National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority

Bendigo and Adelaide Bank Ltd v Tombs [2010] NSWSC 1427 Boz One Pty Ltd v McLellan (2015) 105 ACSR 325; [2015] VSCA 68 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Carr v Finance Corporation of Australia Ltd (No 2) (1982) 150 CLR 139; [1982] HCA 43 Cherryop Pty Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337 Dewhirst v Edwards [1983] 1 NSWLR 34 Director of Public Prosecutions (SA) v District Court of South Australia and Lawrie (2005) 92 SASR 94; [2005] SASC 260 Dobbie v Department of Social Security [1995] FCA 1191 Escobar v Spindaleri (1986) 7 NSWLR 51 Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252 Gooley v NSW Rural Assistance Authority (No 2) [2017] NSWSC 1336 Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2017] NSWSC 1727 Kirkham Estate Wines Pty Ltd v General Manager, NSW Rural Assistance Authority [2004] NSWADTAP 24 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd [2012] NSWSC 911 Mayes v Mayes [1971] 2 All ER 397 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 Minister for Immigration and Border Protection v SZSSJ (2016) 259 CLR 180; [2016] HCA 29 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40 Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 National Australia Bank Limited v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157 National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 2) [2018] NSWSC 969 National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 3) [2018] NSWSC 970 Photios v Cussen [2015] NSWSC 336 R v Medical Practitioners Professional Conduct Tribunal; Ex parte Medical Board (1985) 40 SASR 84 R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180 Re Bluenergy Group Ltd (2015) 300 FLR 155; [2015] NSWSC 977 Re Maria's Farm Veggies Pty Ltd [2016] NSWSC 1770 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 State Bank of New South Wales v Topfelt Pty Ltd (Unreported, Supreme Court of New South Wales, Brownie J, 11 March 1993) State Bank of NSW v Freeman (Unreported, Supreme Court of New South Wales, Badgery-Parker J, 31 January 1996) Suncorp Insurance and Finance v Commissioner of Stamp Duties (1997) 36 ATR 514; [1998] 2 Qd R 285 Suncorp-Metway Ltd v Nam Property Holdings Pty Ltd (2010) 16 BPR 30,859; [2010] NSWSC 1078 Thai v Deputy Federal Commissioner of Taxation (1994) 53 FCR 252 Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 Van Stappen v Mackenzie (2008) 14 BPR 26,387 Varga v Commonwealth Bank of Australia (1996) BPR 97,617 Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 31; [2012] HCA 4 Texts Cited: Australian Law Dictionary (Oxford University Press, 2nd ed, 2013) D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8th ed, 2014) Encyclopaedic Australian Legal Dictionary (LexisNexis, online edition) Thomson Reuters, Ford and Lee: The Law of Trusts (at August 2019) Category: Principal judgment Parties: 2015/27843 National Australia Bank Ltd (Plaintiff / Cross-Defendant) Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust (Defendant / First Cross-Claimant) Kevin Michael O'Brien (Second Cross-claimant)

2016/122304 Josephine Joan Charlton (First Plaintiff) Kevin Michael O'Brien as trustee of the Phoenix Trust (Second Plaintiff) The General Manager, NSW Rural Assistance Authority (First Defendant) National Australia Bank Ltd (Second Defendant) Representation: Counsel: 2015/27843 C Colquhoun (Plaintiff / Cross-Defendant)

2016/122304 C Colquhoun (Second Defendant)

Solicitors: 2015/27843 Dentons Australia Pty Ltd (Plaintiff / Cross-Defendant)

2016/122304 Dentons Australia Pty Ltd (Second Defendant) File Number(s): 2015/27843; 2016/122304

Judgment

1. HIS HONOUR: By a statement of claim brought on 16 January 2015, the National Australia Bank Ltd ("NAB") brought debt and possession proceedings against Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust ("the Trust") (case number 2015/27843) ("the debt and possession proceedings"). NAB claimed a debt owed by Ms Charlton which was made up of an Overdraft, a First Business Options Loan and a Second Business Options Loan (each of which will be set out below) and NAB sought an order for possession under a mortgage.
2. A reply to the statement of claim was filed 4 May 2016. A reply to this reply was filed 5 May 2016. An amended statement of claim was filed on 4 May 2016. An amended defence was filed on 20 May 2016.
3. By a statement of cross-claim filed 9 July 2015 (and later amended on 6 August 2015), Ms Charlton, then as the first cross-claimant, and Kevin Michael O'Brien, as a second cross-claimant, brought a cross-claim in the debt and possession proceedings ("the cross-claim proceedings"). A defence to the first cross-claim was filed 2 September 2015. An amended defence was filed to the cross-claim proceedings on 4 May 2016.
4. Proceedings were commenced by summons by "[Ms] Charlton in her own capacity" and "Mr O'Brien as Trustee of Phoenix Trust" on 21 April 2016 against the General Manager of the NSW Rural Assistance Authority ("the RAA") and NAB. These were judicial review proceedings and bore the case number 2016/122304 ("the judicial review proceedings").
5. On 2 June 2016, Schmidt J made orders that the debt and possession and judicial review proceedings would be heard together whereby the evidence in the one matter would be evidence in the other. (Collectively the debt and possession, cross-claim and judicial review proceedings shall be referred to as "the proceedings").
6. The proceedings have a lengthy case management history which was, in part, described in a judgment of the Court in National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157 ("Charlton No 1") at [21]-[50]. The pleadings are summarised in Charlton No 1 at [15]-[20].
7. Ms Charlton filed a notice of motion dated 5 September 2017 ("the first notice of motion") seeking summary dismissal of the debt and possession proceedings, or alternatively that the judicial review proceedings be heard separately (and before) the debt and possession proceedings (the first notice of motion was formally filed on 27 September 2017). The first notice of motion was dismissed in Charlton No 1.

THE EVIDENCE

1. There was a substantial amount of documentary evidence.
2. The following witnesses gave evidence for NAB in the proceedings: 1. Murray Reid (affidavit dated 16 May 2018): Mr Reid operated V.C Reid & Sons Stock and Station Agency at Forbes NSW, a livestock marketing business. Ms Charlton was a client of the business. 2. Ingrid Scharenguivel (affidavit dated 23 May 2018): Ms Scharenguivel was a Legal Services Associate employed by NAB. Her roles included sending legal notices to customers and maintaining files in respect of those customers. 3. Benjamin Stead (affidavit dated 24 May 2018): Mr Stead was a CPA with David Bicket Certified Practising Accountancy firm in Parkes NSW who conducted a review of Ms Charlton's personal financial situation on 17 May 2018. 4. Ashley Gardiner: Ms Gardiner was an officer of NAB within the Strategic Business Services department ("SBS"). Ms Gardiner swore three affidavits dated 30 July 2015, 14 April 2016 and 8 March 2018, respectively. 5. Clive Hugh Thomas: Mr Thomas was an officer of NAB who was a "Junior Manager" at the Forbes branch of NAB from 6 July 2011 to December 2012 and an "Agribusiness Manager" at the Taree branch of NAB from January 2013. Mr Thomas swore two affidavits dated 24 September 2015 and 8 April 2016, respectively.
3. Ms Gardiner and Mr Thomas were required for cross-examination.
4. The evidence for Ms Charlton and Mr O'Brien respectively was as follows: 1. Ms Charlton swore seven affidavits dated: 1. 26 August 2015 (as defendant); 2. 26 August 2015 (as first cross-claimant); 3. 16 October 2015; 4. 1 April 2016; 5. 27 April 2016; 6. 15 June 2016; and 7. 28 May 2018. 1. Mr O'Brien swore eight affidavits dated: 1. 26 August 2015; 2. 14 October 2015; 3. 1 April 2016; 4. 27 April 2016; 5. 15 June 2016; 6. 13 March 2018; 7. 25 May 2018; and 8. 28 May 2018.
5. Ms Charlton and Mr O'Brien were required for cross-examination.
6. It should be noted that Mr O'Brien did not make oral submissions at the hearing. Rather, he alerted the Court that he would rely on the submissions made by Ms Charlton. Mr O'Brien did, however, file separate closing written submissions dated 2 October 2018. Where those submissions did not, in substance, differ from the submissions of Ms Charlton, they have been dealt with, without separate reference, from the submissions of Ms Charlton. Where Mr O'Brien's submissions differed or significantly expanded on Ms Charlton's submissions, I have endeavoured to attribute the submission to Mr O'Brien in the relevant section of this judgment.

RELEVANT FACTUAL BACKGROUND

1. The relevant factual background will be summarised in chronological order and addressed seriatim below. Prior to that summary, for ease of reference, a summary of the key events and relevant dates appears in tabular form below (although the table anticipates some rulings that I will make as to the course of events): Event Relevant Date(s) Establishment of the Trust 1996 Purchase of the Property 2002 The Overdraft and Loan Facilities 2005 to 2008 Ms Charlton's Default 2011 Attempts by NAB to Discuss the Default with Ms Charlton July-August 2011 Purported Resignation as Trustee of the Trust August 2011 Discussions with the O'Briens August-September 2011 Notice of Cancelation 25 and 26 October 2011 Financial Ombudsman Service Complaint December 2011 to November 2013 Expiry of First Business Options Loan 31 August 2012 Farm Debt Mediation January- August 2014 Notice of Cancellation 17 October 2014 Second Business Options Loan in Arrears May 2011 to October 2014 Outstanding Debt 6 March 2018

Establishment of the Trust

1. The Trust was established on 22 January 1996 by the execution of the Trust Deed ("the Deed").
2. Ms Charlton's brother, Gavin Michael O'Brien, was named as the original trustee of the Trust. Mr Gavin O'Brien, Ms Charlton and her brother, Justin William Laurence O'Brien, were named as beneficiaries.
3. Their uncle, John Laurence O'Brien, was named as the appointor of the Trust
4. On 1 June 1997, John O'Brien wrote a letter with an addressee marked as "To whom it may concern" which stated that Mr O'Brien was appointed as an additional trustee of the Trust. Mr O'Brien's appointment as trustee of the Trust, as well as NAB's notice of the same, will be discussed in relation to the Misrepresentation Issue in the proceedings (which is set out in the list of issues for the proceedings appearing later in the judgment).
5. On 1 July 2001, Gavin O'Brien resigned, and Ms Charlton was appointed, as a trustee of the Trust.

Purchase of the Property

1. In about October 2002, Ms Charlton was considering purchasing a property.
2. On 7 October 2002, a meeting was held in relation to the proposed purchase of "Oriel", Tottenham NSW (Lot 22, Plan DP 724651, Folio Identifier 22/724651) ("the property"). A handwritten note of a "Meeting of Phoenix Trust" recorded that the meeting was held at 24 Court Street, Parkes, and commenced at 2.35 pm. The handwritten note was made by Mr Bill Burke, Ms Charlton's solicitor at that time.
3. The meeting was attended by Ms Charlton, Justin O'Brien and Gavin O'Brien. In addition, Mr O'Brien and a Mr Burke attended the meeting "by invitation only".
4. The handwritten note recorded the decision "that Phoenix Trust trustee enter into Contract for Sale from Eldridge for purchase of 'Oriel' Tottenham for $360,000" and "that Phoenix Trust trustee negotiate and enter mortgage arrangements (1) to Vendor 2nd Mortgage $60,000 and (2) to Suncorp-Metway 1st Mortgage for $250,000, with personal guarantees provided by all beneficiaries".
5. Following the meeting, on 8 October 2002, Ms Charlton executed a contract for sale in respect of the purchase of the property for $360,000 in her capacity as trustee of the Trust.
6. It appears that Ms Charlton obtained loans totalling $315,000 to finance the purchase of the property. On 25 October 2002, Ms Charlton executed a mortgage in favour of Suncorp-Metway Ltd in respect of the property. The stamp on that mortgage recorded the amount secured by the mortgage as $255,000.
7. At around the same time, Ms Charlton executed a further mortgage in favour of Mr Warrick Eldridge and Ms Joanne Eldridge in respect of the property. Annexure A to the mortgage recorded the amount secured by the mortgage as $60,000.
8. On 11 December 2002, Mr Warrick Eldridge, Ms Joanne Eldridge and Ms Charlton executed a transfer in respect of the property for $360,000.
9. All of these documents recorded Ms Charlton as the sole purchaser of the property, and at least insofar as the contract for sale is concerned, the sole trustee of the Trust.

The Overdraft and Loan Facilities

1. This next section concerns the circumstances in which Ms Charlton obtained an Overdraft (with a limit of $150,000), the First Business Options Loan and the Second Business Options Loan. The following tables provide an overview of the history of the Overdraft (and its increased limits) as well as the two additional loan facilities with reference to the date that Ms Charlton executed the relevant documentation and the amounts of the facilities or loans as at the date they commenced (discussed below):

The Overdraft Date Executed by Ms Charlton Limit 5 September 2005 $50,000 21 November 2006 $100,000 10 September 2007 $150,000 2 September 2008 $200,000

First Business Options Loan Date Executed by Ms Charlton Amount 10 September 2007 $110,000

Second Business Options Loan Date Executed by Ms Charlton Amount 10 September 2007 $340,000

(The circumstances of default will be returned to under a separate heading).

First Business Letter of Offer

1. In around 2005, Ms Charlton approached NAB for further finance.
2. On 30 August 2005, NAB issued the "First Business Letter of Offer" to Ms Charlton as trustee for the Trust. Pursuant to the First Business Letter of Offer, NAB agreed to provide the Overdraft to Ms Charlton with a limit of $50,000, which was to be secured by a guarantee and indemnity from Ms Charlton. The account number of the Overdraft was 57-039-1525 ("the Overdraft").
3. The First Business Letter of Offer contained the Overdraft Terms. A summary of the terms relevant to the proceedings, together with references to the corresponding clauses in that document, appear below: 1. Ms Charlton agreed to keep the Overdraft within the facility limit unless Ms Charlton obtained NAB's prior approval and the Overdraft could be cancelled or reduced by NAB at any time: cl A.2; 2. Ms Charlton agreed to pay the total amount owing, including all drawings and any other amounts received by her under the Overdraft, and interest charges and other amounts payable under the First Business Letter of Offer: cl 4; 3. Ms Charlton agreed to immediately repay any amount drawn on the Overdraft in excess of its facility limit unless NAB otherwise agreed: cl 6.1; 4. If the Overdraft was cancelled by NAB, Ms Charlton agreed to pay the total amount owing for the Overdraft, and the facility limit was reduced by the amount of any cancellation: cl 6.3; 5. Ms Charlton was in default if she did not pay on time any amount due under the First Business Letter of Offer or another agreement she had with NAB, or if she did something she agreed not to do or did not do something she agreed to do under the First Business Letter of Offer or another agreement she had with NAB: cl 15(a)-(b); 6. If Ms Charlton was in default and failed to correct the default within any period given in any notice, the total amount owing under the Overdraft became immediately due for payment, and if she did not pay it, NAB could sue for that amount or enforce any security (or do both): cl 16; 7. Ms Charlton warranted that she was the only trustee of the Trust, that she had the power under the Deed to enter into and observe the trustee's obligations under the First Business Letter of Offer, that she had in full force and effect the authorisation necessary to enter the First Business Letter of Offer, to perform her obligations under the First Business Letter of Offer and allow them to be enforced, and that she was not in default under the Deed: cl 23(b)(i), (iv), (v) and (viii); and 8. Ms Charlton undertook to ensure that, except with NAB's prior written consent, she would not retire as trustee of the Trust: cl 23(c)(ii).

First Notice of Agreed Changes

1. On 20 November 2006, NAB issued the First Notice of Agreed Changes to Ms Charlton.
2. Pursuant to the First Notice of Agreed Changes, NAB agreed to increase the limit of the Overdraft to $100,000, which was to be secured by a further guarantee and indemnity from Ms Charlton. The First Notice of Agreed Changes was executed by Ms Charlton on 21 November 2006.
3. On 21 November 2006, Ms Charlton executed a guarantee and indemnity in respect of the $100,000 limit under the Overdraft.

Second Notice of Agreed Changes, Second Business Letter of Offer and Mortgage

1. On 31 August 2007, NAB issued the Second Notice of Agreed Changes to Ms Charlton.
2. Pursuant to the terms of the Second Notice of Agreed Changes, NAB agreed to increase the limit of the Overdraft to $150,000, which was to be secured by a mortgage to NAB in respect of the property. The Second Notice of Agreed Changes was executed by Ms Charlton on 10 September 2007.
3. Also on 31 August 2007, NAB issued the Second Business Letter of Offer to Ms Charlton.
4. Pursuant to the Second Business Letter of Offer, NAB agreed to provide two further facilities to Ms Charlton: 1. the First Business Options Loan in the amount of $110,000 ("the First Business Options Loan"); and 2. the Second Business Options Loan in the amount of $340,000 ("the Second Business Options Loan").
5. Those facilities were secured by a mortgage to NAB in respect of the property. The Second Business Letter of Offer was also executed by Ms Charlton on 10 September 2007.
6. The Second Business Letter of Offer contained the Business Options Loan Conditions, which included the following: 1. The First Business Options Loan and the Second Business Options Loan were for facility terms of 5 and 10 years, respectively, from 31 August 2007; 2. Ms Charlton agreed to pay half yearly interest only instalments, payable in arrears; 3. Ms Charlton agreed to pay the total amount owing, including all drawings and any other amounts received by her under the First Business Options Loan and Second Business Options Loan, and interest charges, fees, charges, premiums and all other amounts payable under the Second Business Letter of Offer: cl 4.1; 4. Ms Charlton agreed to immediately repay any amount drawn on the First Business Options Loan and Second Business Options Loan in excess of the facility limits: cl 4.3; 5. Ms Charlton agreed to pay the total amount owing for the First Business Options Loan and Second Business Options Loan on the due date for last repayment of those facilities: cl 4.6; 6. Ms Charlton warranted that she was the only the trustee of the Trust, that she had the power under the Deed to enter into and observe the trustee's obligations under the Second Business Letter of Offer, that she had in full force and effect the authorisation necessary to enter the First Business Letter of Offer, to perform her obligations under the First Business Letter of Offer and allow them to be enforced, and that she was not in default under the Deed: cl 10(b)(i), (iv), (v) and (viii); 7. Ms Charlton undertook to ensure that, except with NAB's prior written consent, she would not retire as trustee of the Trust: cl 10(c)(ii); 8. Ms Charlton was in default if she did not pay on time any amount due under the Second Business Letter of Offer or another agreement she had with NAB, or if she did something she agreed not to do or did not do something she agreed to do under the Second Business Letter of Offer or another agreement she had with NAB: cl 12(a)-(b); and 9. If Ms Charlton was in default and failed to correct the default within any period given in any notice, the total amount owing under the First Business Options Loan and the Second Business Options Loan became immediately due for payment, and if she did not pay it, NAB could sue for that amount or enforce any security (or do both): cl 13(b).

Business Letter of Advice

1. On 27 August 2008, NAB issued the Business Letter of Advice to Ms Charlton.
2. Pursuant to the Business Letter of Advice, NAB agreed to increase the limit of the Overdraft to $200,000. Ms Charlton executed the Business Letter of Advice on 2 September 2008.
3. On 3 September 2008 NAB increased the Overdraft limit to $200,000, pursuant to the terms of the Business Letter of Advice.

Ms Charlton's Default

1. Ms Charlton defaulted under the Overdraft on 29 April 2011, when the Overdraft went over its limit of $200,000. I accept NAB's contention that the default has not been remedied since that date.
2. It was contended by Ms Charlton (and by Mr O'Brien in his email to Mr Thomas dated 16 August 2011 at 8.23am) that the Overdraft returned back under the prescribed $200,000 limit at 31 August 2011. Ms Charlton referred, in that respect, to a "Transaction Listing" for the period 27 June to 1 September 2011, in which the amount of the Overdraft, on 31 August 2011, was shown as being $199,835 and then $199,845 before returning above the $200,000 limit.
3. However, the "Transaction Listing" specified, under the heading "Important": "This provisional list is NOT A STATEMENT of account". The actual statement of account for the period 21 June 2011 to 20 September 2011 (statement number 41) shows the balance of the Overdraft never appeared lower than the $200,000 prescribed limit. Mr Thomas, in his email dated 5 September 2011 at 10.17am to "Justin", "Kate" (Justin O'Brien's wife), "Kevin" and "Wendy" (Mr O'Brien's wife) explained that the account was not "back in order" on 31 August 2011 because, on that date, "interest was also charged on the Overdraft of $2,118.65" (while the account did briefly move below the $200,000 limit, it did not do so for a full day, which was required to restart the "days irregular" count).
4. Similarly, Ms Charlton had failed to make any payments towards the First Business Options Loan and the Second Business Options Loan since May 2011. Ms Charlton had also failed to make any payments towards the Overdraft since 31 August 2011.

Attempts by NAB to Discuss the Default with Ms Charlton

1. Mr Thomas commenced as an Agribusiness Manager at NAB's Forbes branch on 6 July 2011. One of the customers he was responsible for was Ms Charlton.
2. As the Overdraft was 36 days overdrawn by this time, Ms Charlton was one of Mr Thomas' priority clients. That was because it was NAB's policy, that where facilities were more than 30 days overdrawn, the file would be sent to SBS for credit review.
3. From that time, Mr Thomas repeatedly attempted to contact Ms Charlton to ask that she urgently attend a meeting with him. Despite those attempts, he was never able to arrange a meeting with Ms Charlton.
4. On 6 July 2011, Mr Thomas tried to call Ms Charlton. As there was no answer, he sent an email to her.
5. The email noted that he had taken over from Mr Chris Eyles, who said that he should telephone her regarding the Overdraft. The email also stated that the account was $1,685 over the limit and sitting at 30 days irregular. The email further noted that once the Overdraft was more than 30 days irregular, control was taken out of Mr Thomas' hands and subsequent approvals became difficult.
6. On 7 July 2011, Mr Thomas made a file note of his attempt to call and email Ms Charlton in relation her failure to rectify the default under the Overdraft.
7. On 13 July 2011, Ms Charlton responded to Mr Thomas' email. The email stated that she had "let the family know at the farm" what was required to square the account, and that she understood the account went out of the local manager's control after 30 days so she would "try and be prompt".
8. On 13 July 2011, Mr Thomas responded to Ms Charlton's email. He confirmed that he was the new manager, that Mr Chris Eyles had been promoted to Orange, and said that he was looking forward to catching up.
9. On 14 July 2011, Mr Thomas sent an email to Ms Charlton saying that he wanted to let her know that the account was sitting at 44 days irregular. The email stated: Please if you can organise to regularise the excess asap that would be appreciated. If there is anything I can do to help don't hesitate to call.
10. Ms Charlton did not respond to that email.
11. On 15 July 2011, Mr Thomas issued a report to a NAB credit manager, Mr Nigel Dunn. The report indicated that Ms Charlton had an aggregated group debt of $650,000, and that the Overdraft had been irregular for 44 days.

Purported Resignation as Trustee of the Trust

1. On 15 August 2011, Mr Thomas received an email from Mrs O'Brien. The email stated that Ms Charlton was "no longer Trustee for Phoenix Trust" and that matters concerning the Trust would be dealt with by Mr and Mrs O'Brien. The email also stated: "We have a large amount of paperwork to go through - we have been thrown in at the deep end". The email further stated that Justin O'Brien, who was described as "the hands on at the farm", was available to meet with Mr Thomas at the Forbes branch on 22 August 2011.
2. Ms Charlton prepared two separate letters to resign as trustee of the Trust on 20 August 2011. However, those were not provided to Mr Thomas until 31 August 2011.
3. On 22 August 2011, Ms Charlton sent Mr Thomas confirming that she had resigned as trustee of the Trust. The email continued: My reasons for resigning are numerous and I am very upset about the whole situation. The situation with the bank should not have even evolved had a few plans been followed. I am not about to run anyone down, theres [sic] more to me than that but I have recognised that I will not be put in a position anymore where my personal integrity is compromised. I hope you understand, that the emails I sent to you were truly what I was told was happening. In the interests of my young family its [sic] time for me to move on. Please make the appropriate changes to the contracts.
4. NAB submitted that it may be inferred from this email that Ms Charlton resigned as trustee because she was not happy with the way in which the property was being farmed and managed by her brother, Justin O'Brien, who as noted above, was the "hands on" at the farm.
5. In my view, such a finding is available on the evidence. Apart from the email in question, the evidence is consistent with such a finding.
6. In one part of her evidence, Ms Charlton denied that the reason she resigned as trustee was because she was upset with the way Justin O'Brien was operating the farm: Q. Do you agree with this proposition, the reason you resigned as trustee of the trust is because you were upset with the way in which Justin was operating the farm? A. No, that is not correct. Because he wasn't the only one operating the farm.
7. However, that resistance was, when understood in the light of the evidence referred to below, merely concerned with the question as to whether Justin alone was responsible for the resignation. That further evidence is as follows: Q. Yes, and just to round this issue out, the reason you resigned as trustee of the trust I will rephrase that. The reason that you purported to resign as trustee of the trust is because you were upset, correct? A. I have already said that, Mr Colquhoun. Q. Yes. A. But it wasn't the only reason. Q. Yes. And you were upset because of what was happening on the farm and the plans not being followed, correct? A. They were trying to do what they said they were trying to do. It was just proving that it was taking too long and I have already answered that too. Q. And that's Gavin, your brother A. No. Q. who was operating the farm at the time? A. No. It was Justin.

Discussions with the O'Briens

1. On 22 August 2011, Mr Thomas met with Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien at the NAB office in Forbes.
2. Mr Thomas's file note of that meeting records that there was a discussion of the "overdrawn account & way forward", and that a "production plan for the next 12 months" and an "updated SOP [statement of position]" was prepared. A statement of position is a pro forma spreadsheet used by NAB to assess a customer's net asset position. During the course of the meeting, Mr Thomas populated the pro forma spreadsheet with information provided to him by Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien.
3. The file note also recorded that Mr Thomas would prepare a "cash flow budget" based on the assumptions in those documents and, after obtaining the clients' agreement, as well as put a plan to his Level 3 manager with a "view to rectifying current excess". A cash flow budget is another pro forma spreadsheet used by NAB to ensure that the debt can be serviced by the customer.
4. At the conclusion of the meeting, Mr Thomas said that he would need to visit the farm in order to verify the information provided to NAB.
5. Following the meeting, Mr Thomas prepared two cash flow budgets.
6. On 23 August 2011, Mr Thomas sent an email to Mr O'Brien, Mrs O'Brien, Justin O'Brien and Kate O'Brien attaching copies of the two cash flow budgets for the business, stating: "Please look at these & let me know if there are any irregularities".
7. The email also stated that the cash flow budgets showed the need for an Overdraft of $25,000 and credit approval over a new term debt loan of $670,000 to cover the Overdraft, First Business Options Loan and Second Business Options Loan, as well as the interest on those loans which would be charged to the Overdraft at the end of August 2011. The email stated that the cash flow budgets were dependent on "sticking to projections i.e. we have the income coming in & expenses going out as predicted".
8. Mr Thomas concluded by saying: Have a look & let me know & then I will put up the proposition to credit. Don't hesitate to call me if you don't understand anything.
9. Whilst Mr O'Brien did not respond to this email, he accepted in cross-examination that he understood at this time that any transfer of the loans and security to him as a trustee would be dependent on the assessment of the credit department of NAB.

Notices of Cancelation

1. On 20 October 2011, NAB informed Ms Charlton that enforcement action would be taken by NAB immediately in order to recover the amounts owing, but asked her to contact Mr Thomas if she wished NAB to consider alternative arrangements in respect of her debts. It does not appear that Ms Charlton took steps to contact Mr Thomas.
2. On 25 October 2011, NAB issued a notice of cancellation to Ms Charlton at 110 Forbes Street, Trundle in respect of the Overdraft ("the 25 October 2011 cancellation notice"). The notice was signed "K. White". The notice demanded payment of $228,784.91, being the amount then owing in respect of the Overdraft. Ms Charlton accepted that she received the 25 October cancellation notice.
3. When Mr Thomas was sent a copy of the 25 October 2011 cancellation notice, he noticed that it ought to have been addressed to Ms Charlton at 74 Long Street, Trundle, so on 26 October 2011 he sent an email to Mr Gardiner noting that the correct address was 74 Long Street, Trundle. On that same day, NAB issued a notice to Ms Charlton at 74 Long Street, Trundle ("the 26 October 2011 cancellation notice"). The notice demanded payment of $228,860.48, being the amount then owing in respect of the Overdraft. Ms Charlton observed that the 26 October 2011 cancellation notice was not signed. It stated signed "on behalf of National Australia Bank Limited by its duly authorised attorney". Ms Charlton submitted that the service of the 26 October cancelation notice was defective because it was not served on her.
4. Ms Charlton contended there was no evidence that she had been served with the 26 October 2011 cancellation notice (and the 25 October 2011 cancellation notice was not relied upon by NAB). It was contended that Ms Scharenguivel's evidence did not address this question. It was further contended that NAB could not rely upon service of the 25 October 2011 cancellation notice to prove service of the 26 October 2011 cancellation notice.
5. However, the evidence supports the fact that NAB had notice that Ms Charlton's correct address was 74 Long Street, Trundle at the relevant period in 2011. The evidence of Mr Thomas in his affidavit of 24 September 2015 was: On 31 August 2011 I received a facsimile from Mr Kevin O'Brien. The facsimile attached two letters addressed to "Whom it may Concern" dated 20 August 2011 and 1 June 1997.

Financial Ombudsman Service Complaint

1. On 29 November 2011, NAB Resolve (a service that works with customers who are in dispute with the bank) received a formal letter of complaint from Mr O'Brien. Mr Thomas responded to Mr O'Brien's formal letter of complaint on 1 December 2011, noting that NAB could not respond to Mr O'Brien's complaint without the consent of Ms Charlton, as Ms Charlton was referred to in NAB's documentation as the trustee for the Trust. Mr O'Brien sent a further letter of complaint to NAB Resolve on 6 December 2011.
2. On 13 December 2011, Mr Thomas sent an email to Ms Charlton requesting that she confirm her availability for a meeting with Mr Underwood and himself of NAB to discuss the ramifications of the loans under her name as well as security for the loans.
3. Ms Charlton responded on 15 December 2011. The email stated that she felt that the meeting may be "premature" due to the pending investigation by the Financial Ombudsman Service ("FOS").
4. This is a reference to the complaint made by Ms Charlton and Mr O'Brien to the FOS.
5. On 24 October 2012, the FOS sent a letter to NAB confirming that the matter would be allocated a case manager and would be investigated further.
6. On 19 August 2013, the FOS issued a recommendation in relation to the dispute.
7. On 7 November 2013, the FOS issued a determination in relation to the dispute. By this determination, the FOS concluded that NAB was able to enforce its mortgage and that Ms Charlton was liable for the credit facilities provided by NAB. The determination also found that the first default notice (issued by NAB on 16 November 2011) was invalid. That conclusion was based on the FOS's view that Ms Charlton was a farmer at the relevant time and therefore that NAB was required to send a notice offering mediation under s 8 of the Farm Debt Mediation Act 1994 (NSW) ("FDM Act") to her prior to the issuing of that s 57(2)(b) notice, namely, the first default notice, which constituted enforcement action. NAB did not rely on the first default notice in these proceedings.
8. An issue arose in the proceedings as to whether Ms Charlton was a farmer within the meaning of the FDM Act in late 2011, when NAB had sought to take action with respect to the defaults. NAB considered that Ms Charlton was not a farmer at this time as Justin O'Brien was operating the farm. Ms Charlton disagreed. However, as mentioned, the FOS determination that the first default notice was invalid, combined with the fact that NAB did not rely on that notice in these proceedings, leads to the conclusion that it is not necessary to determine whether Ms Charlton was a farmer at that time.

Expiry of the First Business Options Loan

1. The First Business Options Loan expired on 31 August 2012.
2. From 31 August 2012 to 27 October 2014, Ms Charlton failed to make any payment towards the amount owing in respect of the First Business Options Loan, and interest continued to accrue on the amount owing in respect of the First Business Options Loan, which was calculated and compounded bi-annually and on the basis of default interest rates.

Farm Debt Mediation

1. On 22 January 2014, following the resolution of the FOS complaint, NAB issued a notice under s 8 of the FDM Act to Ms Charlton ("the s 8 notice"). The notice stated that NAB "intends to take enforcement action against property over which it holds a farm mortgage under which you [Ms Charlton] are in default". The notice then provided: 1. the details and dates of the act/s of default; 2. the details of the security instrument; 3. the details of the property; 4. the facilities and the balance of those facilities at the date of the notice; 5. the farmer's rights under the FDM Act; 6. the action required by the farmer; and 7. instructions as to the action required by the farmer.
2. On 13 February 2014, Ms Charlton issued a notice under s 9 of the FDM Act ("the s 9 notice") to NAB. That notice stated that Ms Charlton was "requesting mediation in regard to our farm debt and farm mortgage under which I am in default referred to in the Section 8 Notice … issued by the creditor on 21st January 2014, dispatched 22 January 2014 and received by the farmer on 28th January 2014".
3. On 14 February 2014, NAB sent a letter to the RAA advising that mediation was required in respect of the matter. NAB also asked the RAA to forward a mediation kit to Ms Charlton. That letter attached the s 8 notice and the s 9 notice.
4. On 20 February 2014, the RAA sent a mediation kit to Ms Charlton.
5. On 7 April 2014, NAB wrote to Ms Charlton stating the following: NAB has previously advised you that it does not seek to rely on any notices issued prior to the Farm Debt Mediation notice issued in February 2014. That position remains unchanged.
6. NAB also noted in that communication: You have failed to make arrangements to meet the interest obligations on your facilities since May 2011.
7. On 17 July 2014, NAB and Ms Charlton signed an agreement to mediate and attended a farm debt mediation ("the mediation").
8. On 18 July 2014, the mediator, Mr Dan O'Keefe completed and signed a summary of mediation indicating that the parties did not reach an agreement. That same day, NAB applied to the RAA for a certificate under s 11 of the FDM Act in respect of the Overdraft, First Business Options Loan and Second Business Options Loan ("the s 11 certificate").
9. On 25 July 2014, the RAA advised Ms Charlton that NAB had applied for the s 11 certificate. On the same day, Ms Fran Willard of the RAA made a note of the documents served on Ms Charlton. That same day, the RAA also wrote to NAB acknowledging receipt of the s 11 certificate application and noting that Ms Charlton had been advised of the application and that she had until 22 August 2014 to lodge a submission.

1. Ms Charlton submitted that the decision of the RAA to issue the s 11 certificate was in error because, inter alia, the RAA did not have reference to Ms Charlton's complaints about the "2011 conduct" (as Ms Charlton described it), being the issuance of the first default notice and the 25 October 2011 cancellation notice (as stated above, Ms Charlton disputed the service of the 26 October 2011 cancellation notice).
2. However, I accept the submission of NAB that the material before the RAA contained references to the "2011 conduct". For example, Ms Charlton's bundle of submissions to the RAA included in it a letter titled "Confidential to Mediator Only At This Point" and dated 4 July 2014, which, inter alia, stated: On top of all of this the laws have already been broken the Farm Debt Mediation Act breached by the bank, statutory enforcement notices already issued, contracts terminated against applicable law guidelines and Section 8 (1) Notice issued 797 days approx. after enforcement action already committed and enforcement fees charged to bank account all actions able to be voided by Section 6) of the Farm Debt Mediation Act, are we going to add an invalid mediation to that list based on a "void" Section 8 (1) notice possibly an incorrect Section 11 issued to me as the beneficiary (not legal) based on a dysfunctional contract which voided the farmers rights to legally mediate, I think we need to stop this now treat the situation for what it is "wrong & illegal", the worst part of this is if it continues if s a financial gain by deception by the bank and we all know what that means. Resolution is simple really but it requires addressing the problem not covering it up at my expense or the expense of the continuing Trustee and the beneficiaries.
3. That statement, provided to the RAA, was clearly a complaint directed towards the 2011 conduct.

Notice of Cancellation

1. On 17 October 2014, NAB issued a notice demanding payment of the sum of $422,717.14, being the amount then owing in respect of the Overdraft ("the 2014 cancellation notice").
2. On or about 27 October 2014, NAB issued a default/demand notice to Ms Charlton demanding payment of $1,023,719.70, being the total amount then owing under the Overdraft, First Business Options Loan and Second Business Options Loan, plus enforcement expenses ("the third default notice"). NAB relied upon the affidavit of Ms Scharenguivel sworn 23 May 2018 to prove service.
3. Ms Charlton contended that the third default notice had not been served on her. She advanced the following submissions: 1. The affidavit of Ms Scharenguivel could not prove service. In order to prove service, NAB needed to provide evidence of Ms Renel Cabezuelo, a legal services assistant who authored a form (referred to in the proceedings as "the acknowledgment of service") showing service at 74 Long Street trundle. Ms Scharenguivel was unable to directly confirm service. 2. The acknowledgement of service referred to steps taken in the singular, namely, "a document" in "an envelope". This suggests there was not a distribution to two persons, namely Ms Charlton and Mr O'Brien (it was only served on Mr O'Brien). 3. The signature of Ms Cabezuelo on the acknowledgement of service raises "authenticity issues" given the signature on the third default notice and the acknowledgment of service do not match. 4. No copy of the envelope used to serve the third default notice was produced by NAB. 5. Ms Scharenguivel did not state how the notices were served.
4. Based on the evidence contained in the affidavit of Ms Scharenguivel sworn 23 May 2018, I accept NAB's submission that Ms Charlton was served with the third default notice.
5. The affidavit of Ms Scharenguivel was not objected to and NAB correctly submitted that the evidence of Ms Scharenguivel was not challenged. In fact, Ms Charlton argued that she wanted the affidavit admitted to prove that it was deficient and to challenge the evidence contained within the affidavit. The absence of evidence from Ms Cabezuelo is of no significance as her evidence was tendered, without objection, in circumstances where Ms Cabezuelo was no longer employed by NAB and Ms Scharenguivel, who essentially had the same role as Ms Cabezuelo, was employed, and had access to the relevant files.

Second Business Options Loan in Arrears

1. From May 2011 to 27 October 2014 Ms Charlton failed to make any payment towards the amount owing in respect of the Second Business Options Loan. Interest continued to accrue on the amount owing in respect of the Second Business Options Loan, which was calculated and compounded bi-annually and, in respect of the amount owing in excess of $340,000 (being the facility limit of the Second Business Options Loan), on the basis of default interest rates. By 27 October 2014, the Second Business Options Loan was in arrears in the amount of $88,151.85.

Summary of Notices Issued by NAB: 2011 to 2014

1. In summary, the following notices were issued by NAB to Ms Charlton, with respect to her default, between 2011 and 2014, noting that the 2011 notices were not relied upon: Notice Date Issued Relating to Debt 25 October 2011 cancellation notice 25 October 2011 Overdraft $228,784.91 26 October 2011 cancellation notice 26 October 2011 Overdraft $228,860.48 2014 cancellation notice 17 October 2014 Overdraft $422,717.14 Overdraft; first default notice 16 November 2011 First Business Options Loan; $691,301.53 Second Business Options Loan; and enforcement expenses Overdraft; second default notice 24 January 2012 First Business Options Loan; $707,710.08 Second Business Options Loan; and enforcement expenses Overdraft; third default notice 27 October 2014 First Business Options Loan; $1,023,719.70 Second Business Options Loan; and enforcement expenses

Outstanding Debt as at 6 March 2018

1. As at 6 March 2018, Ms Charlton was indebted to NAB in the amount of $1,633,022.53, which was compromised of the following: 1. $739,987.01 in respect of the Overdraft; 2. $272,511 in respect of the First Business Options Loan; and 3. $620,524.52 in respect of the Second Business Options Loan.

THE ISSUES

1. Based on the above findings NAB has discharged its onus of establishing the matters necessary to found its prima facie entitlement to possession of the property and judgment for debt.
2. That is because the evidence makes clear that: 1. Ms Charlton is the registered proprietor of the property and holds (or at least held) the legal interest in that property in her capacity as trustee of the Trust; 2. Ms Charlton entered into the First Business Letter of Offer and Second Business Letter of Offer; 3. Ms Charlton received, and had the benefit of, monies from NAB pursuant to the Overdraft, First Business Options Loan and Second Business Options Loan; 4. Ms Charlton granted security over the property to NAB in respect of those facilities pursuant to the Mortgage; and 5. Ms Charlton has defaulted in her obligations under the First Business Letter of Offer, the Second Business Letter of Offer and the Mortgage.
3. Just whether NAB ultimately should have a judgment for debt and possession depends upon the resolution of the relatively complex set of issues discussed below.
4. There was not a common set of issues settled between the parties despite a number of attempts to achieve that outcome. NAB contended that the true issues in the proceedings, having regard to Ms Charlton's defence, the cross-claim prosecuted by Ms Charlton and Mr O'Brien, Ms Charlton's summons and the written and oral submissions of the parties were nine-fold as follows: 1. Issue 1: whether the s 11 certificate should be set aside because there was not a "satisfactory mediation" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act ("Section 11 Certificate Issue"); 2. Issue 2: whether action taken by NAB in 2011 constituted "enforcement action" for the purposes of the FDM Act, such that the proceedings are void by reason of s 6 of that Act ("2011 Action Issue"). 3. Issue 3: whether NAB made any representations to Ms Charlton and Mr O'Brien concerning the refinance of the loans to Ms Charlton which constituted misleading or deceptive or unconscionable conduct, such as to entitle Ms Charlton and Mr O'Brien to relief ("Misrepresentation Issue"); 4. Issue 4: whether internal legal advice obtained by NAB concerning the Deed for the Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the property pursuant to the Mortgage ("Right of Indemnity Issue"); 5. Issue 5: whether the third default notice failed to comply with s 57(2)(b) of the RPA because it did not comply with s 170(1) of the Conveyancing Act ("Default Notice Issue"); 6. Issue 6: whether the exclusion of s 38 of the Trustee Act 1925 (NSW) by the Deed for the Trust means that Ms Charlton was unable to acquire and mortgage the property ("Section 38 Trustee Act Issue"); 7. Issue 7: whether the fact that Mr O'Brien was the joint trustee of the Trust means that Ms Charlton is not liable to repay the loans obtained by her, and is not liable to deliver up possession of the property pursuant to the Mortgage ("Joint Trustee Issue"); 8. Issue 8: whether the conduct of a further mediation in January 2016 affects NAB's ability to enforce the loan agreements and the Mortgage ("Further Mediation Issue"); and 9. Issue 9: whether the provision of a draft deed of release by NAB's solicitors to Ms Charlton's then solicitors, in the context of this litigation, affects NAB's ability to enforce the loan agreements and the Mortgage ("Deed of Release Issue"). (Those issues shall, collectively, be referred to as "the nine issues").

THE FDM ACT

1. Since the FDM Act is critical to the resolution of some of the issues in dispute, it is useful to briefly revisit the relevant provisions.
2. Section 6 of the FDM Act provides: 6 Enforcement action in contravention of Act void Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void.
3. "Enforcement action" in relation to a farm mortgage, means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any "statutory enforcement notice", or the continuation of any action to that end already commenced: s 4(1). "Statutory enforcement notice" means a notice under s 57(2)(b) of the RPA, or a notice under s 111(2)(b) of the Conveyancing Act, or a notice under s 71X(1)(b) of the Water Management Act 2000 (NSW): s 4(1).
4. Section 8(1) of the FDM Act contains the general prohibition against enforcement action prior to giving notice of the availability of mediation. It provides: 8 No enforcement action until notice of availability of mediation given (1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section.
5. Again, this provision contains a number of terms defined in s 4(1): 1. A "creditor" means a person to whom a "farm debt" is for the time being owed by a farmer. 2. A "farm debt" means a debt incurred by a farmer for the purposes of the conduct of a "farming operation" that is secured wholly or partly by a farm mortgage. 3. A "farming operation" includes a farming (including dairy farming, poultry farming and bee farming), pastoral, horticultural or grazing operation; 4. A "farm mortgage" includes any interest in, or power over, any "farm property" securing obligations of the farmer whether as a debtor or guarantor; 5. A "farm property" includes "a farm or part of a farm", where "farm" is defined as "land on which a farmer engages in a farming operation"; 6. A "farmer" means a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation and includes a person who owns land cultivated under a share-farming agreement and the personal representatives of a deceased farmer.

ISSUE 1: SECTION 11 CERTIFICATE ISSUE

1. The corresponding issues raised by Ms Charlton seemed to be issues 8-13, 22-24 and 26. Those issues were explained by Ms Charlton as follows: 8. Whether the purported farm debt mediation on the 17th July 2014 was validly held and whether the parties to the mediation agreement possessed the requisite authority to mediate and execute a Heads of Agreement pursuant to 17 (3A) of the Farm Debt Mediation Act 1994. 9. Whether Ms Charlton was denied procedural fairness in respect of the Farm Debt Mediation process by the NSW Rural Assistance Authority. 10. Whether the Section 11 Certificate issued pursuant to section 11 (1) c (i) by the NSW Rural Assistance Authority was issued ultra-vires. 11. Whether the National Australia Bank Limited is entitled to proceed to Judgement and possession without a valid Section 11 Certificate under the Farm Debt Mediation Act. 12. Whether the proceedings to seek judgement and a writ of possession filed in the Common Law Possession List Case number 2015/27843 constitute further enforcement action. 13. Whether s 6 of the Farm Debt Mediation Act applies to these proceedings. 2015/27843. … 22. Whether the Rural Assistance Authority has submitted to the relief sought in the Action Josephine Joan Charlton & Kevin Michael O'Brien vs RAA, by the filing of Snr Crown Solicitor a submittal to every section of the relief sought therein invalidates the Section 11 Certificate in force; In that the Section 11 Certificate in force has been issued ultra- vires under the Farm Debt Mediation Act 1994 and therefore the protection afforded under the Farm Debt Mediation Act is restored to "Oriel" Folio Identifier 22/724651 and hence whether the prohibition of possessory action is therefore barred by the Farm Debt Mediation Act 1994. 23. Whether NAB is entitled to proceed in contravention of the Farm Debt Mediation Act 1994 based on an ultra-vires issued Section 11 Certificate whilst trespassing on the Real Property Act 1900 Section 74F, 11R Caveat which at Section 4 Prohibits Possessory Applications. 24. Whether NAB seeking judgement for debt and possession of property being "Oriel" Tottenham - Folio Identifier 22/724651 is enforcement action according to the Farm Debt Mediation Act 1994 by way of action, the filing and commencement of proceedings in the Supreme Court of NSW Case 2015/27843. … 26. Whether NAB had the legal right to issue Real Property Act 1900 57 (2) b notices and enforcement action before satisfying the requirements of applicable law, the Farm Debt Mediation Act 1994 Section 8(1) and issuing the notice to a beneficiary of the Phoenix Trust with no legal authority to deal with them.

Ms Charlton's Submissions

1. Ms Charlton's overall submission in answer to the Section 11 Certificate Issue was that the s 11 certificate should be set aside because there was not a "satisfactory mediation" for the purposes of the FDM Act. However, she supported that submission with several subsidiary contentions, which I summarise below: 1. Ms Charlton resigned as trustee of the Trust on 20 August 2011, leaving Mr O'Brien as the sole trustee of the Trust. Ms Charlton carried out all of the required steps to resign under the Deed save for the production of the Certificate of Title which NAB withheld. 2. As trustee of the Trust, Mr O'Brien was required to participate in the mediation that took place on 17 July 2014. Since Mr O'Brien did not participate in that mediation (in his closing submissions, Mr O'Brien submitted that the mediator allowed him to be a "support person only"), there was not a "satisfactory mediation" for the purposes of s 4(1A) of the FDM Act. 3. Ms Charlton did not have authority to represent Mr O'Brien under s 17(3A) of the FDM Act. 4. As a result of contentions 1-3 above, the s 11 certificate ought to be set aside. If the s 11 certificate is set aside, the proceedings brought by NAB are void by reason of s 6 of the FDM Act. 5. The provision of the Mediation Summary by Mr O'Keefe was not in compliance with s 18A of the FDM Act because it was not provided "at the completion of the session" (the Mediation Summary was provided on 18 July 2014, the day following the mediation). 6. The s 11 certificate should be set aside under s 69 Supreme Court Act 1970 (NSW) for the following reasons: 1. Aside from the Mediation Summary, the circumstances surrounding the mediation were not taken into account by the RAA. 2. The RAA failed to take into account Mr O'Brien's non-involvement in the mediation. 3. NAB failed to give Ms Charlton notice that it had agreed to a mediation pursuant to s 9A(1) of the Act. This affected Ms Charlton's rights under s 9B(1) having regard to the provisions of s 9B(2)(ii) and (iii). 1. The RAA was obliged to provide to Ms Charlton with NAB and Mr O'Keefe's response to Ms Charlton's submission of 14 August 2014. 2. A satisfactory mediation did not take place because Ms Charlton had initially given a guarantee and indemnity to NAB in respect of the Overdraft in her personal capacity. Hence, NAB was also obliged to mediate with her under the FDM Act in her personal capacity (the mediation that took place was with Ms Charlton in her capacity as trustee). 3. The RAA failed to take into account the action by NAB in 2011. (This will be discussed in the context of the 2011 Action Issue below). 4. The s 11 certificate expired and therefore NAB was not entitled to rely on s 11(6) as authority for the proposition that the mediation was not invalid. (This contention will also be discussed in the context of the 2011 Action Issue below). (Those ten contentions shall be hereinafter referred to, with respect to the Section 11 Certificate Issue, by their respective numbered designations, namely, "contention 1" through to "contention 10").

NAB's Submissions

1. NAB's submissions as to contention 1 were directed at whether Ms Charlton had in fact validly resigned as trustee of the Trust. As to this point, NAB submitted that neither the requirements of the Deed, nor s 44 of the Trustee Act 1958 (Vic) were complied with in order to effect Ms Charlton's resignation.
2. As to contention 2, NAB submitted that, if Ms Charlton had validly resigned as trustee of the Trust, Mr O'Brien's alleged failure to participate in the mediation did not mean that no satisfactory mediation took place for the purposes of s 11(1)(c)(i) of the FDM Act.
3. To this end, NAB submitted that NAB was only obliged to mediate with Ms Charlton under the FDM Act, as Ms Charlton was the farmer and the person owing the farm debt. NAB also submitted that Mr O'Brien could have involved himself in the mediation process as he was present. NAB contended that a satisfactory mediation under the FDM Act did not require the involvement of every person potentially affected by the outcome of the mediation. NAB also advanced the alternate position that, even if a satisfactory mediation had not occurred, the s 11 certificate was still validly issued under s 11(1)(c)(iii) of the FDM Act.
4. As to contention 3, for the reasons expressed in relation to contentions 1 and 2, NAB submitted that it was not relevant that Ms Charlton did not obtain written authority from Mr O'Brien to enter into a Heads of Agreement prior to the mediation.
5. For the purposes of contention 4, NAB submitted that, for the reasons in contentions 1-3, the s 11 certificate was not invalid and, even if this was not the case, the mediation would not be invalid pursuant to s 11(6) of the FDM Act.
6. In relation to contention 5, NAB submitted that the construction of s 18A of the FDM Act did not suggest that the Mediation Summary needs to be completed immediately following the mediation. Therefore, the completion of the Mediation Summary by Mr O'Keefe the day following the mediation was sufficient.
7. As to contention 6, NAB pointed to the fact that the judicial review proceedings had been commenced out of time under r 59.10(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and that time should not be extended under r 59.10(2) because of the prejudice to NAB (having regard to the matters in r 59.10(3)). NAB noted in that respect that Ms Charlton became aware of the decision of the RAA to issue the s 11 certificate at the time it was issued.

Consideration

1. I shall deal with each of the subsidiary contentions raised by Ms Charlton with respect to the Section 11 Certificate Issue seriatim.

Contention 1

1. Ms Charlton contended that she validly resigned as trustee of the Trust, leaving Mr O'Brien as the sole trustee with whom NAB was required to involve in the mediation. I consider Ms Charlton's contention is wrong in law. Clause 15 of the Deed provided, inter alia, as follows: 15. The person(s) named in the Schedule hereto as "The Appointor(s)" or the survivor of them shall have the power by instrument in writing at any time and from time to time to remove any Trustee of these presents and to appoint a new or additional Trustee or Trustees whether in addition to or in substitution for any other Trustee or Trustees… … Upon the appointment, removal or retirement of a trustee pursuant to these presents or whether made or done pursuant to the provisions of the Trustee Act as amended from time to time it shall not be necessary for such appointment, removal or retirement to be effected by registered deed or by any deed and such appointment, removal or retirement shall be fully effective provided the same is made by instrument in writing and signed by the relevant persons pursuant to this deed or such persons as authorised or nominated by or pursuant to the Trustee act aforesaid and any minute recorded in the minutes of the trustee of this deed as to the appointment, removal or retirement of any trustee or trustees shall be conclusive proof that such appointment, removal or retirement was effective in all respects.
2. The "Schedule" of the Deed names the appointor as "John Laurence O'Brien" (Ms Charlton's uncle). As cl 15 of the Deed provided that Ms Charlton, as trustee, could only be removed by the authority of the appointor of the Trust or his personal representatives, Ms Charlton's letter of resignation of 20 August 2011 was not sufficient to meet the requirement of cl 15.
3. It should be noted, in that respect, that the appointor, John Lawrence O'Brien, did author a letter dated 20 March 2016 which stated "[I] hereby accept and confirm the resignation of Josephine Joan Charlton (nee O'Brien) as Trustee of the Phoenix Trust on August 20. 2011." However, while the document appears to comply with cl 15 of the Deed, the letter was not created until after the subject proceedings were commenced. As such, I do not consider the letter to be relevant to my determination of the validity of Ms Charlton's resignation as trustee of the Trust for the purpose of these proceedings; the sole document relevant to the resignation was Ms Charlton's letter of 20 August 2011. In fact, it underlines the absence of evidence that Ms Charlton had validly resigned as trustee before March 2016.

Additional Issues 3, 6 and 7

1. Ms Charlton made the following oral submission in closing addresses: … I say I resigned according to trustee I did everything the trustee told me to do, the only thing I couldn't do was the title because the bank said they were not going to provide the certificate of title.
2. Regardless of whether NAB failed to, withheld, or could not provide Ms Charlton the Certificate of Title, for the reasons expressed above I do not consider that Ms Charlton had done everything else required under the Deed to resign as trustee of the Trust.

Contention 2

1. In my view, the FDM Act, properly construed, placed an obligation on NAB to mediate only with Ms Charlton (not also with Mr O'Brien).
2. The FDM Act provides that mediation must take place between the "farmer" and the "creditor" (see ss 8(1), 9(1), 9(1A), 11(1A), 11AA(1) and 17(4)).
3. Further, under the FDM Act, the mediation must concern a "farm debt" (see ss 4(1A), 8(2), 9(1), 9(1A), 9A(1), 9B(1), 11(1)(c)(i), 11(5) and 12A(1)). Section 4(1) of the FDM Act provides that a "farm debt" is a debt "incurred by a farmer" that is secured wholly or partly by a "farm mortgage". A "farm mortgage" secures the obligations of the farmer.
4. The relevant provisions of the FDM Act were discussed by Heydon J in Waller. His Honour stated (at [52]): [52] Section 8(1) forbids enforcement action by a creditor against a farmer "in respect of" a farm mortgage. The expression "in respect of" can encompass several farm debts secured by the farm mortgage. Similarly, "enforcement action" can encompass remedies sought by the creditor in relation to several distinct disputes about distinct farm debts. Section 8(3) only operates to permit enforcement action under s 8(1) in relation to a dispute about a farm debt if a s 11 certificate is in force in respect of the farm mortgage. But in circumstances like the present, s 11(1)(c)(i) provides that the certificate cannot be issued unless the Authority is satisfied that satisfactory mediation has taken place in respect of "the farm debt involved" in the dispute which went to mediation. The issue of the certificate does not depend on the Authority being satisfied that satisfactory mediation has taken place in respect of any aspect of the farm mortgage at large. Thus the dispute about a farm debt - "the farm debt involved" - which was satisfactorily mediated under s 11(1)(c)(i) must be the same dispute as that which triggered the creditor's desire to take the enforcement action referred to in s 8(1).
5. As mentioned in the factual background above (at [161]-[162]), Ms Charlton agreed that she was, from late 2011 (including the time that mediation was held), the farmer under the FDM Act (despite pleading that the trust was the farmer in the amended defence filed 20 May). Ms Charlton also agreed that she incurred the farm debt and that the farm mortgage secured her obligations. It is clear that Mr O'Brien did not owe a farm debt. The farm debt was the debt owed under the mortgage. That mortgage listed Ms Charlton as the only mortgagor. I am satisfied that, based on the provisions of the FDM Act listed at [291]-[292] above, it was not necessary for Mr O'Brien to be involved in the mediation for the purposes of the FDM Act.

Contention 3

1. For the reasons above, Ms Charlton, as the farmer and person owing the farm debt, was the proper party with whom NAB was required to mediate. As NAB was not required to mediate with Mr O'Brien, it is strictly unnecessary for me to consider whether Ms Charlton lacked the authority to enter a Heads of Agreement on behalf of Mr O'Brien at the mediation as she had not been given written authority as is required by s 17(3A) of the FDM Act.
2. In any event, a breach of 17(3A) of the FDM Act would not invalidate the mediation by reason of s 17(6) of the FDM Act. Section 17(3A) states: (3A) Any person representing a party to a mediation (whether or not the person is himself or herself a party to the mediation) must not attend a mediation session unless the person has been given written authority by the party the person represents to enter into Heads of Agreement.
3. Section 17(6) states: (6) A contravention of this section does not invalidate a mediation.
4. The clear wording of s 17(6) leaves no doubt that it applies to breaches of s 17(3A).

Contention 4

1. As I have rejected Ms Charlton's submissions in respect of contentions 1-3, I do not consider that the s 11 certificate was invalidly issued on those bases. However, even if I was to accept one or all of Ms Charlton's contentions, it does not necessarily follow that the s 11 certificate was invalidly issued, namely, due to the operation of s 11(1)(c)(iii).
2. That provision is as follows: 11 Certificate that Act does not apply to farm mortgage (1) The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and (b) no exemption certificate is in force in relation to the farm mortgage, and (c) the Authority is satisfied that: … (iii) 3 months have elapsed after a notice was given by the creditor under section 8 and the creditor has throughout that period attempted to mediate in good faith (whether or not a mediation session or satisfactory mediation took place during that period).
3. It is clear that 3 months had elapsed from the issuance of the s 8 notice (on 22 January 2014) to the issuance of the s 11 certificate (on 29 August 2014). NAB submitted that during that period, there was no evidence that NAB had failed to attempt to mediate in good faith.
4. The concept of good faith in the context of farm debt mediation was discussed by Einstein J in Aiton v Transfield (1999) 153 FLR 236; [1999] NSWSC 996 ("Aiton") at [151]-[152]: [151] [s 11 of the Farm Debt Mediation Act 1994 (NSW)] was considered by Badgery-Parker J in State Bank of NSW v Freeman (unreported, Supreme Court of NSW, 31 January 1996) who at 7, made plain that the Farm Mediation Act does not deal with the substantive rights of the parties. Rather, "what it does is to interpose, between default of a mortgagor and enforcement action by a mortgagee, a barrier which is, however, limited in duration". [152] To my mind, the following observations of Badgery-Parker J are particularly pertinent to the matter before me: 'An undertaking to mediate in good faith no doubt connotes a willingness on the part of a party to consider such options for resolution of a dispute as are propounded by the mediator or the opposing party; but it does not appear to me than an inference of lack of good faith can be drawn from the adoption of a strong position at the outset and a reluctance to move very far in the direction of compromise, without more' [at 11].

Contention 5

1. Section 18A of the FDM Act provides as follows: 18A Summary of mediation At the end of a mediation, a mediator must fill in the form approved by the Authority for setting out a summary of the conduct and results of the mediation (including any Heads of Agreement entered into by the parties). Note. Failure to comply with this section may result in the withdrawal of the accreditation of a mediator (see section 12 (3)).
2. I do not consider that Mr O'Keefe's provision of the Mediation Summary on 18 July 2014, the day following the mediation, was in breach of s 18A because, as advanced by Ms Charlton, it was not provided literally "at the end of a mediation". Ms Charlton's submission was that the Mediation Summary was not provided "at the completion of the session".
3. I do not consider that Ms Charlton's construction of the provision may be accepted.
4. The expression "[at] the end of" in that provision is a prepositional phrase referring to the noun mediation. However, by its ordinary meaning, and having regard to the context in which the expression is used, the expression is no more than a reference to the closing or finish of the mediation. The mediator must not prepare the summary before this time but the expression "by the end of the mediation" does not mean literally by the moment the mediation ends.
5. The purpose of the provision is simply to provide that a summary meeting the conditions set by the provision is provided and that the time for doing so should be the end of the mediation.
6. The construction proposed by Ms Charlton would create an impractical and unworkable requirement and one inconsistent with the provisions of s 18A which require the mediator to fill out a form setting out a summary of "the conduct and results of the mediation"; the obligation which subsists until the very end of the mediation. It is very unlikely that the legislature would have imposed a requirement which may be virtually impossible to fulfil if the provision were read literally in the manner contended by Ms Charlton. It is unnecessary to decide what degree of latitude in the fulfilment of the provision is available as it is sufficient to conclude that the provision of the summary by the next day could not offend the provision including any implied condition as to the time by which a summary should be provided.

Contention 6

1. Prior to addressing the substantive grounds forming the basis of the application to set aside the judicial review proceedings, it is necessary to consider the submissions by NAB that the judicial review application was out of time and no extension should be granted to bring the application in time in the exercise of the Court's discretion.
2. It may be noted that Ms Charlton, in her written reply of dated 27 April 2016, pleaded that s 29 of the FDM Act had the effect of allowing a 3 year period from the commission of an offence to bring proceedings. No submissions were made in support of that contention. In any case, the proposition is incorrect in the case of the bringing of the judicial review proceedings.
3. Section 29 of the FDM Act provides: 29 Limitation Despite anything in any Act, proceedings for an offence against this Act or the regulations may be brought within the period of 3 years after the commission of the offence or, with the consent of the Attorney General, at any later time.
4. The judicial review proceedings were not proceedings for an offence against the FDM Act. Further, the FDM Act does not mandate that the RAA consider certain circumstances in order to satisfy itself of the matters in s 11(1)(c). Thus, the judicial review proceedings exist outside of the scope of the FDM Act.
5. Having decided that s 29 of the FDM Act does not operate with respect to the judicial review proceedings, I turn to r 59.10 of the UCPR, which provides as follows: 59.10 Time for commencing proceedings (1) Proceedings for judicial review of a decision must be commenced within 3 months of the date of the decision. (2) The court may, at any time, extend the time for commencing proceedings fixed by subrule (1). (3) In considering whether to extend time under subrule (2), the court should take account of such factors as are relevant in the circumstances of the particular case, including the following: (a) any particular interest of the plaintiff in challenging the decision, (b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings, (c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision, (d) any relevant public interest. (4) This rule does not apply to proceedings in which there is a statutory limitation period for commencing the proceedings. (5) This rule does not apply to any proceedings in which the setting aside of a decision is not required.

Contention 7

1. The submission that the RAA failed to accord Ms Charlton procedural fairness by failing to provide Ms Charlton with NAB's and Mr O'Keefe's response to Ms Charlton's submission of 14 August 2014 must fail for the same reasons as expressed at [339]-[343] above. In substance, Ms Charlton's complaint was that she was not given the opportunity to reply to NAB's submissions.
2. It is true that the opportunity to reply must generally be afforded to a person whose rights or interests are affected in the context of a court hearing: see for example Mayes v Mayes [1971] 2 All ER 397; R v Medical Practitioners Professional Conduct Tribunal; Ex parte Medical Board (1985) 40 SASR 84; Escobar v Spindaleri (1986) 7 NSWLR 51; Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57; R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180; Thai v Deputy Federal Commissioner of Taxation (1994) 53 FCR 252; Dobbie v Department of Social Security [1995] FCA 1191; Director of Public Prosecutions (SA) v District Court of South Australia and Lawrie (2005) 92 SASR 94; [2005] SASC 260. However, the same cannot be said in the context of the RAA's decision to issue the s 11 certificate.
3. The legal framework within which the decision was to be made was s 11 of the FDM Act. As mentioned above, the decision-making framework here was limited and did not provide that the RAA was to provide NAB and Mr O'Keefe's reply submissions to Ms Charlton. Nor did s 11 provide that Ms Charlton was required to have the opportunity to make a further submission. The provision did not list the matters that the RAA was required to take into account in coming to its decision. The provision merely stated that the authority be "satisfied" of the matters in s 11(c)(i), (ii) and (iii). In order to afford procedural fairness in the circumstances of this case, it was not necessary to give Ms Charlton the opportunity to comment upon and respond to each and every communication received from other interested parties, namely, NAB and Mr O'Keefe.

Contention 8

1. The contention that Ms Charlton had initially given a guarantee and indemnity to NAB in respect of the Overdraft in her personal capacity cannot be sustained. The guarantees and indemnities identified Ms Charlton "as trustee for the Phoenix Trust".
2. It is true that there was no dispute that Ms Charlton initially gave a guarantee and indemnity in support of the Overdraft. However, that initial guarantee and indemnity was not relied upon as security for that facility (or any other facility) after the Second Notice of Agreed Changes and the Second Business Letter of Offer were executed by Ms Charlton on 10 September 2007. Those documents had the effect of increasing the limit of the Overdraft to $150,000, and providing Ms Charlton with the First and Second Business Options Loans for the amounts of $110,000 and $340,000 respectively.
3. From 10 September 2007, the only security in respect of Ms Charlton's indebtedness to NAB was the Mortgage. Further, NAB did not sue Ms Charlton in respect of any guarantee and indemnity. Nor did NAB seek to enforce any right it has, or had, under any guarantee and indemnity.
4. I also consider that the argument proceeds on the incorrect basis that a trustee has two separate legal personalities; Ms Charlton in her personal capacity and in her trustee capacity are not different persons.
5. That conclusion is supported by a series of authority. For example, in MacarthurCook, Hammerschlag J stated (at [117]): [117] An insuperable difficulty lying in the way of the second defendant's submission that the first defendant contracted as two separate personalities in relation to those obligations is the well-established precept that a trustee, in its personal capacity, and in its trustee capacity, remains the same person. The first defendant could have contracted with MacarthurCook in two different capacities, but it cannot contract with itself. The assumption that a trustee in its personal capacity and in its trustee capacity are different persons is a false one: Minister Administering National Parks and Wildlife Act 1974 v Halloran (2004) 12 BPR 22,391 at 22,409. (See also Suncorp Insurance at 305-306).
6. Further, even if it was accepted that Ms Charlton entered those arrangements in her personal capacity, that fact would not lead to the conclusion that NAB was obliged to mediate with her under the FDM Act in her personal capacity as well as in her capacity as trustee of the Trust.

Contentions 9 and 10

1. As mentioned earlier, these contentions will be discussed in the context of the 2011 Action Issue below.

ISSUE 2: 2011 ACTION ISSUE

1. The corresponding issues raised by Ms Charlton appear to be issues 7 and 29 as follows: 7. Whether National Australia Bank Limited unconscionably engaged in enforcement action as described by the Farm Debt Mediation Act 1994 against Ms Charlton & Phoenix Trust from 2011 to 2014, before any farm debt mediation was conducted, constituting enforcement action barred by S 8 (1) Farm Debt Mediation Act 1994. … 29. Whether NAB had the right considering all the circumstances to categorise the property as a "categorised asset", on or about the 9th September 2011 before enforcement action on the 20th October 2011 and before the purported mediation on the 17th July 2014.

Ms Charlton's Submissions

1. Ms Charlton made a number of submissions as to why the proceedings were bad in law or void by virtue of the first and second default notices (being enforcement actions under the FDM Act) predating the issuing of the s 8 notice, the s 9 notice, the mediation and the issuance of the s 11 certificate.
2. It should be noted at the outset that, while NAB did rely on the 26 October 2011 cancellation notice (and, in the alternative, the 2014 cancellation notice), NAB did not rely on the first and second default notices which were issued prior to the issuance of the s 8 notice. Instead, NAB relied upon the third default notice, after and in reliance upon the s 11 certificate.
3. Ms Charlton made submissions that, notwithstanding NAB's non-reliance on the earlier notices (and reliance on only the third default notice), the proceedings remained void or available to be set aside or dismissed in consequence of the two earlier notices.
4. In summary, Ms Charlton raised eight contentions, with respect to the 2011 Action Issue, which shall once again be referred to, within this section of the judgment, by their respective numbered designations, namely, "contention 1" through to "contention 8".

Contention 1

1. Prior to the mediation, NAB engaged in enforcement actions being the "cancellation of facilities as well as other actions to enforce the mortgage such as, the issuance of a s 57(2)(b) notice under [the RPA]". Ms Charlton submitted that the following notices issued in 2011 and 2012 were the relevant enforcement actions: 1. the 25 and/or 26 October cancellation notice; 2. the first default notice; and 3. the second default notice. (Those notices, for the purposes of this contention, shall be collectively referred to as "the 2011 and 2012 actions").
2. Ms Charlton contended that the 2011 and 2012 actions were enforcement actions for the purpose of the FDM Act for the following reasons.
3. First, having regard to the purpose of the FDM Act, it is clear that the FDM Act was intended to be remedial legislation, "its overriding purpose was to prevent persons being driven off their farms because of the inability to pay debt, afford the possibility of mediation to the farmer, and in some cases result in the ability to restructure loans in a bona fide mediation process, thus avoiding the need in successful cases for litigation".
4. In support of that proposition, Ms Charlton referred to the judgment of Young J in Varga v Commonwealth Bank of Australia (1996) BPR 97,617 ("Varga") (at 5), which was approved by Harrison AsJ in Kiriwina Investment Company Pty Ltd v Green Lees Developments Pty Ltd [2017] NSWSC 1727 ("Kiriwina") (at [59]).
5. In Varga, Young J stated (at 5): One must construe the Act to fulfil its purpose. The purpose was to prevent persons being driven off their farms because of inability to pay debt where it was possible for the debt to be rearranged after a bona fide mediation process. To fulfil the purposes of the Act, one must construe it, to my mind, favourably to the farmer, and unless compelled by the language, not permit the overriding purposes of the Act to be defeated by technicalities.
6. Ms Charlton also relied on the observations of Hayne J (at [25]) and Heydon J (at [29], [37], [66] and [67]) in Waller in support of her application. Those passages are extracted below: [25] As Heydon J further explains, the expression "enforcement action" (as it is defined in s 4(1) of the Act) extends to all of the relief that was claimed by the lender in its proceedings. The lender by its pleadings asserted its "entitle[ment] to repayment, including principal and the unpaid arrears of interest" only "under the terms of the Mortgage". The width of the definition of "enforcement action", extending to "any other action to enforce the mortgage" (emphasis added), and the express exclusion of "the enforcement of a judgment" obtained before the commencement of the Act from the definition (emphasis added), point strongly to this construction. And any other construction would frustrate the evident purpose of the Act: to require mediation in respect of the farm mortgage concerned (which is defined by reference to a particular farm debt) before a lender can enforce - that is, bring proceedings in respect of - the farm mortgage. Whether the Act would have prevented a claim for a money judgment, brought only by reference to the third loan agreement, need not be decided. … [29] In outline the legislative scheme is that if a farmer incurs a "farm debt" that is secured by a "farm mortgage", the "creditor" is unable to take "enforcement action" under the farm mortgage until, inter alia, a certificate is issued that the Act does not apply because satisfactory mediation has taken place. The question which the appeal raises is how far that scheme works if a certificate is issued in respect of one farm debt but the creditor later wishes to take enforcement action in relation to another. … [37] Section 11(1) of the Act provides for the issue of a certificate by the New South Wales Rural Assistance Authority ("the Authority"). The relevant part of s 11(1) is as follows: "The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and (b) no exemption certificate is in force in relation to the farm mortgage, and (c) the Authority is satisfied that: (i) satisfactory mediation has taken place in respect of the farm debt involved". The provisions in relation to exemption certificates are immaterial, since no exemption certificate was ever issued. … [66] The expression "enforcement action" is defined in s 4(1) of the Act as meaning not only taking possession of the property, but "any other action to enforce the mortgage". In the Amended Statement of Claim the respondent pleaded that it was a term of the Registered First Mortgage that interest be paid monthly in accordance with, inter alia, the Third Loan Agreement. In the Amended Statement of Claim the respondent also pleaded that the appellant was obliged, under the Registered First Mortgage, to pay the principal sum ($640,000) with interest owing. The respondent contended that a claim for a debt is not "enforcement action" because it does not involve the enforcement of security over the farm property. The better view, with respect, is that the definition of "enforcement action" is wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage. And since the claim to the order for possession was solely based on the breach of the money obligations arising under the Registered First Mortgage and the Third Loan Agreement, it was inextricably interlinked with the claim for a money judgment. The definition of "enforcement order" in s 4(1) provides that it does not include "the enforcement of a judgment that was obtained before the commencement of this Act". The word "judgment" is not limited to judgments other than money judgments. Had that type of enforcement action not been excluded, it would have fallen within the definition of "enforcement action". The exclusion leaves the enforcement of judgments (including money judgments) open if they were obtained after the commencement of the Act. It follows that action to obtain a money judgment after the commencement of the Act is "enforcement action" so long as it is action to enforce the mortgage. The structure of the Amended Statement of Claim, and the manner in which the proceedings were conducted, justify the characterisation of the respondent's conduct as action to enforce the mortgage, and hence as "enforcement action". [67] Hence the attempt in the Supreme Court proceedings to obtain a money judgment was an action barred by s 8(1) as much as the seeking of possession.

Contention 2

1. The 2011 and 2012 actions were barred by ss 8(1) and 10 of the FDM Act as they occurred prior to Ms Charlton being informed of NAB's intention to take enforcement action in respect of the Mortgage and of the availability of mediation under the FDM Act in respect of farm debts (see s 8(2)). The second default notice was, in any event, invalid due to the operation of s 57(5) of the RPA.
2. Ms Charlton contended that the second default notice was invalid because, even if the Mortgage contained a provision that the principal could be claimed immediately upon any default, s57(5) in the RPA precludes that provision from taking effect until the s 57(2)(b) notice under the RPA has been served and the time given for compliance with the notice has expired and is unsatisfied. Section 57(5) of the RPA provides: (5) Without prejudice to any other manner in which it may be deprived of force or effect, a covenant, agreement or condition whereby upon a default referred to in subsection (2) (a): (a) the whole of the principal or other money of which the payment is secured by a mortgage or charge becomes payable, or (b) a part of that principal or other money (not being a part to which that default relates) becomes payable, has no force or effect until the powers conferred by section 58 become exercisable by reason of that default.

Contention 3

1. Subsequent steps purportedly taken in compliance with the FDM Act did not cure the earlier breach of s 8 such that the issuance of the s 11 certificate was invalid. Those steps were: 1. the issuance of the s 8 notice; 2. the issuance of the s 9 notice; and 3. the mediation.

Contention 4

1. As the issuance of the s 11 certificate was invalid, the issuing of the 2014 cancellation notice and the third default notice (constituting a statutory enforcement notice pursuant to s 57(2)(b)), remained contrary to the FDM Act because those actions represented a continuation of the enforcement action engaged in 2011. In that respect, the 2014 cancellation notice and the third default notice were "simply an attempt to validate already invalid actions" and NAB "continued to use the unlawful basis on which they obtained the s 11 certificate knowing it was ultra vires".
2. In support of this contention, Ms Charlton placed reliance upon Roxo v Normandie Farm (Dairy) Pty Ltd [2012] NSWSC 765 ("Roxo"); Cherryop Pty Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337 ("Cherryop"); and Waller.
3. Ms Charlton also submitted that the commencement of these proceedings constituted enforcement action which was also linked to the initial enforcement actions.
4. Ms Charlton submitted that Kiriwina and Roxo were authority for the proposition that, for the purposes of the FDM Act, notices under s 57(2)(b) of the RPA can be inextricably interlinked to the commencement of proceedings and therefore constitute a single enforcement action. Reference was first made to the judgment of Harrison AsJ in Kiriwina at [131]-[136] as follows: [131] On 23 December 2015 when Kiriwina exercised its power of sale under s 58, Mr Denshire lost his beneficial interest in Greenlees. However, his obligations under his personal covenant to repay the debt contained within the mortgage instrument still existed. (See the first covenant in Annexure A of the mortgage instrument which I have set out earlier in this judgment). Kiriwina (as mortgagor) was also entitled to bring proceedings for the shortfall of any debt after Greenlees' sale on the basis of this covenant. To my mind, because the statutory process in exercising the power of sale under s 58 requires the issue of s 57(2)(b) notices, these notices cannot be separated from either the sale or proceedings or the remaining obligations that still remain. In other words, the issuing of default notices and the subsequent proceedings brought for a shortfall following sale are viewed as a single, inextricably interlinked process founded upon Mr Denshire's personal covenant to repay. It is my view that the current proceedings arise from the reliance upon rights arising from Greenlees' mortgage which are inextricably interlinked to the issue of the s 57(2)(b) notices. In this respect, the proceedings are similar to Waller despite no s 57(2)(b) notices being issued in that case. [132] Kiriwina has not made any submissions to this Court as to why the commencement of these proceedings should be viewed as a separate action to the s 57(2)(b) notices. It is my view that the evidence leads to a contrary conclusion. [133] Hence, the time of the enforcement action was 10 September 2014, being the date on which the s 57(2)(b) notices were issued. At that time, Kiriwina had not yet exercised its power of sale pursuant to s 58 of the Real Property Act. As the mortgage debt was secured by Greenlees it fell into the definition of farm debt contained in s 3 of the Farm Debt Mediation Act. It follows that Kiriwina was also a creditor within the meaning of the Act at the relevant time. As a creditor under a farm debt, the Act applies pursuant to s 5(1). [134] While Mr Denshire was aware of the provisions of the Farm Debt Mediation Act at the time the s 57(2)(b) notices were issued, there is nothing in the Act that suggests this would deprive him of the benefits the Act confers upon him. This conclusion is also supported by s 9(1A) of the Act, which provides that a farmer may request a mediation where notice under s 8 has not been given. (My emphasis). It is my view that the provisions of s 9(1A) of the Act means that there is no statutory obligation upon Mr Denshire to request such a mediation even if he knew of its availability. [135] In these circumstances, Kiriwina was required to give notice of availability of mediation under s 8 of the Farm Debt Mediation Act. Kiriwina did not do so. As a consequence, s 6 of the Farm Debt Mediation Act renders the current proceedings void. Conclusion [136] In summary, firstly, Mr Denshire and Denshire Enterprises fall within the definition of "farmer"; Mr Denshire was engaged in a "farming operation" at all relevant times; and he owed a farm debt that was secured by the Greenlees property at the time of commencement of the enforcement action. Kiriwina is therefore a creditor within the meaning of the Act. The nature of the all monies mortgage and Kiriwina's current claim for debt are inextricably interlinked. On this basis, there is a single enforcement action running from 10 September 2014, being the date on which the s 57(2)(b) notices were issued.

Contention 5

1. The issuance of the first default notice could not be withdrawn because the definition of "enforcement action" under s 4(1) of the FDM Act includes "the giving of any statutory enforcement notice". Thus, the taking of any enforcement action in respect of the farm debt was prevented, even though a farm debt mediation occurred before the third default notice was issued and in spite of the fact that the notice was not relied upon by NAB.

Contention 6

1. Ms Charlton contended that, although she was served with the 25 October 2011 cancellation notice and the first default notice, those notices were not provided to her as "guarantor".

Contention 7

1. Ms Charlton's submitted that the debts in the s 8 notice were the same source as those referred to in the first default notice. Ms Charlton's contention seemed to be that NAB was barred, under the FDM Act, from issuing a s 8 notice which concerned the same debt as had been relied upon with respect to an earlier default notice (in 2011or 2012).

Contention 8

1. Ms Charlton also contended that the RAA had committed a "jurisdictional error of law" in issuing the s 11 certificate as it did not have regard to the matters in contentions 1-7 when issuing that certificate, including whether the 2011 and 2012 actions were enforcement actions occurring prior to the issuance of the certificate. That submission formed part of the judicial review proceedings.

NAB Submissions

1. NAB met Ms Charlton's contentions upon the bases listed below. It should be noted at the outset that NAB accepted that a s 57(2)(b) notice is enforcement action for the purposes of s 4(1) of the FDM Act. In summary, NAB's submissions were as follows: 1. The cancellation of facilities prior to the date of the mediation, namely, the 26 October 2011 cancellation notice, did not constitute an enforcement action for the purposes of the FDM Act. Rather, that cancellation concerned the failure of Ms Charlton to maintain the Overdraft within its limits. That cancelation was an action taken under the First Business Letter of Offer, and did not depend upon the terms of the Mortgage. 2. In any event, NAB pleaded its case for debt and possession upon the third default notice. It did not rely upon the first or second default notices, which were issued prior to the issuance of the s 8 notice and the mediation. It was contended the third default notice was issued after the requisite notices under the FDM Act and subsequent to the mediation and the s 11 certificate being issued by the RAA. 3. There was a factual context in which the first default notice was issued, namely, the involvement of the FOS which resulted in NAB treating Ms Charlton as a farmer and the debt as a farm debt under the FDM Act and issuing the s 8 notice in early 2014. 4. Whilst Ms Charlton's complaint was that she underwent a mediation in the context of an enforcement action, there was nothing in the FDM Act which prohibited NAB from taking the course it did. There was no prohibition under the FDM Act in issuing a s 8 notice which concerned the same debt as had been relied upon with respect to the first default notice. Reliance, in that respect, was placed upon the provisions of ss 10(2) and 22 of the FDM Act. 5. The authorities relied upon by Ms Charlton did not apply to this matter because of the differing facts and circumstances and the consequential application of principle.

Contention 1

1. I accept NAB's submission that the 26 October 2011 cancellation notice did not constitute "enforcement action" for the purposes of the FDM Act.

The Scope of Enforcement Action under the FDM Act

1. The definition of "enforcement action" in the FDM Act makes it clear that the enforcement action must relate to a "farm mortgage". Enforcement action in relation to a farm mortgage means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any statutory enforcement notice, or the continuation of any action to that end, where a "statutory enforcement notice" includes a notice under s 57(2)(b) of the RPA.
2. As mentioned earlier, in Waller, Heydon J held at [66] that "the definition of 'enforcement action' is wide enough to extend beyond enforcement of the security by taking possession to include reliance on any of the rights in the farm mortgage", including by attempting to obtain a money judgment.
3. However, I accept NAB's submission that Waller should be distinguished from the present matter. From the preliminary observations made in Gooley as to the decision in Waller (extracted at [237] above), the key difference to be observed is that in Waller, the statement of claim relied upon new loan agreements in addition to the mortgage (see Waller at [29]). In the subject proceedings, the 26 October 2011 cancellation notice only related to the Overdraft (see Waller at [66]). Further, this matter does not involve the entry into of new loan agreements after the farm debt mediation (see Gooley at [58(10)] as extracted at [237] above).
4. Additionally, while I accept, with respect, the statement of Young J in Varga (extracted at [380] above) as to the construction of the FDM Act, I disagree with Ms Charlton's submission that "enforcement action" should be construed to include any exercise of a contractual right by a creditor.
5. If that approach were adopted, s 6 of the FDM Act would capture action that falls well short of anything that could be properly described as "enforcement action", such as charging a higher interest rate, or the imposition of an additional fee. The FDM Act cannot have been intended to operate in this way, particularly having regard to the object of the Act being, inter alia, "to provide for the efficient and equitable resolution of matters involving farm debts" (see s 3 of the FDM Act). It is plain that requiring mediation prior to the exercise of any contractual right by a creditor would be neither efficient nor equitable.

Was the 26 October 2011 cancellation notice an Enforcement Action?

1. Based on the above analysis of the scope of "enforcement action" for the purposes of the FDM Act, the 26 October 2011 cancellation notice did not constitute enforcement action for the following reasons: 1. The First Business Letter of Offer dated 30 August 2005 upon which the 26 October 2011 cancellation notice relied was not a "farm mortgage" within the meaning of the FDM Act. To adopt the reasoning in Gooley at [61], the issuance of the 26 October 2011 cancellation notice was not "predicated upon a farm mortgage". 2. The issuance of the 26 October 2011 cancellation notice was the mere exercise of a contractual right under the Overdraft Terms contained in the First Business Letter of Offer to cancel the Overdraft (see cll A.2, 6.3 and 16 of the Overdraft Terms). It did not purport to be, and did not involve, the exercise of any right under the Mortgage, including, as Ms Charlton contended, the right of possession. The 26 October 2011 cancellation notice did not invoke or rely upon the Mortgage, nor did the Mortgage afford a contractual right to NAB to cancel the Overdraft. That contractual right was contained in the First Business Letter of Offer only. 3. It is true that the 26 October 2011 cancellation notice reduced the limit of the Overdraft to zero and required the repayment of the amount then outstanding under the Overdraft. It is also true that the right to sue for the unpaid money existed under cl 27.2(a) of the mortgage. However, NAB did not seek to enforce those rights. In fact, the 26 October 2011 cancellation notice specifically left open the question of whether NAB would "pursue action for recovery for any balance indebtedness and enforce any securities". 4. As the 26 October 2011 cancellation notice only pertained to the Overdraft, and did not relate to the First Business Options Loan and the Second Business Options Loan, it cannot be used to impugn NAB's action with respect to those loans.

Was the 26 October Cancellation, in any event, void?

1. As I have found that the 26 October 2011 cancellation notice was not enforcement action for the purpose of the FDM Act, it is strictly unnecessary for me to determine the effect of s 6 of the FDM Act.
2. However, I shall briefly address the submission made by NAB that, if the 26 October 2011 cancellation notice constituted enforcement action for the purposes of the FDM Act, the notice would be void, the effect of which would be that it could not "now infect the legal proceedings that have been commenced by NAB".
3. I would accept NAB's submission that if the 26 October 2011 cancellation notice constituted enforcement action, that notice would be void pursuant to s 6 of the FDM Act. Section 6 of the FDM Act states, "Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void". If assumed to be enforcement action, the 26 October 2011 cancellation notice was not otherwise in compliance with the FDM Act as it occurred prior to the mediation.
4. I also accept that the effect of the notice being void pursuant to s 6 would be that the notice would not affect any subsequent enforcement undertaken by NAB in accordance with the FDM Act, including the bringing of the subject proceedings for the following reasons: 1. The word "void" is not defined in the FDM Act, but it usually means "legally non-existent" or "of no legal effect" (see for example, Australian Law Dictionary (Oxford University Press, 2nd ed, 2013) and Encyclopaedic Australian Legal Dictionary (LexisNexis, online edition)). 2. Typically, the term "void" is distinguished from "voidable", which means that something is capable of being set aside, by some further action of a party or by order of a Court.
5. NAB made a further submission that, if the 26 October 2011 cancellation notice was void, the 2014 cancellation notice was, in any event, valid, as the Overdraft remained in default at the time of the issuance of the 2014 cancellation notice which occurred in accordance with the FDM Act after the mediation, and after the RAA had issued the s 11 certificate in accordance with the FDM Act.
6. NAB relied on the following evidence to substantiate that the Overdraft remained in default and was so at the time of the issuance of the 2014 cancellation notice: 1. the terms of the Overdraft included terms that Ms Charlton must keep the Overdraft within the facility limit of $200,000 and immediately repay any amount drawn on the facility in excess of the facility limit; 2. by 26 October 2011, the Overdraft was 128 days overdrawn and had an outstanding balance of $228,860.486; and 3. no payments have been against the Overdraft since 26 October 2011.

NAB's Non-Reliance on the First and Second Default Notices

1. By way of background, at the time of the issuance of the first and second default notices in November 2011 and January 2012, respectively, NAB considered that Ms Charlton was not acting as a "farmer" for the purposes of the FDM Act.
2. However, since late 2013, when the FOS determined that Ms Charlton was a farmer at that time (described at [160] above), NAB proceeded on the basis that Ms Charlton was the "farmer" for the purposes of the FDM Act at that time.
3. Whilst I do not accept that the issuance of the first and second default notice by NAB were justified based on its belief at the time that Ms Charlton was not the farmer for the purposes of the FDM Act, I do accept that NAB withdrew reliance on those notices.
4. The pleadings within the amended statement of claim are consistent with NAB's contention that: 1. NAB pleaded its claim for debt and possession upon the third default notice and the mortgage security the farm debts referred to in that notice. 2. No reliance was placed, in that respect, upon the first and second default notices.
5. Those contentions may be sustained upon the basis of para 17A of the amended statement of claim when read in the light of the immediately preceding paras 14, 15 and 16 (and the heading accompanying those paragraphs). Further, no pleadings were made with respect to the first and second default notices. The pleaded third default notice was issued after the mediation and the s 11 certificate was issued.
6. Thus, in my view, while the first and second default notices were enforcement actions for the purposes of the FDM Act, those notices have no bearing on the matters arising in the 2011 Action Issue.

Contention 2

1. In contention 1, I concluded that the 26 October 2011 cancellation notice was not an enforcement action such as to breach the FDM Act and that the first and second default notices were not relevant to the 2011 Action Issue as they were not relied upon by NAB in these proceedings. It is therefore unnecessary to consider whether the 2011 and 2012 actions were barred by ss 8(1) and 10 of the FDM Act.
2. I similarly find it unnecessary to consider whether the second default notice was invalid pursuant to s 57(5) of the RPA as that notice was not relied upon by NAB.

Contentions 3 and 4

1. Contentions 3 and 4 shall be discussed together as they are, in effect, founded upon the same premise that earlier breaches of the FDM Act can infect later actions which are seemingly valid under the FDM Act.
2. I once again repeat my conclusion that the 26 October 2011 cancellation notice was not an enforcement action and the first and second default notices were not relied upon by NAB and therefore not relevant to the 2011 Action Issue.
3. It is therefore strictly unnecessary for me to consider whether the issuing of the 2014 cancellation notice and the third default notice represented a continuation of that purported enforcement action. Nevertheless, if I were to accept contention 1 of Ms Charlton, contentions 3 and 4 would fail for the following reasons.

Does a breach of the FDM Act prevent future enforcement action?

1. It is true that ss 8 and 10 of the FDM Act entitled Ms Charlton, as the farmer and person owing the farm debt, to have a mediation under the FDM Act prior to enforcement action by NAB.
2. However, on a proper construction of the FDM Act, it does not follow that, if enforcement action is taken in respect of a farm mortgage in contravention of the FDM Act, the creditor can never take enforcement action in respect to that farm mortgage. I accept NAB's submission that such a construction would give rise to a "procedural vortex" whereby the creditor would never enforce its rights under that farm mortgage.
3. That a creditor could never enforce its rights is inconsistent with authority suggesting that the FDM Act does not alter the substantive rights of parties, but rather imposes procedural requirements.
4. In State Bank of NSW v Freeman (Unreported, Supreme Court of New South Wales, Badgery-Parker J, 31 January 1996), Badgery-Parker J aptly stated (at 13-14): The Act does not deal with those rights of the parties, which are clearly substantive rights. What it does it to interpose, between default of a mortgagor and enforcement action by a mortgagee, a barrier which is, however, limited in duration. … It appears to me to be the very clear effect of s.10 and s.11, that they deal not at all with substantive rights but only impose procedural requirements.
5. A construction of the FDM Act where a creditor could never enforce its rights is also inconsistent on a reading of the FDM Act itself.
6. Section 10(2) of the FDM Act provides that enforcement action is only postponed to allow for mediation to occur; any statutory enforcement notice or other process given, served or executed is not invalidated.
7. Additionally, as mentioned above (at [414]-[416]), s 6 of the FDM Act may render enforcement action void and unable to infect later proceedings in accordance with the FDM Act.
8. On the basis of the proper construction of the FDM Act, I reject Ms Charlton's submission in contention 3 that an earlier breach of the FDM Act cannot be cured by later valid acts. I therefore also reject Ms Charlton's submission in contention 4 that the issuance of the s 11 certificate was invalid. The issuance of the 2014 cancellation notice and the third default notice were not a continuation of the enforcement action engaged in by NAB in 2011.

Did the commencement of these proceedings constitute enforcement action which was linked to the initial purported enforcement actions?

1. Ms Charlton relied on Kiriwina and Roxo to support her proposition that a notice issued under s 57(2)(b) of the RPA (such notice was contained within the first default notice) can be inextricably interlinked to the commencement of proceedings and can therefore constitute a single enforcement action.
2. I accept NAB's submission that Kiriwina and Roxo concerned facts which are far removed from the present case.
3. In Kiriwina, s 57(2)(b) notices were issued and the property sold by the mortgagee, following which proceedings were commenced against one of the mortgagors for the shortfall. Harrison AsJ rejected an argument that the filing of the statement of claim for recovery of debt was a distinct "enforcement action" from the taking of possession such that it was not necessary for there to be a farm debt mediation, holding (at [131]) that the issuing of default notices and the subsequent proceedings brought for a shortfall following sale should be viewed as a single, inextricably interlinked process founded on the mortgagor's personal covenant to pay under the mortgage. Her Honour held that "the current proceedings arise from the reliance upon rights arising from [the] mortgage which are inextricably linked to the issue of the s 57(2)(b) notices". In these proceedings, the third default notice was not issued, and the proceeding was not commenced, until after a farm debt mediation had taken place under the FDM Act.
4. The differences between the circumstances in Roxo and the subject case can be summarised as follows: 1. In Roxo, the defendant had granted a mortgage to the plaintiff. Some 6 years later, the plaintiff served a s 57(2)(b) notice on the defendant. The defendant thereafter served a notice pursuant to s 9(1A) of the FDM Act. 2. A mediation was undertaken but, as the RAA later found, not one that was conducted in accordance with the FDM Act. After that mediation, the plaintiff lodged an application for a s 11 certificate and commenced proceedings filed by statement of claim seeking, inter alia, possession. Thereafter, the RAA advised the parties that it would not grant a s 11 certificate because of the deficiency in the mediation. Nonetheless, the plaintiff, after that advice, obtained a default judgment and shortly thereafter a writ of possession was issued. 3. The defendant sought a stay of the possession proceedings. The plaintiff then sought an adjournment of that application on two bases, one of which was that another s 11 certificate was sought and, if granted, any defects in the proceedings occasioned by non-compliance with the FDM Act would be cured because the s 11 certificate operated retrospectively (the judgment referred to the defendant making the submission whereas it would be appropriate to be a reference to the plaintiff). 4. It is true that at [31] of the judgment, Adamson J was of the opinion that, having made findings that the defendant was a "farmer" for the purposes of the FDM Act, the FDM Act applied to the enforcement action by the plaintiff in the proceeding, and that the plaintiff was prohibited from giving a s 57(2)(b) notice to the defendant unless and until it had obtained a s 11 certificate. However, in contrast to the present proceedings, as noted from the prior recitation of the circumstances of the matter, no s 11 certificate had been issued by the RAA whatsoever. The default notice which was prohibited was a default notice given prior to the application for a s 11 certificate (or any determination as to the same). 5. Thus, at [32], Adamson J found that she did not accept that a s 11 certificate (if issued) could retrospectively validate proceedings that were otherwise a nullity under s 6, namely, the default notice issued earlier in time. Thus, it was said that the clear words would be required in the FDM Act to resuscitate a s 57(2)(b) notice which was void because it was issued in breach of the FDM Act. The counterpart of that notice in the present case are the first and second default notices upon which NAB places no reliance. The discussion by Adamson J at [34], as to the operation of s 11(4), does not seem to take the discussion any further.

NAB's withdrawal of the first default notice

1. Ms Charlton's contention that NAB did not withdraw the first default notice cannot be accepted. A letter from Ms Fiona Worboys, Agribusiness Manager, to Ms Charlton dated 7 April 2014 stated: NAB has previously advised you that it does not seek to rely on any notices issued prior to the Farm Debt Mediation notice issued in February 2014. That position remains unchanged.
2. That communication made it abundantly clear that NAB had withdrawn the first default notice and that Ms Charlton was aware of NAB's withdrawal of reliance.

The Charging of Interest to the Overdraft

1. I do not accept that because NAB's right to charge interest arose under both the First Business Letter of Offer and the Mortgage, the charging of interest to the Overdraft constituted enforcement action. The right to charge interest under the First Business Letter of Offer and the right to charge interest under the Mortgage were rights arising from separate instruments and are plainly distinct.
2. Thus, for the reasons expressed at [405]-[411] above, the charging of interest to the Overdraft under the First Business Letter of Offer was not enforcement action.

Contention 5

1. I do not consider that the definition of "enforcement action" under s 4(1) of the FDM Act carries the effect that, once a statutory enforcement notice is given, it cannot subsequently be withdrawn. I have formed this conclusion on the basis of the "procedural vortex" analysis discussed at [431]-[438] above whereby a creditor would never be able to enforce its rights under a farm mortgage if a statutory enforcement notice was issued in breach of the FDM Act. As above, I do not consider that a proper construction of the FDM Act would support that outcome.

Contention 6

1. I reject the submission of Ms Charlton that the 26 October 2011 cancellation notice and the first default notice were not provided to Ms Charlton as "guarantor". Ms Charlton in her personal capacity and Ms Charlton as guarantor are not distinct for similar reasons to those expressed at [365] to [366]. In any event, Ms Charlton accepted that she received both notices.

Contention 7

1. I accept NAB's submission that the FDM Act did not preclude NAB from issuing a s 8 notice which concerned the same debt that was the subject of an earlier default notice (this conclusion assumes that earlier default notices had been relied upon, which as I have found above, is a conclusion which cannot be sustained).

Contention 8

1. As I have rejected Ms Charlton's submissions in relation to contentions 1-7, I do not consider that Ms Charlton's judicial review arguments within the 2011 Action Issue have sufficient prospects of success to warrant the exercise of the Court's discretion to extend time to being proceedings (see [324]-[326] above). I have taken that into account when forming my conclusion at [327] above that time should not be extended for Ms Charlton to bring the judicial review proceedings.

ISSUE 3: MISREPRESENTATION ISSUE

1. The counterpart issue raised by Ms Charlton was issue 5, namely, "whether National Australia Bank engaged in conduct which was misleading and deceptive in relation to representations about future dealings with Mr O'Brien Trustee of Phoenix Trust from 22 August 2011 onwards in breach of the ACL, following Ms Charlton's resignation as Trustee 20th August 2011". This issue formed the basis of the cross-claim proceedings.

Ms Charlton's Submissions

1. The central contention of Ms Charlton was that NAB's conduct constituted unconscionable conduct or misleading or deceptive conduct in contravention of various statutory prohibitions. Ms Charlton's key arguments can be summarised as follows: 1. Mr O'Brien was at all relevant times, a trustee of the Trust. 2. NAB knew that Mr O'Brien was trustee of the Trust at the time the Overdraft was originally obtained in 2005. Ms Charlton pointed to the following evidence in that respect: 1. Ms Charlton had told Mr Underwood that Mr O'Brien was a co-trustee whilst they drove around at the farm just prior to the establishment of the Mortgage. 2. NAB must have known that there was an additional trustee as Mr Gavin O'Brien was named on the "trustee company confirmation account styling" as a trustee (thus Ms Charlton was not the sole trustee). 3. Mr Chris Eyles had sent communications on the subject of the interest rates applicable to the loan facilities on 11 August and 2 September 2011 which addressed to Ms Charlton, but which stated "DEAR MR KM O'BRIEN". 4. Mr O'Brien also pointed to evidence bearing upon NAB's knowledge that Mr O'Brien was a trustee, as follows: 1. NAB were provided with the Deed with all attachments, appointments and resignations. This was required by NAB Legal to conduct a review of the Deed. 2. The result of the review was faxed to Mr Underwood, NAB Agribusiness Manager Forbes, on 19th August 2005 approximately 2 years before draw down on the loan accounts. The letters of offer identified Ms Charlton as trustee of the Trust. 3. Mr O'Brien's appointment was prominent with the attached documents to Debbie Cram, Senior Legal and Securities NAB, as he was the first trustee appointed to the Trust after the originating trustee, Gavin Michael O'Brien, became trustee at Settlement. NAB was well aware of these facts and "even charged a substantial read fee". 1. In August 2011, NAB represented that it would continue the Trust's financial facilities beyond the date of the expiration of the loan for $110,000 on 31 August 2011. Further, NAB failed to inform Ms Charlton and Mr O'Brien that it would not continue the Trust's financial facilities. 1. As mentioned at [131] of this judgment, Mr Thomas communicated on 5 September that NAB's legal department was "Ok going forward with Kevin as Trustee". Ms Charlton submitted that this statement was misleading as Mr Thomas was not in a position to provide the statement as it was subject to "credits approval". It was contended that he did not hold reasonable grounds at that point to make that future representation as he did not hold all the information required as this involved "cash-flow's, assessment on the ground at [the] farm and was subject to credit department approval". 1. In reliance upon NAB's conduct, Ms Charlton and Mr O'Brien did not seek to refinance the debt prior to its expiry on 31 August 2011 or prior to 20 October 2011 when NAB informed Ms Charlton that enforcement action would be taken. Further, after 20 October 2011, Ms Charlton and Mr O'Brien were unable to refinance the Trust's debt to NAB with another financial institution or to service the interest obligations. 2. Ms Charlton submitted that the bank had improperly departed from her, the primary customer, by holding the meeting of 22 August 2011, mentioned at [101] of this judgment, without her, and that going forward with another party created a state of confusion. Due to the confusion, Ms Charlton and her family did not act and in those circumstances, the bank essentially acted prematurely in withdrawing the funds. 3. Ms Charlton and Mr O'Brien have suffered loss and damage.

NAB Submissions

1. NAB made the following six contentions as to this issue: 1. Mr O'Brien was not a trustee of the Trust at all relevant times. He was not a trustee at 7 October 2002. By 31 August 2011, Mr O'Brien had disclaimed his position as trustee by virtue of his inaction since his alleged appointment on 1 June 1997. 2. Assuming that Mr O'Brien was a trustee, NAB was not aware of that fact until notified on 31 August 2011. 3. NAB did not engage in misleading or deceptive conduct or unconscionable conduct. The relevant facilities were not expiring on 31 August 2011. Further, any representation that the facilities would be extended beyond that date was clearly subject to NAB undertaking due diligence. Mr O'Brien was aware of that process. NAB did not fail to inform Ms Charlton and Mr O'Brien that it would not continue the Trust's financial facilities. In fact, NAB made every effort to communicate with Ms Charlton and her family that potential outcome. 4. There was no evidence that Ms Charlton and Mr O'Brien would have been able to refinance the facilities with another financial institution. 5. Similar to contention 3 of NAB, NAB attempted to assist Ms Charlton throughout the whole process, not to create confusion. 6. The evidence pertaining to loss was limited to Ms Charlton's proposed pig enterprise, which Ms Charlton accepted would not have been pursued on behalf of the Trust if the facilities continued. (The six contentions of NAB, for the purposes of the Misrepresentation Issue, shall be referred to by their respective numbered designations, namely, "contention 1" through to "contention 6").

Contention 1

1. It is strictly unnecessary for me to determine whether Mr O'Brien was a trustee of the Trust at all relevant times, as I will conclude below that NAB was not aware that Mr O'Brien was trustee and that no misleading representation was made. Nevertheless, the following observations may be made.

Was Mr O'Brien a trustee of the Trust as at 7 October 2002?

1. I would accept NAB's submissions that there are some inconsistencies in Ms Charlton's case in that respect.
2. First, the evidence that Mr O'Brien was "invited" to the meeting (referred to at [24] of this judgment).
3. Secondly, as to the decision made at the meeting on 7 October 2002, that the trustee of the Trust would enter a contract for sale for the purchase of the property and enter mortgages thereof (see [26] of this judgment), a solicitor only recorded these decisions as being implemented by a sole trustee.
4. Thirdly, as found at [44] of this judgment, the evidence does not support a conclusion that the loan with Stacks was taken out by both Ms Charlton and Mr O'Brien; Ms Charlton was recorded on the Stacks mortgage as the sole borrower and mortgagor.

By 31 August 2011, had Mr O'Brien disclaimed his position as trustee of the Trust?

1. The evidence did not explain why Mr O'Brien had done nothing between 1 June 1997 (his alleged appointment) and the end of August 2011 (the first date that NAB was informed that Mr O'Brien was trustee).
2. Mr O'Brien submitted that, in 2001, he "moved [the] Phoenix Trust herd from the Lachlan River system to the Bogan stock route and stayed there for approximately eight months - virtually no mobile reception there. I was just not available to do other things with the business of the Trust or purchasing a property or whatever". However, that contention was only raised in closing submissions and was not supported by evidence. Mr O'Brien also submitted that he "was able to be present at the meeting of the Phoenix Trust on Monday October 7, 2002". However, as found at [25] above, he attended by invitation only. As discussed at [456]-[459] below, the fact that he was invited seems inconsistent with him acting as trustee of the Trust at that time.
3. On this basis there seems to be some argument that Mr O'Brien disclaimed his position as trustee if he indeed held that position. However, it is unnecessary to decide that point.

Contention 2

1. As to whether NAB knew that Mr O'Brien was trustee of the Trust from the time at which the Overdraft was originally obtained in 2005, NAB was correct to submit that the cross-claim was not pleaded in that way. Nevertheless, for reasons previously expressed above (at [213]), I will give latitude to Ms Charlton and Mr O'Brien to pursue this issue.
2. As I have found, the evidence does not support a conclusion that NAB was aware until 31 August 2011 that Mr O'Brien was a trustee of the Trust.
3. As earlier discussed (at [110]-[118]), Mr Thomas considered that NAB had not, before 31 August 2011, been provided with any paperwork suggesting that Mr O'Brien was a trustee. Communications sent by Mr Thomas in 2014 stated, for example, that NAB did not previously have the letter showing Mr O'Brien having been appointed as a trustee. A file note made by Mr Thomas on 2 September 2011 indicated the same. Mr O'Brien did not dispute this.
4. I do not accept Ms Charlton's contention that she had told Mr Underwood that Mr O'Brien was a co-trustee whilst they drove around at the farm. That evidence emerged for the first time in cross-examination, was not supported by documentary evidence and was, in my view, not convincing.
5. In relation to Mr Gavin O'Brien being named as a trustee on the "trustee company confirmation account styling", I accept NAB's submission that there was no evidence within that document, or otherwise, to suggest the appointment of Mr O'Brien as co-trustee a few years earlier.
6. No evidence supported the contention that NAB was provided with the Deed with all attachments, appointments and resignations.
7. Further, although Mr O'Brien asserted that his appointment as trustee of the Trust was "prominent with the attached documents to Debbie Cram Senior Legal and Securities NAB", no evidence supported that claim.
8. The existence of a substantial "read fee" cannot prove that such documents existed or that NAB was aware of those documents. In any event, the fee on the Trustee Company Confirmation was not referred to as a "read fee" and the amount of $350 does not seem substantial.
9. The significance of the letters of offer identifying Ms Charlton as trustee of the Trust was not properly explained. I do not see how that evidence bears upon NAB's awareness of Mr O'Brien being trustee of the Trust.

Contention 3

1. NAB did not engage in misleading or deceptive conduct or unconscionable conduct for the following reasons.
2. First, I accept NAB's submission that the facilities, in particular, the First Business Options Loan, were not to expire on 31 August 2011.
3. It is true that the fixed interest period for both the First Business Options Loan and the Second Business Options Loan were to expire on 31 August 2011. However, the facilities themselves were not due to expire until 31 August 2012 and 31 August 2017, respectively.
4. Secondly, the evidence does not support a conclusion that representations were made by NAB to the effect that it would continue the Trust's financial facilities beyond the date of the expiration of the loan for $110,000 on 31 August 2011.
5. Ms Charlton and Mr O'Brien's reliance on one part of the email of 5 September 2011 from Mr Thomas stating that the legal department had come back and had informed him that they were "OK going forward" with Mr O'Brien as trustee of the Trust, was not a true reflection of the conduct as a whole.
6. In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60, the High Court emphasised the need for the conduct as a whole to be taken into account for the purposes of a claim for misleading or deceptive conduct. Gleeson CJ, Hayne And Heydon JJ stated (at [39]): [39] In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account. It is also important to remember that the relevant question must not be reduced to a crude inquiry: "Did the agent realise the purchasers were relying on the diagram?" To do that would be impermissibly to dilute the strict liability which s 52 imposes.
7. It is true that Mr Thomas' evidence was that he was willing to consider an application to refinance the facilities, on the basis that the property would be transferred into Mr O'Brien's name (as the replacement trustee). However, it was made clear that any transfer of the facilities to Mr O'Brien was contingent upon credit approval; Mr O'Brien would have to satisfy NAB of the financial position of the farming business. It was clear from the second paragraph of the 5 September 2011 email from Mr Thomas that part of that process was to undertake a farm visit so that he could be assured of "numbers, assets etc & confirm the cash flow". Despite his efforts, Mr Thomas was never able to visit the farm to verify the information provided to him.

Contention 4

1. There was no evidence that Ms Charlton and Mr O'Brien would have been able to refinance the facilities with another financial institution.

Contention 5

1. As to Ms Charlton's submission that NAB departed from her, the primary customer, causing a confusing situation, the following observations can be made.
2. The statement of position and the cash flow budgets obtained at the meeting on 22 August 2011 were in the context of NAB undertaking due diligence, namely, the credit approval (referred to at [480]-[481] above).
3. The evidence of Mr Thomas in cross-examination was that the meeting, held in the context of that due diligence, was for NAB to attempt to assist, not to create confusion. The following evidence was given: Q. So you were happy that if you had - given that you knew that I had resigned on 20 August 2011, you were happy then to approach the rest of the members in the family on 22 August to go through finance arrangements with them and as per your affidavit that meeting that involved Kevin O'Brien as the trustee of Phoenix Trust, the - my brother Justin O'Brien and his wife Kate, and my mother Wendy. They were - so given that you knew that I had resigned and you were sitting there at a meeting on 22 August, did it concern you that perhaps discussing going forward with another party that wasn't a party to the contract may create a situation of confusion? A. As I said all I was doing was trying to help. I didn't realise your dad was a trustee. Q. Yeah? A. But I did know your dad and your brother were running the farm and all I was trying to do was help.
4. I accept Mr Thomas's evidence in that respect, especially having regard to his efforts to communicate with the family in order to assist and clarify the situation which are described at [67]-[91] above. In accepting Mr Thomas' evidence, I also accept NAB's submission that it did not cause a confusing situation.

Contention 6

1. The evidence pertaining to loss was limited to Ms Charlton's proposed pig enterprise. However, Ms Charlton accepted that this was the enterprise that she intended to pursue herself; it was not something that would have been pursued on behalf of the Trust if NAB's facilities had been extended. In any event, the evidence in relation to Ms Charlton's pig enterprise did not rise higher than a mere assertion.

ISSUE 4: RIGHT OF INDEMNITY ISSUE

1. The counterpart issue raised by Ms Charlton was issue 1, namely, "whether [NAB] was reckless not to have disclosed the findings of its own legal department prior to the draw down and execution of contracts with Ms Charlton who acted then as trustee of [the Trust]".
2. A number of Ms Charlton's submissions, in this respect, traverse contentions made by her in other contexts. For completeness, the summary below will capture most, but not all, of those contentions, avoiding repetition where it is unnecessary. Some issues raised by Ms Charlton in this context have been resolved earlier in this judgment. Ms Charlton's submissions, in summary, were as follows: 1. The issue concerned the confirmation (of 19 August 2005) discussed at [39]-[41] above. 2. The advice concerned the Trust and the Deed relating to the Trust. Ms Charlton never obtained a loan with respect the property "for herself". She is not liable to pay the loans. The property was purchased by her as trustee. All moneys and property were held or "vested" in a trust fund. The assets were held by the Trust until distribution to the beneficiaries. The property was never distributed to Ms Charlton as a beneficiary. 3. After Ms Charlton's resignation as trustee Mr O'Brien was the remaining trustee and held "full vesting rights" or the property vested in him as trustee or was "possessed of the capital of the trust fund". The Deed by its terms vested the property in Mr O'Brien. Ms Charlton suggested that the fact that the Registrar General allowed Mr O'Brien to put the caveat on the title under s 74F of the RPA was also evidence of Mr O'Brien's vesting rights under the Trust. 4. The Deed stated that every trustee was fully indemnified out of the Trust. 5. The confirmation referred to in (1) reveals that NAB knew there was another trustee. 6. The suggested amendment under "Attachment 11" to the confirmation was "never advised or done". The document was concealed from Ms Charlton and the Trust. The customer was never afforded that expert advice. The contracts and the Trust were totally incompatible and, to the extent of that conflict, the Deed prevails. 7. The "financial accommodation" from NAB was "for the purpose of the conduct of a farming operation". Primary production was the source of business income. 8. Mr Underwood, who was mentioned in the confirmation, visited the property just prior to establishing the mortgage. In the years that followed the loan "exceptional circumstance interest rate subsidies were approved in drought circumstances" where NAB was the lender. Nonetheless at the time of the "farm debt dispute", NAB challenged that Ms Charlton was a farmer. 9. A farm debt mediation under the FDM Act should have been afforded to Ms Charlton in 2011 "because the obligations of the creditor [were] not confined to just 'debtor' but extended to the defendant as 'guarantor' regardless of resignation status". 10. It was disputed that Mr O'Brien took no action as trustee between 1 June 1997 and 30 August 2011. Reliance was placed upon the letter by Mr Chris Eyles of 11 August 2011, the meeting between Mr O'Brien and Mr Thomas on 22 August 2011 and the registration of an Australia Business Number. 11. NAB gained interest payments for many years after 2011, notwithstanding NAB did not afford a mediation in 2011 as it should have. That the FOS investigation was underway was not an excuse. This only prohibited NAB from an enforcement action. The obligation imported by s 8(1) is on a creditor in respect of a farm debt for the purpose of the FDM Act. The FOS was incorrect at para 15 of its recommendations as NAB did not have a s 11 certificate at the time of its determination. 12. The RAA did not take into account the change in position of the parties as the summary of mediation "in regard to the farmer debtor and the 2011 conduct which involved cancellation of overdraft 25 October 2011 and 16 November 2011 s 57(2)(b) enforcement action notice". By 14 August 2014 "elections to sever relations with NAB had already been made" and there was no change in the position of the parties. Ms Charlton lacked a capacity to settle.

ISSUE 5: DEFAULT NOTICE ISSUE

1. Ms Charlton's list of issues did not contain a counterpart issue.
2. This issue may be dealt with shortly given my earlier rejection of Ms Charlton's submissions that the third default notice was not served upon her in accordance with the requirements of s 170 of the Conveyancing Act. In short, service was properly undertaken in accordance with that Act.
3. It should be noted that, as service was properly undertaken, Ms Charlton's submission that NAB failed to allow the lapse of time required by cl 29.2(a) of the Mortgage and s 57(2)(b) of the RPA by failing to serve the third default notice must also fail.
4. While unnecessary to decide, the NAB rejoinder to any contention that the third default notice was invalid because of improper or ineffective service must, in my view, be accepted.
5. Ms Charlton contended: No Section 57(2)(b) notice under Real Property Act 1900 was served on the Defendant Ms Charlton following the issuance of the s 11 certificate by the RAA on 29 August 2014 and the 17th October 2014 Cancellation Notice for the Overdraft ending last four digits 1525. The Plaintiff has failed to provide evidence to support the actual service of a s 57(2)(b) notice under the Real Property Act 1900 to the Defendant Ms Charlton, following the s 11 Certificate dated 29 August 2014 which the defendant also states has issued ultra-vires. As such the Plaintiff has also failed yet again to allow the lapse of time permitted pursuant to 29.2(a) of the Mortgage Memorandum, being the time permitted by the Real Property Act 1900 under s 57(2)(b). This notice is a condition precedent to the commencement of proceedings for the judgement for debt and possession of land the relief sought by the Plaintiff in these proceedings.
6. Ms Charlton also submitted: The s 57(2)(b) notice on which the plaintiff relies cannot be relied upon as it was not served on the Defendant and they have failed to prove they did, the onus is on them as mortgagee to do so. The Defendant, has maintained throughout the entire matter that the 27 October 2014 s 57(2)(b) notice under the Real Property Act was not served on her. Failure to serve a statutory notice under s 57(2)(b) of the Real Property Act 1900 means the Mortgagee cannot invoke any acceleration clause in the mortgage and therefore are unable to exercise a power of sale at any later date.

ISSUE 6: SECTION 38 TRUSTEE ACT ISSUE

1. This issue appears to relate to issue 25 of the issues identified by Ms Charlton and Mr O'Brien in the following terms: 25. Whether there are exceptions in relation to the indefeasibility of "Oriel's" title, due to the existence of the discretionary trust and the terms of the Phoenix Trust Deed whereby neither the Trustee nor the beneficiary can own any part of the capital of the Trust and given Section 38 of the Trustee Act 1925 being expressly excluded from the Trusts Deed removing any registered title holder being for the time being possessed in respect of any mortgage charge and in particular as the property has not been distributed out of the capital of the Trust Fund.
2. The axis of this submission appears to be cl 7 of the Deed.
3. Clause 7 of the Deed is in the following terms: 7. The provisions of Sections 37 and 38 of the Trustee Act shall not apply to the provisions of this Trust and the same are hereby expressly excluded and save as may be hereinafter contained any power of accumulation given by that Act or by any Act of the Commonwealth of Australia or of any ordinance of a Territory of the Commonwealth of Australia or of any Act of a State thereof is hereby negatived.
4. Reference must also be made to cll 12, 13 (b)-(c), (o) and (z). Those clauses are extracted below: 12. All moneys available for investment may be invested in any one or more of the following investments in the Commonwealth of Australia or in any part of the world that is to say in the purchase of any real or personal property or interest of any nature whatsoever therein or in any of the Public funds or Government securities of any Government or in the purchase of or loan upon mortgage over any freehold or leasehold lands in any of the Australian States or Territories or elsewhere or shares whether fully paid up or otherwise or stock debentures secured or unsecured notes or rights to new issues of shares in any corporation whether public or private carrying on business in the Commonwealth of Australia or elsewhere or upon deposit for a fixed term or otherwise with any corporation or institution carrying on a business in the Commonwealth of Australia or elsewhere with liberty to vary or transpose any such investments from time to time. … 13. Notwithstanding the trust powers and provisions hereinbefore contained the Trustee shall have the following absolute powers and discretions in addition to the cowers vested in it by law: … (b) To purchase and or to sell real property or any interest Therein and generally to traffic in real property or any interest therein including the taking and granting of leases or licences over such property in such manner as the Trustee shall deem fit and so long as any real property or interest in real property shall form part of the Trust Fund at the discretion of the Trustee to manage use or let the same or any part or parts thereof to receive stock on agistment to erect pull down rebuild and repair buildings and erections to carry out improvements of any nature to purchase such stock plant equipment and fittings as the Trustee considers necessary having regard to the purposes for which the real property is from time to time being used to make allowances to any arrangements with tenants to grant or acquire easements or other rights and generally to deal with such property or interest or join in dealing with the same as if it was absolute owner beneficially entitled thereto without being responsible for loss and without any of the restrictions imposed by law on Trustees. (c) To raise or concur in raising any money which the Trustee shall think expedient for any purpose in relation to the execution of the Trusts and powers conferred on the Trustee by this settlement including the purchase of property and the payment of calls on shares or generally for the benefit of the beneficiary by mortgaging or charging with or without a power of sale all or any part of the Trust Fund or the assets from time to time representing the same or without security and with or without interest and any such mortgage may be an overdraft or contributory one and may also be a joint mortgage with other persons or a guarantee mortgage and whether in any case whatsoever the liability arising out of such borrowing is joint or several and no lender shall be concerned to enquire into the necessity for any such borrowing or the application of the money borrowed. … (o) To contract with and/or sell or grant options to purchase any part of the Trust Fund to or to purchase real or personal property from or to borrow money from or to enter into any sharefarming or agistment agreements leases or tenancies or partnerships with the trustee in its own capacity or any or either of the Trustees if more than one in its personal capacity either alone or in conjunction with another or others notwithstanding that if it may be a Trustee hereof and any partnership agreement may provide for reasonable remuneration of partners including the Trustees or one or more of them. … (z) To encumber all or any part of the assets of the trust by way of charge, mortgage or otherwise for the purpose of giving third party security to any person body or organisation for any reason whatsoever in order to secure a loan to the Trustee or Trustees for the tame being hereof any one or more of the beneficiaries for the time being hereof or any other person whether he or they be associated with this trust or otherwise or any company organisation corporation or other entity.

ISSUE 7: JOINT TRUSTEE ISSUE

1. There appears to be five issues raised by Ms Charlton and Mr O'Brien which concern or relate to the Joint Trustee Issue. Those issues are 2, 4, 6, 19 and 20, which were in the following terms: 2. Whether National Australia Bank should have raised the issue of Ms Charlton being an additional Trustee with her and then included Mr O'Brien as Trustee of Phoenix Trust as the Co-Trustee in the execution of the contracts and subsequent mortgage. … 4. Whether the loan contracts and mortgage were correctly executed with the requisite authority in relation to Phoenix Trust given the that Trustees are required to act jointly when more than one exists to effectuate legal dealings as described in the Trustee Act 1925 and Phoenix Trust Deed Clause 13t). … 6. Whether the National Australia Bank was aware of the missing legal authority in respect of its dealings with the Phoenix Trust. … 19. Whether NAB was entitled to use the contract against Ms Charlton as being legally binding and enforceable without Phoenix Trust co-trustee's Mr O'Brien authorisation, such as Mr O'Brien being required to be a named party to the contract for contract to have legal effect, then proceed to obtain a Section 11 Certificate without the participation of Mr O'Brien the Trustee of Phoenix Trust in the purported 1st Mediation. 20. Whether NAB is entitled to use a contract which lacks requisite authority, to seek judgement for a debt where there is no default, by the Trustee of Phoenix Trust, the continuing trustee who is not a contracting party, and the beneficiary of the Phoenix Trust who resigned as a Trustee according to the rights given under Phoenix Trust Deed prior to NAB commencing legal action.
2. Further, Ms Charlton did not agree with the statement of issue by NAB, which she described as "misleading and deceptive".
3. The development of Ms Charlton's critique of the issue exposes the nature of the contentions advanced by her. Those submissions were as follows: 1. The "loans" were offered to the Trust by letter of offer. 2. Clause 13(t) of the Deed requires the trustee to act "jointly". NAB knew there was more than one trustee but offered "the loans only to Ms Charlton at the time a trustee". 3. Ms Charlton had "absolute unfettered discretionary powers confined on the Trustee" so long as it was for the benefit of the beneficiaries. 4. Mr O'Brien was a trustee jointly with Ms Charlton until she resigned. Mr O'Brien remained a trustee with "sole vesting rights" to manage and operate the Trust. 5. Ms Charlton cannot deliver up possession and is not liable to repay the loans "she never received personally". 6. NAB refused to change the Certificate of Title from Ms Charlton (recorded as Ms O'Brien), notwithstanding her resignation as trustee. This is "unconscionable" and damaging to all parties.

ISSUE 8: FURTHER MEDIATION ISSUE

1. This issue appears to concern or relate to issues 14 and 15 of the issues presented by Ms Charlton and Mr O'Brien, now extracted: 14. Whether the second purported mediation while proceedings on foot in matter 2015/27843 which included different parties can serve to validate the existing Section 11 Certificate. 15. Whether the undetermined second mediation whether for the sake of conformity the named registered proprietor entitles NAB to enforce or seek possession without proper legal proprietorship.
2. The issue concerns a mediation ordered by Schmidt J in those proceedings. Ms Charlton contended that the orders required Mr O'Brien to participate, notwithstanding that "he did not appear on the loan contracts" and he did not participate in the mediation held 17 July 2014. It was said the further mediation was ordered to be "a mediation that satisfied the [FDM Act]".
3. Ms Charlton seemed to contend this mediation was not in accordance with the FDM Act because the mediation occurred in circumstances where enforcement action remained on foot, including the very proceedings before Schmidt J. No s 11 certificate was applied for by NAB although it was submitted that no s 11 certificate could ever be validly issued by this further mediation because it would be a retrospective "issuance of a s 11 certificate" to serve the purpose of validating proceedings.
4. I agree with the submission of NAB that it is difficult to understand the purport of that submission on the issues raised.
5. It is not entirely clear that Ms Charlton did contend that the mediation affected NAB's ability to enforce the loan agreement and the Mortgage or that the mediation could not overcome defects arising with respect to the earlier mediation. Schmidt J ordered the following with respect to the mediation: DIRECTIONS MADE: Parties take the necessary steps to arrange a mediation which satisfies the requirements of the Farm Debt Mediation Act and that mediation occur on or before 30 October 2015. In the event that the mediation is unsuccessful, the parties have liberty to approach the Listings Manager for a hearing date with an estimate of 1 day.
6. It is sufficient to find, in the disposition of this issue, that the mediation ordered by Schmidt J does not prevent NAB relying upon the extant s 11 certificate, provided that it is (as discussed with respect to earlier issues) valid.

ISSUE 9: DEED OF RELEASE ISSUE

1. NAB contended that the issue raised by Ms Charlton was that the provision of a draft Deed of Release by NAB's solicitors to Ms Charlton's then solicitors, in the context of this litigation, affects NAB's ability to enforce the loans agreements and the Mortgage in these proceedings.
2. Ms Charlton disagreed and contended the significance of the draft Deed of Release reflected the conduct of NAB in the proceedings and its attitude to the FDM Act. It was designed to avoid the exposure of the "factual matrix" of the matter and to avoid the operation of law.
3. NAB is entirely correct to submit that the issue does not arise on the pleadings. There is no evidence as to the draft Deed of Release and any role it played in the proceedings. Just how any offer by NAB by deed or otherwise may have affected its ability to enforce loan agreements or the Mortgage was not explained.
4. I reject Ms Charlton's contentions under this issue.

ADDITIONAL ISSUES

1. The additional issues were earlier dealt with under the heading "Issues".

THE CROSS-CLAIM PROCEEDINGS

1. The cross-claim proceedings were ventilated in the context of the Misrepresentation Issue. As I have rejected Ms Charlton's submissions as to the Misrepresentation Issue, the cross-claim proceedings must accordingly fail.

CONCLUSION

1. Having regard to the findings made at [205] and [206] of this judgment, and the resolution of the issues raised by the parties in these proceedings so far as they were properly amenable to resolution (see [207]-[214]), I consider that NAB has discharged its onus of establishing the matters necessary for an entitlement to possession and judgment for debt.
2. For the reasons given above, the cross-claim proceedings should be dismissed.
3. So far as Ms Charlton and Mr O'Brien brought an application to extend time to bring the judicial review proceedings, that application is refused. In any event, the judicial review proceedings would alternatively have been dismissed as a matter of merit.
4. The question of costs has not been the subject of submissions and is reserved.
5. NAB shall bring in short minutes of order reflecting this judgment within 14 days of the publication of the judgment. If there is dispute as to the orders proposed, NAB should file and serve a submission in support of the order within the same period. Ms Charlton and Mr O'Brien should, in the event of a dispute as to whether the proposed orders reflect this judgment, file and serve a submission in reply within a further 14 days.

DIRECTIONS

1. The Court makes the following directions: 1. NAB should file and serve short minutes of order reflecting this judgment within 14 days of its publication together with a submission in support of the orders proposed in the event of any dispute as to the proposed orders. 2. In the event as to any dispute as to the short minutes of order reflecting the terms of this judgment, Ms Charlton and Mr O'Brien shall file and serve submissions as to that issue within 14 days of the receipt of NAB's short minutes of order and submissions in support thereof. 3. The Court will make orders administratively in Chambers upon the receipt of consent short minutes of order or, in the event of any dispute as to the form of the orders, after consideration of the submissions advanced by the parties.

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: 29 October 2019