appointment, lease, settlement or other assurance by deed of any property (emphasis added); the definition of "assurance" as including "a conveyance and a disposition made otherwise than by will"; and the definition of "disposition" as including, relevantly, a conveyance.
7. Several matters should be noted about the terms of this section. First, the heading identifies that it applies to registration of a power of attorney "for dealings affecting land". Section 35 of the Interpretation Act 1987 (NSW) provides that headings to provisions of an Act are taken to be part of the Act, and I therefore have regard to the heading in construing the scope of the section. That heading is consistent with the terms of the section, on the basis that the phrase "affecting land" should be read as limiting the reference both to a "conveyance" and to an "other deed". It follows that the broad definition given to "conveyance" under the Powers of Attorney Act as extending to an "assurance by deed" of any property does not extend the operation of s 52 of the Powers of Attorney Act beyond a dealing with land.
8. Second, that reading of the section is consistent with the Explanatory Note to the Powers of Attorney Bill 2003, which the Court may consider in the interpretation of a provision of the Act by s 34(2) of the Interpretation Act. That Explanatory Note relevantly provides that: "Clause 52 provides that certain deeds (or memoranda that operate as deeds) that are executed by an attorney under a power of attorney do not have effect until the power of attorney is registered. The proposed section substantially re-enacts the provisions of section 163(2) and (4) of the Conveyancing Act 1919. However, the proposed section makes it clear that this requirement to register powers of attorney is limited to deeds and memoranda affecting land [emphasis added]. There has been some doubt in the case law about whether section 163(2) and (4) of the Conveyancing Act 1919 extend to other kinds of deed. However, the case law has tended to suggest that those provisions are limited to instruments affecting land. See Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404 at 432.
9. Third, the operation of that section is limited to a document that is either a "conveyance or other deed". The definition of the term "conveyance" refers to several kinds of dealing "by deed", although that definition may raise a question whether the words "by deed" apply only to the phrase "assurance by deed" or to each of the relevant forms of "conveyance". Any ambiguity arising from that matter is readily resolved by reference to the Explanatory Note to the Powers of Attorney Bill, in accordance with s 34(2) of the Interpretation Act, which makes clear that the section is intended to apply to deeds or memoranda that operate as deeds. The term "deed" is also extended by s 52(3) of the Powers of Attorney Act to include a "memorandum, dealing or other instrument affecting land that is deemed by an Act to have effect as a deed". The Terms Agreement was not deemed by any such Act to have effect as a deed.
10. These matters have the result that, on its proper construction, s 52 of the Powers of Attorney Act could not apply to either the Terms Agreement or the Loan Transfer Deed when they were executed on 30 June 2006. The Terms Agreement was described as an "agreement" and was expressly executed "as an agreement" and not as a deed (Ex P1, CB 243). Because that document was not a conveyance (as defined), a deed or a memorandum deemed by any Act to have effect as a deed, s 52 of the Powers of Attorney Act did not apply to it. This is sufficient to have the result that Mr Truskett's claim under s 52 of the Powers of Attorney Act in respect of the Terms Agreement must fail. I should add, for completeness, that that claim must also fail for a second reason. Although the Terms Agreement contemplated the provision of finance for and the giving of security in respect of Mr Truskett's acquisition of the Woodlots, the Forestry Rights or an interest in land, the relevant land had not been acquired at the time the Terms Agreement was executed. I address the issue (raised in oral submissions at, inter alia, T99ff) whether s 52 of the Powers of Attorney Act deprives a document of effect when it does not affect land at the time executed in respect of the Loan Transfer Deed below. For the reasons set out below, Mr Truskett's claim under s 52 of the Powers of Attorney Act in respect of the Terms Agreement would also fail because the Terms Agreement did not affect land when it was executed.
11. Turning now to the Loan Transfer Deed, Mr Cassimatis submits, and I did not understand Mr Freeman to contest, that subject to any effect of the Powers of Attorney Act, the assignment, by the Loan Transfer Deed, of WFL's rights under the Terms Agreement to MIS was effective in equity from the date it was executed on 30 June 2006, and at law on the date on which notice of that assignment was given to Mr Truskett on or about 13 October 2010. The Loan Transfer Deed was executed as a deed and to that extent is capable of falling within the scope of s 52 of the Powers of Attorney Act.
12. I have referred to the terms of the Loan Transfer Deed above. I am not persuaded that the assignment of the relevant loans or of the "Related Securities" (as defined) or any other rights assigned under that deed affected land, for the purposes of s 52 of the Powers of Attorney Act, at the point the Loan Transfer Deed was executed, where the land which was the subject of the relevant project had not then been acquired. That section seems to me to be directed to a conveyance or deed that has a present effect on land that is its subject matter, not to a transaction that might at some future point affect land when and if that land is acquired by one of the parties to that transaction.
13. Mr Freeman did not submit that, if the Powers of Attorney Act did not apply to the Loan Transfer Deed when it was executed, because it did not then affect land, and the Loan Transfer Deed was therefore valid and effective when executed, it could cease to be valid and effective because land was subsequently acquired by one of the parties to it and then fell within its scope. There may have been good reason that no such submission was made, since that submission would not have advanced Mr Truskett's case. If the Loan Transfer Deed was effective when executed, because it did not then affect land, it brought about the assignment of the loans and associated rights at that point and it was not necessary for it to remain in effect into the indeterminate future to sustain the validity of assignments that had already taken effect in equity.
14. I should add that a submission (which Mr Freeman did not advance) that s 52 of the Powers of Attorney Act could have subsequent or continuous operation so as to later invalidate deeds or conveyances that did not affect land and were valid when executed may have raised difficult issues. On the one hand, a reading of s 52 of the Powers of Attorney Act as applying only if land is affected at the point an instrument is executed, and not if it is acquired the next day and then affected, would leave scope to avoid the registration requirement under s 52 of the Powers of Attorney Act, if there were any reason to do so. On the other hand, there is a real risk to commercial certainty if, for example, a contract executed as a deed under power of attorney that had not affected land when executed and had been valid and effective for many years could later cease to become effective, possibly without the parties recognising that result, if a party to it later acquired land that was then affected by it. I need not and should not determine that question, where Mr Freeman did not submit that the section could have such an effect and that possibility was not addressed in submissions.
15. For completeness, I should note that Mr Cassimatis also submitted that there was nothing in the Pre-Lease Agreement that required the powers of attorney to be registered, because that agreement did not affect land. It is by no means clear that Mr Truskett contended to the contrary. If that matter was in issue, I would accept Mr Cassimatis' submission because the Pre-Lease Agreement also did not affect land, even apart from the fact that the relevant land had not yet been acquired.
16. Counsel also addressed the question (T11) whether the lack of registration of the power of attorney granted by Mr Truskett to WFL had the result that it was ineffective at the point at which WFL granted a lease of the relevant land to Mr Truskett and Mr Truskett did not get what he bargained for or was promised in the PDS and the power(s) of attorney ought be revoked or cancelled. Mr Cassimatis submitted that that was not the position, because WFL committed to register a Forestry Right and did so, implicitly with the consequence that there was no total failure of consideration, and also by reason of a claim for estoppel by conduct that I will address below (T12). Mr Cassimatis submitted that the Forestry Right, as registered on the title, gave Mr Truskett equivalent rights to that which he would have obtained under a lease and contemplated that WFL would perform the steps which it undertook and for which Mr Truskett was charged and claimed tax deductions (T13).
17. On the findings that I have reached above, a claim that the power of attorney given by Mr Truskett was ineffective when WFL purported to grant a lease of the relevant land to Mr Truskett could not impeach the Terms Agreement or the Loan Transfer Deed on the basis of a total failure of consideration, even if the lease was invalid, where other consideration including the registration of the Forestry Right was provided by WFL to Mr Truskett. That claim also could not impeach MIS's rights under the assignment of the Terms Agreement, by reason of any claim for misleading or deceptive conduct by WFL, or for equitable fraud, where any claim against MIS alleging that it was knowingly involved in any such conduct or equitable fraud on MIS's part was rightly abandoned in the absence of evidence to support it.
18. Mr Truskett also relied on subsequent attempts by MIS to register the powers of attorney under which the Terms Agreement, the lease and the Loan Transfer Deed were purportedly executed, and particularly a letter dated 18 March 2016 from MIS's solicitors to Land and Property Information ("LPI") in which MIS's solicitors submitted, inter alia, that the Terms Agreement and lease contained covenants concerning land and that, if LPI refused to accept the power of attorney for registration, then the Terms Agreement and lease would have no effect by operation of s 52(1) of the Powers of Attorney Act and Mr Truskett may be able to avoid repaying the loan advanced to him to fund the purchase of his interest in the Woodlots (CB 1255). LPI ultimately did not permit the registration of those powers of attorney and no proceedings were brought by MIS to overturn that decision (T32-33). The effect of s 52 of the Powers of Attorney Act on MIS's rights under the Terms Agreement and Loan Transfer Deed is a mixed question of fact and law and it seems to me that any submission, or admission, as to that matter in this correspondence should be given little weight. I have addressed the effect of that section above and reached the contrary view to that contemplated by the letter dated 18 March 2016.

Whether the powers of attorney were limited or revocable or should be revoked

1. Mr Truskett pleads, in paragraph 12(a)(6) of the Amended Defence in the District Court proceedings, that the power of attorney granted by Mr Truskett to WFL was not irrevocable, on the basis that, if MIS acquired all the contracts and other assets of WFL, WFL would no longer have the capacity to acquire land to grow the Woodlots, acquire forestry rights and otherwise provide a valid and binding 25 year lease to Mr Truskett. That claim must fail, because its premise that MIS acquired all of WFL's contracts and other assets was not established. Mr Truskett also pleads, in paragraph 12(a)(8) of the Amended Defence in the District Court proceedings, that the irrevocable authority for the power of attorney was not irrevocable and was limited by various matters and that, if those matters did not occur, WFL was to refund all monies received from Mr Truskett.
2. Mr Freeman submitted, in his opening submissions, that the power of attorney granted by Mr Truskett to WFL on 22 June 2006 was incorporated in the PDS and the PDS limited that power of attorney or conditioned its use, to empower the attorney to complete lease agreements and, when executing a lease agreement and the Terms Agreement, the attorney could only do so if the power of attorney was registered (T15). So far as that submission turns on the terms of the PDS and that power of attorney, the PDS contemplated that a number of documents, and not only a lease agreement, would be executed under power of attorney granted by Mr Truskett and that rights would be conferred on Mr Truskett in several ways, including by the grant of a Forestry Right which would confer similar rights to a lease. So far as that submission is directed to execution of a lease, I have held above that any invalidity of the execution of the lease did not impeach the validity of execution of the Terms Agreement or the assignment of WFS's rights under the Terms Agreement to MIS. This claim must fail.
3. By his Amended Originating Process in the Supreme Court proceedings, Mr Truskett also sought a declaration that the power of attorney dated 22 June 2006 was void, having been obtained by misleading and deceptive conduct of Mr Derham and WFL and, further and alternatively, an order under s 28 of the Powers of Attorney Act on the bases that the objects of the power of attorney had been carried out or had become incapable of being carried out or that the power of attorney was otherwise exhausted. In his Points of Claim in the Supreme Court proceedings, that claim was formulated somewhat differently, as seeking declarations that powers of attorney dated 22 June 2006 (presumably relating to the Terms Agreement) and 30 June 2006 (presumably relating to the Loan Transfer Deed) are limited powers of attorney and not irrevocable and that the powers of attorney are null and void ab initio; and an order that the powers of attorney be revoked as and from their respective dates.
4. Mr Cassimatis responds that s 15 of the Powers of Attorney Act provides that an instrument that creates an irrevocable power of attorney is valid if it is given for valuable consideration or is expressed to be given for valuable consideration, and need not be created by deed. It seems to me that there was consideration for the relevant instrument, so far as the arrangements included reciprocal promises, including for payment of an amount per Woodlot by Mr Truskett and for the allocation of Woodlots to Mr Truskett by WFL, once his application was accepted.
5. So far as Mr Truskett seeks an order under s 28 of the Powers of Attorney Act that the powers of attorney be revoked and cancelled ab initio, that section provides that: "The Supreme Court may order that an irrevocable power of attorney is terminated and may order that the instrument creating the power be delivered up for cancellation if the Court considers that: (a) the objects of the power of attorney have been carried out, or (b) the objects of the power of attorney have become incapable of being carried out, or (c) the power of attorney is otherwise exhausted."
6. It has not been established in this case that the objects of the power of attorney have been carried out, where MIS has not yet received the amounts due to it under the Terms Agreement, or are incapable of being carried out or are exhausted, where future obligations exist under the Terms Agreement. Accordingly, I do not consider that the basis for an order under s 28 of the Powers of Attorney Act is established.

Several matters abandoned, not pressed or not established by Mr Truskett

1. It seemed from the oral submissions made in opening by Mr Freeman that Mr Truskett placed primary weight on a substantially narrower case than had been pleaded in his Amended Defence and Amended Cross-Claim in the District Court proceedings and in his Points of Claim in the Supreme Court proceedings, although Mr Freeman initially opened on the basis that Mr Truskett sought to have the other issues raised in his pleadings determined (T17). I sought clarification of the extent to which other allegations put by Mr Truskett were not pursued, in the course of the hearing, and Mr Freeman subsequently narrowed Mr Truskett's case to that which had some evidentiary basis and, at the conclusion of the hearing, Mr Freeman handed up marked up copies of the Amended Defence, Amended Cross-Claim and Points of Claim which indicated the aspects of them that were not pressed. That clarification was helpful, although incomplete in some respects because there was a degree of internal inconsistency in the marking up of those documents. I now note several other allegations that were abandoned by Mr Truskett, or were not supported by substantive submissions although not expressly abandoned, or, if pressed, were not established.
2. Paragraph 10E of Mr Truskett's Amended Defence filed in the District Court proceedings pleads that a contract said to comprise his offer of 22 June 2006, WFL's purported assignment of that offer to MIS on 30 June 2006 and WFL's purported written acceptance of the offer by the letter dated 26 July 2006 failed for lack of consideration, because WFL could not complete the contract in respect of the 30 Woodlots for which Mr Truskett had made payments. Mr Freeman did not appear to support that allegation in oral submissions. If that allegation is pursued, it must fail, because the contracts contain a complex array of mutual promises; WFL delivered a substantial part of the promised benefits of the contracts, including by registration of the Forestry Right; and Mr Truskett obtained substantial benefits from the arrangement by way of tax deductions, notwithstanding the subsequent liquidation of WFL, the extinguishment of the profit à prendre and the termination of the leases mean that he will not receive all of the benefits of the contracts.
3. Allegations in paragraph 11 of the Amended Defence in the District Court proceedings, including that MIS and WFL acted in concert to commit equitable fraud against Mr Truskett, that MIS abetted contraventions by WFL of the prohibition on misleading and deceptive conduct under s 52 of the former Trade Practices Act, that WFL had made various representations as to the present and as to the future as to which there was no reasonable basis, that WFL had been involved in "asset and income stripping", that the Loan Transfer had not been properly stamped and that WFL did not provide or intend to provide Mr Truskett with any form of leasehold title to any portion or parcel of land that he could utilise as collateral or security for any financial purpose, were abandoned. Allegations of equitable fraud by WFL, Mr Derham and MIS and allegations that MIS knew or ought to have known of that equitable fraud and combined with WFL to commit that equitable fraud in paragraphs B.1 and B.6 of the Points of Claim in the Supreme Court proceedings were also abandoned.
4. Further allegations in the particulars to paragraph 5 of the Amended Cross-Claim in the District Court proceedings and paragraph C.5 in the Points of Claim in the Supreme Court proceedings of MIS's participation in representations made to Mr Truskett were also abandoned. Allegations in paragraphs 6-7 of the Amended Cross-Claim in the District Court proceedings and paragraph C.6-C.7 in the Points of Claim in the Supreme Court proceedings of representations to Mr Truskett and as to the content of those representations were also abandoned, and a claim in the Amended Cross-Claim in the District Court proceedings for damages for contravention of the Trade Practices Act was also abandoned. An allegation of non-disclosure in paragraph 8 of the Amended Cross-Claim in the District Court proceedings was abandoned, although the corresponding allegations remained in paragraph C.8 of the Points of Claim in the Supreme Court proceedings.
5. I should note, for completeness, that Mr Freeman had opened Mr Truskett's case on the basis that it was represented to Mr Truskett that his position was secured by way of Forestry Rights and that he was to receive a 25 year lease, which would entitle him to use the interest in land to secure a financial facility by way of mortgage and that, irrespective of whether the power of attorney was registered or not, there was no basis for a representation that he would gain any of those entitlements and that he was never to be provided with anything that would allow him to grant a mortgage (T17). Mr Cassimatis responded that no claim for misleading and deceptive conduct was available against Mr Derham because he is not a corporation within the scope of the Trade Practices Act and no basis for the extended application of the Trade Practices Act is established. Mr Cassimatis also submitted that it is not established that WFL was acting as MIS's agent in the relevant circumstances, and there is no evidence that MIS was involved with the issue of the PDS, the formation of the Terms Agreement or the management of the Woodlots. Mr Cassimatis also addressed the particular representations that were pleaded, but it is not necessary to address those claims where the pleaded representations were not pressed.
6. My attention was not drawn to any express representation in the PDS or transaction documents that the rights granted to Mr Truskett could be mortgaged, other than to the extent that they would be secured in favour of WFL, and I am not satisfied that there was any implied representation to that effect. Such a representation does not follow merely from the long term character of the investment, where Mr Truskett was obtaining other benefits over the term of the investment, including substantial tax deductions. So far as a representation arose from the grant of a mortgage under cl 5 of the Terms Agreement, it appears to have been directed to the mortgage that was in fact granted under that agreement and has not been falsified. So far as the alleged representation was directed to that matter, or the grant of Forestry Rights and a lease to Mr Truskett, no basis for relief against MIS has been established where there is no evidence that it was knowingly concerned in any misleading or deceptive representation and any case to that effect was not pressed in submissions.
7. Mr Cassimatis also submitted that any claim by Mr Truskett under the Trade Practices Act would be out of time, so far as any cause of action would have accrued, at the latest, by the date of the lease agreement dated 29 March 2007, the six year limitation period would expire on 28 March 2013, and claims under the Trade Practices Act were first raised in Mr Truskett's defence filed on 26 February 2015. I need not reach a concluded view as to that question, since it appears the relevant claims were largely abandoned or not pressed and no basis for relief against MIS arises from them.
8. Paragraph 14 of Mr Truskett's Amended Defence in the District Court proceedings pleads an allegation as to a failure properly to describe a parcel of land, allegedly rendering the pre-lease or final lease of that land to Mr Truskett unenforceable. That allegation was not addressed by Mr Freeman in oral submissions and I assume that it was also not pressed. Allegations in paragraphs 15-17 that WFL did not provide a final lease to Mr Truskett and was not the owner of the relevant land were abandoned.
9. Allegations in paragraph 5 of the Amended Cross-Claim in the District Court proceedings of breach of the terms and conditions of the offer made by Mr Truskett and purportedly accepted by WFL were abandoned, although several factual allegations were retained in that paragraph. The corresponding claim for breach of contract remained in paragraph C.5 in the Points of Claim in the Supreme Court proceedings, although no submissions were made to support it and I assume that it was not pressed. It is therefore not necessary to address Mr Cassimatis' submission, made before this claim was abandoned, that this claim was embarrassing in form; that the limitation period in respect of the claim had expired, where the Amended Cross-Claim was not filed until 2 June 2015; that there is no evidence of loss suffered by Mr Truskett in respect of the claim; and that the allegation that there was a total failure of consideration must fail.
10. Paragraphs 10-11 of the Amended Cross-Claim in the District Court proceedings and paragraphs C.10-C.11 of Points of Claim in the Supreme Court proceedings plead contraventions of ss 51A, 51AA and 52 of the Trade Practices Act on the basis that Mr Truskett was allegedly never to receive consideration for any of the monies paid to any of the parties, or the payments made to MIS, or the payments made to WFL and assigned to MIS from 30 June 2006. This allegation was not addressed by Mr Freeman in oral submissions but, if it is pressed, the proposition that Mr Truskett did not receive any consideration for any of the monies paid was not established for the reasons noted above.
11. Paragraph 20 of the Amended Cross-Claim in the District Court proceedings and paragraph C.14 in the Points of Claim in the Supreme Court proceedings were in substantially the same terms, although there are again inconsistencies as to which aspects of the claim were abandoned in the two proceedings. I proceed on the basis, confirmed by Mr Freeman in submissions, that the allegations of asset and income stripping were abandoned by Mr Truskett, notwithstanding that they remained in the Amended Cross-Claim in the District Court proceedings.

MIS's reliance on ratification or estoppel

1. MIS in turn contends that Mr Truskett ratified or affirmed the attorney's conduct in executing the Terms Agreement under power of attorney by behaving in a manner consistent with the terms of the relevant project documents after he received copies of them (the receipt of which is disputed by Mr Truskett, as I noted above) and encouraged WFL and later MIS to assume he would not default under the Terms Agreement. It is not necessary to determine that submission where I have held above that the Terms Agreement was not invalidated by the matters put by Mr Truskett and it would not assist MIS unless it could be shown that such ratification or affirmation also extended to the Loan Transfer Deed, which was not known to Mr Truskett for much or all of the relevant period.
2. Mr Cassimatis also submits that an estoppel by conduct is established, so far as WFL initially and MIS subsequently advanced the loan to Mr Truskett in accordance with the Terms Agreement and refrained from taking earlier recovery steps or lending money to another applicant, in reliance on Mr Truskett's submission of the 2006 application form, including accepting the Terms Agreement; receipt of the loan amount and then making loan repayments; his receipt of the July 2006 letter (which is disputed); and his conduct in a manner consistent with the terms of the Terms Agreement and the Lease Agreement.
3. There may be an open question, not addressed by the parties in submissions, whether an estoppel by representation (including by conduct) can arise in respect of a matter of law and not only of fact. Such an estoppel was described as extending to 'the legal complexion of facts' in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 at 415-16, 432 and as to 'the state of the law or the existence of a legal right, interest or relationship or the content of future conduct' in Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 at 445. It is not necessary to determine that question, since MIS's claim for estoppel by conduct was put on the basis that WFL and MIS relied on Mr Truskett's conduct in that regard. That proposition was not established by the evidence, where MIS did not call any relevant decision-maker to establish such reliance (Mr Fahad took up his position long after the relevant events) and it is not obvious why any decision-maker at MIS would have given particular attention to the arrangements with Mr Truskett specifically, as distinct from arrangements with borrowers generally. Had it been necessary to determine the claim for estoppel by conduct, I would not have found that such an estoppel was established.
4. There was also reference in submissions to the possibility of a conventional estoppel arising from the course of dealings between WFS and MIS on the one hand and Mr Truskett on the other in relation to the loan to Mr Truskett. After the conclusion of the hearing, Mr Freeman made further submissions addressing that question without leave, submitting that the Court should receive those submissions by reason of personal matters affecting him to which he refers. It is not necessary to determine whether I should grant leave to make those further submissions, given the matters to which Mr Freeman refers, and I have not had regard to them because it is not necessary to determine whether a conventional estoppel is established given the findings that I have reached on other grounds. I do note, for completeness, there is also an open question whether such an estoppel can be established as to a matter of law, although there is some authority that it can be established as to private rights that could have been dealt with by contract: Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226 at 244-245; Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269 at 296; Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1 at 120, on appeal as Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55 at [332]; KR Handley, Estoppel by Conduct and Election (2nd ed, 2016), [8-011], [8-014].
5. MIS also relies on the matters put in support of a claim for estoppel to submit that Mr Truskett adopted his attorney's acts in executing the Terms Agreement and the Lease Agreement and ratified those documents. Mr Cassimatis refers to Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [131]-[134], where the Court of Appeal observed that: "A principal can ratify the making of a contract entered into by a purported agent when the agent did not in truth have authority to make the contract on behalf of the principal. The ratification has retrospective effect, and the agent is treated as having had the requisite authority … Whether the conduct of the principal amounts to ratification is a question of fact, but there should be "clear adoptive acts" …; the conduct must be unequivocal … It is well expressed in Dal Pont, Law of Agency, 2nd ed at 5.28 - The positive acts of the alleged principal may, aside from any express words, constitute sufficient evidence of ratification. This may be so where the fair inference to be drawn from a person's conduct, on an objective basis, is that the person consents to a transaction to which he or she might properly have objected. Put another way, ratification "is implied from or involved in acts when you cannot logically analyse the act without imputing such approval to the party whether his mind in fact approved or disapproved or wholly disregarded the question". … Acceptance of the benefit of the unauthorised act of the agent with knowledge that the benefit flows from that act will ordinarily suffice …. There must be full knowledge of all the material circumstances in which the act was done, unless the principal intends to ratify and take the risk whatever the circumstances … The extent of knowledge necessary depends on the particular facts. It should be enough knowledge to decide whether or not to adopt the unauthorised act …" [citations omitted]
6. It is also not necessary to determine that claim, given the findings that I have reached on other grounds. Had it been necessary to determine this matter, I would not have been satisfied that ratification was established, where it was not established that Mr Truskett knew that the relevant powers of attorney were not registered at the time that he made payments of interest on the loan or claimed tax deductions in that regard. It is not necessary to determine the further question whether ratification can avoid the specified result that a deed affecting land executed pursuant to a power of attorney is of "no effect" under s 52 of the Powers of Attorney Act in a case where that section applies, since I have held that that section was not applicable in this case. I also note that, if (contrary to my view) the powers of attorney were invalid and it was necessary for MIS to rely on ratification, Mr Truskett's ratification of the Terms Agreement and Lease Agreement would not have assisted MIS unless it could also establish ratification of the Loan Transfer Deed, by which it acquired the rights which it now seeks to assert from WFL.

Orders and costs

1. For these reasons, there should be judgment for MIS in proceedings 2013/258692 and proceedings 2016/42689 brought by Mr Truskett should be dismissed. Mr Truskett should pay MIS's costs of and incidental to both proceedings, as agreed or as assessed. The parties should bring in agreed Short Minutes of Order to give effect to this judgment or, if there is no agreement between them, their respective drafts of such orders and short submissions as to the differences between them, within 14 days.

Amendments 02 August 2017 - Para 4 - correct 22 June 2016 to 22 June 2006 Para 32 - correct 7 March 2007 to 7 March 2017. Para 43 - italicise "affecting land" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 August 2017