Caveats - Whether mortgagee bank entitled to exercise power of sale - Estoppel - Waiver - Duty of good faith and fair dealing - Misleading or deceptive conduct - Unjust transactions - Allegations concerning the bank's exercise of its powers of sale - Turns on own facts

Consumer Credit (Western Australia) Code, s 6, s 8, s 70(1), s 70(2), s 80

Transfer of Land Act 1893 (WA), s 138

Ajayi v R T Briscoe (Nigeria) Ltd [1963] 3 All ER 556

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57

Barns v Queensland National Bank Ltd [1906] HCA 26; (1906) 3 CLR 925

Bashford v Bashford [2008] WASC 138

Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618

Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286

Bunbury Foods Pty Ltd v National Bank of Australasia Ltd [1984] HCA 10; (1984) 153 CLR 491

Commonwealth Bank of Australia v Renstel Nominees Pty Ltd [2001] VSC 167

Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305

Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42

Ellison v Alliance Acceptance Ltd (1984) NSW ConvR 55-217

Eng Mee Yong v Letchumanan [1980] AC 331

Equititrust Ltd v Franks [2009] NSWCA 128; (2009) 258 ALR 388

Fletcher v Ould Pty Ltd [2000] WASC 322

Grundt v Great Boulder Pty Ltd [1937] HCA 58; (1937) 59 CLR 641

Harvey v McWatters (1948) 49 SR (NSW) 173

Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 76 FCR 151

Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161

J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546

Linnpark Investments Pty Ltd v Macquarie Property Development Finance Ltd [2002] WASC 272

McCourt v National Australia Bank Ltd (No 2) [2010] WASC 151

McCourt v National Australia Bank Ltd [2010] WASC 121

Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95

Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171

Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234

Super Chem Products Ltd v American Life and General Insurance Co Ltd [2004] UKPC 2; [2004] 2 All ER 358

Tadrous v Tadrous [2009] NSWSC 407

The Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573

Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd [2005] WASCA 106; (2005) 30 WAR 290

1 CORBOY J: This is an application by the plaintiff (the Bank) for the removal of caveats lodged by the first defendant (Mr McCourt) against certificate of title volume 1643 folio 765 (the Elizabeth Crescent property) and certificates of title volume 1593 folio 645 and volume 2044 folio 114 (together, the Joel Crescent property).

2 The Bank also seeks orders that Mr McCourt be prohibited from lodging fresh caveats over the Elizabeth Crescent and Joel Crescent properties until further order of the court and that he pay the Bank's costs of the application on an indemnity basis.

3 The application is made by chamber summons for an urgent hearing. However, the relief sought is in the same terms as the orders claimed in the originating summons by which these proceedings were commenced.

(a) an order should be made directing the second defendant to remove each of the caveats the subject of the application;

(b) no order should be made restraining Mr McCourt from lodging any further caveats against the titles to the Elizabeth Crescent and Joel Crescent properties;

(c) the Bank should be awarded its costs of the application but not on an indemnity basis.

5 Mr McCourt and the fifth defendant (Ms McCourt) are the registered proprietors of the Elizabeth Crescent and Joel Crescent properties. In July 2007, the Bank provided a facility to Mr and Ms McCourt in their own right and as trustees for The McCourt Family Trust and to Redden (WA) Pty Ltd (Redden) as trustee for the Redden Family Trust (together, the Borrowers). The facility was secured by mortgages granted over several properties, including the Joel Crescent and Elizabeth Crescent properties.

6 On 19 December 2008, the Bank gave notice (the Notice) that it had cancelled the facility as a result of the Borrowers' default by failing to repay all monies due and owing on expiry of the facility. The Notice was apparently drawn so as to comply with the provisions of the Consumer Credit (Western Australia) Code (the Code); it specified that the Borrowers had 35 days to pay $10,488,802.63 so as to remedy the default claimed by the Bank (see s 80 of the Code). An issue to be considered in this application is whether the Code applies to the facility agreement and if so, with what effect in the context of the disputes between Mr McCourt and the Bank.

7 The Bank served notices of default under the Transfer of Land Act 1893 (WA) (TLA) contemporaneously with the Notice. The TLA notices referred to the same default as that indentified in the Notice: failure to pay the amount outstanding on expiry of the facility.

8 The amount specified in the Notice was not paid and subsequently, on 29 January 2009 the Bank served further notices of default and demand under the TLA. The notices of default and demand included a demand made under the mortgage granted over the Joel Crescent property (the TLA Notice of Demand); however, there was no demand made under the mortgage granted in respect of the Elizabeth Crescent property. The TLA Notice of Demand did not refer to the expiry of the facility but rather, made demand for payment of an amount secured by the mortgage over the Joel Crescent property and said to be 'currently due and owing'.

9 The Bank has realised its securities by selling various properties, including most recently, four units forming part of the Joel Crescent property (a unit development has been undertaken on the property). The Bank intends to dispose of the Elizabeth Crescent property and the remaining units in the Joel Crescent property. Ms McCourt and the children of Mr and Ms McCourt reside in the Elizabeth Crescent property. In September 2009, the Bank obtained an order for possession of that property.

10 Mr McCourt has endeavoured to prevent the Bank from exercising powers of sale over the properties securing the facility by lodging caveats against the titles to the properties. That has resulted in various applications to this court concerning different properties to the Elizabeth Crescent and Joel Crescent properties. However, those applications were, in substance, similar to this application: McCourt v National Australia Bank Ltd [2010] WASC 121 (McCourt); McCourt v National Australia Bank Ltd [No 2] [2010] WASC 151 (McCourt (No 2)) and McCourt v National Australia Bank Ltd (decision of Kenneth Martin J delivered on 28 June 2010 in CIV 1809 of 2010) (McCourt CIV 1809). Those applications provide important context for this matter.

11 The Bank's summons was first heard on 30 July 2010. Directions were made at the conclusion of the hearing to give Mr McCourt an opportunity to adduce further evidence, if he chose, about his ability to make a payment into court or as to the worth of any undertaking that he might be willing to provide if the court declined to remove the caveats. The possibility that this evidence could be relevant was raised in the context of the balance of convenience in acceding to or refusing the Bank's application.

12 Further evidence was provided and submissions were made about that evidence at a reconvened hearing. Mr McCourt sought leave to provide further submissions following that hearing. Leave was not opposed and further submissions were received from Mr McCourt on 17 August 2010. Those submissions raised for the first time an argument that the Bank owed the Borrowers a duty of good faith and fair dealing in its conduct of the facility.

13 The second to fourth defendants and Ms McCourt did not appear on the hearing of the Bank's chamber summons. The second defendant informed the court by letter that it would abide by any order made by the court. The third and fourth defendants are the purchasers of the units sold in Joel Crescent. Counsel for the Bank advised that the purchasers did not wish to be heard. He also provided a letter from Ms McCourt's solicitors indicating that she would abide by any order made by the court and that she supported the Bank's 'position'.

(a) An affidavit sworn by Kristy Cherie Yeoh on 5 July 2010. The affidavit incorporated as an annexure an affidavit sworn by Christie Teresa Facius on 16 June 2010 and filed and served in McCourt CIV 1809.

(b) Affidavits sworn by Mr McCourt on 29 July and 10 August 2010.

(c) An affidavit sworn by Rodney Charles Carter on 5 August 2010.

15 There was no objection to any part of the evidence led in the affidavits.

16 The following matters concerning the facility provided by the Bank were stated by Ms Facius in her affidavit; they were not disputed by Mr McCourt:

(a) The facility was provided by the Bank to the Borrowers on 27 July 2007.

(b) On 29 January 2008, the Bank increased the limit of the facility to $9,300,000. A fresh 'facility agreement details' document (the Facility Details) was issued by the Bank on that date and a facility letter bearing the same date was sent to the Borrowers (attachment 'CTFA' to Ms Facius' affidavit).

(c) The facility (and a home loan provided to Mr and Ms McCourt as trustees for The McCourt Family Trust) was secured by:

(i) a registered mortgage granted by Mr and Ms McCourt over property located at 1 Agett Road, Claremont (the Agett Road property);

(ii) separate registered mortgages granted by Mr and Ms McCourt over properties located at 23A and 23B Leon Road, Dalkeith (the Leon Road properties);

(iii) a registered mortgage granted by Ms McCourt over property located at Lot 1002 Butterfly Road, Yallingup (the Yallingup property);

(iv) a registered mortgage granted by Mr and Ms McCourt over the Joel Crescent property.

17 The mortgages identified above are those that were expressly referred to by Ms Facius in her affidavit. The Facility Details indicated that the facility was also secured by other mortgages, including a mortgage granted over the Elizabeth Crescent property (see attachment 'CTFA' to Ms Facius' affidavit). An oddity in this application is that neither party put into evidence a copy of the mortgage granted in respect of any of the secured properties. However, an inference can be readily drawn that a mortgage was granted to the Bank over the Elizabeth Crescent property from other documents that were tendered (in addition to the Facility Details):

(a) the particulars recorded on the title to the Elizabeth Crescent property referred to the registration on 16 May 2006 of a mortgage granted in favour of the Bank (see attachment 'KCY 3' to Ms Yeoh's affidavit);

(b) the order made on 23 September 2009 requiring Ms McCourt to deliver up possession of the Elizabeth Crescent property to the Bank referred to a mortgage self-evidently granted to the Bank and bearing the same dealing number as that given in the particulars appearing on the title to that property (see attachment 'KCY 2' to Ms Yeoh's affidavit);

(c) the descriptions of the estate or interest claimed by Mr McCourt against the title to the Elizabeth Crescent property referred to a mortgage granted to the Bank (the descriptions are reproduced later in these reasons).

18 The documents constituting the facility agreement were not in issue (see for example, par 25 of Mr McCourt's written submissions dated 30 July 2010). They comprised the Facility Details, a 'Portfolio Package Customer Agreement' (annexure 'B' to Mr McCourt's affidavit sworn 29 July 2010) (the Customer Agreement) and the letter dated 29 January 2008 from the Bank to the Borrowers that accompanied the Facility Details.

19 The documents constituting the facility provided that:

(a) as at 29 January 2008, the limit on the facility was $9,300,000;

(b) the facility could be accessed through various linked sub-accounts;

(c) the 'minimum repayment' for each linked sub-account under the facility was the unpaid balance of the sub-account and any other money owing under the agreement when the facility was cancelled;

(d) the annual review of the facility was 30 January 2009 and each anniversary of that date;

(e) each of the Borrowers was jointly and severally liable for the unpaid balance of any linked sub-account and any amount owing under the agreement;

(f) the Bank could cancel the facility at any time whether or not there was a breach of the agreement and if the facility was cancelled:

(i) the Bank was to give the Borrowers notice of the cancellation;

(ii) the portfolio limit and any sub-account limit would be reduced to zero;

(iii) the Borrowers were to immediately repay any unpaid balance in any linked sub-account and any other money owing under the agreement;

(cl 5.1 of pt 2 of the Customer Agreement)

(g) the Bank might conduct an annual review of the Borrowers' operation of the facility and their financial position, the review to be undertaken prior to or on the annual review date (cl 5.4 of pt 2 of the Customer Agreement);

(h) the events of default included a failure to pay on time any amount due under the facility or the Borrowers doing something they had agreed not to do or not doing something they had agreed to do under an agreement they had with the Bank (cl 9.1 of pt 3 of the Customer Agreement).

20 A significant effect of the provisions of the facility agreement was that the amount advanced under the facility was immediately repayable on cancellation of the facility with there being no pre-condition to the Bank's right of cancellation; that is, the facility was an 'on-demand' or 'at call' facility.

21 The facility letter of 29 January 2009 contained various 'approval' conditions. Properties were to be listed for sale, with the proceeds of sale to go to reducing the Borrower's indebtedness to the Bank. Further, 'full proceeds of Partnership Dissolution Funds confirmed as $850,000 and due no later than 29th February 2008' were to be applied to debt reduction.

22 Separate titles had not been issued for the lots to be created as part of the Joel Crescent unit development at the time that the Bank commenced proceedings and its summons was first heard. However, titles have been recently issued.

23 The contracts of sale made between the Bank's agents and the third and fourth defendants were dated 28 May and 3 June 2010 respectively and provided that settlement on each sale was to occur 30 days after registration of the strata plan and the issue of separate titles (see attachment 'CTF 36A' and 'CTF 36B' to Ms Facius' affidavit at pages 524 and 578 respectively of Ms Yeoh's affidavit, special condition 5.1; see also pars 4.91 and 4.93 of Ms Facius' affidavit). Those provisions of the sale contracts explain the urgency for the Bank's application.

24 Ms Facius stated in her affidavit that the Bank did not expect that the amount owing pursuant to the facility would be repaid from the proceeds of the sale of all of the secured properties excluding the Elizabeth Crescent property. Consequently, the Bank anticipated that it would seek to sell the Elizabeth Crescent property. Counsel for the Bank advised that the Bank had decided to sell that property last as Ms McCourt and her children reside at the property (I note in that regard that the order for possession that was obtained some time ago was made by consent).

25 Mr McCourt has not disputed that the amount outstanding on the facility as at 19 December 2008 and 29 January 2009 was as stated in the Notice and the TLA Notice of Demand respectively. Ms Facius stated that as at the date she made her affidavit (16 June 2010), the amount owing to the Bank was $5,402,500 and that it was not expected that the sale of the units comprising the Joel Crescent property would be sufficient to discharge the debt. Again, those statements were not contested by Mr McCourt.

26 Counsel for the Bank advised during the reconvened hearing of the summons that the amount claimed as owing under the facility was $2,936,575.73. Whether the sale of all the secured properties, including the Joel Crescent and Elizabeth Crescent properties, would discharge the Borrowers' debt to the Bank is considered later in these reasons.

The Customer [the Borrower] is in default under the Credit Contract with [the Bank] ... because the Credit Contract has expired and the Customer has failed to repay to the Bank all of the moneys outstanding pursuant to the Credit Contract (such moneys having become immediately due and payable on the expiry of the Credit Contract). As a result of this default, the Credit Contract is hereby cancelled in accordance with the terms of the Credit Contract.

28 The Notice indicated that the term 'Credit Contract' was to be understood as a reference to the facility. The notice further stated that 'the action' necessary to remedy the default was for the Borrowers to pay $10,488,802.63 to the Bank within 35 days from the date of the notice failing which:

(a) all amounts owing under the Credit Contract would become immediately due and payable;

(b) the Bank might commence enforcement proceedings against the Borrowers for all amounts owing under the Credit Contract.

29 It is not necessary to reproduce the terms of the TLA Notice of Demand; it is sufficient to note that it made demand for payment of an amount that was said to be then due and owing to the Bank (the TLA Notice of Demand is attachment 'CTF 11' to Ms Facius' affidavit, at pages 84 - 86 of Ms Yeoh's affidavit).

30 Mr McCourt lodged caveats L343283 against the title to the Elizabeth Crescent property and L343286 and L343284 against the Joel Crescent property prior to the commencement of these proceedings (the caveats were each dated 14 June 2010). The caveats claimed an estate or interest in the properties in identical terms (see attachments 'KCY 4' and KCY 5' to Ms Yeoh's affidavit):

As registered proprietor who has been granted a mortgage and the mortgage has (i) purported to exercise its power of sale contrary to previous representations and (ii) exercised its purported power of sale in bad faith in relation to this property, further or alternatively other properties in which Mr McCourt has a interest and which secured by mortgages with the same mortgagee.

31 The wording of the estate or interest claimed in each caveat reflected, in part, observations made by Murphy J in McCourt [23].

32 Mr McCourt lodged fresh caveats in respect of the Elizabeth Crescent and Joel Crescent properties between the commencement of the proceedings and the hearing of the Bank's summons for urgent relief. The caveats were lodged after caveats L343283 and L343284 had lapsed (see attachments 'C' and 'D' to Mr McCourt's affidavit sworn 29 July 2010). The replacement caveats were L375721 (the Elizabeth Crescent property) and L375720 lodged against certificate of title volume 2044 folio 114 (forming part of the Joel Crescent property). The estate or interest claimed in the properties was described in the following terms:

The estate [or] interest being claimed is as a mortgagor who [has] been granted a mortgage secured by properties including the land described above and the mortgagee has:

(i) Purported to exercise its power of sale in relation to these properties (including the land described above) contrary to previous representations;

(ii) Further or alternatively, has not satisfied the requirements to exercise its power of sale over these properties (including the land described above);

(iii) Further or alternatively, exercised its purported power of sale over other properties securing the mortgage in bad faith. As a result the caveator fears the same will happen if the mortgagee exercises its purported power of sale over the land described above.

33 The replacement caveats added a new ground for the claimed estate or interest: that the requirements for the exercise of the power of sale had not been satisfied. The new ground for the claimed estate or interest principally related to the basis upon which the Bank stated in the Notice (and in the notices of default and demand issued under the TLA at the same time as the Notice) that it had cancelled the facility: that the facility had expired and the Borrowers had defaulted by failing to repay the amount outstanding on expiry. Mr McCourt contends that on a proper construction of its terms, the facility agreement made no provision for the consequences of the facility expiring. That is, the facility agreement did not stipulate that all moneys outstanding at an 'expiry date' were repayable as the agreement made no provision for expiry and so there was no obligation to repay the money advanced at the time that the Notice was issued.

34 The new ground goes to whether the power of sale is exercisable by the Bank at all rather than to whether a power, admittedly available, had been properly exercised. Mr McCourt submits that the distinction is significant for the approach to be taken to the balance of convenience and in particular, the application of the principle expressed in Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161.

35 The Bank made no submission to the effect that the description of the estate or interest claimed did not encompass each of the matters argued by Mr McCourt as to why the caveats should be maintained. It has not been necessary to further consider that question given the findings I have made on Mr McCourt's contentions and the balance of convenience.

36 Mr McCourt contended that the caveats should not be removed for the following reasons:

(a) The Bank had not satisfied the requirements of s 106 and s 108 TLA for the exercise of its powers of sale. The real point of that contention was the submission, previously noted, that there had been no default under the facility at the time of the Notice and the TLA Notice of Demand as there was no obligation to repay any amount outstanding under the facility.

(b) The facility agreement attracted obligations of good faith which conditioned the Bank's right to make a demand and the means by which the demand could be made.

(c) The Bank had waived the effect of its notices of default and demand through its dealings with Mr McCourt.

(d) The Bank was estopped from relying on its notices of default and demand as:

(i) [the Bank] represented that Mr McCourt would not be in default if he had unpaid debt at the expiry date;

(ii) Mr McCourt relied on this representation; and

(iii) [the Bank] changed its position to Mr McCourt's detriment.

(Paragraph 44 of Mr McCourt's written submissions dated 30 July 2010.)

(e) The Bank engaged in conduct that contravened s 52 of the Trade Practices Act 1974 (Cth) (TPA) by 'representing to Mr McCourt that he would not be in default if he had unpaid debt at the expiry date and then issuing default notices stipulating that the event of default was failure to pay all moneys due at the expiry date'.

(f) The Bank had failed to exercise its powers of sale in good faith and it was feared that it would act in bad faith in the future.

(g) The issue of the notices of default and demand and/or the Bank's exercise of a power of sale were 'unjust transactions' within the meaning and for the purpose of s 70 of the Code.

37 As previously noted, it was further submitted by Mr McCourt that it was not necessary for him to make any payment into court on the principle stated in Inglis v Commonwealth Trading Bank of Australia as he had put in issue whether the Bank's power of sale was exercisable at all; that is, his case was not confined to the question of whether the Bank had exercised in good faith a power that was admittedly available: and see Harvey v McWatters (1948) 49 SR (NSW) 173; Fletcher v Ould Pty Ltd [2000] WASC 322.

38 The submissions made on behalf of Mr McCourt did not clearly distinguish between the Notice, the notices of default and demand issued for the purpose of the TLA at the same time as the Notice, the TLA Notice of Demand and the notices issued in respect of other mortgages that were also served with the TLA Notice of Demand. All but the first of the contentions referred to above were directed to the Bank's conduct in issuing all or any of the various notices of cancellation, default and demand that were served on Mr McCourt. Strictly, the first contention was directed to the TLA Notice of Demand. However, the argument was expressed by reference to the Notice and it was, in substance, an argument that there had been no default that could properly found any of the notices of default and/or demand. It was said that the Bank had not lawfully exercised its powers of sale in the past and it could not do so in the future where the exercise was based on a failure to satisfy the demand contained in the Notice.

39 The principles to be applied in considering applications for the removal or extension of a caveat were comprehensively summarised by Beech J in Bashford v Bashford [2008] WASC 138 [42] - [57]. It is, however, necessary to make some short observations concerning the exercise of the discretion conferred by s 138 TLA to fully expose the approach that I consider should be taken in determining the Bank's application:

(a) The principles governing interlocutory injunctions are relevant to applications under s 138 having regard to the purpose and effect of a caveat (as to which, see J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546). However, those principles must be applied in a way that is sensitive to the statutory context. Consequently, it will be unusual for a caveat to be removed on an interlocutory application where a prima facie case (in the sense explained in the next paragraph) as to the existence of a caveatable interest has been demonstrated. That is because the purpose of a caveat is to protect a proprietary interest. In many cases, the removal of a caveat will have the practical effect of destroying the benefit of the proprietary interest that is claimed: Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50 and see also the observations of Pullin JA in Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95 [22] and [29]. The court retains, however, a discretion as to whether it will require the withdrawal of a caveat on grounds of convenience even where there is a 'seriously arguable or ... indisputable caveatable interest': Tadrous v Tadrous [2009] NSWSC 407 [6] and see Navarac.

(b) The principles stated in cases such as Custom Credit must now be understood in the light of Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57: Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171, [42]. In Australian Broadcasting Commission v O'Neill, the High Court re-affirmed and explained Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618. The first question to be considered in determining an application for an interlocutory injunction is whether the applicant has made out a prima facie case for relief if the action proceeds to trial. That does not mean that the applicant must show that it is more probable than not that it will succeed at trial; 'it is sufficient to show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial': Australian Broadcasting Commission v O'Neill, [65] and see Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd, [42] and Meagher RP, Heydon JD, Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrine and Remedies (4th ed, 2002) [21-345], [21-350] and [21-370]. The expression 'prima facie case' is used in these reasons to denote the 'sufficient likelihood of success to justify the preservation of the status quo' test.

(c) What constitutes a sufficient likelihood of success depends 'upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks': Australian Broadcasting Commission v O'Neill [65], citing from Beecham (612) and see Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [42].

(d) In Australian Broadcasting Commission v O'Neill, Gummow and Hayne JJ (with whom Glesson CJ and Crennan J agreed) observed that much of the assumed disparity between Beecham and American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 lost its force when the decisions were read in context. However, their Honours noted that a difference between the reasoning in each decision lay in Lord Diplock's statement in American Cyanamid to the effect that there would be a serious question to be tried if the court was satisfied that the applicant's claim was not vexatious or frivolous and that this would be sufficient. That statement was inconsistent with Beecham and was not to be followed: Australian Broadcasting Commission v O'Neill [71].

40 The right asserted by Mr McCourt, as caveator, is to prevent the registration of instruments that are inconsistent with his estate or interest as a mortgagor who challenges the Bank's exercise of its powers of sale. In assessing what constitutes a sufficient likelihood of him succeeding in any challenge, it is relevant to note (particularly as the practical consequences likely to flow from maintaining the caveats are to be considered) that:

(a) Mr McCourt does not dispute the validity of the mortgages granted to the Bank.

(b) Mr McCourt has not commenced proceedings to vindicate his claims despite the various notices of default and demand being issued in late 2008 and early 2009 and the Bank taking possession of some of the secured properties in February 2009. The Bank has subsequently sold several of the secured properties and the only steps taken by Mr McCourt in that time have been to lodge caveats against the titles of the remaining properties and to contest their removal.

(c) Prior to this matter, there had been no allegation that the Bank was not entitled, under the terms of the facility agreement and the TLA, to exercise its powers of sale. The complaints previously made concerned the manner in which the powers were exercised and the conduct of the Bank in seeking to exercise rights that were inconsistent with representations or arrangements that it was said to have previously made.

(d) Four of the units forming part of the Joel Crescent property have been sold so that the consequences of refusing the Bank's summons would be to prevent settlement on the contracts of sale.

41 Mr McCourt's affidavit sworn on 29 July 2010 referred to and annexed a statutory declaration he declared on 16 July 2010 in support of caveat L343286. Mr McCourt's evidence as contained in the affidavit and the statutory declaration was to the following effect:

(a) Mr McCourt has extensive experience in real estate, including as a settlement agent and since 1995, a property developer. As a result of that experience he was 'in constant appraisal of valuations and the buying and selling of property'. He had 'referred to this experience when assessing National Australia Bank Limited's actions regarding its exercise of the power of sale over various properties'.

(b) He was the sole director of Redden, which was now in receivership.

(c) The terms of the facility were to be found in the Facility Details, the facility letter of 29 January 2008 and the Customer Agreement.

(d) There was an understanding between himself and the Bank to the effect that he would repay the facility by developing and selling properties. An aspect of that arrangement was that the Bank had demonstrated a 'great degree of flexibility' in its dealings with Mr McCourt concerning the management of the facility, reflecting its understanding of the nature of what Mr McCourt did with the properties that were acquired and the role that the sale of those properties played in servicing the facility.

(e) In mid-April 2008, the Bank agreed to release funds from an account established for the purpose of covering interest payments subject to certain conditions, including the sale of the Agett Road property and receipt of funds from the dissolution of a partnership involved with the ownership of the Clifton Motel, Bunbury by specified dates. The funds were to be fully applied to debt reduction (see 'DPRM 9' to the statutory declaration declared on 16 July 2010). According to the Bank's letter, the funds from the dissolution of the partnership were confirmed as being a minimum of $850,000 (that is, the same amount as was referred to in the letter of 29 January 2008) and were said to be due no later than 31 May 2008.

(f) On 25 August 2008, the Bank wrote to Mr and Ms McCourt advising that the facility had been 'increased' and 'extended' until 30 November 2008 (the letter forms part of a bundle of documents marked 'DPRM 16' to Mr McCourt's statutory declaration, pages 119 - 120 of his affidavit). The increase referred to, among other things, an increase in the facility limit to permit 'continued capitalization of interest until 30/11/08 settlements'. The extension of the facility was to permit the settlement of offers on the Agett Road property and another property. The increase and extension were said to be subject to various conditions including settlement on the sale of the specified properties by 30 November 2008, all of the proceeds from the dissolution of the Clifton Motel being applied in reduction of the Borrowers' debt and the provision of financial information prior to 30 November 2008.

(g) The letter was sent contemporaneously with letters on other facilities granted by the Bank to the various partnerships involving Mr McCourt. Those facilities were also extended to 30 November 2008 (see 'DPRM16'). I note that there was no suggestion in Mr McCourt's affidavit or statutory declaration that he did not agree with the Bank's proposal in the letter of 25 August 2008, including the conditions contained in the proposal. Indeed, subsequent correspondence with the Bank indicates that Mr McCourt and the Bank dealt with each other in October 2008 on a basis consistent with the terms of the letter of 25 August 2008.

(h) On 23 September 2008, Mr McCourt met with the southwest regional manager for the Bank, Mr Kappler. Mr McCourt was behind with payments on the facility at the time of the meeting. However, the meeting was amiable, its purpose being to 'discuss how to get things back on track'. According to Mr McCourt, it was apparent that Mr Kappler wanted Mr McCourt to 'keep trading' and there were discussions about how that could be achieved. To that end, Mr Kappler suggested that:

1. [Mr McCourt] [a]pply the proceeds I expected to receive from the settlement of the Clifton Hotel in Bunbury servicing my debts in the following manner:
   1. Pay off my credit card debt of $30,000;
   2. Pay my tax bill of approximately $120,000;
   3. Put $200,000 into debt reduction; and
   4. Apply the reminder into an offset account to cover interest.
2. In return, NAB would keep the facility going, that is, operating normally.

(i) Subsequent to the meeting, there were various communications between the Bank and Mr McCourt in October 2008. Those communications are dealt with later in these reasons but it should be noted that in his statutory declaration, Mr McCourt denied that the Bank gave him 'the impression' that it expected him to repay the facility by 30 November 2008. Rather, 'the impression' that the Bank gave him was that 'the facility would continue beyond that date and that the settlement of the Clifton Motel would be a continuation of the arrangements' that he had with the Bank.

(j) Mr Clifton was counting on the Bank 'following through with what was agreed concerning the application of the proceeds of the Clifton Motel'. He planned to pay off his credit card and then use the credit available for daily activities. He also planned on paying a tax bill and on being able to continue trading.

(k) The sale of the Clifton Motel settled on 26 February 2009. The entire amount of the settlement sum was paid to the Bank but it did not apply the sale proceeds according to what Mr McCourt contends was agreed at the meeting with Mr Kappler on 23 September 2008. Rather, the Bank applied the proceeds to servicing the facility. As a result of the Bank's actions, Mr McCourt experienced and continues to experience extreme financial hardship.

(l) Mr McCourt had purchased the Leon Road properties for redevelopment. He intended to live in one of the properties and to sell the other property. The properties were purchased for $1.75 million each in October 2007. He caused the houses located on the properties to be demolished and the properties were vacant land at the time that they were auctioned by the Bank in May 2010.

(m) He attended the auction of the Leon Road properties conducted on instructions from the Bank. In the course of the auction, he heard the auctioneer advise those present that the Leon Road properties were going 'cheap, cheap, cheap'. The properties were sold at auction for a combined total of $2.71 million. The sale price was said to be less than the true value of the properties, reference being made to valuation reports obtained by the Bank in early December 2009. The valuation reports valued the properties at $1.6 million each.

(n) Mr McCourt purchased the Agett Road property in May 2007 for $1.9 million. He purchased the property with a view to renovating and reselling the property. He expended $450,000 in renovations and expected to sell the property for between $2.6 million and $2.75 million. The property was sold at auction in April 2009 for $2 million. The property was sold the day before it was due to be auctioned.

(o) He had been informed by Ms Gray of Acton Real Estate, Dalkeith that a colleague had attended the auction and that there were other prospective buyers waiting at the auction. On the Monday after the scheduled auction, 'Ms Gray's colleague told Ms Gray that she (the colleague) would have been prepared to bid $2.5 million for the Agett Road property'.

(p) He had reason to believe that the Bank did not exercise its power of sale over the Agett Road property in good faith as the property was sold the day before it was due to be auctioned; on 7 July 2008 he had sold the Agett Road property for $2.875 million, although settlement did not occur; the property was further sold in October 2009 for $2.495 million and he had been informed by Ms Gray of the sale of two other properties in Agett Road, Claremont from which he concluded that the Agett Road property had been sold at an undervalue.

(q) He purchased the Yallingup property in 1985. In mid-October 2009, Burgess Rawson provided a valuation report, valuing the property at $3.69 million. In mid-November 2009, NAB sold the Yallingup property for $2.8 million.

(r) One of the directors of the corporate purchaser of the Yallingup property had an association with a person who was formerly employed by the real estate agent who sold the Yallingup property on behalf of the Bank. Further, the sale of the Yallingup property did not follow a 'closed tender process'. According to Mr McCourt 'in effect, everyone who was interested in buying the Yallingup property knew the amount that NAB was prepared to except for it'.

(s) No work was required to ready the Elizabeth Crescent property for sale at the time that NAB issued the Notice. Consequently, over 15 months had passed during which the Bank could have exercised its power of sale but it had not yet done so. He estimated that the property could have been sold for about $1 million and:

[h]ad [the Bank] exercised its power of sale over the Elizabeth Crescent property sooner than [my] overall debt position would be improved. I regard their failure to do so as an unacceptable delay.

(t) In relation to the Joel Crescent property, little work was required to ready it for sale after the Bank issued the Notice. He estimated that the work required to ready the property for sale could have been completed within 60 days and he regarded the Bank's failure to exercise its power of sale during the 15 months that had passed since the Notice had been served as an unacceptable delay. He estimated that the Joel Crescent property could have been sold for between $2.2 million and $2.4 million had the Bank exercised its power of sale shortly after the Notice had been issued.

(u) Mr McCourt 'feared' that the Bank had not exercised its powers of sale in good faith in the past and that it would not do so in the future.

42 Ms Facius stated in her affidavit that the Bank had no record of a meeting between Mr McCourt and Mr Kappler on 23 September 2008. Some hearsay matters were deposed to in that regard but there was no direct evidence provided by Mr Kappler. It was, however, common ground that there was correspondence between Mr McCourt and the Bank in October 2008. That correspondence needs to be considered in the context of not only what Mr McCourt says transpired in the previous month but also what the Bank maintains were its relevant dealings with Mr McCourt.

43 The matters to which Ms Facius deposed in her affidavit can be broadly divided into three parts: evidence concerning the facility, evidence of the circumstances surrounding the sale of the secured properties and evidence about the Bank's dealings with Mr McCourt. Ms Facius' evidence was not directly contested by Mr McCourt in his affidavits, although there were obvious differences about the meeting of 23 September 2008.

44 As to the exercise by the Bank of its powers of sale, Ms Facius stated that:

(a) The Bank took possession of the Agett Road property in February 2009. On 25 February 2009, it appointed real estate agents for the purpose of marketing and selling the property. At about the same time, it received a valuation report valuing the property at $2.12 million. Shortly afterwards, the Bank received a marketing appraisal from the real estate agents it had appointed recommending that the property be sold by auction. The agents advised that they considered that the selling price of the property would be between $2 million and $2.2 million.

(b) On the day before the auction was scheduled to be held, the Bank's agents received a cash offer for the purchase of the Agett Road property for $2 million. The Bank accepted the offer. Settlement of the sale of the property occurred in early July 2009.

(c) The Bank took possession of the Yallingup property in February 2009. It appointed agents for the purpose of selling the Yallingup and Joel Crescent properties at about the same time. In late March 2009, the Bank's agents received a valuation report for the Yallingup property which valued the property at $2.75 million. Real estate agents were appointed for the sale of the Yallingup property in May 2009. They advised that the likely selling price of the property would be between $2.8 million and $2.9 million. A marketing campaign was undertaken for the sale of the property by public tender. Five offers were received, three of which were conforming bids. The highest of those bids was for $2.8 million.

(d) The two non-conforming offers received by the Bank's agents were from Mr Rod Carter. The Bank knew of Mr Carter as an associate of Mr McCourt (I infer that the references are to the same Mr Carter who has sworn an affidavit in these proceedings). The highest of the non-conforming offers from Mr Carter was for $3.69 million, subject to finance with settlement in 180 days and payment of a 2% commission.

(e) On about 9 October 2009, Mr McCourt provided the Bank with a proposal for the release of its securities over the Yallingup and Joel Crescent properties on payment of $4 million financed by the Bank of Queensland. There was a letter within the proposal suggesting that a further $400,000 might be provided once a valuation of the properties had been completed. The Bank rejected that proposal as it would not repay sufficient debt to release the securities. The Bank subsequently accepted the $2.8 million conforming bid for the Yallingup property. Settlement occurred in November 2009.

(f) The Bank took possession of the Joel Crescent property in February 2009. In April, the Bank's agents received a valuation report which valued the property at $1.68 million if the units were sold as a single complex and $2.065 million if the units were sold individually. It was necessary for work to be undertaken before the strata plan could be lodged for registration and that work was, in due course, completed.

(g) Market appraisals and a further valuation report were received in early 2010. The market appraisals and valuation report suggested a per unit sale price of between $260,000 and $350,000. In March 2010, the Bank appointed real estate agents for the purposes of selling the Joel Crescent property. One unit has been sold for $310,000 and three units for $265,000 each.

(h) The Bank took possession of the Leon Road properties in February 2009. The Bank obtained a valuation report shortly afterwards valuing each property at $1.35 million. It subsequently appointed real estate agents who advised that the properties should be marketed at a sale price of $1.4 million each. In April 2009, the Bank obtained a further valuation report valuing each of the properties at $1.2 million.

(i) In September 2009, the Bank entered into an unconditional contract for the sale and purchase of each of the Leon Road properties with Mr Carter. Settlement was to occur in early December 2009, the combined sale price of the properties being $3 million. Subsequently, Mr Carter requested the Bank to either release him from his obligation to settle on the contract or alternatively, extend the time by which settlement was to occur. The sale contract was varied following negotiations with Mr Carter but settlement did not occur. On 30 December 2009, Mr Carter purported to withdraw his offer to purchase the properties and the Bank terminated the contract on 3 February 2010.

(j) In February 2010, the Bank obtained a valuation of the Leon Road properties which valued each property at $1.45 million. Subsequently, the Bank appointed real estate agents who advised that the properties should be sold at auction with the expected sale price to be between $1.35 million and $1.45 million. The auction was held on 1 May 2010 and the Bank entered into contracts for the sale of the properties for $1.35 million and $1.36 million respectively.

45 Ms Facius also deposed to the Bank's dealings with Mr McCourt in 2008 and 2009. In summary, Ms Facius stated that:

(a) In about January 2008, Mr McCourt agreed with the Bank that he would sell his interest in the Clifton Motel and dissolve the partnership that operated the Motel in an attempt to reduce his indebtedness to the Bank. It was anticipated that an amount of $850,000 would be received by Mr McCourt from the dissolution of the partnership.

(b) A meeting was held on 2 July 2008 between Mr McCourt and representatives of the Bank's strategic business services department (Ms Facius' note of the meeting is attachment 'CTF 51' to her affidavit; pages 1005 - 1007 of Ms Yeoh's affidavit). It was the Bank's practice that the delegated commitment authority for all credit decisions passed to the impaired asset manager once that department received a file. The purpose of the meeting held on 2 July was to explain to Mr McCourt the involvement of the strategic business services department and to 'work out a solution to regularise the financial position of Mr McCourt'. At the time of the meeting, interest was being capitalised on the facility and Mr McCourt sought a 90-day extension during which time he intended to sell the Agett Road property (which was then on the market). Mr McCourt indicated that he had sold, and was endeavouring to sell, other properties.

(c) There were various exchanges between the Bank and Mr McCourt in October 2008. Those exchanges are dealt with in the next paragraph.

46 The evidence of Mr McCourt and Ms Facius indicated that the following exchanges occurred between the Bank and Mr McCourt in October 2008:

(a) The Bank wrote to Mr McCourt on 7 October 2008 (the letter is attachment 'DPRM 13' to Mr McCourt's statutory declaration made 16 July 2010). The letter commenced by noting that on 19 September 2008 the existing authority for accounts through which the facility was provided had been cancelled by Mr McCourt. Further, '[a]ll transactions (with the exception of monthly interest capitalisation per existing approval Dd 25/8/08), including any direct debits and periodic payments on the accounts have now been stopped'. The letter then sought Mr McCourt's written advice on certain matters, including the current status of the dissolution of the Clifton Motel partnership and his intentions 'in respect to review of NAB facilities from 30/11/08 expiry and conditional settlements'. The letter concluded by reminding Mr McCourt of the existing approval conditions as stated in the Bank's letter of 25 August 2008.

(b) On 16 October 2008, Mr McCourt wrote to the Bank in response to its letter of 7 October 2008. The letter advised on progress towards the sale of various properties and then stated, among other things, that:

(i) full proceeds from the sale of the Clifton Motel would be applied towards debt reduction, with dissolution of the partnership expected within seven days;

(ii) the Agett Road property would be sold prior to 30 November 2008 with the proceeds to go to debt reduction;

(iii) a full copy of '2007 financials and tax returns' would be provided prior to 30 November 2008;

(iv) it was Mr McCourt's intention to 're-negotiate' the facility on 30 November 2008.

(c) On 21 October 2008, a further meeting was held between representatives of the Bank and Mr McCourt (Ms Facius' note of the meeting is attachment 'CTF 53' to her affidavit; pages 1009 - 1010 of Ms Yeoh's affidavit). The purpose of the meeting was said to be to 'sort out the issues relating to Mr McCourt's portfolio facility, home loan, sale of properties and cash flow issues'. In the course of the meeting, Mr McCourt asked the Bank to advance $155,000 to a business partner on the basis that this was a condition of the sale of the Clifton Motel and to advance $50,000 to Mr McCourt for living expenses. The Bank agreed to advance the $155,000 requested on the basis that it would assist in the dissolution of the partnership in respect of the Clifton Motel, with the proceeds from the sale to be applied to reduction of the Bank's debt.

(d) On 27 October 2008 the Bank wrote to Mr McCourt (the letter is attachment 'CTF 54' to Ms Facius' affidavit; pages 1011 - 1013 of Ms Yeoh's affidavit) advising that:

(i) it had agreed to increase the facility limit from $10.3 million to $10.455 million, with the Bank to transfer $155,000 to Mr McCourt's business partner on condition that it received at least $730,000 from the dissolution of the partnership relating to the Clifton Motel;

(ii) existing conditions in respect of the facility were confirmed, including that all interest and costs due until expiry of the facility were to be lodged in an account specifically held for that purpose.

(e) The Bank's letter of 27 October 2008 referred to the facility expiring on 30 November 2008 and a number of conditions required steps to be taken by that date. The letter specified additional conditions for the facility, including that there was to be a full review of the facility at settlement of the Agett Road property or by 30 November 2008, whichever was the earlier. Non-compliance with any of the conditions contained in the letter constituted an event of default. Mr and Ms McCourt signed the letter in a section that requested that they do so to acknowledge their agreement.

47 Obviously, any observations about the evidence relied on by the parties must reflect the interlocutory nature of the application. It is well established that in considering whether there is a prima facie case the court does not ordinarily evaluate the applicant's evidence or undertake a preliminary trial: Beecham (622); but see also Eng Mee Yong v Letchumanan [1980] AC 331, 341, where the Privy Council held that a trial judge had not erred in finding that there was no serious question to the tried on the American Cyanamid test given the vague, inconsistent and implausible assertions contained in an affidavit made by a caveator. Much of the evidence in this application was not contested and I consider that the following matters are relevant to the determination of the Bank's application:

(a) It appears from the Bank's letter of 29 January 2008 that from at least that time, the Bank was concerned to impose conditions on the facility that would result in a significant reduction of the Borrowers' debt through the sale of properties and/or the realisation of partnership assets.

(b) Mr McCourt's evidence concerning the understanding that he says subsisted between himself and the Bank as to how the facility would be serviced, and the flexibility that he asserts the Bank demonstrated in dealing with the facility, would need to be considered at trial in the context of the conditions imposed by the letter of 29 January 2009 and the subsequent correspondence from the Bank in which conditions, with time stipulations, were imposed for debt reduction. In any event, there was no submission that the arrangement to which Mr McCourt deposed could found an estoppel.

(c) Having regard to the evidence that has been led, I consider that I should accept Mr McCourt's assertion that the meeting of 23 September 2008 occurred and his evidence of what transpired at the meeting for the purpose of determining the Bank's chamber summons. However, the effect of what occurred at the meeting must be considered in the context of the contemporaneous documents, particularly as there was no evidence from Mr McCourt, and no submission that suggested, that the documents did not accurately record the dealings between himself and the Bank.

(d) The use of the proceeds from the dissolution of the Clifton Motel partnership to reduce the Borrowers' indebtedness to the Bank was first raised in the facility letter of 29 January 2008. Correspondence in mid April 2008 and subsequently, suggested that funds from that source would be available shortly. As at 16 October 2008, Mr McCourt was still advising the Bank that the dissolution of the partnership was expected within seven days. The statements attributed to Mr Kappler at the meeting held on 23 September 2008 and whatever arrangements might have been made at that meeting would need to be assessed against that background. Mr McCourt contends that the statements, which concerned the use of the funds to be realised on the dissolution of the partnership, formed the basis of an arrangement that the Bank would maintain the facility for some indefinite time into the future.

(e) The correspondence exchanged between Mr McCourt and the Bank in October 2008 made no reference to any arrangement concluded at the meeting on 23 September 2008, nor did Mr McCourt refer to any representation, understanding or impression that the facility would remain available after 30 November 2008 and that the settlement of the Clifton Motel would simply represent a continuation of arrangements with the Bank.

(f) Further, the correspondence exchanged between the Bank and Mr McCourt in October 2008 referred to different arrangements for the use of the proceeds from the dissolution of the Clifton Motel partnership to those which Mr McCourt states he made with Mr Kappler at the meeting on 23 September 2008. The Bank's letter of 7 October 2008 confirmed the conditions stipulated in its letter of 25 August 2008. Those conditions required the full proceeds of the dissolution of the partnership to be used for debt reduction. Mr McCourt replied by stating that the full proceeds from the sale of the Clifton Motel would be applied to debt reduction and the Bank again confirmed that this was required in its letter of 27 October. As I have already indicated, I accept Mr McCourt's account of the meeting for the purpose of this application. However, the October correspondence strongly suggests that neither the Bank nor Mr McCourt regarded whatever was discussed at the meeting as creating a binding agreement or arrangement for the future conduct of the facility. Mr McCourt's letter of 7 October and the fact that he signed the Bank's letter of 27 October to acknowledge his agreement with its terms are obviously important matters in assessing any argument concerning the effect of the meeting of 23 September 2008.

(g) There is other evidence that must be considered when assessing what Mr McCourt says about the impressions that he formed from the September meeting or the conclusions that he reached about any arrangement made at the meeting. In particular, it seems that the notion of extending the facility and fixing an expiry date arose in the context of the Bank capitalising interest. Clearly, that could not continue indefinitely (Ms Facius' note of the meeting of 2 July 2008 refers to the fact that a point would be reached when there was insufficient equity). Further, it is difficult to see how references in the Bank's correspondence to an expiry date for the facility could be understood as conveying anything other than an intention on the part of the Bank to regard the facility as being at an end (cancelled) on that date unless some other agreement or arrangement was reached and that all money advanced under the facility would then become due and owing. That is particularly as transactions had ceased on the sub-accounts through which the facility was provided. It is also difficult to see how Mr McCourt can maintain that he did not understand that the Bank's references to an expiry date in its letters of 25 August and 7 and 27 October 2008 were to the possible termination or cancellation of the facility with a concomitant obligation to repay the money advanced, when he wrote to the Bank on 16 October 2008 stating that he intended to 're-negotiate' the facility prior to 30 November 2008. The steps that he proposed in his letter were consistent with an understanding that he needed to satisfy the Bank's requirements prior to that date or the facility would be terminated and the amount outstanding would become due and owing.

48 I emphasise that those observations concerning the evidence relate only to the question of whether Mr McCourt has established a prima facie case in the sense explained in Australian Broadcasting Commission v O'Neill. However, Mr McCourt's assertion that at no stage did the Bank give him the impression that it expected him to repay the facility on expiry on 30 November 2008 or that he was given the impression that the facility would continue beyond that date cannot be unreservedly accepted even for that limited purpose when the cotemporaneous documents containing or recording the dealings between the Bank and Mr McCourt are considered.

49 In McCourt, Mr McCourt applied for an order extending caveats lodged against the titles to the Leon Road properties following notice being given under s 138B TLA_._ The Leon Road properties had been sold and settlement was imminent at the time of Mr McCourt's application.

50 The statutory declaration sworn by Mr McCourt in support of the caveats is reproduced at [3] of the reasons delivered by Murphy J. It indicated that Mr McCourt 'feared' an 'improper dealing' by the Bank in selling the Leon Road properties as:

(a) the properties might have been sold at an undervalue;

(b) the Bank might not have exercised its power of sale in good faith by selling the Agett Road and Yallingup properties at an undervalue and by not selling the Joel Crescent property despite it being ready for sale for 15 months.

(a) There was competing authority on the question of whether a registered proprietor had a caveatable interest in its own property. However, it was unnecessary to reach a concluded view on that question as the caveats should not be extended on other grounds: [8] - [12]. The Bank did not seek to revisit that issue in this application.

(b) Mr McCourt had not demonstrated that he had a valid caveat or that the caveat disclosed a proprietary interest as:

(i) There was no satisfactory evidence that the Leon Road properties had been sold at an undervalue: [17] - [19].

(ii) The matters stated in Mr McCourt's statutory declaration did not raise even an arguable case of want of good faith on the part of the Bank in exercising its powers of sale: [21].

(iii) The caveats were invalid having regard to the description of the estate or interest claimed:[22].

(iv) It was likely that the caveats were also invalid as they forbade absolutely any dealing with the properties. Such a claim appeared to exceed any legitimate claim that Mr McCourt might have in equity for the contracts of sale to be set aside;[26].

(c) The caveats should not be extended on the balance of convenience as [25]:

(i) The total debt owed by Mr McCourt to the Bank well exceeded not only the value of the properties caveated, but also the combined values of those properties and all others properties sold by the Bank (even assuming that all of the properties ought to have been sold for the amounts suggested by Mr McCourt).

(ii) The grounds of relief sought by Mr McCourt would not have the effect of destroying his claim which was really a money claim for the difference between the sale price of the land and its alleged higher market value. It was, in other words, a claim for which damages (or more precisely, an account or equitable compensation) was an adequate remedy.

(iii) Mr McCourt did not offer an undertaking as to damages.

(iv) Insofar as Mr McCourt's complaints concerned the sale of other properties, there had been ample opportunity in which to commence proceedings to substantiate those complaints.

52 Mr McCourt lodged further caveats over the Leon Road properties after the decision of Murphy J. The Bank applied by chamber summons to remove those caveats. That application was determined by Murphy J in McCourt (No 2).

53 It is apparent from his Honour's reasons in McCourt (No 2) that the Bank relied on an affidavit sworn by Ms Facius in support of its application. It is also apparent that the contents of that affidavit were similar to the affidavit that she swore in McCourt CIV 1809, being the affidavit annexed to Ms Yeoh's affidavit in this matter.

54 The statutory declaration sworn by Mr McCourt in support of the further caveat lodged over the Leon Road properties was substantially reproduced at [38] of the reasons of Murphy J. Mr McCourt also relied on an affidavit that he made in opposition to the Bank's application. The contents of that affidavit were reproduced at [47] of his Honour's reasons.

55 The declaration referred to the meeting said to have been held on 23 September 2008 between Mr McCourt and Mr Kappler. According to Mr McCourt's declaration, Mr Kappler made representations at that meeting on which Mr McCourt relied to order his affairs on the understanding that when the proceeds of the sale of the Clifton Motel were received the Bank would 'act as they undertook to act' at the meeting. It was said that the Bank resiled from that arrangement when it issued notices of demand on 29 January 2009 in respect of the Leon Road mortgages.

56 Mr McCourt's affidavit also dealt with what was alleged to have occurred in the September 2008 meeting with Mr Kappler. However, as Murphy J noted, the effect of the arrangement to which Mr McCourt deposed in the affidavit was somewhat different to that to which he had described in his statutory declaration. Significantly, in his affidavit Mr McCourt complained not about the Bank resiling from an arrangement that it would maintain the facility by issuing the notices of demand but rather, that the Bank reneged on a slightly different arrangement by applying the whole of the proceeds from the sale of the Clifton Motel to the reduction of its debt. Mr McCourt deposed to an intention to pay off various debts and being able to 'continue to trade' but that he was left without any money as a result of the Bank's action.

(a) The evidence in the statutory declaration and affidavit sworn by Mr McCourt was sparse and ambiguous. That made it difficult to characterise the nature of the arrangement asserted by Mr McCourt to ascertain whether the Bank might arguably have been estopped: [52].

(b) There were difficulties in reconciling Mr McCourt's position in the application with what had been submitted on his behalf at the hearing of the previous application. Mr McCourt had submitted in the prior application that he had made a decision to apply the proceeds of the sale of the Clifton Motel fully to reducing the Bank's debt after being served with the notices of demand under the Leon Road mortgages. In this application, his complaint was that the Bank had prevented him accessing part of the proceeds to use for other purposes: [53] - [54].

(c) The arrangements deposed to by Mr McCourt and as explained by his counsel, did not establish that his claim for an equitable estoppel had or might have substance: [62]. The object of the September 2008 meeting as alleged by Mr McCourt was to enable him to keep trading to generate income, the ordinary inference being that this would provide an opportunity to at least pay the interest due under the facility. However, there was no evidence that interest had been paid after the meeting of 23 September 2008.

58 Murphy J also held that the balance of convenience favoured the removal of the caveats for the reasons summarised at [73]. It should be noted that those reasons included that Mr McCourt had not contended that the notices of demand served by the Bank were defective in the time that had elapsed since their issue and that during that period the Bank had, to Mr McCourt's knowledge, sold or made arrangements to sell some of the secured properties.

59 The account given by Mr McCourt in his affidavit read in McCourt (No 2) of the meeting allegedly held with Mr Kappler was substantially identical with what was stated by him in his statutory declaration made in support of caveat L343286 and annexed to his affidavit in this matter. There was, however, one material difference between the affidavit in McCourt (No 2) and the statutory declaration relied on in this matter. The statutory declaration did not state that the purpose of the arrangement made at the 23 September 2008 meeting was to enable Mr McCourt to earn income. The declaration also referred, for the first time, to Mr McCourt's impressions about the Bank's attitude to possible expiry of the facility and repayment of the money advanced.

60 In McCourt CIV 1809, Mr McCourt sought to restrain the Bank from completing the sale of the Leon Road properties. Kenneth Martin J refused the application, noting that Mr McCourt had not paid or indicated that he could pay the amount of the Bank's debt into court, the debt then being approximately $5.5 million (reference being made to Inglis v Commonwealth Trading Bank of Australia). His Honour found that:

(a) The affidavit made by Mr McCourt in support of the application did not establish a representation by the Bank that would found either an estoppel by convention or an equitable estoppel. In particular, Mr McCourt's evidence of the meeting on 23 September 2008 with Mr Kappler and the purpose of that meeting was insufficient to support any form of estoppel.

(b) Notes made by Ms Facius of meetings held in July and October 2008 between representatives of the Bank and Mr McCourt did not detract from the position established by the Bank's correspondence with Mr McCourt, particularly its letter of 27 October 2008 which indicated that Mr McCourt had approximately a month to realise various properties and so reduce the Bank's debt.

(c) Mr McCourt's claim for relief under the TPA did not assist as it relied on the same facts that were said to found the estoppel. In his Honour's assessment, the TPA claim was 'inherently weak'.

(d) A claim pursuant to the Code did not accord with the general nature of Mr McCourt's business as a property developer.

(e) The Bank had not waived its right to cancel the facility, demand repayment and, if necessary, exercise its powers of sale.

(f) As to the balance of convenience, the sale of the Leon Crescent properties had almost been completed and as there was no proper basis for attacking the validity of the Bank's right to exercise its powers of sale, the principles in Inglis v Commonwealth Trading Bank applied. Further, damages or some other form of monetary compensation was an adequate remedy if Mr McCourt ultimately succeeded in any of his claims against the Bank.

Whether the Bank was entitled to exercise a power of sale

61 Mr McCourt contended that there was a serious question to be tried as to whether the Bank was entitled to exercise a power of sale in respect of any of the secured properties, including the Elizabeth Crescent and Joel Crescent properties. That contention involved the following propositions:

(a) By s 106 TLA a mortgagee can issue a notice demanding payment of the money owing on a mortgage where the mortgagor is in default in payment of the principal sum or interest secured by the mortgage. Section 108 TLA permits the mortgagee to sell the secured property if the default in payment continues for one month after the service of the s 106 notice.

(b) A notice given under s 106 which specifies a non-existent default is defective: see Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573.

(c) The Notice specified the Borrowers' default as being 'because the Credit Contract had expired and the customer has failed to repay to the Bank all moneys outstanding pursuant to the Credit Contract (such moneys having become immediately due and repayable on the expiry of the Credit Contract)'. The default specified was a non-existent default as 'it was not a term of the facility that all moneys were due and payable at "expiry" of the facility'.

62 Central to Mr McCourt's contention was the fact that the documents constituting the facility agreement made no reference to the expiry of the facility or to an expiry date. Rather, the facility agreement permitted either party to cancel the facility. It was said that cancellation and expiry connoted different means by which an agreement might be terminated so that the default specified in the Notice was a 'nonsense' as the money advanced could only be due and owing on cancellation of the facility, there being no provision in the facility agreement that required the Borrowers to pay all moneys outstanding at an 'expiry date'.

63 It was also said that correspondence from the Bank that referred to the facility expiring on 30 November 2008 was confusing. For example, the Bank's letter of 7 October 2008 enquired about Mr McCourt's intentions for a review of the facility 'from' the 30 November 2008 expiry date. It was suggested that the use of the word 'from' implied that the facility would survive beyond that date. The confusion was compounded by the fact that the Bank did not state in any of its correspondence that all money advanced under the facility would be repayable at the expiry date.

64 Reference was also made to a letter dated 27 January 2009 from an officer of the Bank located at its Margaret River branch to Mr and Ms McCourt (annexure 'DPRM 1' to Mr McCourt's affidavit sworn 10 August 2010). The letter referred to the facility being over limit for 25 days and indicated that it could be brought back within limit by a payment of approximately $67,000 into one of the linked sub-accounts. Mr and Ms McCourt were invited to contact the officer if the required payment could not be made. There was no suggestion in the evidence that they made the payment requested or that they took any other step in response to the letter.

65 It was said that the letter was 'strongly probative' of the fact that it was not a condition of the facility that the amount outstanding was repayable on the expiry date and that the Bank had waived the effect of the Notice by indicating that the facility continued to operate.

66 The point of those submissions was to suggest that in the course of their dealings prior to 30 November 2008, the Bank and Mr McCourt had not made an agreement that the amount outstanding under the facility would become due and owing on that date. Consequently, there was no term of the facility agreement nor any collateral agreement or arrangement that required repayment on the expiry date of 30 November 2008 so that there could not have been a default in failing to repay the amount outstanding on and after that date. The Notice was, accordingly, defective.

67 There was no issue at the hearing and reconvened hearing of the Bank's summons that the facility agreement permitted the Bank to cancel the facility at any time regardless of whether there had been a default. In his third set of written submissions, Mr McCourt raised for the first time an argument that the Bank owed the Borrowers a duty of good faith. The content of that duty was not clearly indentified but it is apparent that on Mr McCourt's argument the duty conditioned the making of a demand under the facility and accordingly, the procedure by which the facility could be cancelled. The argument is different to the contention now being considered; this contention proceeded on the basis that the Bank's right to cancel was unfettered.

68 I consider that Mr McCourt's prospects of succeeding in establishing at a trial that the Notice (and by inference, the TLA Notice of Demand) was 'defective' by specifying a non-existent default are insufficient to sustain the caveats. The Bank's right of cancellation was not contingent on the occurrence of any event, including an event of default. Cancellation of the facility was effected simply by the Bank making a decision, with cl 5 of pt 2 of the Customer Agreement requiring the Bank to give notice of the decision that had been made.

69 The Notice stated that the facility was 'hereby' cancelled as a result of the Borrowers' default in failing to repay the amount outstanding on expiry. As such, the Notice both embodied the Bank's decision to cancel the facility and notified the Borrowers of that decision. The Borrowers were then given 35 days to repay the amount due and owing.

70 In my view, the facility was cancelled by the Bank according to the terms of the facility agreement even if, as Mr McCourt contends, the Notice specified a non-existent default as the reason for cancellation. Cancellation of the facility only required a decision by the Bank to that effect; the notification required by the facility agreement merely communicated that cancellation had occurred. The reason, if any, given for the cancellation of the facility could have no material consequence as the Bank's right was unfettered. Mr McCourt's argument confuses the means by which cancellation was effected - a decision made by the Bank - with the form by which the cancellation was notified - the Notice.

71 It is not necessary to consider whether the Bank and Mr McCourt did reach an agreement prior to 30 November 2008 that the facility would expire on that date and the amount outstanding would become due and payable given the view that I have formed as to the interpretation of the facility agreement and the effect of the Notice that would most likely be adopted if there was a trial on the issue of whether the Bank was entitled to exercise its powers of sale. However, the effect of the dealings between the Bank and Mr McCourt during 2008 is also relevant to the estoppel and waiver grounds relied on by Mr McCourt to support the caveats and so it is convenient to make some observations about that matter at this point.

72 There is, in my view, ample material in the documents in evidence to support a conclusion that the Bank and Mr McCourt agreed that the facility would remain in place for a specified period and that the Bank would capitalise interest in the interim provided that certain conditions were met. There is no real ambiguity about the reference to an expiry date in that context. There is also little doubt that by its correspondence of August and October 2008 the Bank had communicated an intention to terminate the facility on 30 November 2008 in the absence of some further agreement and that Mr McCourt understood that this was the Bank's position. Put simply, 'expiry' meant termination of the facility both according to its ordinary meaning and in the context of the dealings between the Bank and Mr McCourt. Mr McCourt's understanding is evidenced by his statement in his letter of 16 October 2008 that he intended to renegotiate the facility.

73 Much of the argument put by counsel for Mr McCourt apparently accepted that the Bank and Mr McCourt had agreed or understood that the facility would expire on 30 November 2008, the thrust of the submission being that there was no agreement over the consequences of the facility expiring. There is an obvious lack of commercial reality in an argument that suggests that Mr McCourt and the Bank agreed that the facility would expire on a particular date but they did not agree that the amount advanced at that date would become due and owing. As I have already indicated, what else could expiry date mean than termination and what else could occur on termination other than that the amount outstanding would become due and owing? That apparently accords with Mr McCourt's understanding at the time, at least in the absence some further agreement with the Bank; he intended to renegotiate the facility prior to 30 November 2008 and to provide full financial information for that purpose. Clause 9, pt 3 of the Customer Agreement would apply if an agreement to repay the facility on expiry was made. The clause defined an event of default widely to include the Borrowers failing to do something they had agreed to do and consequently, the Notice would not specify a non-existent default on that finding and it would not be 'defective'.

74 In my view, the prospects of Mr McCourt successfully arguing that there was no agreement that the facility would expire on 30 November 2008 and/or the amount outstanding would not become due and owing on expiry are sufficiently remote that a prima facie case on the contention that the Bank was not entitled to exercise its powers of sale on that basis has not been established.

75 There was no suggestion by Mr McCourt that the demand for repayment made in the Notice did not permit a reasonable opportunity to meet the demand: see Bunbury Foods Pty Ltd v National Bank of Australasia Ltd [1984] HCA 10; (1984) 153 CLR 491 and Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286. There was, however, a submission made by Mr McCourt in his third set of written submissions that the Bank owed a duty of good faith in its conduct of the facility.

76 The submission entailed the following propositions:

(a) The Bank's 'interpretation of the facility [was] uncommercial'. I understood the reference to the Bank's interpretation of the facility to be to the Bank's contention that the facility was to be payable on expiry.

(b) 'As matter of practicality and policy, if "on demand" provisions in loan facilities were given the unrestricted operation that NAB contends then it would greatly complicate the commercial relationship between lenders and borrowers and, if repeated to a significant degree, would dramatically undermine the sound operation of finance markets'. Various matters were identified in support of that proposition which, when taken together, were said to indicate that a term making a loan payable on demand was incompatible with the purpose and effect of a commercial loan unless ameliorated by an obligation of good faith and fair dealing. Such an obligation would require a lender to give a borrower 'a clear and fair warning ... before seeking to rely on so onerous provision as an on-demand provision'.

(c) It has been increasingly accepted that an on-demand loan attracts an obligation of good faith, reference being made to Commonwealth Bank of Australia v Renstel Nominees Pty Ltd [2001] VSC 167 [47].

(d) Good faith and fair dealing required the Bank to 'have been clear about what would happen at the expiry date'.

77 Counsel for Mr McCourt referred only to Renstel Nominees in support of the proposition that the Bank owed a duty of good faith. However, the Bank made no submissions in response to those provided by Mr McCourt on the good faith ground. Accordingly, I do not propose to look beyond Renstel Nominees on the question of whether an obligation of good faith and fair dealing can or should be implied into a commercial facility. An interlocutory application is not, in any event, the proper occasion to explore the controversies surrounding the possible implication of the obligation into commercial contracts, particularly as the search in this instance is only for a prima facie case (and see generally, Seddon NC and Ellinghaus MP, Cheshire and Fifoot's Law of Contract (9th Australian ed, 2008) [10.43] and see also, Paterson JM, 'Limits on a Lender's Right to Repayment on Demand: Construction, Implication and Good Faith?' (1998) 26 Australian Business Law Review 258 for a discussion of whether it is commercially desirable to condition a lender's right to demand repayment by a duty of good faith). I would only add that the reasoning of Byrne J in Renstel Nominees does not go so far as establishing that it is becoming 'increasingly accepted' that on-demand facilities attract an obligation of good faith and fair dealing.

78 In Renstel Nominees, Byrne J held that a bank's decision to cancel an overdraft facility was subject to a duty of good faith having regard to such well known authorities as Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 and Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 76 FCR 151. His Honour did not attempt an analysis of the content of the duty. Rather, he considered whether it was reasonable for the bank to have terminated the facility in the particular circumstances that prevailed, recognising that it had a contractual right to cancel the facility at its discretion and that it was entitled to have regard to its legitimate commercial interests in exercising that discretion.

79 Mr McCourt contended that the Bank was obliged to give a 'clear and fair' warning to the Borrowers before making a demand and that it ought to have been 'clear about what would happen at the expiry date'. The evidence discloses that from at least late January 2008, the Bank imposed conditions on the operation of the facility that were designed to reduce the Borrowers' indebtedness. Subsequently, meetings were held to discuss Mr McCourt's financial position and the conduct of the facility. An expiry date for the facility was specified in late August 2008. Interest on the facility was capitalised throughout 2008. I have already concluded that a court would most likely find at any trial that Mr McCourt understood that the facility would be terminated on 30 November 2008 and the amount outstanding would become due and payable unless some other agreement was reached. That was evident for some time prior to the Notice being served. The demand made in the Notice indicates that the amount outstanding under the facility was not significantly reduced during 2008 and that there had been delays in property transactions that were intended to achieve a reduction in debt. Mr McCourt has not suggested that he endeavoured to renegotiate the facility by providing financial information prior to 30 November 2008 or by taking other steps.

80 In all of those circumstances, I consider that the Bank did warn Mr McCourt that the facility would be terminated and a demand made for repayment of the amount outstanding well before the stipulated expiry date. I further consider that there is no real prospect of Mr McCourt persuading a court that the Bank acted unreasonably in cancelling the facility and issuing the notices of demand and default (assuming, without deciding, that reasonableness is the touchstone of good faith and fair dealing). The Bank apparently had good reason to cancel the facility (and Mr McCourt did not suggest otherwise) having regard to its legitimate commercial interests and the financial position of Mr and Ms McCourt as evidenced by the capitalisation of interest, the attempted selling down of properties and the failure to reduce the principal sum borrowed and it gave reasonable notice of its intention to do so.

81 Mr McCourt contends that the Bank is estopped, in effect, from relying on the various notices of demand and default that were served on him, alternatively, that it waived the effect of the notices. Reference was made to Barns v Queensland National Bank Ltd [1906] HCA 26; (1906) 3 CLR 925.

82 Subject to one matter that was raised in Mr McCourt's third set of submissions, the conduct said to constitute a waiver by the Bank of its right to cancel the facility, demand repayment and exercise a power of sale or to estop it from exercising those rights was substantially the same as that considered by Murphy J in McCourt (No 2) and it would seem, Kenneth Martin J in McCourt CIV 1809. I have independently come to the conclusion that Mr McCourt's prospects of successfully establishing that the Bank is estopped from asserting its rights under the facility agreement or that it has waived those rights are insufficient to justify the retention of the caveats. Two judges of this court have already considered the question of whether Mr McCourt's allegations concerning the meeting of 23 September 2008 could found an estoppel. In my view, the administration of justice could be brought into disrepute if I failed to have due regard to their Honour's decisions. I note that Mr McCourt's counsel did not identify any particular error in the reasons delivered by Murphy J and Kenneth Martin J (although I understand the decisions are the subject of an appeal). In any event, as I have already indicated, I agree with the conclusions reached by their Honours on the basis of my own assessment of the evidence.

83 As Murphy J observed in McCourt (No 2), the evidence provided by Mr McCourt about the meeting allegedly held on 23 September 2008 and the arrangement said to have been made at that meeting was 'sparse and ambiguous'. That ambiguity is compounded first, by the way in which Mr McCourt has sought to characterise in different terms the purpose and effect of the arrangement alleged and second, by the reference in this application to Mr McCourt's impressions. An impression is ordinarily something less definite than a belief or expectation engendered by a representation or course of conduct. The evidence of impressions did not assist in determining whether the Bank, through Mr Kappler, made a representation to Mr McCourt that could found an estoppel and Mr McCourt's impressions do not constitute evidence of a mutual assumption or understanding.

84 I agree with the observations of Murphy J at [55] and [56] of McCourt (No 2) as to why Mr McCourt's account of what is said to have occurred at the meeting on 23 September 2008 could not found an estoppel. To the extent that Mr McCourt's evidence in this matter was intended to suggest that an arrangement was made to keep him trading, I also agree with the reasoning of Murphy J at [57] to [61] of McCourt (No 2).

85 In his reasons delivered in McCourt CIV 1809, Kenneth Martin J concluded that Mr McCourt's evidence of the meeting of 23 September 2008 given in an affidavit sworn for the purpose of that matter was insufficient to sustain any argument that the Bank was estopped from exercising its powers of sale. His Honour noted that the argument for Mr McCourt was also directed to what Ms Facius' notes of the meetings of 2 July and 21 October 2008 disclosed concerning discussions between the Bank and Mr McCourt over the conduct of the facility. His Honour observed that the matters recorded in the meeting notes did not detract from the certainty and formality of the Bank's correspondence, especially its letter of 27 October 2008.

86 I agree with that observation and consider that it also applies to the discussion said to have been held on 23 September 2008. The statements attributed to Mr Kappler lack the unequivocal quality necessary for an estoppel, particularly when they are said to estop the Bank from subsequently asserting that the facility had expired and/or that repayment would not be required on expiry (rather than from asserting some position in respect of the application of the proceeds from the dissolution of the Clifton Motel partnership).

87 Further, the subsequent exchanges between Mr McCourt and the Bank suggest two matters. First, that whatever was discussed at the meeting was not intended to fix the parties' position in the future. That is plain from the difference between what Mr Kappler said and what was stated in the October 2008 correspondence. Second, that the Bank and Mr McCourt proceeded on an understanding or arrangement that the facility would come to an end on 30 November 2008 in the absence of an agreement to the contrary and that it would not be withdrawn in the interim, provided that Mr and Ms McCourt adhered to the Bank's conditions.

88 Again, I stress that I have formed this view solely for the purpose of considering whether Mr McCourt has established a prima facie case and that I am not evaluating his evidence in isolation. The conclusion is based on the contemporaneous documents (the letters of 25 August and 7, 16 and 27 October 2008 and the notes of the meetings of 2 July and 10 October 2008) considered in the context of the matters referred to at [47] of the reasons. The effect of the correspondence is, in my view, clear.

89 There are further reasons why I consider that Mr McCourt had not established a prima facie case to the effect that the Bank is estopped from, in effect, exercising its powers of sale. Those reasons revolve around the elements of a promissory estoppel identified by Brennan J in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, 428 - 429. In considering Mr McCourt's evidence by reference to those elements, I have inferred from his statutory declaration made 16 July 2010 that the assumption or expectation that he says he made or held as a result of the meeting of 23 September 2008, and the impression that he says he formed, was that the Bank would not cancel the facility and/or demand repayment of all money outstanding on or after 30 November 2008.

(a) There is no direct evidence that Mr McCourt acted or abstained from acting in reliance on an assumption or expectation that the Bank would not cancel the facility and/or demand repayment (and consequently, would not exercise its powers of sale). An assertion that he was 'counting on [the Bank] following through with what was agreed concerning the application of the proceeds of the Clifton Motel' is not evidence that he actively abstained from acting in a way that would found an estoppel in the terms contended for by Mr McCourt. There was no evidence, for example, that Mr McCourt refrained from seeking funding from other sources that would have been reasonably available and by which the facility could have been repaid.

(b) There was no evidence that the Bank knew or intended that Mr McCourt should act or abstain from acting in any way on an assumption or expectation that it would not cancel the facility and/or demand repayment of all monies outstanding on or after 30 November 2008. Rather, the Bank's correspondence with Mr McCourt in October 2008 clearly indicates the contrary. That is especially so when the correspondence is considered in the context of the dealings between the Bank and Mr McCourt from January 2008.

(c) There was also no evidence that any act or failure to act by Mr McCourt would cause detriment if the assumption or expectation was not fulfilled. Mr McCourt's evidence that he was planning to use part of the proceeds of the sale of the Clifton Motel to pay personal expenses and that 'as a result of [the Bank's] actions I experienced, and continue to experience extreme financial hardship' does not satisfy the requirements for a promissory estoppel. First, the detriment must flow from the change of position if the representation or assumption that induced the change is abandoned and not merely from the assertion of its legal rights by the party said to be estopped: see, for example, Grundt v Great Boulder Pty Ltd [1937] HCA 58; (1937) 59 CLR 641, 674 - 675 (Dixon J). Second, the evidence is directed to the consequences of the Bank applying the proceeds from the sale of the Clifton Motel in a particular way and not to any assumption or expectation made or held about cancellation or repayment of the facility.

(d) In The Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 Deane J noted that circumstances may be such that any significant detriment would be avoided altogether if the party affected was given reasonable notice of the intended departure from an assumption or expectation, particularly where the assumption or expectation concerned a future state of affairs (442). That is, a representation that does not give rise to a contractually binding promise but which may found an estoppel in equity may be withdrawn on reasonable notice (see for example, Equititrust Ltd v Franks [2009] NSWCA 128; (2009) 258 ALR 388 and Ajayi v R T Briscoe (Nigeria) Ltd [1963] 3 All ER 556, 559). On Mr McCourt's case, he assumed or expected that the Bank would not cancel and/or demand repayment of the facility as a consequence of what occurred at the meeting on 23 September 2008. In my view, any representation made at that meeting which induced such an assumption or expectation was withdrawn on reasonable notice by the correspondence exchanged between the Bank and Mr McCourt in October 2008. That is especially so in the context of an on-demand facility. The letter of 7 October 2008 confirmed once again that the facility would expire on 30 November. Consequently, the Borrowers were given nearly two months in which to take steps to either renegotiate the facility with the Bank or find alternative finance to discharge the facility. Mr McCourt did not protest in his letter of 16 October that the Bank was acting unreasonably by giving him insufficient time.

91 The extent to which, if at all, waiver and estoppel are separate doctrines has long been the subject of controversy: see Meagher, Gummow & Lehane's Equity: Doctrine and Remedies [17-140] and Young PW, Croft C and Smith ML, On Equity (2009) [12.320]. In Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd [2005] WASCA 106; (2005) 30 WAR 290 Steytler P at [40] observed that the doctrine of waiver still appeared to be governed by what was said by the High Court in Verwayen. His Honour then provided a detailed analysis of the differing views expressed by the judges in that case which well illustrated the uncertainties surrounding the doctrine.

92 The traditional formulation of waiver is the doing of an intentional act, with knowledge, by which a party renounces a right or benefit; the party's conduct prevents it from taking up two inconsistent positions: see Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305, 326. That formulation was accepted by Steytler P in Wiltrading: '... there must, at least, have been an unequivocal act with knowledge of the relevant facts' [50] (McLure JA agreed generally with the reasons delivered by Steytler P). That is the formulation that I have adopted for the purpose of determining whether Mr McCourt has established a prima facie case of waiver.

93 I do not consider that such a case has been made out in relation to a contention that the Bank waived its right to cancel the facility and/or demand repayment as a result of whatever occurred at the September 2008 meeting. That is for the same reasons that I have already given in relation to the estoppel ground.

94 Mr McCourt also submitted that the Bank had waived 'the effect' of the notices of default and demand by indicating to him in the letter of 27 January 2009 that the facility would continue to operate (this was the additional matter introduced by Mr McCourt's third set of written submissions to which I referred at the commencement of this section of the reasons). Put that way, the submission focuses on the effect of the communication on Mr McCourt's position and as such, traverses the same ground as a claim that the Bank was estopped. The line of demarcation, if any, between waiver and estoppel must lie in the unilateral character of waiver and concomitantly, the absence of any requirement for detrimental reliance: see KR Handley, Estoppel by Conduct and Election (2006) at 14-006 where reference is made to the observation of Lord Steyn in Super Chem Products Ltd v American Life and General Insurance Co Ltd [2004] UKPC 2; [2004] 2 All ER 358, 367 that:

Generally waiver is of a unilateral character: it involves giving up something. Estoppel by representation is bilateral in character and focuses on the impact on the representee.

95 The question, therefore, is whether the letter of 27 January 2009 constituted a deliberate act by which the Bank, with knowledge, gave up a right which it subsequently and inconsistently sought to assert. The facility had been cancelled and the 35 day period for making payment of the amount outstanding had expired at the time that the letter was sent. The rights subsequently asserted by the Bank were to issue the TLA Notice of Demand and to exercise powers of sale over the secured properties. The TLA Notice of Demand was issued two days after the letter.

96 I do not see how the letter of 27 January 2009 could constitute a waiver of the cancellation of the facility. The facility had been terminated and only a fresh agreement could bring about a new facility, even if that facility was on the same terms as had previously applied. In any event, the letter was not, in my view, an unequivocal act to that effect and the Bank did not, strictly, later assert an inconsistent right; that is, it did not subsequently purport to cancel the facility but rather, it exercised rights as a mortgagee (albeit that those rights could be traced back to the cancellation of the facility on 19 December 2008). Similarly, I do not consider that the letter was an unequivocal act by which the Bank waived the right to issue statutory notices of demand and realise on its securities.

97 In my view, Mr McCourt has not established a prima facie case of waiver.

98 Mr McCourt contends that the Bank engaged in conduct that was misleading or deceptive or likely to mislead or deceive by representing to him that he 'would not be in default if he had unpaid debt at the expiry date and then issuing default notices stipulating that the event of default was failure to pay all moneys due at the expiry date'. Again, the focus is on a representation allegedly made about what would occur on the expiry of the facility.

99 It is difficult to see how the statements said to have made by Mr Kappler could constitute a representation to the effect contended for by Mr McCourt. Further, as Kenneth Martin J observed in McCourt CIV 1809, Mr McCourt's claim that s 52 TPA was contravened is essentially a reformulation of the claim that the Bank was estopped from exercising its powers of sale. I agree with his Honour that the TPA claim does not establish a prima facie case for relief. It is not easy to see how Mr McCourt could succeed in establishing that he was misled or deceived or that there was a likelihood of him being misled or deceived as a consequence of anything said at the meeting held on 23 September 2008 given the terms of the correspondence exchanged in August and October 2008 and the matters discussed at the meetings held in July and October 2008.

100 As with the estoppel claim there are difficulties that would confront Mr McCourt in any claim for relief under the TPA. Moreover, although various orders may be made under s 87 TPA, ordinarily damages are awarded for a contravention of s 52. That has obvious significance in determining whether the caveats ought to be removed as a matter of convenience with Mr McCourt left to pursue any claim for compensation.

The exercise by the Bank of its powers of sale

101 In McCourt and McCourt (No 2) Murphy J held that there was not 'even an arguable case' that the Bank had failed to exercise its powers of sale in good faith. I agree with his Honour. Again, the conclusion that I have reached is based on my assessment of Mr McCourt's allegations and the evidence adduced on the Bank's application having due regard to the findings made by Murphy J and the reasons for those findings.

102 The relevant principles are summarised by Murphy J in McCourt [13] - [16] and McCourt (No 2) [65] - [69]. I gratefully adopt his Honour's summary; it encapsulates the principles that I have applied.

103 I have already set out in some detail the evidence relied on by Mr McCourt to substantiate his fear that the Bank has in the past exercised its powers of sale in bad faith and that it may do so in the future and also, the circumstances in which the Bank actually exercised its powers. I agree with the observation of Murphy J in McCourt that 'there was no evidentiary basis for thinking that there was any calculated indifference to [Mr McCourt's] interests, or that the sale was colourable by reason of it being to a party related to the Bank' [21] having regard to that evidence. The evidence discloses that the Bank followed a procedure of appointing agents, obtaining valuations and marketing appraisals and disposing of the properties in a way that was consistent with the advice received from its agents. There was no suggestion that the valuation reports obtained by the Bank were not professionally and independently provided.

104 Further, the evidence does not indicate that the prices obtained by the Bank for the properties that had been sold were inconsistent with the valuations it obtained so as to suggest fraud; indeed, the prices obtained were entirely consistent with the valuations and market appraisals obtained by the Bank. Mr McCourt's evidence does not demonstrate that he has a sufficient likelihood of successfully contending that the Bank exercised its powers in bad faith to justify the caveats being retained:

(a) The Leon Road property was sold at auction. The valuation reports to which Mr McCourt has referred at par 52 of his statutory declaration made 16 July 2010 were obtained five months prior to the auction and the statement attributed to the auctioneer that the properties were going 'cheap, cheap, cheap' does not demonstrate any want of good faith on the part of the Bank. It is self-evidently, an auctioneer's spiel.

(b) In relation to the Agett Road property, the evidence at par 59 of Mr McCourt's statutory declaration of what he was told by Ms Gray is of such a hearsay nature that no weight can be accorded to the evidence even allowing for the interlocutory nature of the application. That is especially given the seriousness of an allegation of bad faith. I note that Ms Gray provided a statutory declaration for the purpose of McCourt (No 2) (see the reasons of Murphy J, [42] - [44]) but there was no declaration or affidavit made by her that was relied on in this application. The other matters referred to in Mr McCourt's statutory declaration do not disclose any relevant basis for suggesting an absence of good faith in relation to the sale of the Agett Road property.

(c) The matters referred to at par 68 of Mr McCourt's statutory declaration concerning the identity of the purchaser of the Yallingup property are too tenuous to suggest any impropriety in the disposition of that property. Further, no weight can be given to a general and obviously inadmissible assertion that 'everyone who was interested in buying the Yallingup property knew the amount that NAB was prepared to accept for it'.

(d) The only matters complained of in respect of the sale of the Joel Crescent and Elizabeth Crescent properties were allegations of delay in the arranging for their sale. The Bank's evidence sufficiently explains the delay in arranging for the sale of the Joel Crescent units. Mr McCourt did not dispute what was stated by counsel for the Bank regarding the decision to sell the Elizabeth Crescent property last. The passage of time in relation to the sale of both properties does not demonstrate a disregard for Mr McCourt's interests. The inconsistency between Mr McCourt complaining about delay in the sale of those properties and his attempt to prevent the Bank from proceeding to complete their sale by lodging the caveats and contesting this application was not explained.

105 It was contended that the Code applied to the mortgages granted by Mr and Ms McCourt to the Bank and that Mr McCourt was entitled to relief pursuant to s 70(1) of the Code. That section provides that:

(1) Power to re-open unjust transactions. The Court may, if satisfied on the application of a debtor, mortgagor or guarantor that, in circumstances relating to the relevant credit contract, mortgage or guarantee at the time it was entered into or changed (whether or not by agreement), the contract, mortgage or guarantee or change was unjust, re-open the transaction that gave advice to the contract, mortgage or guarantee or change.

106 Section 70(2) provides that in determining whether a term of a particular credit contract, mortgage or guarantee is unjust, the court is to have regard to the public interest and to all of the circumstances of the case and may have regard to a number of specified matters. Mr McCourt's written submissions dated 30 July 2010 referred to the matters specified in pars (a), (c), (i), (j) and (l) of s 70(2) as being relevant to establishing injustice. The submissions then identified the 'transaction' for the purpose of s 70 as being the 'issue of default notices contrary to [the Bank's] previous representations' and/or the Bank's 'purported exercise of its power of sale'.

107 There may be scope for argument as to what constitutes a 'transaction that gave rise to the contract, mortgage or guarantee or change' for the purpose of s 70(1). However, it is clear that the issue of a default notice or the exercise of a power of sale pursuant to a mortgage is not such a transaction; they cannot be said to have given rise to 'the' contract, mortgage or guarantee or change to which the Code applies.

108 Further, the Code does not apply to every credit contract. Section 6(1) provides that the Code applies to the provision of credit and to the credit contract and related matters if, when the credit contract was entered into, the credit was provided or was intended to be provided wholly or predominately for personal, domestic or household purposes. Section 6(4) provides that for the purposes of s 6, investment by the debtor is not a personal, domestic or household purpose. Section 6(5) provides that the predominate purpose for which credit is provided is the purpose for which more than half of the credit is intended to be used. Finally, s 8 provides that the Code applies to a mortgage if, among other things, it secures obligations under a credit contract or a related guarantee.

109 Mr McCourt stated in his statutory declaration made 16 July 2010 that he has been a property developer since 1995. He also stated that there was an understanding between himself and the Bank that he would repay the facility by developing and selling properties. Those matters suggest that the credit provided through the facility may have been used wholly or predominately for investment purposes so that the Code would not apply to the facility and to the mortgages granted to secure the facility. On the other hand, the notice was apparently drawn on the assumption that the Code applied - it referred to the facility agreement as being a credit contract and provided a period of time for repayment of the amount outstanding that was consistent with the provisions of the Code.

110 It was said in Mr McCourt's written submissions dated 30 July 2010 that the Code applied to the mortgage granted in respect of the Leon Crescent property as:

(a) Mr McCourt had given evidence that he intended to live in a residence to be built on one of the two lots constituting the property with the other lot to be sold; and

(b) the remaining properties over which mortgages were granted to secure the facility were 'predominately for personal use in the sense that they were properties for the benefit of Mr McCourt's family'. I infer that this was intended to suggest that Mr McCourt's property development activities were undertaken ultimately for the financial benefit of his family.

111 Those matters do not establish that the dominant purpose of the facility was to provide credit to be used for personal, domestic or household purposes. It would be necessary to lead evidence as to how the credit that was provided by the facility was used to establish that the Code applied to the facility agreement and to the mortgages granted to secure the facility . Under the terms of the facility agreement, the facility was made available through linked sub-accounts. Evidence would be required to show how the funds made available through the facility to those sub-accounts were applied. There is no evidence of that kind.

112 The evidence clearly demonstrates that the facility was used predominantly for investment purposes. The submission that the Code applies appears to have been made without due regard to the provisions of s 6(4) and s 6(5). In my view, Mr McCourt has not established a prima facie case that the Code applied to the facility agreement or that he was entitled to relief under s 70 even if it did apply.

113 It is only necessary to consider the balance of convenience if the applicant for interlocutory relief has established a prima facie case. I have concluded that Mr McCourt has failed to establish such a case. However, I would have held that the balance of convenience favoured granting the Bank's application and ordering the removal of the caveats if I had found that Mr McCourt had established a prima facie case. That is the same conclusion that was reached by Murphy J and Kenneth Martin J in McCourt, McCourt (No 2) and McCourt CIV 1809.

114 Some matters relevant to the balance of convenience were identified at [40] of these reasons. It is also particularly significant that monetary compensation is an available and adequate form of relief for any of the causes of action that Mr McCourt might possess. There are, in addition, two matters that were raised in argument and which I consider are relevant to the balance of convenience. They concern the consequences of Mr McCourt being unable to make a payment into court if that was made a condition for the caveats being maintained and the apparent lack of worth of any undertaking as to damages that he might offer. I will expand on those matters before making some general comments about the balance of convenience in the context of this application.

115 The first matter relevant to the balance of convenience that was raised by Mr McCourt concerns whether the amount realised from the sale of all of the secured properties, including the Elizabeth Crescent property, will be sufficient to discharge the Bank's debt. Mr McCourt contends that there will be a surplus and accordingly, a payment into court should not be required as a condition for preserving the caveats; Ellison v Alliance Acceptance Ltd (1984) NSW ConvR 55-217 was cited in support of that submission.

116 Mr McCourt's contention rested on the following analysis of the evidence:

(a) Ms Facius stated at par 4.24 of her affidavit that the amount owing by the Borrowers as at 31 May 2010 was $5,402,500;

(b) an amount of $2,710,000 was to be deducted from that sum on account of the sale of the Leon Road properties, leaving a balance outstanding of $2,692,500;

(c) according to valuations referred to by Ms Facius, the sale of the Joel Crescent properties would realise $2,065,000 gross, leaving a balance owing of $627,500;

(d) Ms Facius had stated in her affidavit that the Elizabeth Crescent property had been previously valued at approximately $1 million, although an up to date valuation was required.

117 Those calculations make no allowance for continuing interest and costs. The effect of those expenses can be seen from the fact that on Mr McCourt's calculations, the amount owing after the sale of the Leon Road properties would be $2,692,500, whereas counsel for the Bank informed me at the reconvened hearing of the summons that the amount owing as at that date was $2,936,575. It should also be noted that the sale prices for the Joel Crescent units achieved so far were towards the bottom end of the valuation range.

118 The second matter concerns Mr McCourt's capacity to make a payment into court or to offer an undertaking as to damages that could adequately protect the Bank's position. As previously mentioned, an opportunity was provided to Mr McCourt, if he chose, to either make arrangements for a payment into court or to adduce evidence as to the worth of any undertaking that he might be willing to provide. Mr McCourt endeavoured to address those matters by reference to the evidence contained in the affidavit made by Mr Carter.

119 The effect of Mr Carter's evidence was that he was prepared to grant a second mortgage to the Bank as a form of security. No attempt was made to explain the terms on which the mortgage would be granted and how it would operate to secure the Bank's position. For example, on what basis could Mr Carter ensure that the first mortgagee would not exercise any right in the future that might jeopardise the Bank's interests?

120 In the event, counsel for the Bank stated at the reconvened hearing that the Bank did not wish to enter into a relationship with Mr Carter given its past dealings with him. The court cannot foist a mortgage on the Bank, particularly where it is proposed to be granted by a non-party who has no interest in the litigation (and I do not read the decision of Barker J in Linnpark Investments Pty Ltd v Macquarie Property Development Finance Ltd [2002] WASC 272 as suggesting otherwise) so the fact that such an offer was made and rejected merely becomes a factor to be taken into account in considering the balance of convenience generally. The matter was left at the conclusion of the reconvened hearing on the basis that I would have regard to any offer to make a payment into court that might be received shortly after the hearing. No offer has been made.

121 It may be readily inferred that any undertaking offered by Mr McCourt would be of little worth and counsel for Mr McCourt did not argue to the contrary. The inference can be drawn from the circumstances surrounding the Bank's application. It is reinforced by the fact that Mr McCourt did not provide any evidence of his financial position but rather offered security in the form of the second mortgage proposed to be granted by Mr Carter.

122 The question of the balance of convenience necessarily proceeds on the basis that I am wrong in concluding that Mr McCourt has not established a prima facie case. That leaves open the possibility on at least two of the grounds relied on by Mr McCourt that the 'ordinary rule' said to be laid down by Inglis v Commonwealth Trading Bank should be not be followed and considerations such as those referred to in Harvey v McWatters and Fletcher v Ould should prevail. I consider that the fact that Mr McCourt has not made a payment into court and that he is unable to offer an undertaking that would protect the Bank are matters to be taken into account in determining the balance of convenience but that they do not, of themselves, dictate that the Bank's application must succeed and the caveats must be withdrawn.

123 In my view, the balance of convenience favours the removal of the caveats not only for the reasons given by Murphy J in McCourt and McCourt (No 2) but also because it is unlikely that the amount realised on the sale of the remaining secured properties will be sufficient to discharge the Bank's debt if the caveats are maintained and at some later date it is held that the Bank ought to be permitted to exercise a power of sale over those properties. It is not clear when and in what circumstances the Bank might either have its debt repaid (Mr McCourt does not dispute the indebtedness) or its entitlement to exercise its power of sale determined. Mr McCourt has not commenced proceedings to vindicate his claims. He has not been able to obtain alternative sources of finance to pay out the Bank. It may be that sales in the near future of the remaining secured properties will be sufficient to discharge the debt but that position will quickly change with accumulating interest and costs.

124 Further, I consider that the Bank's position ought to be secured even on the assumption that, contrary to the view I have formed, Mr McCourt has demonstrated a prima facie case. Two other judges of this court have concluded that Mr McCourt could not establish a serious question to be tried on arguments that canvassed many (but admittedly, not all) of the matters raised in this application. That suggests that the Bank's position ought to be properly secured as the price for maintaining the caveats. The conclusion is reinforced by the rather unreal context within which the issue of convenience falls to be considered given that Mr McCourt has not commenced proceedings in pursuit of his claims despite the skirmishing that has now persisted for some time over the Bank's exercise of its powers of sale.

125 There was no submission by Mr McCourt that the relief to be granted on the Bank's chamber summons should be confined to the removal of the caveats on the Joel Crescent properties so as to permit settlement on the contracts of sale that had been entered into by the Bank. Nevertheless, I have considered that question and decided that the caveat lodged against the Elizabeth Crescent property should also be removed.

126 The estate or interest claimed in the Joel Crescent and Elizabeth Crescent caveats is identical. The arguments of Mr McCourt and the Bank at the hearing of the Bank's chamber summons did not distinguish between the caveats and I have found that Mr McCourt has failed to establish a prima facie case for their retention. There is no point in principle by which a distinction can be made between the Joel Crescent and Elizabeth Crescent caveats for the purpose of determining the Bank's interlocutory application. I can see no utility in limiting the grant of relief; that would serve only to defer matters and increase costs.

127 The Bank also sought an order prohibiting Mr McCourt from lodging any further caveats against the titles to the Joel Crescent and Elizabeth Crescent properties. However, it made no submission as to why such an order should be made and I do not consider that an order in those terms is appropriate. It would be an extraordinary step to absolutely prohibit Mr McCourt from lodging a caveat in the future. Events may subsequently occur that would properly ground a claim by Mr McCourt to an estate or interest in one or other of the properties.

128 Finally, the Bank sought an order for costs on an indemnity basis. Again, no submissions were made by the Bank as to why such an order should be made, although no doubt it relies on the fact that many of the matters canvassed in these proceedings have already been decided adversely to Mr McCourt on other interlocutory applications. However, I do not consider that it is appropriate to make an indemnity costs order. The application concerns different properties to those that were the subject of the previous proceedings. The decisions made in those proceedings are the subject of an appeal and there has been nothing in the way in which Mr McCourt's case has been conducted in this matter that would justify an indemnity costs order.