N1 Loans Pty Ltd v Sarai

Catchwords: LAND LAW — possession of land — mortgage default
CONTRACTS — cross-claim — whether lenders breached loan agreement by prematurely appointing receiver — whether interest provisions in loan agreement void for uncertainty — whether on proper construction interest to be paid in advance or in arrears
EVIDENCE — whether judicial notice can be taken of fact that appointing a receiver would make it difficult for a solicitor to refinance

Legislation Cited: Evidence Act 1995 (NSW), s 144

Cases Cited: ASSK Investments Pty Ltd v AMA Group Ltd (2020) 149 ACSR 387; [2020] NSWSC 1756
Brown v Gould [1972] Ch 53
Hammond v Vam Ltd [1972] 2 NSWLR 16
In the matter of Leslie Muir Holdings Pty Ltd [2019] NSWSC 1519
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8
Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460; [2002] HCA 9

Category: Principal judgment

Parties: N1 Loans Pty Ltd (First Plaintiff)
N1 Venture Pty Ltd (Second Plaintiff)
N1SY Pty Ltd (Third Plaintiff)
N1 WH2 Pty Ltd (Fourth Plaintiff)
Jovan Sarai (First Defendant)
Aldrich Pty Ltd (Second Defendant)
Cross Claim
Jovan Sarai (First Cross-Claimant)
Aldrich Pty Ltd (Second Cross-Claimant)
N1 Loans Pty Ltd (First Cross-Defendant)
N1 Venture Pty Ltd (Second Cross-Defendant)
N1SY Pty Ltd (Third Cross-Defendant)
N1 WH2 Pty Ltd (Fourth Cross-Defendant)
Sam Kaso as receiver & manager over the personal assets on the cross-claim Jovan Sarai (Fifth Cross-Defendant)

Representation: Counsel:
M Young SC (First, Second, Third & Fourth Plaintiffs; First, Second, Third & Fourth Cross-Defendants)
R Marshall SC, M Fernandes (First & Second Defendants; First & Second Cross-Claimants)
O Small (Fifth Cross-Defendant)
Solicitors:
Summer Lawyers (First, Second, Third & Fourth Plaintiffs; First, Second, Third & Fourth Cross-Defendants)
Swaab (First & Second Defendants; First & Second Cross-Claimants)
Kingston & Partners (Fifth Cross-Defendant)

File Number(s): 2024/431013

Publication restriction: No

JUDGMENT

Introduction

1. The plaintiffs seek possession of two properties owned by the first defendant, one in Ryde and the other in Darling Point, both suburbs in Sydney. The first defendant resides in the Darling Point property.

2. I will refer to the first defendant as Mr Sarai and the second defendant, Aldrich Pty Ltd, as Aldrich. Mr Sarai, at all relevant times, was the sole shareholder and director of Aldrich. Mr Sarai and Aldrich have filed cross-claims against the four plaintiffs, and also against the receiver.

3. The two properties are subject to registered mortgages in favour of the plaintiffs. The plaintiffs lent Aldrich a total of $12,825,000 secured by the properties. Mr Sarai guaranteed repayment of the loans.

4. The two loans and the two mortgages were executed at the same time on precisely the same terms. For convenience, the terms common to both loans were referred to by the parties as “the Agreement”. However, the parties in respect of each loan are slightly different. In the loan in respect of the Darling Point property the agreement was made between the first, second and third plaintiffs (as lenders) and Aldrich (as borrower). Mr Sarai became a mortgagor and guarantor of the loan. The amount borrowed was $10.5m.

5. In the loan in respect of the Ryde property the fourth plaintiff was the lender. Aldrich was again the borrower, and Mr Sarai was the mortgagor and guarantor. The amount borrowed was $2,325,000.

6. The loans were executed on 26 September 2024 together with a Deed of Cross-Collateralisation. Under this deed the two loans were collateralised so that they each secured the whole of the secured monies.

7. The loans were repayable after three months, but with monthly interest only to be paid during the three months.

8. A chronology is of assistance (although it is noted that there are some discrepancies of dates as between the plaintiffs’ and defendants’ respective chronologies):

| 2003 | Mr Sarai became the sole director and shareholder of Aldrich. | | 17/05/2011 | Mr Sarai became the registered owner of the Ryde property. | | 01/02/2022 | Mr Sarai exchanged contracts to purchase the Darling Point property for $14m. | | 26/09/2024 | The two loans were executed. | | 27/09/2024 - 1/10/2024 | Mr Sarai became the registered owner of the Darling Point property. The mortgages were executed in respect of the two properties and the principal amounts of each loan were advanced to Aldrich. An amount equal to the first interest payment was deducted from the respective advances. | | 30/10/2024. | The plaintiffs said the interest for November was due. | | 04/11/2024 | The plaintiffs provided default notices to the borrowers in respect of each loan. | | 20/11/2024 | The plaintiffs filed statements of claim commencing proceedings against the defendants. | | 21/11/2024 | The lenders in the Darling Point loan appointed Mr Sam Kaso as receiver and manager of the assets of Mr Sarai. | | 30/11/2024 | The defendants said the interest for November was due | | 26/02/2025 | Mr Kaso is appointed receiver and manager of the assets of Aldrich and also appointed as agent for the mortgagee in possession of the Ryde property. |

The evidence

9. Nearly all of the evidence was in affidavit form or documentary exhibits attached to the affidavits. Only one deponent, Mr Sarai, was cross-examined and the cross-examination was short (but meaningful).

10. The plaintiffs relied on an affidavit of Mr Blake Palmer, dated 29 July 2025 and Mr Ren Hor Wong dated 3 October 2025. There were also two affidavits of service from Mr Justin Richards dated 26 and 27 November 2024, respectively. Mr Palmer is a solicitor in the employ of the plaintiffs’ solicitors. Mr Wong is a principal of three of the plaintiff companies and a business associate of the fourth (the third plaintiff).

11. The defendants relied on affidavits of Mr Sarai, dated 25 July 2025, and Mr Anthony Del Baglivo, dated 17 October 2025. Mr Del Baglivo is a finance broker who dealt with the defendants in securing finance.

12. The receiver, Mr Kaso, relied on his own affidavit of 25 July 2025.

13. It is clear from the affidavit material that Mr Sarai was not an amateur in the finance and property fields. He is the principal of a firm of lawyers which, inter alia, practises in property conveyancing and leasing and debt recovery and insolvency. In his affidavit he also describes himself as a “property investor” and lists nine properties of which he was the owner (either personally or through a company) as at July 2024.

14. Before signing the relevant loan agreements Mr Sarai had the benefit of legal advice. Under cross-examination he gave this evidence:

“Q. Sir, in November and December 2024, you had solicitors in the form of Ziman and Ziman; correct?

A. Yes.

Q. And Ziman and Ziman wrote a number of items of correspondence to Summer Lawyers, being the plaintiff's solicitors in November and December 2024 on your behalf; is that correct?

A. Yes.

Q. You knew, didn't you, that if there was some grounds to argue that the receiver had been prematurely appointed, you could have applied to the Court to have the receiver removed, didn't you?

A. Did I know?

Q. Yes, you knew, didn't you?

A. I suspected that was an option but I was discussing it with my lawyers and‑‑

Q. You knew that if you were in a position to pay out what was arguably the right amount of money to the lenders in late 2024, but the lenders weren't accepting that money, that you could go to the Court and force the lenders to accept the money, didn't you?

A. I understand that was an option, yes.”

15. Mr Sarai denied that he did not take any action after the appointment of the receiver because he had never been able to refinance the loans. I think this fact blunts the defendants’ submissions arising from Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161. Mr Sarai would not have had to pay money into Court to have the receiver removed. To the contrary he could have submitted that the appointment of the receiver was the very reason he could not pay money into Court.

16. As to the availability of finance there was this passage of evidence:

“Q. You knew also that there was no point in trying to remove the receiver in November 2024 or December 2024 because you knew that you wouldn't be able to refinance the loan regardless of whether the receiver was there or not; that's right, isn't it?

A. No, that's not right, we were actually looking for finance for weeks and weeks and weeks and received multiple offers.

Q. None of which proceeded; correct?

A. They didn't proceed at the end even though we were pursuing them because of the amounts have been changing and various other reasons.

Q. In your affidavit, at the end, you refer to an application you made to Westminster Capital in 2025, and that you being hopeful of getting money from them; correct?

A. Yes.

Q. And nothing came of that either, did it?

A. No.

Q. That's because there simply wasn't sufficient money in the property to satisfy the valuation requirements of any of the lenders you approached; isn't that right?

A. No, that's not correct.”

17. It was suggested by the defendants’ senior counsel that I should take judicial notice that a solicitor whose affairs had been placed under a receiver would find it very difficult to obtain finance. There is certainly logic in the proposition, but I do not think it such a commonplace event that I could take judicial notice of the fact (as required by s 144 of the Evidence Act 1995 (NSW)). I will return to the taking of judicial notice below.

18. Moreover, it is clear from the passages of cross-examination just quoted that Mr Sarai did not single out the appointment of a receiver as an impediment to him obtaining finance.

The issues

19. The parties provided me with a joint statement of issues:

20. Is any part (and, if so, which part) of the interest provisions in the Agreement void for uncertainty?

21. Upon what day of the month, on the proper construction of the Agreement, is interest on the loans payable?

22. Have the plaintiffs breached the agreement by their appointment of a receiver to the defendants’ assets?

23. If so, what loss (if any) has been occasioned to the cross-claimants by reason of that breach?

24. Are the plaintiffs entitled to possession of the two properties the subject of these proceedings, being the Darling Point and Ryde properties?

The first two issues

20. The first two of the above issues can be dealt with together. The point is one of construction of the interest clauses in the loan documents. Each loan was constituted by two documents, a Finance Offer Schedule and a Memorandum of Common Provisions Version 5 (the “MCP”).

21. The controversy arises from the identification of when interest payments were to be made. Was it in advance or in arrears or is the position so uncertain that the interest provisions are void for uncertainty?

22. The defendants said that examination of the relevant clauses could only lead to a conclusion they were so vague as to be unenforceable. The plaintiffs said the interpretation favoured a conclusion that payment was to be made in advance.

23. The importance of the due date is that unless the November interest payment was due in advance, the borrowers were not in default when the receiver was appointed (in respect of Mr Sarai) on 21 November 2024 and, in turn, the appointment was a breach of the Agreement by the lenders.

24. If there had been a breach, then the defendants are entitled to damages because Mr Sarai, carrying the stigma of the appointment of a receiver, had been unable to refinance the loans. The damages claim is incorporated in the cross-claims which also join the receiver.

25. Conversely if I found in favour of the plaintiffs’ case, the appointment of the receiver on 21 November 2024 was valid and all the other issues would fall away. The plaintiffs would be entitled to their requested possession orders.

26. Senior counsel for the plaintiffs, although advocating for the retention of the interest payment clauses, said:

“I freely concede that to say that the interest provisions here were badly drafted is something of an understatement … .”

27. The plaintiffs submitted that a finding of ‘vagueness’ or uncertainty should not be easily reached. To this end I was referred to Brown v Gould [1972] 1 Ch 53 and Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8.

28. In Brown, Megarry J, at pp 56-57, quoting from his earlier decision In re Lloyd’s Trust Instruments, 24 June 1970, stated:

“I think the starting point on any question of uncertainty must be that of the court’s reluctance to hold an instrument void for uncertainty. Lord Hardwicke LC once said ‘A court never construes a devise void, unless it is so absolutely dark, that they cannot find out the testator’s meaning’: Minshull v Mishull (1737) 1 Atk. 411, 412. Lord Brougham said ‘The difficulty must be so great that it amounts to an impossibility, the doubt so grave that there is not even an inclination of the scales one way’: Doe d. Winter v Perratt (1843) 9 Cl. & F. 606, 689. In a well-known statement, Sir George Jessel MR said that the court would not hold a will void for uncertainty ‘unless it is utterly impossible to put a meaning upon it. The duty of the court is to put a fair meaning on the terms used, and not, as was said in one case, to repose on the easy pillow of saying that the whole is void for uncertainty’: In re Roberts (1881) 19 Ch.D. 520, 529. That this is not a doctrine confined to wills but is one which applies to other instruments, such as planning permissions, is shown by such cases as Fawcett Properties Ltd. v Buckingham County Council [1961] A.C. 636, where, by a majority, the Delphic language of a condition in a planning permission escaped from being held void for uncertainty largely because of its resemblance to a section to be found in a modern Act of Parliament. …”

29. In Upper Hunter, Barwick CJ said, at [9]:

“But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd. (1932) 147 LT 503, at p 512 ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) & Nephew Ltd. v. Ouston (1941) AC 251 is not ‘so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention’, the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.”

30. Brown and Upper Hunter were relied upon by Black J in In the matter of Leslie Muir Holdings Pty Ltd [2019] NSWSC 1519, at [38]:

“A contractual provision will not be void for uncertainty merely because its language may admit more than one possible meaning or because, when construed, the application of the provision may produce more than one result, unless the Court is unable to attribute to the parties any particular contractual intention or to determine its meaning upon the proper application of the principles of construction: G Scammell & Nephew Ltd v Ouston above; Council of the Upper Hunter County District Council above at 436–7; Brown v Gould above at 61-2; Braude v Kaye above at [336]ff. The Court will endeavour to give effect to a contract reached between businesspeople, even if its terms are not fully or well stated, although whether the parties have expressed their agreement carefully is a matter relevant to whether they have entered into an agreement, and the Court should seek to put a fair meaning on a contractual provision unless it is impossible to do so: Council of the Upper Hunter County District above at 436; Hammond v Vam Ltd [1972] 2 NSWLR 16 at 18; Sagacious Procurement Pty Ltd above at [73]; Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98 at [143].”

31. Hammond v Vam Ltd [1972] 2 NSWLR 16 (referred to by Black J in Leslie Muir Holdings), was quoted by the defendants in aid of their submissions, to the effect that the interest clauses were “so lacking in certainty of meaning that it is incapable of enforcement”.

32. The defendants went on to submit that if the interest clauses were void for uncertainty, it would follow that no interest was ever payable. The submission raised the distinction between the whole of the interest clauses being unenforceable or only those parts that refer to when the interest was payable (in advance or in arrears).

33. These are the relevant interest clauses. Firstly, under “Payment arrangements” in the Finance Offer Schedule:

“Payment type

Interest only

Your interest charges for a payment period are due on the last day of the period.

Payment period

Monthly in advance

Repayment

Monthly repayments are to be made on the anniversary date of the first drawdown every month.

You must pay us the secured money on the last day of the facility term.”

34. One of the Special Conditions states:

“Retained interest

$108,937.50 in interest has been deducted from the facility limit and retained by us to pay towards interest you must pay us.

Notwithstanding any clause to the contrary in this facility or the memorandum of common provisions, once interest accrues for a payment period, those interest charges are non-refundable. This applies even if you repay in a month where interest has already been paid.”

35. Secondly, in the MCP:

“3.5 If your **payment type is “**interest only”

If the offer states that your payment type is “interest only”, you do not need to make any payments of principal during the interest only period. However, you must pay interest charges as set out in this clause 3.5.

If the offer does not specify:

(a) a period for which interest only applies, interest only is payable for the whole of the facility term.

(b) when interest charges are due in each payment period, they are due on the last day of each payment period.

If the offer specifies that interest payments are due on the last day of each payment period (in arrears), the following applies.

You must pay the accrued interest charges on the last day of each payment period (unless we otherwise agree).

If the offer specifies that interest payments are due on the first day of each payment period (in advance), the following applies.

You must pay the interest charges we calculate for the payment period on the date you make your first drawdown and on the first day of any further payment period (unless we agree otherwise).

…

4.1 Interest charges and how we calculate them

(a) You must pay interest to us on the interest payment date.

(b) At all times you must pay interest calculated at the standard interest rate.

(c) If we believe you have met all your obligations, we will notify you in writing that we shall accept interest calculated at the discount interest rate for that payment period.

(d) If we notify you in writing that we shall accept the discount interest rate for a payment period, we accept the discount interest rate for that payment period only.

(e) Specific interest calculation information is detailed in the special conditions contained in the offer.

4.2 When is interest payable?

If the offer states that for a payment period you must pay interest in advance, you must pay interest on the first business day of the next payment period, unless we otherwise agree (e.g., if you pay interest only in arrears).

If the offer states that for a payment period you must pay interest in arrears you must pay interest on the last business day of the previous payment period, unless we otherwise agree (e.g., if you pay interest only in advance).

If no payment period is stated in the offer, interest is payable in advance on the first business day of the next month (unless we agree otherwise).”

36. There is no dispute that the loans were to be repaid on an interest only basis followed, after three months, by repayment of the principal sums. Clearly this was short term finance envisaging refinancing. As observed by Mr Small, on behalf of the receiver:

“Mr Sarai should have had really his ducks in a row from the date of the first drawdown. He should have been looking for refinance at that stage. The three‑month loan at this quantum, you would expect someone to have an exit strategy in place at the date of the first drawdown. Mr Sarai's an experienced property investor and a solicitor, and to the extent he didn't have that in place, well we would say he failed to look after his own interests.”

37. Mr Small then made this point:

“He made the first interest payment on the date of the first drawdown. And it would be usual to expect that the second interest payment would happen one month later.”

38. The drawdown of the loans included a deduction of the first interest payments. The plaintiffs drew comfort from this fact in support of their interpretation that interest was to be paid in advance. I think the point is important. Not only does it represent a payment in advance, it reflects “a fair meaning” of the loan documents essentially recognised by Mr Sarai in accepting the deduction on drawdown (therefore in advance) and in him not immediately looking to the court to annul the appointment of the receiver. He had legal advice, he knew coming to court was an option, but he chose not to do so.

39. A second point arising from Mr Small’s submission is that if payment was to be made in arrears, then there would have been a two-month gap between the first and second payments, a result entirely inconsistent with a three-month loan, and not making commercial sense.

40. It is important, in the construction or interpretation exercise of a commercial agreement, to apply commercial sense and achieve commercial convenience. In ASSK Investments Pty Ltd v AMA Group L**td (2020) 149 ACSR 387; [2020] NSWSC 1756 Hammerschlag J (as his Honour then was) said this:

"The HOA is a commercial contract which is to be given a business-like interpretation. Interpreting it requires attention to the language used by the parties, the commercial circumstances which it addresses, and the objects which it is intended it secures. The meaning of the words chosen is determined objectively by reference to its text, context, and purpose, the question being what a reasonable person would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole and so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust: see Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109 ; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 589 [22]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] ; Zhu v Treasurer of the New South Wales (2004) 218 CLR 530 at 559 [82]; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at 528 [15]; Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640 at [35] ; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117."

41. While Mr Sarai’s acceptance of the initial drawdown is not an answer to the construction question, it is consistent with the construction put forward by the plaintiffs.

42. The interest provisions in the MCP are no doubt a little difficult to follow. However, this part of cl 3.5 is consistent with what occurred in this matter:

“You must pay the interest charges we calculate for the payment period on the date you make your first drawdown and on the first day of any further payment period (unless we agree otherwise).”

43. Interest was deducted on the first drawdown suggesting that the above part of cl 3.5 is applicable to these loans. This means interest payments were to be made in advance.

44. Clause 4.2 refers back to the offer where the relevant provisions are to be found under “Payment arrangements” in the Finance Offer Schedule, quoted above. This is where, I think, the real dilemma arises. The payment arrangements might certainly be seen as suggesting two opposed payment instructions. The words “Your interest charges for a payment period are due on the last day of the period” seem to be the very opposite of “Monthly in advance” and “Monthly repayments are to be made on the anniversary date of the first drawdown every month”.

45. Notwithstanding the apparent conflict, in my view, and in endeavouring to maintain the integrity of the Agreement as endorsed by the above authorities, the Agreement requires payment of interest in advance. I think the following are important factors in my reaching this conclusion:

46. The arrears favouring words appear under the heading “Payment type”, but the advance favouring words fall under the heading “Payment period” which is the point at issue, namely when the payment is to be made.

47. The repayment “on the anniversary date of the first drawdown every month” is consistent with the deduction of interest that occurred on the first drawdown.

48. A clear distinction is made between interest and principal with the statement that the “secured money” becomes payable “on the last day of the facility term.” The distinction is that on the last day of the term the borrower will pay back the principal, the interest payments having already been made.

49. Although of much lesser importance there are two instructions favouring payment in advance but only one suggesting payment in arrears.

50. The MCP has a “Definitions and interpretation” part, but I do not think any of the definitions assist. I did not understand the parties to make any contrary submission.

51. Because I have come down on the plaintiffs’ side in respect of when the payment of interest was due, it follows that:

52. The borrowers were in default when the receiver was appointed in respect of Mr Sarai.

53. The appointment of the receiver was accordingly valid.

54. It was the borrowers and not the lenders who were in breach of the Agreement.

55. No other reason, besides the construction issue (both as to uncertainty and due date) was advanced by the borrowers to disentitle the lenders from an order for possession.

56. The cross-claims which depend on the construction issue being found in favour of the defendants, must fail.

Damages if the cross-claims had been successful

48. My following reasons only arise if I am wrong on the construction point so that the plaintiffs were in breach of the Agreement, and the appointment of the receiver on 21 November 2024 was invalid.

49. In this scenario the cross-claimants would be entitled to damages to put them in the position they would have been if there had not been a breach of contract. The damages claimed by the cross-claimants are based on the difference between the interest rate that could have been obtained on refinancing (10% per annum) and the standard default interest rate charged by the plaintiffs (36% per annum).

50. The damages at 26% per annum are up to 31 May 2026, by which time it is anticipated that the loans would be discharged. I have been provided with a schedule of calculations of the damages which are $4,550,000 in respect of the Darling Point loan and $1,007,500 arising from the Ryde loan.

51. The damages claim is dependent upon my reaching a conclusion that Mr Sarai and Aldrich would have been able to refinance the loans upon completion of the three-month term of the loans. Such a conclusion has the following difficulties:

52. Firstly, there is no evidence that any final refinancing agreement had been made before the receiver had been appointed.

53. Secondly, the suggestion that refinancing would have occurred is dependent upon my taking judicial notice that but for the appointment of the receiver refinancing would have been available.

54. In his affidavit, Mr Sarai gives details of attempts to refinance and of a letter his solicitors wrote to the plaintiffs’ solicitors, on 17 January 2025, in which it is stated that “the appointment and presence of the Receiver ... has been of no utility to your clients and has served to impede and or prevent our client’s attempts to re-finance the loans.”

55. I accept that as a matter of common sense a lender might be wary of providing substantial funds to a person whose affairs had been placed under receivership. However, I think it would be taking a step too far to conclude that in this case I could take judicial notice that the defendants would have obtained further finance if the receiver had not been appointed.

56. In Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460; [2002] HCA 9, McHugh J, at [64], said this about judicial notice:

“As a general rule, facts in issue or relevant to a fact in issue must be proved by admissible evidence. The doctrine of judicial notice is an exception to this rule. A court may judicially notice a fact whenever it ‘is so generally known that every ordinary person may be reasonably presumed to be aware of it’. The information which the court acquires by taking judicial notice of facts is not ‘evidence strictly so called’. Facts that may be judicially noticed fall into two categories: Facts that can be judicially noticed without inquiry and facts that can be judicially noticed after inquiry.”

55. Arguably, the whole of the damages claim depends upon me taking judicial notice, without inquiry, that the appointment of a receiver precluded the obtaining of further finance. This is against a background of there being no evidence of the fact of refusal of finance which could, presumably quite easily, have been obtained from at least one of the persons approached for finance. There is no correspondence stating this fact, and no proposed lender has provided evidence of a refusal of finance because of the existence of the receiver.

56. I decline to take the judicial notice requested by the defendants. It follows that I cannot safely conclude that refinance would have been obtained by the defendants. I repeat, that I would have expected the refinance to have been in place before the loans went into default. Mr Sarai knew the loans only had a three-month term, he knew the interest rate was high (especially on default), he was an experienced borrower, all of which suggest that refinancing was not the straightforward task that he has suggested.

57. It follows that I would have rejected the damages claim as put forward by the cross-claimants. Another factor arises from the failure to mitigate the damages. As seen above, Mr Sarai had the option to approach the court immediately upon the appointment of the receiver to challenge the appointment. If the presence of the receiver was so important to his financing efforts, one would have expected him to have taken prompt action to have the receiver removed.

58. In relation to the cross-claim against the receiver, there would have been a declaration that the receiver had been wrongly appointed, but no damages would have flowed, because the receiver has not actually received any funds.

Orders

59. In respect of costs, the plaintiffs said they did not seek any order for payment of their costs. I would otherwise have ordered that the defendants pay the plaintiffs’ costs of the whole of the proceedings. I do note that in not requesting a costs order, the plaintiffs reserved their expenses rights under the mortgages.

60. I make the following orders:

61. Judgment for the Plaintiffs for possession of the land described in folio identifier xxxxx being the land situated at and known as xx xxxxx Road, Darling Point in the State of New South Wales.

62. Judgment for the Plaintiffs for possession of the land described in folio identifier xxxxx being the land situated at and known as xx xxxxx Road, Ryde in the State of New South Wales.

63. Leave to issue writs of possession forthwith.

64. The cross-claims are dismissed.

65. No order is made as to the costs of the proceedings.

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