One Capital Pty Ltd v Casada Holdings Pty Ltd [2024] VSC 520

2 The dispute arises from a 'Loan and Security Agreement' that was entered into on 30 April 2021, between the plaintiff (as 'Lender') and the following related entities[1] (as 'Borrower') (Loan Agreement),[2] whereby the plaintiff agreed to provide a loan of $3.5 million to the Borrower entities, being:

(a) Ti Tree Food & Fodder Holdings Pty Ltd (ACN 644 962 523) in its own capacity and as trustee for the Ti Tree Food & Fodder Trust (Ti Tree Holdings);

(b) Ti Tree Food & Fodder Pty Ltd (ACN 644 952 296) (Ti Tree);

(c) Aileron Pastoral Holdings Pty Ltd (ACN 605 457 421) (Aileron); and

(d) the defendant.

3 Mr Craig Astill is, and was at all relevant times, a director of each of the Borrower entities.

4 On or about 4 May 2021, pursuant to the Loan Agreement, the plaintiff advanced the sum of $3.5 million to the defendant.[3] In support of the loan, the plaintiff was granted security, in the form of a second ranking mortgage over the following properties (among others):[4]

(a) # Clarke Street, Prahran, Victoria, 3181 (Clarke Street);

(b) # Roney Macs Twist, Dinner Plain, Victoria, 3898; and

(c) # Sugarmat Lane, Dinner Plain, Victoria, 3898,

(together, the Properties).

5 Relevantly, the borrowing the subject of the Loan Agreement was also supported by:

(a) a 'General Security Agreement' executed that same day, made between each of the Borrower entities (as 'Grantor') and the plaintiff (as the 'Secured Party') (General Security Agreement)[5] as collateral security for the repayment of the monies which may from time to time be owing or remain unpaid pursuant to the Loan Agreement; and

(b) two 'Specific Security Deeds' provided by the defendant (as 'Grantor') to the plaintiff (as the 'Secured Party'), the first of which concerned specified 'Marketable Securities'[6] and the second of which concerned 'Secured Money' held in nominated accounts maintained by the defendant with Westpac Banking Corporation.[7]

6 In addition to the Loan Agreement, on 30 April 2021 Mr Astill (as 'Guarantor') provided a 'Guarantee and Indemnity' in favour of the plaintiff (as 'Beneficiary') (Guarantee and Indemnity)[8] pursuant to which (at least) Mr Astill guaranteed the obligations of the 'Debtor' being relevantly each of the Borrower entities named above, in respect of the 'Guaranteed Moneys'[9].

7 Since the Loan Agreement and related documents were entered into on 30 April 2021, there has been a history of non-payment by the defendant and the other Borrower entities of monies due to the plaintiff, and a failure by them to comply with their obligations under the Loan Agreement, the General Security Agreement and second ranking mortgages, which resulted in the plaintiff commencing enforcement action under the securities.

8 On or about 28 February 2022, the plaintiff and the defendant entered into a Deed of Forbearance (Deed of Forbearance),[10] which was prepared and signed as part of a proposed refinancing with Fidelity Capital which ultimately did not proceed.[11] Under the Deed of Forbearance, the plaintiff agreed to temporarily forbear from further enforcement action under the relevant securities on the terms set out in the Deed,[12] which effectively required payment by the defendant of the 'Outstanding Debt' in the sum of $3,831,358.78 (being the amount due under the Loan Agreement as at 22 February 2022) plus enforcement and discharge costs and other amounts which may become due. However, the defendant defaulted under the Deed of Forbearance, by failing to pay the total amount alleged to be owing, which as at 28 October 2022 was stated as being $4,079,555.57, whereupon the plaintiff issued the Writ in this proceeding seeking an order for possession of the relevant properties.

9 The Writ that was issued on 28 October 2022 by One Capital as plaintiff, named Casada as the sole defendant. In the statement of claim filed with the Writ, the plaintiff pleaded that the total amount owing under the Loan Agreement was (then) the sum of $4,079,555.57,[13] which it alleged 'is now due and payable'. In the prayer for relief the plaintiff claimed, as against the defendant, 'possession' of the three properties located in Victoria, framed relevantly as follows:

(a) all that piece of land situated at and known as # Clarke Street, Prahran VIC 3181 more particularly described in Certificate of Title Volume ##### Folio 076;

(b) all that piece of land situated at and known as # Roney Macs Twist, Dinner Plain VIC 3898 more particularly described in Certificate of Title Volume ##### Folio 762;

(c) all that piece of land situated at and known as # Sugarmat Lane, Dinner Plain VIC 3898 more particularly described in Certificate of Title Volume ##### Folio 016;

10 That is to say, the plaintiff followed (what is now regarded as) a common practice amongst mortgagees of seeking (only) possession of the defendant's Properties pursuant to the plaintiff's rights as registered second mortgagee under the Transfer of Land Act 1958 (Vic), rather than payment of the outstanding debt.

11 On 14 November 2022, the defendant's (then) solicitor, Doherty & Colleagues Lawyers, filed an appearance for the defendant in the proceeding.

12 On or about 7 December 2022, the Borrower entities and Mr Astill entered into a Deed of Settlement (Deed of Settlement)[14] with the plaintiff, which was executed as a Deed on 8 December 2022.[15] Under the Deed of Settlement, the parties recorded that as at 7 December 2022, the outstanding debt owed to the plaintiff was $4,045,094 including legal costs, but the plaintiff had agreed to accept the sum of $3,925,000 (the Settlement Sum) on an 'all in basis' and in full and final payment of all monies owing under the Loan Agreement, the 'Further Agreements' and the Deed of Forbearance, and the Supreme Court proceeding on the terms and conditions set out in the Deed of Settlement. The 'Debtors' were required to pay the Settlement Sum 'on or before close of business, Friday, 9 December 2022', being the day following execution of the Deed. Upon receipt of the Settlement Sum in accordance with the terms of the Deed, the plaintiff agreed to unconditionally release the Debtors from (inter alia) all claims and to discharge and release any and all security interests. Subject to the plaintiff complying with the terms of the Deed, the Debtors also released the plaintiff and its servants or agents from all claims. The Deed expressly provided (in cl 4(m)) that 'time is of [the] essence.'

13 The Deed of Settlement also provided in cl 2(f) that:

Should the Debtors default in payment of the Settlement Sum, OCP [the plaintiff] shall be entitled to continue with the SC proceedings so as to enter judgment for the Debt [i.e. $4,045,094] (plus costs and any further accrued interest under the OCP Documents).

14 The next clause, cl 2(g), provided the mechanism agreed between the parties '[f]or the purposes of entering judgment against the Debtors pursuant to this Deed'.

15 As matters transpired, the defendant did not pay the Settlement Sum as required on 9 December 2022. Nor at any later stage has it paid the (then) outstanding debt of $4,045,094 including legal costs, that it acknowledged was owed to the plaintiff.

16 However, the defendant contends that since the issue of the Writ on 28 October 2022, the following amounts have been repaid to the plaintiff:[16]

17 Against that background, on 2 February 2024, the plaintiff's solicitors notified the defendant's (former) solicitors,[17] Doherty & Colleagues Lawyers, that the plaintiff intended to enter judgment for possession of the various mortgaged properties.[18] To that end, the plaintiff filed and served an affidavit of its solicitor, Mr Luke Owens sworn on 8 February 2024.[19] Therein Mr Owens deposed that that the defendant has failed to file and serve a defence within the prescribed time period, and stated relevantly that:

1. The Plaintiff seeks to enter judgment against the Defendant in default of defence for the following:

(a) an order for possession of:

(i) all that piece of land situated at and known as # Clarke Street, Prahran VIC 3181 more particularly described in Certificate of Title Volume ##### Folio 076;

(ii) all that piece of land situated at and known as # Roney Macs Twist, Dinner Plain VIC 3898 more particularly described in Certificate of Title Volume ##### Folio 762;

(iii) all that piece of land situated at and known as # Sugarmat Lane, Dinner Plain VIC 3898 more particularly described in Certificate of Title Volume ##### Folio 016;

18 On 13 February 2024, pursuant to one of the Specific Security Agreements made on 30 April 2021, the plaintiff appointed Mr Brent Kijurina (of Hall Chadwick) as receiver to the defendant in relation to the units held by it in the MLC Private Equity Co-Investment Fund 1.[20]

19 On 19 February 2024, the defendant's (new) solicitor, 'Richard Flory - Lawyer' filed a summons in this proceeding seeking the following orders:

1 Until further order, the plaintiff be restrained from:

(i) entering judgment in default of defence or seeking an order for possession of the land or otherwise entering judgment seeking a warrant for possession of the land;

(ii) taking any other enforcement action against the defendant including appointing a receiver or mortgagee in possession or any other external controller pursuant to any security and other documents entered into between the parties.

(iii) appointing a receiver to Casada Holdings Pty Ltd (ACN 167 964 310) or otherwise taking any further steps to enforce the Deed of Settlement dated 7 December 2022 ("the Deed of Settlement") pending hearing and determination of this proceeding.

(iv) taking possession of the properties referred to in the Deed of Settlement and in this proceeding.

(v) further disposing of any motor vehicles, the subject of the motor vehicle collection in the possession of the plaintiff and to fully account to the defendant for any sales.

1. The plaintiff provide a full accounting of all moneys paid to it and moneys it alleges is owed under any security and loan agreements it has with the defendant.
2. The plaintiff pay the defendant's costs on an indemnity basis.

20 On 21 February 2024, Delany J made orders on the papers, by consent, establishing a timetable for the filing and service of any further affidavit material by the respective parties, together with short submissions and the form of order for which they contend, and listed the defendant's summons for hearing on 1 March 2024.

21 When the defendant's summons came on for hearing before Delany J, his Honour informed the parties that he had read the material. When addressing the introductory submissions made by Mr Mereine on behalf of the plaintiff, his Honour noted that while there was only one summons before the Court, being that filed by the defendant, the submissions filed on behalf of the plaintiff indicate that it is effectively seeking orders for possession of the properties located in Victoria that remain, but was doing so after 'a two-year gap since an appearance with nothing happening, and there's a contest.'[21] In those circumstances, his Honour observed:[22]

So, it seemed to me that in terms of what your client [the plaintiff] wants, and I can understand why it seeks final relief, that the more appropriate course would be an order that within seven days your client file and serve any summons on which it wishes to rely in support of final relief in the proceeding together with any further affidavit evidence on which it wishes to rely in support of such final relief.

Because it seems to me that on one level your client is seeking to obtain judgment for breach of the settlement deed, but the settlement deed talks about a monetary sum not about relief for possession in the relevant default provision. And I'll come back to Mr Parncutt [counsel for the defendant] in a minute, but so far as the merits of the case are concerned, it might be that your client would wish to seek summary judgment by bringing an application for summary judgment, or alternatively, for judgment in default of defence.

I'm just concerned about a situation where the court proceeds after a two-year interval in circumstances where there's been a whole lot going on in the meantime without there being a separate summons that says this is why the plaintiff is entitled to final relief. . . .

. . .

If your client wants to enter judgment in default of defence, I'm just troubled about doing that if you like administratively in circumstances where so much has gone on since 2022 between the parties. And I think it would be preferable that your client's application for orders for possession proceed on the basis of a summons that relies on perhaps in the alternative judgment in default of defence, or summary judgment on the basis that the defendant does not have an arguable defence is the old language but does not have any real prospects of success.

MR MEREINE: Yes, being the phrase in the Civil Procedure Act.

HIS HONOUR: That's it.

MR MEREINE: Yes.

HIS HONOUR: So, that's what I've got in mind, but as I say, your client doesn't have a summons, but I think I should as part of what we deal with today make orders that provide for that and bring that back - I'd have in mind that that would be referred then to an associate justice for determination because I'm not going to be able to deal with it because of other commitments. But in a way, that's the easiest part of the application this morning.

22 His Honour then turned to address the issues arising on the defendant's summons and the submissions prepared by Mr Parncutt on its behalf, being first, the fact that a receiver had been appointed to the defendant albeit for a limited purpose only; second, the fact that Mr Astill is seeking to make a claim but he is not a party to the proceeding and thirdly, the matters complained about relate principally to the sale of the cattle station and the hay farm, each of which is located in the Northern Territory, and the registered proprietors of those properties are, in each case companies that are not parties to this proceeding or the defendant's application.

23 Mr Parncutt acknowledged that the correct plaintiff for any claim to prevent the sale of the Northern Territory properties is not Casada Holdings, but he asserted that Mr Astill, as guarantor, has standing to bring a suit, whereupon the following exchange ensued:[23]

MR PARNCUTT: But my point is - sorry to interrupt Your Honour, my point, Your Honour, is that the guarantor, Mr Astill, has standing to bring suit - - -

HIS HONOUR: Well, he might have standing, but he's not a party to this proceeding.

MR PARNCUTT: No, he would need to be made a party.

HIS HONOUR: But that's not part of your client's application.

MR PARNCUTT: No, but as the application originally began, it was an urgent injunction to prevent sale of further properties based on the evidence which was filed concerning the millions of dollars in sale at an undervalue.

HIS HONOUR: Well, I appreciate what you say about that, but my concern as you'll no doubt be aware is to try and identify whether or not your client has established a serious question to be tried or is likely to do so if I adjourn the matter. Now, at the moment, it seems to me that the answer is no for the reasons first of all, so far as Mr Astill makes a claim is not a party, so far as the complaints relate to the sale of the cattle station and hay farm in the Northern Territory, the registered proprietor of those properties is not a party, and so far as Mr Astill complains that he signed the contracts of sale having no choice but to do so, once again, if he has a cause of action, he's not a party, but really, they're contracts that relate to properties which are the properties not of Casada Holdings, are they?

MR PARNCUTT: True.

HIS HONOUR: So, there's no issue there. And then there's a complaint about motor vehicles allegedly sold by One Capital Partners [the plaintiff] in breach of some obligations, but the company who would have a right to complain about that is a company called Casson - - -

MR PARNCUTT: Investments.

HIS HONOUR: - - - Investments Pty Ltd and it's not a party either.

MR PARNCUTT: No. Well, what would be beneficial going forward now that the matter is being tidied up would be for Your Honour to respectfully grant leave for the joinder of - - -

HIS HONOUR: I'm not going to do that in circumstances where there's no formal application and no supporting material from those companies, and particularly in circumstances where as I understand it, two of the companies are now in receivership. I'm going to deal with the application that's been filed, and it seems to me that none of the matters that are referred to in the evidence that's relied on or in the submissions, including matters such as breach of 420A of the Corporations Act, are claims or matters that are properly made by Casada Holdings, and I think you agree with me, don't you?

MR PARNCUTT: Yes, Your Honour, but I do stress from the perspective of Mr Astill, he's a guarantor, his - - -

HIS HONOUR: Yes.

MR PARNCUTT: - - - interests have been affected by - - -

HIS HONOUR: Well - - -

MR PARNCUTT: - - - the sale at an undervalue.

HIS HONOUR: - - - that might be right, he can bring his own proceeding. But I'm dealing with the summons issued in this proceeding, he's not a party to that summons. It frankly seems to me that - and I think we're really in heated agreement about this, that what I should do in relation to the summons because there's no serious question to be tried to be raised by Casada Holdings [the defendant] is to order today that the summons be dismissed.

That doesn't mean that Mr Mereine's client can go ahead and enter default judgment because I propose to order that within seven days the plaintiff file and serve any summons on which it wishes to rely in support of orders for final relief in the proceeding together with any further affidavit evidence on which it wishes to rely in support of that relief, and I propose to order that any summons issued pursuant to order 2 is to be heard by an associate justice of this court or other judicial officer on a date to be determined by the court.

So, that means that at the moment, there's no order for judgment against Casada Holdings. Now, if Mr Astill or some other company wants to bring a proceeding, then that's a matter for it, but at the moment I'm dealing with a summons that was initially filed on 19 February following a request on 13 February for an urgent hearing.

MR PARNCUTT: Although it's a matter for my client, it would be prudent to issue a summons returnable at the same time as the application for summary judgment.

HIS HONOUR: Well, that's a matter for him to work out for others to deal with and not for me. So, what I propose to do this morning as I mention is I propose to dismiss the application by summons dated 19 February 2024. I propose to order that within seven days, the plaintiff, One Capital Partners Pty Ltd, file and serve any summons on which it wishes to rely in support of orders for final relief in the proceeding together with any further affidavit evidence on which it wishes to rely in support of final relief.

I propose to order that any summons referred to in order 2 is to be heard by an associate justice of this court, or by other judicial officer on a date to be determined by the court. And then what should I do about costs? It seems to me, Mr Parncutt, that your client can't sensibly oppose an order that it pay the plaintiff's costs of and incidental to the summons of 19 February, can it?

MR PARNCUTT: No.

HIS HONOUR: And then are there any other orders that should be made this morning?

MR PARNCUTT: Not that I can think of, Your Honour.

HIS HONOUR: Mr Mereine, are there any other orders that should be made this morning?

MR MEREINE: Yes, Your Honour. In respect of costs, we would seek them on an indemnity basis based on the principles in Colgate-Palmolive, and Your Honour's well familiar I'm sure with that decision and the decision in Fountain Selected Meats which is referred to in that case where Justice Woodward in Fountain Gate said: 'I believe that it is appropriate to consider awarding solicitor and client or indemnity costs wherever it appears that an action has been commenced or continued in circumstances where the applicant properly advised should've known that he had no chance of success'. . . . and, in my submission, the costs ought to be paid by the defendant on an indemnity basis.

HIS HONOUR: All right. Mr Parncutt, what do you say about that? It's correct to say, isn't it, that given the matters that you and I have discussed, and the matters referred to in Mr Mereine's submissions, that the applicant company should've known that it had no chance of success?

. . .

MR PARNCUTT: Well, on one view, Your Honour, the application by the plaintiff to seek to enter judgment in default of defence - - -

HIS HONOUR: But that's not what I'm dealing with because I don't have an application for that. Why we're here is because of the summons issued by your instructor on 19 February.

MR PARNCUTT: That was to prevent the entering of a judgment on a false fiction by the plaintiff.

HIS HONOUR: Well, it's for injunctive relief to prevent the appointment of a receiver, to prevent the possession of properties, to prevent the disposition of motor vehicles, and to take enforcement action, and to restrain the entering of judgment in default. And for the reasons that we've been discussing, it's clear to me that there's no arguable basis to support a claim for those orders. So, in the circumstances, I propose to order that the defendant pay the plaintiff's costs of and incidental to the summons dated 19 February 2024 on an indemnity basis.

24 Accordingly, his Honour made orders that day, along the lines indicated.

25 Further, on that same day (1 March 2024), the plaintiff moved to appoint Mr Brent Kijurina (of Hall Chadwick) as receiver and manager of all of the defendant's assets pursuant to the General Security Agreement.

26 By summons dated 5 March 2024, filed pursuant to the orders of Delany J made on 1 March 2024, the plaintiff sought orders pursuant to ss 61 and 63 of the Civil Procedure Act 2010 (Vic) (CPA) and r 22.03 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) that there be judgment for the plaintiff against the defendant and that the plaintiff recover possession of the three remaining Victorian properties. In the alternative, similar orders were sought pursuant to rr 21.02 and 21.03 of the Rules. The summons was listed for hearing before Efthim AsJ on 8 April 2024.

27 On 14 March 2024, the plaintiff filed a second affidavit of Luke Owens (which was sworn on 5 March 2024) in support of its summons (Owens 5 March Affidavit). On 5 April 2024, the plaintiff filed a third affidavit of Luke Owens (Owens 5 April Affidavit), providing an update in relation to the service of the summons and Owens 5 March Affidavit.

28 On 5 April 2024, the defendant filed an affidavit of Mr Astill (affirmed on 4 April 2024) in relation to the plaintiff's summons. Notwithstanding that no separate summons was filed by the defendant, the affidavit of Mr Astill included as Exhibit CAA-21, a copy of the defendant's (proposed) draft defence and counterclaim, which named Mr Astill as the second plaintiff by counterclaim. In his affidavit, Mr Astill stated:[24]

1. By way of final relief, Casada and I seek the relief sought in the attached Defence and Counterclaim as follows:

(a) A declaration that One Capital Partners Pty Ltd (ACN 632 377 274) breached s420A of the Corporations Act 2001 (Cth) and/or s 90 Law of Property Act 2000 (NT) in the conduct of the sale.

(b) Damages at common law, alternatively equitable compensation.

(c) Further or in the alternative to sub-paragraph (b), an order declaring that Casada and I be entitled in equity to be credited with such deficiency in reduction of our liability caused by OCP sacrificing, impairing or diminishing the security by the sale at an undervalue of the Aileron Cattle Station and the Oolloo Hay Farm.

(d) An order that OCP provide a full accounting of all moneys paid to it and moneys it alleges are owed under any security and loan agreements it has with Casada or me.

(e) An order that OCP pay the costs of the Plaintiffs by counterclaim on an indemnity basis.

The hearing of the plaintiff's application for summary judgment before Efthim AsJ

29 The plaintiff's application for summary judgment was heard by Efthim AsJ on 8 April 2024. At the hearing Mr Mereine appeared for the plaintiff and Mr Willis SC and Mr Parncutt appeared for the defendant. The plaintiff relied on its (earlier) outline of submissions that was prepared by Mr Mereine and filed on 29 February 2024 for the hearing before Delany J.[25] The defendant relied on its outline of submissions, prepared by Mr Willis SC and Mr Parncutt, dated 8 April 2024.[26]

30 On 6 May 2024, his Honour delivered his reasons for judgment. In essence, his Honour:

(a) commenced by construing the Deed of Settlement in order to ascertain whether the plaintiff has a right to possession of the Properties;

(b) determined (at paragraph [19]) that, as the Settlement Sum (of $3,925,000) was not paid, the Deed of Settlement did not prevent the plaintiff from enforcing its security interests and seeking possession of the Properties;

(c) noted (at paragraph [22]) that the matters raised in the proposed counterclaim, which the defendant relies on to set up a set off, were before Delany J and no new evidence was filed in relation to the present application before him;

(d) was of the view (at paragraph [25]) that the defendant has 'no reasonable prospects of success' on the proposed counterclaim, based on the same evidence as was before Delany J;

(e) was of the view (at paragraph [27]) that it would not be appropriate to join Mr Astill as a defendant so that he could bring a counterclaim in this proceeding. But his Honour noted that if Mr Astill wishes to continue with such a proceeding it was open to him to bring a separate action if he chose to do so;

(f) observed (at paragraph [32]) that as there is no question of law or fact raised by the plaintiff's pleading concerning Mr Astill, and no claim is made against him as a guarantor, in the circumstances of this case he would not exercise his discretion to make an order under r 9.06(b)(ii); and

(g) determined (at paragraph [34]) that in circumstances where there is no defence and the Deed of Settlement does not prevent the plaintiff from being entitled to possession of the securities, it is in the interests of justice that there be summary judgment against the defendant.

31 Accordingly, his Honour found that the plaintiff was entitled to enter judgment against the defendant for recovery of possession of each of the three properties.

32 Later that day (being 6 May 2024), the defendant filed a fifth affidavit of Mr Craig Astill setting out the basis for its request, pursuant to r 66.16 of the Rules, that the Court grant a stay of execution of orders to be made pursuant to Efthim AsJ's judgment.

33 On 7 May 2024, his Honour made orders that there be judgment for the plaintiff against the defendant, that the plaintiff recover possession of the Properties, and that the defendant's application for a stay of execution be dismissed.

34 By notice of appeal filed on 21 May 2024, the defendant appeals against the whole of the orders and judgment made by Efthim AsJ on 7 May 2024.

35 In its Notice of Appeal, the defendant lists various grounds of appeal, which may be summarised as follows:[27]

(a) Efthim AsJ incorrectly construed the Deed of Settlement as not prohibiting the plaintiff from seeking possession of the Properties, in circumstances where the Deed of Settlement effectively confined the plaintiff to seeking only judgment for a specified amount;

(b) Efthim AsJ failed to properly exercise his discretion by not granting leave to the defendant to file a defence and counterclaim, in circumstances where the assertions in the defence and counterclaim required a full hearing on the merits; and

(c) Efthim AsJ erred in holding that Mr Craig Astill, as guarantor under a Deed of Guarantee and Indemnity dated 30 April 2021, should not be joined to the proceeding and allowed to bring a counterclaim.

36 The defendant seeks that the orders made on 7 May 2024 by Efthim AsJ be set aside, the defendant be granted leave to file and serve a defence and counterclaim, and that Mr Astill be granted leave to be added as a defendant (and plaintiff by counterclaim) to the proceeding.

37 Further, by summons filed on 25 July 2024, together with an affidavit in support of Mr Astill affirmed on 25 July 2024, the defendant seeks a stay of the orders of Efthim AsJ made on 7 May 2024 pending the hearing of this appeal.

38 The appeal and stay application are brought by Mr Astill in his capacity as the sole director of the defendant. The receiver does not seek to prosecute the appeal.

Appeal from a determination by an Associate Justice

39 Section 17(3) of the Supreme Court Act 1986 (Vic) (Supreme Court Act) establishes that an appeal 'from any determination of the Trial Division constituted by an Associate Judge' lies to 'the Trial Division constituted by a Judge of the Court.' Any appeal brought under s 17(3) of the Supreme Court Act is to be brought in accordance with rr 77.06.1 to 77.06.9 of the Rules.[28]

40 Nowadays, an appeal from an Associate Judge is required to be conducted by way of 'rehearing'.[29] As was noted by Ferguson J in Oswal v Carson,[30] the Rules in relation to appeals from orders of Associate Judges were changed with effect from 1 January 2013, whereas previously such an appeal was to be conducted by way of rehearing de novo. In Allesch v Maunz, the High Court explained the essential difference between a 'rehearing' and a 'hearing de novo', as follows:[31]

For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error.

41 Accordingly, in the present case, the defendant is required to demonstrate an error of law on the part of Efthim AsJ before the Court may exercise its appellate power.[32]

42 The powers of a judge hearing an appeal from an Associate Judge are set out in r 77.06.9 of the Rules as follows:

77.06.9 Powers of Judge of the Court hearing appeal

(1) On an appeal referred to in Rule 77.06, a Judge of the Court shall have all the powers of the Court constituted by an Associate Judge.

(2) The Judge of the Court shall have power to -

(a) receive further evidence upon questions of fact, whether by oral examination in court, by affidavit, or by deposition taken before an examiner;

(c) give any judgment and make any order which ought to have been given or made; and

(d) make any further or other order as the case may require.

(3) The powers of a Judge of the Court under this Rule may be exercised notwithstanding -

(a) that no notice of appeal has been given in respect of any particular part of the judgment or order of the Associate Judge which is the subject of the appeal or by any particular party to the proceeding before the Associate Judge; or

(b) that any ground for allowing the appeal or for affirming or varying the judgment or order of the Associate Judge is not specified in the notice of appeal.

43 Further, it should also be noted that pursuant to r 77.06.6, unless otherwise ordered, an appeal shall not operate as a stay of execution or of proceedings under the judgment or order.

44 The appeal was listed for hearing before me on 6 August 2024 on an estimate of one day. As matters transpired, the hearing was not completed within the day and a second day was required.

45 To date the defendant has filed the following affidavits on which it relies:

(a) the affidavit of Mr Craig Astill affirmed on 19 February 2024 (First Astill Affidavit);[33]

(b) the affidavit of Mr Craig Astill affirmed on 22 February 2024 (Second Astill Affidavit);[34]

(c) the affidavit of Mr Craig Astill affirmed on 29 February 2024 (Third Astill Affidavit);[35]

(d) the affidavit of Mr Craig Astill affirmed on 5 April 2024 (Fourth Astill Affidavit);[36]

(e) the affidavit of Mr Craig Astill affirmed on 6 May 2024 (Fifth Astill Affidavit);[37] and

(f) the affidavit of Mr Craig Astill affirmed on 25 July 2024 (Sixth Astill Affidavit).[38]

46 In support of its appeal, in addition to the oral submissions made by Ms Worsfield, the defendant relies upon its outline of submissions, prepared by Mr Flory, filed on 24 July 2024, and a further outline of submissions prepared by Ms Worsfield which was filed on 9 August 2024. The submissions filed on 24 July 2024, prepared by Mr Flory, incorporate written submissions relied upon by the defendant at earlier hearings in this proceeding - namely, the written submissions of Mr Willis SC and Mr Parncutt dated 8 April 2024 (Willis SC submissions) (and relied upon at the hearing of the summary judgment application before Efthim AsJ on 8 April 2024), and the written submissions of Mr Parncutt dated 22 February 2024 (and relied upon at the hearing before Delany J on 1 March 2024).

47 The plaintiff relies on the following affidavits:

(a) the affidavit of Mr Gautam Rajamani sworn 29 February 2024 (Rajamani Affidavit);[39]

(b) the affidavit of Mr Luke Kenneth Owens sworn 5 March 2024 (Owens 5 March Affidavit);[40]

(c) the affidavit of Mr Luke Kenneth Owens sworn 5 April 2024 (Owens 5 April Affidavit);[41]

(d) the affidavit of Mr Luke Kenneth Owens sworn 11 July 2024 (Owens 11 July Affidavit);[42]

(e) the affidavit of Mr Luke Kenneth Owens sworn 31 July 2024 (Owens 31 July Affidavit);[43] and

(f) the affidavit of Mr Luke Kenneth Owens sworn 14 August 2024 (Owens 14 August Affidavit).[44]

48 In addition to the oral submissions made by Mr Kirby on the hearing of the appeal, the plaintiff relied on its written submissions dated 29 February 2024 (prepared by Mr Mereine for the hearing before Delany J and relied on at the hearing of the summary judgment application before Efthim AsJ), its outline of submissions dated 31 July 2024, and its supplementary outline of submissions dated 13 August 2024 in opposition to the defendant's appeal, in which the plaintiff makes submissions in relation to the following matters:

(a) the defendant's specific grounds of appeal;

(b) the (alleged) incompetency of the appeal; and

(c) the defendant's application for a stay of execution.

49 Whilst the plaintiff raised a 'preliminary point', challenging the competency of the appeal on the basis it is brought by the defendant's sole director, purportedly in the name of the defendant, but in circumstances where a receiver and manager has been appointed, it is convenient to deal with that issue at the end of my reasons, rather than in advance of the specific grounds of appeal.

Grounds 1(a)-(d) - Does the Deed of Settlement prohibit the plaintiff from seeking possession of the Properties?

50 Pursuant to ground 1, the defendant submits that Efthim AsJ erred in law in concluding[45] that the Deed of Settlement, by which 'the plaintiff and the defendant compromised the proceeding', did not prohibit the plaintiff from seeking possession of the Properties. The defendant contends that, in so holding, his Honour made several (interrelated) errors. Namely, his Honour:

(a) incorrectly decided that the issue before the Court was whether by settling the Supreme Court proceeding the plaintiff relinquished its securities ̶ whereas the correct issue was whether the plaintiff was entitled to an order for possession in circumstances where the Deed of Settlement provided only for judgment for a sum certain and did not provide for an order for possession;

(b) failed to give effect to the terms on which the plaintiff had compromised the Supreme Court proceeding and failed to allow the defendant to enforce such a compromise;

(c) failed to hold that the plaintiff was required by the terms of the Deed of Settlement to bring a claim to enforce the compromise in the proceeding, rather than sue on the securities; and

(d) failed to take into account that the plaintiff's original claim had been transmuted from one suing on the loan to one suing on the Deed of Settlement.

51 In summary, the defendant submits that, '[a]s a matter of form', by the Deed of Settlement, the plaintiff compromised its claim and 'turned the relief available to it merely into a claim for judgment for a debt.'[46] In support of this argument, the defendant points to the Deed of Forbearance[47] that was entered into ten months earlier,[48] which, in contrast, provided that upon default, the plaintiff was entitled, amongst other things, to commence proceedings and enter judgment for possession of the property or for payment of a monetary amount.

52 The defendant contends that while the plaintiff made its application for summary judgment before Efthim AsJ on the basis that it was not seeking to enforce the Settlement Deed, but rather was seeking to enforce the securities it held that had not been released,[49] that course was not open to it. That is because, so the defendant submits, cl 2(f) of the Deed provided:

(f) Should the Debtors default in payment of the Settlement Sum, OCP shall be entitled to continue with the SC proceedings so as to enter judgment for the Debt (plus costs and any further accrued interest under the OCP Documents).

53 Before Efthim AsJ, the defendant acknowledged that the Deed of Settlement did not deprive the plaintiff of its security, but it submitted that the Deed of Settlement, by its terms, effected a compromise between the parties and as such, the compromise binds each of the plaintiff and the defendant as to the means by which they may pursue their rights. On the hearing of the appeal, the defendant submitted that:[50]

The Settlement Deed:[51]

1. fixes the quantum of the debt owing by the borrowers to One Capital [the plaintiff];
2. provides that upon payment of the agreed settlement sum, the releases provided for in clause 3 operated. Until released (ie receipt of the settlement sum), One Capital still held its securities, including the mortgage over the three properties.
3. provides on default that One Capital could enter judgment for the debt (and the debt only), and then enforce the judgment in a manner of its choice.

54 Further, the defendants do not cavil with his Honour's reliance on the decision of the High Court in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd,[52] where the High Court reiterated that a commercial contract is to be construed objectively according to business commonsense. Relevantly, in their joint judgment, Kiefel, Bell and Gordon JJ stated:[53]

[16] It is well established that the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it.

[17] Clause 4 is to be construed by reference to the commercial purpose sought to be achieved by the terms of the lease. It follows, as was pointed out in the joint judgment in Electricity Generation Corporation v Woodside Energy Ltd, that the court is entitled to approach the task of construction of the clause on the basis that the parties intended to produce a commercial result, one which makes commercial sense. It goes without saying that this requires that the construction placed upon cl 4 be consistent with the commercial object of the agreement.

55 Rather, the defendant takes issue with Efthim AsJ's finding (at paragraph [19]) that cl 2(f) together with cl 3 of the Deed of Settlement did not prohibit the plaintiff from seeking possession. Relevantly, his Honour stated:

[19] After taking into account clauses 2(f) and 3.1(a), (b) and (c), I accept the plaintiff's submission that a reasonable business person in the position of the contracting parties would not have understood the plaintiff to forego its right to enforce the guarantee. The Deed of Settlement makes it clear that upon receipt of the settlement sum, which has not been paid by the defendant, the plaintiff will immediately discharge and release any and all security interests. The security interests remain on foot and, in my view, the Deed of Settlement does not prohibit the plaintiff from seeking possession.

56 The defendant also points to his Honour's erroneous reference (in the first sentence of the passage above) to the plaintiff's 'right to enforce the guarantee' as indicating that his Honour 'erred in his understanding of the nature of the parties' obligations in interpreting the Settlement Deed', because 'Casada [the defendant] was a borrower, not a guarantor pursuant to the Loan Agreement the Deed of Forbearance and the Settlement Deed.'[54]

57 Against that background, the defendant contends that his Honour:[55]

erred in not finding that a reasonable business person in the position of One Capital and Casada would have understood that the Settlement Deed required:

a. One Capital to bring its claim for debt (per clause 1(f));[56] and

1. enforce any judgment subsequently obtained in the manner of One Capital's choice.

58 The defendant's submission in respect of each of the companion grounds of appeal 1(b), 1(c) and 1(d), the text of which is set out earlier, refer to and rely upon its submissions in respect of ground 1(a).

59 In respect of ground 1(b), that his Honour 'failed to give effect [to] the terms on which the plaintiff had compromised the Supreme Court proceeding and failed to allow that [sic] the defendant to enforce such a compromise', the defendant further submits that:[57]

Associate Justice Efthim erred in finding that the construction of the Settlement Deed entitled One Capital to be able to obtain more than what was bargained for and specified in the Settlement Deed, namely a judgment for debt pursuant to clause 2(f).

60 In relation to ground 1, the plaintiff submits that:

(a) his Honour correctly construed the Deed of Settlement by reference to what a reasonable business person in the position of the parties would have understood it to mean and on the basis that the parties intended to produce a commercial result which makes commercial sense. Further, contrary to the defendant's assertion in ground 1(a), '[h]is Honour correctly found that the Deed [of Settlement] did not prevent the plaintiff from enforcing its security interests and seeking possession of the Properties';[58]

(b) the Deed of Settlement provides in cl 2(c) for the acceptance by the plaintiff of the Settlement Sum, which was to be paid by 9 December 2022, being the day after the Deed of Settlement was executed. As payment of the Settlement Sum was not made, and given that cl 4(m) of the Deed of Settlement provided that 'time is of [the] essence', the releases in cl 3 did not take effect;

(c) in response to ground 1(b), the plaintiff contends that the Deed of Settlement did not compromise the proceeding; rather, it says that under cl 2(e) of the Deed, the discontinuance of the proceeding was conditional on the payment of the Settlement Sum. In circumstances where the Settlement Sum was not paid, the proceeding remained on foot,[59] and the plaintiff sought orders in the proceeding for possession of the Properties. That is because the statement of claim sought only possession of the Properties, not a debt, and the plaintiff's summons[60] before Efthim AsJ sought summary judgment for possession of those Properties on that basis. Indeed, as the plaintiff notes, it was not open to it to claim a debt unless it first amended both its pleaded claim and the relief sought, which the plaintiff did not seek to do or need to do.[61] Further, as the plaintiff did not proceed under the Deed of Settlement for an order for possession of the Properties, any issues concerning the procedure in Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd[62] and Seachange Management Pty Ltd v Pital Business Pty Ltd[63] are not relevant;[64]

(d) in response to the defendant's assertion that his Honour erroneously referred to the plaintiff's 'right to enforce the guarantee' and thereby demonstrated a misunderstanding of the 'nature of the parties' obligations in interpreting the Settlement Deed,' the plaintiff submits that '[t]here is nothing in this point'.[65] That is because:[66]

[10] A proper reading of all of paragraph [19] of the Reasons shows that his Honour was referring to the fact that the plaintiff's security interests had not been released under the Settlement Deed and they remained on foot, which meant that the plaintiff could seek possession of the Properties.

[11] The defendant was named as a joint borrower and had also provided mortgages over its Properties. The Proceeding concerns the plaintiff's enforcement of those mortgages, also known as security interests. The defendant was being sued in its capacity as a mortgagor.

(e) in respect of each of grounds 1(c) and 1(d), the plaintiff relies on its submissions in response to ground 1(b) above.

61 In my view, essentially for the reasons advanced by the plaintiff, his Honour did not fall into error when construing the Deed of Settlement, and in finding that the Deed did not prevent the plaintiff from enforcing its security interests and seeking possession of the three Victorian properties. His Honour construed the Deed correctly, by reference to what a reasonable business person in the position of the parties would have understood it to mean, and on the basis that the parties intended to produce a commercial result which makes commercial sense.

62 In cl 2(a) of the Deed, the Defendant acknowledges the Debt owing of $4,045,094.00 as at 7 December 2022. The Deed then records in cl 2(b) that the plaintiff has agreed to accept the lesser sum of $3,925,000.00, being the 'Settlement Sum', on an 'all in basis' and in full and final payment of all monies owing under the various other agreements 'on the terms and conditions set out in this Deed'. Further, the Deed provides in cl 2(c) that '[t]he Debtors must pay the Settlement Sum to [the plaintiff] on or before the close of business, Friday, 9 December, 2022', i.e. the day following execution of the Deed. Clause 4(m) provided '[t]hat time is of [the] essence.'

63 Under cl 2(e) of the Deed, consent orders discontinuing the Supreme Court proceeding were to be signed contemporaneously with payment of the Settlement Sum. But as that payment was not made, on time or at all, the obligations under cl 2(e) were not enlivened and the releases set out in cl 3.1 did not take effect. Each of those releases was framed in terms of '[u]pon receipt of the Settlement Sum'. Relevantly, the release in cl 3.1(b) provided that '[u]pon receipt of the Settlement Sum, [the plaintiff] shall immediately discharge and release any and all security interests'. However, absent payment of the Settlement Sum that release did not take effect. And as the plaintiff noted, other than the conditional releases in cl 3, which did not become effective as the Settlement Sum was not paid, the Deed does not contain any provisions which otherwise restrict or extinguish the plaintiff's rights under its securities.[67]

64 Clause 2(f) of the Deed provided that should the Debtors default in payment of the Settlement Sum, the plaintiff 'shall be entitled to continue with' the Supreme Court proceeding so as to enter judgment for the Debt. Clause 2(g) provided a mechanism for the plaintiff to enter judgment against 'the Debtors', i.e. not just against the defendant, pursuant to the Deed if it chose to do so.

65 In circumstances where payment of the Settlement Sum was not made in accordance with the Deed, or at all, the proceeding was not compromised and the plaintiff's security interests had not been released, and the plaintiff was not foreclosed from continuing with its proceeding. In my view, the defendant's contention that notwithstanding the default in payment of the Settlement Sum in accordance with the Deed, the Deed nevertheless operated to foreclose the plaintiff's right to pursue its claim in this proceeding for possession of the three properties pursuant to its security interests, is an 'uncommercial' construction. That construction does not accord with what a reasonable business person in the position of the parties would have understood the Deed to mean, and does not produce a commercial result which makes commercial sense.

Ground 2 - failure to properly exercise discretion re filing defence and counterclaim

66 Pursuant to ground 2, the defendant submits that his Honour failed to properly exercise his discretion by not granting the defendant leave to defend and bring a counterclaim under s 64 of the CPA in circumstances where the proposed defence and counterclaim raised the issue of the sale by the plaintiff of properties in the Northern Territory ̶ which were known to the parties as the Oolloo Hay Farm and Aileron Cattle Station ̶̶ at (what the defendant alleged was) an undervalue. The defendant submits that had the sale of those properties been properly conducted (and not sold at an undervalue), its debts to the plaintiff would have been repaid in full, rendering this issue of such a nature that only a full hearing on the merits was appropriate.

67 By its proposed defence and counterclaim, which was made available at the hearing before his Honour, the defendant raises claims against the plaintiff relating to its (alleged) breach of its (mortgagee's) duty in equity, s 420A of the Corporations Act 2001 (Cth) and s 90 of the Law of Property Act 2000 (NT). The defendant contends that the plaintiff sold, as mortgagee, the Aileron Cattle Station and the Oolloo Hay Farm for the sum of $15,600,000[68] in circumstances where it was aware that there were recent valuations and expression of interest for significantly higher amounts. The defendant asserts that the plaintiff took no action prior to executing the relevant transfers '(such as obtaining valuations or obtaining the advice from experts as to whether the sale process previously conducted by Aileron, Ti Tree and Ti Tree Fodder was appropriate) to satisfy itself that it was selling Aileron Station and Oolloo Farm for market value and utilising the correct process.'[69] And whilst a claim for breach of the duty of good faith owed by the plaintiff to the defendant is 'not specifically pleaded in the draft defence and counterclaim', the defendant submits that 'the factual matters giving rise to the cause of action are pleaded' and '[o]n appeal the Court is entitled to consider this cause of action in addition to the causes of action pleaded in the draft Defence and Counterclaim.'[70]

68 The defendant submits that these are 'serious, substantial and weighty issues which set up a set-off against the debt claimed' and are 'matters on which a full trial on the merits is required', such that '[i]t cannot be said, to the summary judgment standard, that they have "no real prospect of success" (s 63(1))'.[71] Further, even if, contrary to the defendant's submission, s 63 of the CPA were satisfied, the defendant contends that the grounds set out in the proposed defence and counterclaim are of such a nature that only a full hearing on the merits is appropriate and it is not in the interests of justice to grant summary judgment.[72]

69 The defendant contends that his Honour 'erred in not exercising his discretion and allowing the the [sic] proceedings to proceed to trial pursuant to section 64 of the [CPA], including permitting Mr Astill and Casada to bring their counterclaim.'[73]

70 The defendant submits that insofar as the application for summary judgment might be based on the terms of the Deed of Settlement, the matter is governed by the principles set out by the Full Court in Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd[74] and the Court of Appeal in Seachange Management Pty Ltd v Pital Business Pty Ltd[75] (Seachange).[76] The defendant contends that Efthim AsJ contradicted principles affirmed in Seachange, where Maxwell P and Nettle JA cited, with approval, McPherson J in General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd.[77] In Seachange, Maxwell P and Nettle JA observed that some agreements involving extraneous matters 'may be summarily enforced' but that 'the Court will reject an application for summary enforcement unless clearly satisfied that justice can be done.'[78] Further, their Honours said, whether summary judgment would be granted would depend on 'the extent to which extraneous matters are involved, how substantial are the questions of credibility likely to arise and whether pleadings and discovery may become desirable.'[79]

71 The plaintiff submitted, by way of overview, that the defendant's contentions concerning the proposed defence and counterclaim are untenable for the following reasons:[80]

(a) the damages claim under the proposed Defence and Counterclaim is not a defence to the plaintiff's claim for possession of the Properties;

(b) as has been referred to by both Delaney [sic] J and Efthim AsJ, the two Northern Territory properties the subject of the proposed damages claim for sale at an undervalue [being the Aileron Cattle Station and the Oolloo Hay Farm] were not owned by the defendant and it has no cause of action in respect of those sales transactions. The former owners of those properties can bring their own separate damages claims if they seek to do so;

(c) in seeking to agitate the claims in the proposed Defence and Counterclaim, the defendant is falling foul of Inglis v Commonwealth Trading Bank of Australia[81] by not paying the claimed mortgage debt into Court or otherwise providing acceptable security for it in circumstances where the plaintiff's current security position is deteriorating by the day;

(d) the plaintiff was not the "controller" of the two Northern Territory properties when the contracts of sale to sell them were entered into;

(e) the transaction agent, Mr Obeid, who conducted the sale of the Northern Territory properties, was retained by the defendant and was its agent, not the plaintiff's agent;

(f) the first mortgagee over the Northern Territory properties, Merricks Capital (Mr Geoff Davis), was the party threatening to enforce its security if the properties were not sold under an unconditional contract;[82]

(g) the claims in the proposed Defence and Counterclaim against the plaintiff as to the sale process have no merit; and

(h) the tenuous and faint claim of duress against Mr Astill is groundless.

72 For the assistance of the Court, counsel for the plaintiff prepared, as an annexure to the plaintiff's supplementary submissions filed on 13 August 2024, a 'Chronology of sale process for the NT Properties - Oolloo Farm and Aileron Station'. The chronology steps through the relevant events between 30 April 2021 (when the Loan and Security Agreement was executed) and 30 January 2024 (when settlement of the sale of the NT properties took place) set out in the extensive body of material that is discussed in, and exhibited to, the Rajamani Affidavit.[83]

73 The plaintiff submits that the chronology (and reference to the facts and documents set out therein) demonstrates that 'the sales process and selection of the purchaser was not conducted by the plaintiff or its agents.'[84] Rather, the position was that a comprehensive sales process by expressions of interest was conducted by CMFC (Mr Obeid) and LAWD real estate agents', each of whom were appointed by Mr Astill in his capacity as sole director of the vendor companies.[85]

74 As for the valuations, the evidence was that these were prepared on 7 and 8 February 2023, and the extensive sale process commenced almost six months later, with potential purchasers undertaking their own due diligence and making their own determination as to value. The plaintiff submitted that:[86]

Numerous potential purchasers, including CPC and Mr Charlie Shahin, were of the view that the carrying capacity of the properties was less than 8,500.[87] Notably, both valuations contained a disclaimer which said: "[t]his valuation is current as at the Date of Valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movement or factors specific to the particular property)".[88]

75 And while the sales process was undertaken by entities appointed by Mr Astill in his capacity as sole director of the vendor companies, it is the case that, in the final outcome, the transfers were executed by the plaintiff as mortgagee, so as to ensure that the sales were completed. The plaintiff explained the circumstances which necessitated that course, as follows:[89]

[24] In January 2024 the plaintiff took steps to facilitate the completion of the land and business sales agreements using its power of sale as a mortgagee because it could then "sell through" the numerous further mortgages and caveats on the titles to the properties. Otherwise, the sales would fall through as the vendors could not repay those further mortgages and caveats.[90]

[25] The Deed of Transfer executed by the plaintiff as mortgagee to complete the sales agreements specified as consideration the aggregate of the purchase price under the Business Sale Agreement and Land Sale Agreement, i.e. the same price as the deals agreed to by the vendors. Recital E stated as follows:

In order to facilitate completion of the Business Sale Agreement and the Land Sale Contract, the Transferor intends to execute a transfer by mortgagee to effect the transfer of the Land, and to transfer title to the Subject Assets, in accordance with this deed.

76 That is to say, the transfers that ultimately were executed by the plaintiff as mortgagee, provided for a consideration that was the same price as the deals that had been agreed to by the vendors during the sales process that was undertaken by entities appointed by Mr Astill in his capacity as sole director of the vendor companies. During oral submissions, counsel for the plaintiff clarified that the consideration received on the sale of both properties, together with the assets the subject of the business sale agreement (livestock, plant and equipment and other items), was just over $22 million.[91]

77 The plaintiff also observed that there is a faint suggestion in the defendant's submissions (at paragraph [36]) as to whether the plaintiff pressured Mr Astill to execute documents. However, counsel for the plaintiff noted that '[i]t is not clear if this is actually put as a submission of some form of actionable pressure' and '[t]he draft Defence and Counterclaim does not contain allegations of economic duress or illegitimate pressure.'[92]

78 The plaintiff submits that relevantly:[93]

[27] . . . Mr Obeid is alleged to have made the relevant statements[94] and he was not the plaintiff's agent. The statements were made to Mr Astill in his capacity as the sole director and company secretary of the vendor companies. The statements were made by Mr Obeid, the vendors' agent, who was appointed by Mr Astill.

[28] Mr Obeid had previously sent drafts of the agreements to Mr Astill and sought to discuss them with him. Also, Mr Astill had the benefit throughout the process of advice from a solicitor, Mr Richard Bryson of Bryson Kelly, and attended a meeting with Mr Bryson on the day that the contracts were signed.[95] The settlement adjustment sheet for the sale of the Northern Territoty [sic] properties shows that $32,500.00 was paid to Bryson Kelly, the firm of solicitors acting for Mr Astill's vendor companies.[96]

79 Further, the evidence given by Mr Rajamani confirms that representatives of the plaintiff did not make the alleged statements to Mr Astill. The plaintiff submits that:[97]

[29] Mr Rajamani, a director of the plaintiff, did not have any direct contact with Mr Astill, and did not, at any time, seek to pressure Mr Astill to sign the Business Sale Agreement and a Land Sale Agreement.[98] Similarly, Mr Fernandez, a director of the plaintiff, has never spoken with Mr Astill and did not at any time seek to pressure Mr Astill to sign the Business Sale Agreement and a Land Sale Agreement.[99]

[30] In an email sent on 30 November 2023, the purchaser (not the plaintiff) told Mr Obeid, among others, that he would withdraw the offer if contracts were not signed the following day. Statements that a purchaser would walk away or that a secured lender would take steps to enforce its securities (particularly after numerous unremedied defaults) do not amount to duress, they merely state the commercial reality of the situation.

80 Apropos the notion that taking steps to enforce a security do not amount to or constitute 'duress', the plaintiff relied on the oft-cited passage from the judgment of Hargrave J in Commonwealth Bank of Australia v Doggett, where his Honour stated:[100]

Mere commercial pressure to act is not sufficient to establish the second element of duress. In the commercial arena, many acts are done under pressure, sometimes overwhelming pressure, so that it can be said that the party had no choice but to act. To constitute duress, however, the commercial pressure must be of a kind that is regarded by the law as illegitimate. As Tadgell JA said in McKay, 'a threat by the creditor to institute legal proceedings or to pursue another legal remedy in order to recover the debt could seldom be wrong in itself'.

81 Before addressing the substance of ground 2, it is convenient to outline, by way of background, the principles applicable to the grant of summary judgment.

82 The principles in Victoria concerning the requirements which must be satisfied for a plaintiff in order to obtain summary judgment were considered and aptly summarised by Matthews JR (as her Honour then was) in Padella Pty Ltd v Elliott.[101] For convenience, I have largely adopted those principles as distilled by her Honour, which are set out below.

83 Section 61 of the CPA permits a plaintiff to make an application for summary judgment on the ground that the defendant's defence or part of that defence has no real prospect of success. Section 63 of the CPA provides that, subject to s 64, the court may give summary judgment in a civil proceeding 'if satisfied' that a claim has 'no real prospect of success'.

84 Section 64 of the CPA provides that:

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because -

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

85 In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[102] the Court of Appeal set out the relevant test to be applied in determining an application for summary judgment made under ss 61 and 63 of the CPA, as follows:[103]

(a) the test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a "real" as opposed to a "fanciful" chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the "hopeless" or "bound to fail test" essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125];

(c) it should be understood, however, that the test is to some degree a more liberal test than the "hopeless" or "bound to fail" test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

86 Section 7(1) of the CPA sets out its overarching purpose, which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9 of the CPA requires the court to have regard to these purposes in making any order or giving any direction in a civil proceeding.

87 Where a plaintiff in a civil proceeding seeks to bring an application under s 61 of the CPA, it must be made in accordance with Order 22 of the Rules.[104]

88 In my view, in determining not to grant leave to the defendant and Mr Astill to defend and bring a counterclaim under s 64 of the CPA, his Honour correctly exercised his discretion.

89 The plaintiff's application for summary judgment, brought by summons dated 5 March 2024, sought judgment for possession of the three Victorian properties under ss 61 and 63 of the CPA and r 22.03 of the Rules. Accordingly, at the hearing before Efthim AsJ on 8 April 2024, the defendant was required to show that it had a 'real' as opposed to a 'fanciful' chance of success on its proposed defence to the plaintiff's claim for possession.

90 The plaintiff conveniently summarised what took place at the hearing of the plaintiff's application and the process his Honour followed in considering the exercise of his discretion, as follows:[105]

(g) the defendant's outline of submissions dated 8 April 2024[106] and filed before Efthim AsJ that day relied in substance on:

(i) construction arguments concerning the Settlement Deed;

(ii) the defendant's alleged claims for breaches of the mortgagee's duty by the plaintiff in the sale of the Northern Territory properties, as set out in its draft Defence and Counterclaim;[107] and

(iii) being granted leave to join Mr Craig Astill, as guarantor, as second defendant and to file the proposed Defence and Counterclaim;

(h) during the hearing before Efthim AsJ on 8 April 2024, the defendant's Senior Counsel conceded that the plaintiff was entitled to possession of the Properties, subject to the filing of the proposed counterclaim which he agreed, in response to his Honour's question, was "crucial";[108]

(i) Efthim AsJ's Reasons:

(A) construed the Settlement Deed in light of the defendant's contentions - refer paras [14] - [19] of the Reasons;

(B) considered the proposed counterclaim - at paras [20] - [26];

(C) considered the issue of the proposed joinder of Mr Astill - at paras [27] -[32]; and

(D) determined that the defendant had no real prospects of success under s 63(1) of the CPA in respect of these contentions, has no defence and that summary judgment was suitable and in the interests of justice in the circumstances - at paras [21], [25], [26] and [34].

91 In considering the defendant's proposed counterclaim, his Honour reviewed the materials in evidence before the Court, including all of the emails that were provided by the plaintiff, some of which he noted were 'omitted from the evidence provided by Mr Astill before Delany J.'[109] Having done so, he observed that '[t]hose emails provided extensive evidence of the sale process over a period of six months and did not support the allegations of Mr Astill.'[110] Accordingly, his Honour determined, 'after looking at those emails and on the evidence before the Court' that he was satisfied that 'the defendant here has no real prospects of success' on its proposed defence to the plaintiff's claim for possession.[111]

92 His Honour then turned to consider the separate position of Mr Astill, noting that should he wish to agitate complaints of the kind set out in the proposed counterclaim, 'there is nothing which would prevent him from bringing a separate action.'[112] His Honour had already recorded that at the earlier hearing before Delany J, the defendant's counsel had agreed with his Honour that the Northern Territory properties the subject of Mr Astill's complaints about a sale at an undervalue were owned by other companies, and were not 'claims or matters that are properly made by Casada Holdings'.[113]

1. Claims under s 420A of the Corporations Act 2001, s 90 of the Law Property Act 2002 (NT) or in equity would be claims by those third parties for damages or equitable compensation. Those claims:

(a) are not defences to a claim for possession against the Properties owned by the defendant;

(b) if viable, could be brought by those third parties in separate proceedings; and

(c) are not a reason to join Mr Astill or those other companies to this proceeding.

94 In my view, the reasoning adopted by Efthim AsJ in exercising his discretion and in determining not to grant leave to the defendant and Mr Astill to defend and bring a counterclaim, is sound. Having reviewed the extensive body of material before the Court, and with the benefit of submissions from the respective counsel, I share the view his Honour expressed (at paragraph [30]) that 'Mr Astill should not have been joined as a party for the proceeding to continue and his presence was not necessary for the plaintiff to obtain the orders that it sought.'

95 Further, when addressing the 'interests of justice' test under s 64 of the CPA, I agree with the plaintiff's submission that the position that the defendant has adopted, in response to the plaintiff's claim for possession of the properties owned by the defendant, in seeking to agitate the claims set out in the proposed defence and counterclaim falls 'foul of Inglis v Commonwealth Trading Bank of Australia[114] by not paying the claimed mortgage debt into Court or otherwise providing acceptable security for it in circumstances where the plaintiff's current security position is deteriorating by the day.'[115]

96 The headnote to the report of Inglis's case in the Commonwealth Law Reports conveniently summarises what is generally regarded as the rule in Inglis's case, as follows:[116]

As a general rule an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and, in particular, a power of sale unless the amount of the mortgage and, in particular, a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless, if the amount is disputed, the amount claimed by the mortgagee is paid into court; and this rule will not be departed from merely because the mortgagor claims to be entitled to set off the amount of damages claimed against the mortgagee.

97 During the course of the defendant's reply submissions on the second day of hearing counsel referred to Inglis's case and stated:[117]

Your Honour, if Your Honour is against Casada in relation to the effect and construction of the deed of settlement, and finds that One Capital was entitled to obtain summary judgment for possession, Casada accepts that Inglis does not permit the offset of the counter-claim if it [sic] the construction - if it does not succeed on its construction argument.

However, it's open to Your Honour to under-rule 22.08(2) to stay that judgment, pending the hearing and determination of any counter-claim that the parties would bring.

98 As I have indicated earlier in these reasons that I agree with the construction adopted by his Honour, with the result that the plaintiff was entitled to proceed to seek to obtain summary judgment for possession of each of the Victorian properties, the position is that Casada (and Mr Astill) accept that it is not permitted to set-off the damages claimed in its proposed counterclaim.

99 For completeness, I should also note that to the extent that a claim of duress against Mr Astill was faintly pressed in respect of the sale of the Northen Territory properties, I do not regard the steps taken to enforce those securities as amounting to or constituting 'duress'.

Ground 3 - Plaintiff seeking to recover sum inconsistent with Deed of Settlement (no longer pressed)

100 In ground 3 of its notice of appeal, the defendant contended that Efthim AsJ erred in holding that judgment could be entered against the defendant notwithstanding that the sum which the plaintiff sought to recover from the defendant was not the correct sum because it was not based on, and was inconsistent with, the Deed of Settlement dated 7 December 2022.

101 Counsel for the defendant addressed ground 3 in oral submissions made on the first day of the hearing. However, in its submissions filed on 9 August 2024, in advance of the hearing resuming on 15 August 2024, the defendant stated '[g]round 3 is not pressed by Casada.'[118]

Ground 4 - Joinder and counterclaim of Mr Astill

102 Pursuant to ground 4, the defendant contends that his Honour erred in holding that the proposed joinder and counterclaim of the guarantor, Mr Craig Astill, as the proposed second defendant, should be ignored on the basis that the plaintiff was not seeking an order for a judgment sum but rather an order for recovery of possession based on rights under the securities without regard to the rights and obligations of the parties under the Deed of Settlement.

103 As will be apparent, much of the subject matter of ground 4 has already been canvassed in the context of considering ground 2 above.

104 In support of ground 4, the defendant relies upon its submissions in relation to grounds 1(a) and 2 above.[119] In essence, the defendant submits that his Honour erred in deciding that 'it would not be appropriate to join Mr Astill as a defendant so that he can bring a counterclaim in this proceeding'[120] and 'in not permitting the counterclaim to proceed in this proceeding'.[121] Rather, the defendant submits that

Mr Astill 'is a necessary and proper party to the counterclaim'[122] and says that by not allowing Mr Astill to initiate a counterclaim, 'the Defendants have been deprived of setting off any amounts alleged to be owed by the Defendants [sic] to the Plaintiff [sic]'.[123]

105 The plaintiff contended that his Honour was correct not to allow the joinder of Mr Astill as a guarantor.

106 First, counsel submitted, there was nothing in the Deed of Settlement, in circumstances where the Settlement Sum was not paid, which prevented the plaintiff from seeking an order for possession on the basis of asserted rights of the third party guarantor, Mr Astill.

107 Secondly, the evidence shows that Mr Astill is not an owner of any of the properties the subject of the plaintiff's claims for possession in the proceeding, nor is he the owner of the Northern Territory properties, and there is no question of fact or law in the plaintiff's claim that concerned him.[124]

108 Further, the plaintiff noted, Mr Astill has not been sued as a guarantor. The position is, as set out under ground 2 above, that his Honour noted (in paragraph [27] of his Reasons), that if Mr Astill has 'a desire to continue with such a proceeding, there is nothing which would prevent him from bringing a separate action.'

109 Counsel for the plaintiff said that at the hearing before Efthim AsJ, counsel for the defendant had referred his Honour to the decision of Croft J in Webster Investments Pty Ltd v Anderson[125] concerning the right of a surety or a co-obligor in equity to bring proceedings, in support of Mr Astill's case for joinder.

110 In Webster Investments, a mortgagee (Webster) conducted an inadequate sale process for a security property and then had private negotiations and sold it covertly to a guarantor of the loan and granted him a gratuitous release. Webster then sued East, a co-guarantor, for the deficiency on the realisation of the security property. East successfully argued, by way of defence, that Webster had by its conduct impaired or sacrificed the security property. Webster's conduct was held to amount to gross misconduct or fraud, prejudicial to East as surety and sufficient to justify the extinguishment of East's liability as guarantor of the loan.[126]

111 Counsel for the plaintiff submitted that in the present case, 'no claim has at this stage been brought by the plaintiff against Mr Astill and the Properties the subject of the proceeding have not been sold.'[127] Accordingly, he said '[s]elf-evidently, unlike in Webster Investments, there is no need or basis to argue that the Properties have been impaired or sacrificed by the plaintiff as mortgagee.'[128]

112 The issue of Mr Astill's joinder and counterclaim has been addressed already under ground 2 above.

113 The observations made by the plaintiff's counsel (reproduced above) about Webster Investments are apposite in circumstances where the plaintiff has not sued Mr Astill in the proceeding as a guarantor and the three Victorian Properties the subject of the proceeding have not been sold.

114 By summons filed on 25 July 2024,[129] the defendant sought a stay of the orders of Efthim AsJ made on 7 May 2024, pending the hearing of the appeal in this matter. The defendant filed the Sixth Astill Affidavit (affirmed on 25 July 2024) in support.[130]

115 In support of its application for a stay of execution, and any warrant of possession issued pursuant to them, the defendant submits that the Court should exercise its power to order a stay pursuant to r 66.16 of the Rules. Rule 66.16 provides that the Court 'may stay execution of a judgment.'

116 The defendant acknowledges that it made an application for a stay before his Honour on 7 May 2024, which was refused.[131] However, it says that the circumstances have changed since that refusal, namely because the defendant has commenced this appeal.

117 In order to make out grounds for a stay, the defendant accepts that it must demonstrate 'special' or 'exceptional ' circumstances. In Cellante v G.Kallis Industries Pty Ltd,[132] Young CJ held that special circumstances exist where there is a real risk that the appeal, if successful, will be nugatory. His Honour held that the circumstances were not limited to the respondent's financial circumstances resulting in the funds not being recovered by a successful appellant. Such circumstances will exist where, for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment is executed.

118 More recently, in Yuanda Vic Pty Ltd v Facade Designs International Pty Ltd, the Victorian Court of Appeal considered and summarised the relevant principles applicable to stays as follows: [133]

As the authorities hereinafter referred to demonstrate, an applicant for a stay must demonstrate the existence of special or exceptional circumstances. Special circumstances may exist where there is a real risk that an appeal, if successful, would be rendered nugatory in the absence of the grant of a stay. In such a case, the Court will be required to balance the prospect that an appeal may be rendered nugatory in the absence of a stay, against the principle that the successful party in the proceeding should be entitled to the fruits of the judgment. Further, a stay should not be granted unless the applicant has demonstrated at least an arguable ground of appeal.

119 Relying on Cellante and Yuanda, the defendant contends that here, exceptional circumstances exist, being that there is a real risk that the appeal, if successful, will be rendered nugatory unless a stay is ordered because the plaintiff intends to sell the three properties as soon as possible and (in the absence of a stay) it is likely that the Properties will have been sold.[134]

120 The defendant, in its submissions dated 9 August 2024, acknowledges that '[t]he duration of any stay will be confined to the period between the hearing of the appeal and the delivery of the Court's determination.'[135] The defendant is also aware that the Court has also been informed that there is no likelihood of the Sheriff executing the warrant of possession before Friday, 30 August 2024.[136]

121 The plaintiff submits that the Court should dismiss the defendant's stay application for the following reasons.

122 First, it says, the defendant's appeal does not operate as a stay of execution of the Orders made by Efthim AsJ: see r 77.06.6.[137] The plaintiff is prima facie entitled to the fruits of its judgment.[138]

123 Secondly, the Court has jurisdiction under r 66.16 to stay a judgment and an inherent jurisdiction.[139] The circumstances of an appeal and the enforcement of a mortgage by an order for possession raise particular considerations for the Court's discretion.[140]

124 In Snowball v Capital Securities XVII Pty Ltd, Dixon J summarised the general principles that are applicable on a stay application made under r 66.16, as follows:[141]

(a) the prima facie position is that a party entitled to judgment is entitled to immediately enforce that judgment;

(b) any exercise of the inherent jurisdiction to order otherwise 'must be exercised on grounds relevant to a stay of the enforcement proceedings, rather than on grounds which may bear upon the validity or correctness of the judgment'; and

(c) the applicant for a stay bears the onus of demonstrating the stay sought is justified.

125 The decided cases demonstrate that in cases involving applications for a stay of enforcement of a mortgage pending an appeal, the courts routinely require the applicant to tender payment or submit to a condition of payment by way of security. In Serobian v Commonwealth Bank of Australia, the New South Wales Court of Appeal dismissed an application on appeal for a stay of execution by a bank of the enforcement of a mortgage. Therein McColl JA stated that:[142]

...I would note that where a stay is sought to restrain the enforcement of a mortgage, the fact that the applicants failed to tender payment or to offer to submit to a condition of payment, while not a bar to the grant of a stay of judgment for possession, may be "a very weighty consideration militating against the grant of such relief": Rahme v Commonwealth Bank of Australia [1993] HCA 62; (1993) 117 ALR 618 (at 619) per Deane J; see also Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161 (at 164).

126 In Inglis v Commonwealth Trading Bank of Australia,[143] Walsh J (at first instance) said:[144]

...If the debt has not been actually paid, the Court will not, at any rate as a general rule, interfere to deprive the mortgagee of the benefit of his security, except upon terms that an equivalent safeguard is provided to him, by means of the plaintiff bringing in an amount sufficient to meet what is claimed by the mortgagee to be due.

The benefit of having a security for a debt would be greatly diminished if the fact that a debtor has raised claims for damages against the mortgagee were allowed to prevent any enforcement of the security until after the litigation of those claims had been completed.

In my opinion the fact that such claims have been brought provides no valid reason for the granting of an injunction to restrain, until they have been determined, the exercise by a mortgagee of the remedies given to him by the mortgage.

127 On appeal to the Full Court, their Honours were in agreement that the appeal should be dismissed. Barwick CJ (with whom Menzies and Gibbs JJ agreed) stated:[145]

The case falls fairly, in my opinion, within the general rule applicable when it is sought to restrain the exercise by a mortgagee of his rights under the mortgage instrument. Failing payment into court of the amount sworn by the mortgagee as due and owing under the mortgage, no restraint should be placed by order upon the exercise of the respondent's rights under the mortgage.

128 In the present case, the Sixth Astill Affidavit[146] was filed in support of the stay. The plaintiff notes that therein Mr Astill admits (at paragraph [10]) that a significant debt is owing to the plaintiff as second mortgagee. Thus, in circumstances where the defendant has admitted the debt − not only in the Deed of Settlement, but also more recently in the affidavit in support − the plaintiff contends that the position before the Court is that the defendant has admitted that a debt is owing and has not offered to pay the debt into Court or otherwise offer a credible basis to repay the debt owing.

129 In response to Mr Astill's statement (at paragraph [11] of that affidavit) that 'there is no likelihood that the Plaintiff will gain any benefit from executing the warrant for possession', the plaintiff says the execution of the warrant is a matter for the plaintiff. The plaintiff submits the position is, however, as explained in the affidavits filed by its solicitor, Mr Luke Owens,[147] that because the first mortgagee's debt continues to accrue interest, the plaintiff's security position continues to diminish by reason of effluxion of time, and a stay will exacerbate that prejudice to the plaintiff.[148]

130 The plaintiff submits that Mr Astill was aware from at least 7 May 2024, when Efthim AsJ dismissed his application for a stay, that he needed to be ready with alternative living arrangements for those persons living at the Prahran property.[149] The Properties are owned by the defendant company and the occupiers of the Prahran property, Mr Astill and his family, have had many months to make alternative arrangements for accommodation in circumstances where they have known that the plaintiff as second mortgage is pressing for possession in order to sell the Properties.[150]

1. Whilst Mr Astill refuses to vacate the Prahran property, there is a futility in the position of the defendant, in that the mortgage to the first mortgagee, Balanced, is also in default and a large and growing amount of money (over $7.3 million) is owing to it.[152] The Properties therefore will be sold by Balanced if they are not sold by the plaintiff.
2. In the meantime, the plaintiff is suffering and will suffer irremediable prejudice as its security position deteriorates every day, as set out at paragraphs [16] - [22] of the Owens 11 July Affidavit,[153] that the defendant engages in delay and obfuscation.

132 To date no stay has been granted by the Court pursuant to the defendant's summons filed on 25 July 2024, because it was not necessary. That is because, once it became clear that there was no real risk that the Sheriff would execute the warrant of possession before Friday, 30 August 2024, I indicated to the parties that I would endeavour to deliver judgment on the appeal before that date.

133 In light of the views I have reached on each of the grounds of appeal advanced by the defendant, the appeal will be dismissed. And as the appeal is no longer 'pending', the summons is spent.

The plaintiff contends the appeal is incompetent

134 The plaintiff challenges the competency of the appeal, as it is brought by the defendant's sole director, Mr Astill, purportedly in the name of the defendant. The plaintiff contends that in circumstances where a receiver and manager has been appointed to the defendant, any appeal can be brought only by the receiver.

135 The receivership appointment was made in accordance with a general security agreement executed by Casada on or about 30 April 2021 (General Security Agreement).[154] The Instrument of Appointment recites by way of 'background' that the General Security Agreement was granted by Casada (as Grantor) 'as collateral security for the repayment of the monies which are now or may from time to time be owing or remain unpaid pursuant to a loan agreement dated on or around 30 April 2021 between the Secured Party [OCP] and the Grantor [Casada]' and that certain events of default have occurred, thereby constituting a default by reason whereof the security has become enforceable.

136 The plaintiff's solicitor, Mr Owens, gave evidence that on or about 1 March 2024, Mr Brent Trevor-Alex Kijurina (of Hall Chadwick) was appointed by the plaintiff as receiver and manager of all of the defendant's assets, including the Properties the subject of the Orders (made by Efthim AsJ on 7 May 2024).[155] The Instrument of Appointment states, relevantly:[156]

Take notice that the Secured Party pursuant to the Company Security and pursuant to all of the powers so enabling it to do so (whether contained in the Company Security or otherwise) hereby appoints Brent Kijurina of Hall Chadwick, Level 40, 2 Park Street, Sydney NSW 2000, jointly and severally to be the Receiver and Manager of the Company Security being the property set out in the schedule hereto and to act in relation thereto in accordance with the powers conferred on the Secured Party under the Company Security, in accordance with the Secured Party's instructions to the Receiver from time to time for the consideration and on the terms and conditions as may be agreed between the Secured Party and the Receiver from time to time.

SCHEDULE

All of the Grantor's PPSA Personal Property and Other Property

137 Under cl 15.3 of the General Security Agreement, the receiver is given general powers regarding the property in respect of which he is appointed 'to do everything that the Grantor may lawfully authorise an agent to do on behalf of the Grantor in relation to that property' and in relation to that property the receiver may exercise (inter alia) the statutory powers conferred on receivers and receivers and managers under the Corporations Act and the PPSA.

138 Clause 15.4 sets out certain 'specific' powers of the receiver and provides relevantly as follows:

Without limiting clause 15.3, but subject to any restriction imposed by the Secured Party in the terms of the Receiver's appointment, the Receiver may do any one or more of the following things:

. . .

(9) on behalf of the Grantor:

(a) ...

(b) commence, defend, prosecute, settle, discontinue and compromise litigation, administrative or arbitral proceedings in relation to the Collateral;

139 Accordingly, the plaintiff contends that under clause 15.4(9) of the General Security Agreement, the right of Casada to commence and prosecute litigation in relation to the Collateral (as defined[157]) is under the sole control of the receiver and manager. Here, the receiver and manager does not seek to prosecute this appeal. This was confirmed by Mr Kijurina, by letter to the plaintiff's solicitors dated 26 July 2024, sent in response to a request for clarification of his position, where he stated relevantly:[158]

I confirm that in my position as Receiver of the Company, I have not authorised the director, Mr Craig Astill, or any legal representatives to act on behalf of the Company, and particularly to seek to appeal the Order and Judgment made by the Court on 7 May 2024.

It is my view as Receiver that, as I am currently without funds, it is uncommercial for the Company to proceed with the appeal and therefore, I do not intend to join the proceedings if the matter is allowed to proceed.

Ultimately, the major asset available to the creditors is the subject property located at # Clarke Street, Prahran VIC 3181.

. . .

140 The plaintiff refers to and relies upon the judgment of Slattery J in Great Australian Operations Pty Ltd (Receivers and Managers Appointed) v Washington H. Soul Pattinson and Company Ltd,[159] where his Honour conducted an extensive review of the issue of what residual powers of directors remain available in circumstances where a receiver has been appointed over the company's assets. Justice Slattery endorsed and applied a practical test of the kind stated by Owen J in Re Geneva Finance Ltd,[160] which in essence was to decide whether the purported exercise of power by the directors would be detrimental to the functions of the receiver, and if so, the directors must defer to the receiver.

141 The plaintiff submits that in circumstances where Mr Astill is purporting to exercise powers in respect of possessory rights over the secured properties to which the receiver has been appointed, and in particular the 'major asset available to the creditors' being the property at # Clarke Street, which is one of the Properties the subject of the Orders under appeal, it is clear from cl 15.4(9) of the General Security Agreement that Mr Astill's purported exercise of these powers is detrimental to important functions of the receiver.[161]

142 Further, the plaintiff submits that the appeal puts the defendant's assets at risk of being diminished by an adverse costs order.[162]

143 At the outset of the hearing of the appeal on 6 August 2024, counsel for the defendant acknowledged that the issue of competency of the appeal 'is in essence a threshold question.'[163] And while no written submissions had been filed by the defendant addressing the issue, counsel explained that the defendant's position is effectively as set out in email correspondence passing between the parties' respective solicitors on 22 May 2024.[164] Relevantly, when the plaintiff's solicitor informed the defendant's solicitor by email on 21 May 2024 that he had 'no authority to file any notice of appeal or other proceeding on behalf of Casada Holdings Pty Ltd',[165] the defendant's solicitor, Mr Flory, responded, stating:[166]

In relation to your email below, with respect, I believe you have seriously misinformed yourself over the rights of companies in receivership and the rights and obligations of directors of companies in receivership.

Your threat is unprofessional and outside the permissible parameters of a letter of demand and I reserve my rights. Kindly note that for example the Supreme Court of New South Wales in the matter of V and M Davidovic Pty Limited (Receiver and Manager appointed) [2012] NSWSC 1598 confirmed that directors are not prevented from taking steps they reasonably believe are in the Company's interests, which is supported by other authorities such as Hawkesbury Development Co Limited v Landmark Finance Pty Limited [1969] 2 NSWR 782 at 790 which held that the power of a company's internal organs to function during the receivership bears a direct inverse relationship to the scope of the receivership such that the performance of a legitimate company activity by Mr. Astill leads to a corresponding decrease in the scope of the receivership by the Receiver.

His Honour in V and M Davidovic Pty Limited (above) also referred to the decision in Re Geneva Finance Limited (1992) 7 WAR 496 at 510, 7 ACSR 415, for the observation that directors are not prevented from taking steps they reasonably believe are in the company's interests unless such action would prejudice the proper administration of the receivership. His Honour, French J, in analysing the tension between the different roles of the director and the receiver held unequivocally that a director was entitled to instruct legal representatives to bring legal proceedings, as has occurred in this case.

In any event your counsel did not raise such an objection at the hearing of the application before Efthim A.J or before Delany J and, neither Efthim A.J or Delaney [sic] J raised any issue with us acting when they knew that clearly a Receiver had been appointed to the Company.

In our view, your client is estopped from claiming otherwise. The appeal is a hearing de novo. You will have the opportunity to raise the point that there was no right to bring the initial application in the first instance, a point albeit without foundation, and not taken before Efthim A.J or Delany J, or supported by them, but belatedly raised on appeal. If it were not a nonsense point, which it clearly is, it would have been raised by your counsel as an issue of locus standi, which he saw fit not to do.

. . .

144 When addressing the Court, counsel for the defendant observed that the defendant's solicitor was mistaken when he referred in his email to the appeal as being 'a hearing de novo' - because cases such as Oswal v Carson[167] make clear that the appeal is a re-hearing. She then referred to the transcript of the hearing of the application before Efthim AsJ on 8 April 2024, where (then) counsel for the plaintiff, Mr Mereine, referred his Honour to the appointment of the receiver and manager and the specific powers conferred on him by cl 15.4(9) of the General Security Agreement, and noted that the plaintiff's 'statement of claim is clearly in respect of the collateral of which the receiver is appointed over.'[168] Mr Mereine said that the plaintiff accepts, 'as a matter of law, that the appointment of a receiver to a company does not entirely displace a director's powers and authority to commence a proceeding.'[169] Citing the recent decision of Hetyey AsJ in Re Lifestyle Residences Hobsons Bay Pty Ltd (recs & mgrs. apptd),[170] Mr Mereine continued, stating:[171]

the practical question arises as to whether the exercise by a director of any power in the name of the company would interfere with the legitimate exercise by the receivers of their powers. Put differently, the real question is whether the director can exercise a power without prejudicing the legitimate interest of a receiver and secured creditor in the realisation of the relevant assets.

145 In Re Lifestyle Residences, Hetyey AsJ concluded that:[172]

1. In my view, the interests of the relevant secured creditor are threatened by the continuance of this proceeding because the company's assets are at risk of being diminished by the legal costs incurred and its exposure to an adverse costs order. Accordingly, it is appropriate that Mr Burgess now provide a satisfactory indemnity to the company in respect of these costs. Further, the indemnity should be underpinned by an appropriate amount of security, also provided by Mr Burgess.

146 Against that background, at the hearing on 6 August 2024, Mr Kirby, counsel for the plaintiff, contended that in the absence of an indemnity, the defendant company's assets are at risk of being diminished particularly as an adverse costs order has already been made against Casada by Delany J on an indemnity basis. Further, he submitted, the Court should refuse to grant Casada leave to file the proposed defence because that is a matter for the receiver and manager, and as the defence responds to the plaintiff's claim about the collateral and the specific power in cl 15.4(9), 'the defence would clearly interfere with the legitimate exercise of the receiver's powers in respect of the relevant property.'[173] Secondly, he submitted, the Court should refuse leave to file the proposed defence because it has no real prospect of success.

147 The fact that the receiver had been appointed to the defendant was adverted to in the course of the hearing before Efthim AsJ, when counsel for the defendant, Mr Willis SC, turned to address the plaintiff's point about Casada and the capacity of Mr Astill as a director to instruct and act for Casada and for it to be a defendant and counterclaimant. Relevantly, Mr Willis SC informed his Honour that he is 'instructed that Mr Astill would indemnify Casada Holdings for the costs involved in it being − advancing and pursuing its defence and counterclaim'[174] and that his 'instructions are that he [Mr Astill] would provide security in a form acceptable to the court.'[175] However, there is no evidence of any security having been provided.

148 On the hearing of the appeal, counsel appearing for the defendant, Ms Worsfield, took the Court through the body of evidence relevant to the issue as to competence, as outlined above, and then turned to the authorities, noting that the relevant principles are conveniently set out by Slattery J in Great Australian Operations,[176] and she observed that counsel for the respective parties 'appear to be in heated agreement as to what the principles are'.[177]

149 Against that background, the defendant's position is that the appeal in this proceeding is one that the receiver has declined to prosecute, in circumstances where the receiver is required to act upon the directions of the plaintiff, and given that the director, Mr Astill, is prepared to indemnify Casada for the costs of the proceeding, it is appropriate that the proceeding and the appeal proceed. The Court informed counsel for the defendant that if an indemnity is to be proffered, and relied upon, it should be formulated in clear terms, addressing both the indemnity and security for costs issues that were raised by Efthim AsJ, and be articulated in a written form. To date that had not been done, notwithstanding that the matter was raised by his Honour at the hearing in April 2024. In those circumstances, counsel for the defendant indicated that she would seek further instructions.

150 Counsel for the plaintiff, Mr Kirby, responded by pointing out that the application brought by the plaintiff in the proceeding was one for summary judgment, where the plaintiff is seeking to obtain possession of the three secured properties to which the receiver has been appointed, and in circumstances where the property at Prahran, in which Mr Astill and his family reside, is (according to the receiver) 'the major asset available to the creditors' and the very asset that the plaintiff is attempting to realise.[178] Accordingly, in circumstances where the evidence before Efthim AsJ was that two notices to quit have been served on Mr Astill and his wife by the receiver, and the receiver is trying to obtain possession of the secured property, a matter about which Mr Astill has complained in his sixth affidavit filed on 25 July 2024,[179] counsel for the plaintiff submitted that the pursuit of the appeal in this proceeding − and the (effective) practical stay on the enforcement of the warrant of possession[180] − constitute interference with, and prejudice, the legitimate interest of the receiver and of the secured creditor in the realisation of the relevant assets. As counsel explained,[181] the receiver is actively seeking 'the physical possession' of the secured property whereas the plaintiff is seeking the 'legal possession' of the secured property, and that is quite a common position as it may transpire that 'the mortgagee has to sell to get the rights under the Transfer of Land Act to override any subsequent encumbrances.'[182] Mr Kirby submitted that 'they are trying to secure effectively possession of the security, but that has all been on hold pending the stay application.'[183]

151 Finally, Mr Kirby referred the Court to two passages from the judgment of Owen J in Re Geneva Finance on which the plaintiff relies as being apposite in the present case. The first is where his Honour, in addressing the relative position of the receiver on the one hand and the directors on the other, stated:[184]

The question is not who has the higher duty, as between receiver and directors, in relation to assets which are subject to the security and which the receiver has in his possession and control. That question must always be answered in favour of the receiver unless the receiver has abandoned the asset or is acting in breach of duty. The real question is whether the directors, wishing to exercise a power which they would otherwise have, can do so without prejudicing the legitimate interests of the receiver and the secured creditor in the realisation of the assets.

152 The second is taken from his Honour's summary of the eight elements he extracted from the authorities and from his apprehension of general principle in order to decide the application before him. The eighth element is framed as follows:[185]

1. The subject of inquiry should be the role and function of the receiver rather than the identity of the residual duties which remain with the directors. The receiver would be justified in refusing to grant access to the documents where to do so would impede the receiver in the proper exercise of his function or would impinge prejudicially upon the position of the debenture holder by threatening or imperilling the assets which are subject to the charge.

153 Against that background, counsel for the plaintiff submitted that when considering the competency of the appeal, it is necessary for the Court to look at the function and role of the receiver. Here, he said:[186]

I mean, the receiver is appointed over these very properties. It goes to the actual heart of what's being attempted to be done here, which is the realisation of the asset and a secured creditor is [sic] appointed the receiver. Understand that it's the secured creditor who has taken the order and obtained the order for possession, which is not, I might say, unusual. And there's nothing stopping the secured creditor doing that.

154 Further, counsel submitted, that in circumstances where there is an order for possession of the major security asset, namely the Prahran property, and Mr Astill seeks to bring an appeal so as to set aside the actual order for possession, the simple point is that there is a demonstrable 'conflict of interests' between what Mr Astill is trying to do and what the receivers are doing in respect of the primary asset over which they are appointed.[187]

155 This is so notwithstanding that the director has now undertaken to indemnify the defendant against the costs incurred in bringing the appeal and has provided security by way of payment in to Funds in Court an agreed sum of $100,000 on account of any costs that may be ordered to be paid in the event that the appeal is unsuccessful.

156 In that regard, at the mention of this matter held on 7 August 2024, following the first day of hearing, the issue of the indemnity proffered on behalf of Mr Astill was discussed with the parties and considered by the Court. The substance of what transpired is noted under 'Other matters' in the Orders made that day, as follows:

(a) when addressing the issue of the indemnity proffered on behalf of Mr Astill, counsel for the defendant confirmed that Mr Astill will:

1. indemnify the defendant against any costs it may incur in respect of, and/or associated with:

2. the hearing of the application before Efthim AsJ on 8 April 2024; and

3. the hearing of the notice of appeal dated 21 May 2024 and the summons for the stay application filed on 25 July 2024;

4. consent to a non-party costs order against him in the event that any costs may be payable to the plaintiff because the appeal and/or stay application are unsuccessful;

(b) counsel for the defendant also confirmed that Mr Astill would provide security for the costs mentioned in paragraph 6(a) above, by lodging the sum of $100,000 with Funds in Court in advance of the further hearing;

(c) counsel for the defendant also confirmed that Mr Astill has paid, effectively by way of performance of the indemnity proffered to the Court, all costs incurred by the defendant to date in relation to:

1. the hearing of the application before Efthim AsJ on 8 April 2024; and

2. the notice of appeal dated 21 May 2024 and the summons for the stay application filed on 25 July 2024.

(d) counsel for the plaintiff informed the Court that the Sheriff has been informed that the matter is currently part heard and the Sheriff has been instructed not to execute the warrant of possession (issued pursuant to the Orders) before Friday, 30 August 2024.

157 On 14 August 2024, the Legal Administration Team at Funds in Court notified Chambers that it had received an amount of $100,000 by way of security for costs.

158 The indemnity/security for costs arrangement that is recorded under 'Other matters' in the Orders made on 7 August 2024 serves to address, or at least ameliorate, the plaintiff's concern that the appeal puts the defendant's assets at risk of being diminished by an adverse costs order. But the very fact of the appeal being pursued − with the attendant 'delay' in the enforcement of the warrant of possession − has interfered with the receiver's efforts to obtain 'practical possession' of the major asset, being the Prahran property, and thereby interfered with the legitimate interest of the secured creditor in the realisation of the relevant assets.

159 As the defendant's appeal has not been successful, with the dismissal of the appeal the scope for any further interference should be at an end.

160 For the reasons set out above, the defendant's appeal will be dismissed. The defendant's summons filed on 25 July 2024, seeking a stay of the judgment of

Efthim AsJ made on 7 May 2024 pending the hearing of the appeal in this matter, will also be dismissed.

161 I will hear from the parties as to the appropriate form of orders.

[1] Ti Tree Holdings, Ti Tree, Aileron and Casada are related entities by reason of their common director, Craig Anthony Astill: see AB 4B: 1191, 1196, 1201, 1205.

[2] A copy of the Loan Agreement is at Exhibit CAA-2 (AB 2A:709-740).

[3] Affidavit of Craig Anthony Astill filed on 19 February 2024, at [10].

[4] The three properties listed are now the only three remaining - the other properties have been sold.

[5] A copy of the General Security Agreement is at pages 8 to 78 of Exhibit LKO-3. (AB 17:1779-1849).

[6] A copy of the first of the 'Specific Security Deeds' is at Exhibit CAA-4 (AB 2A:814-857).

[7] A copy of the second of the 'Specific Security Deeds' is at Exhibit CAA-4 (AB 2A:858-884).

[8] A copy of the Guarantee and Indemnity is at Exhibit CAA-1 (AB 2A:682-708). That version of the document is not executed but it provides for the guarantee to be given by both Mr Astill and his wife, Jacqueline Rosemary Astill. It is unclear whether Mrs Astill executed the document, but in his affidavit filed on 19 February 2024, Mr Astill states (AB 2A:671 (at [11(c)] emphasis in bold italics added)) that 'A guarantee and indemnity was also provided by me as part of the security (Exhibit CCA-1).'

[9] Clause 1.1 defines 'Guaranteed Moneys' to mean:

(a) The Principal Sum of $3,500,000.00 advanced in accordance with the Loan Agreement, together with interest, fees and charges payable under the Loan Agreement;

(b) all present or future indebtedness of the Debtor to the Beneficiary either alone or in conjunction with any other person on any account whatever under the Transaction Documents;

(c) any loss or Claim suffered by the Beneficiary arising out of or in connection with a breach by the Debtor of any Obligation of the Debtor under the Transaction Documents;

(d) any interest awarded against the Debtor or payable by the Debtor in respect of any such Claim; and

[10] A copy of the Deed of Forbearance is at Exhibit CAA-9 (AB 2A:929-943).

[11] See paragraphs [60]-[63] of the Rajamani Affidavit; AB 4B:1175.

[12] Under cl 2 of the Deed of Forbearance, the Transaction Parties expressly acknowledged and agreed (inter alia) that:

(a) They are indebted to the Lender for the Outstanding Debt under the Loan Agreement, and interest shall continue to accrue to the whole of the Outstanding Debt at the Interest Rate, regardless of any funds retained by the Lender.

(b) The Securities are valid and enforceable securities and secure repayment of the Outstanding Debt.

(c) Nothing in this Deed constitutes any waiver of the Lender's rights under the Loan Agreement or the Securities.

[13] See statement of claim at [19] (AB 1A:1-09-1-10).

[14] A copy of the Deed of Settlement is at Exhibit CAA-10 (AB 2A:944-958).

[15] See Exhibit CAA-10 (AB 2A:944 at 958).

[16] See Second Affidavit of Craig Anthony Astill filed on 22 February 2024, at [2] (AB 2B:1002).

[17] On 6 February 2024, a Notice of Change of Solicitor was filed on behalf of the defendant, notifying that 'RICHARD FLORY' now acts on behalf of the defendant in lieu of Doherty & Colleagues Lawyers.

[18] Affidavit of Craig Anthony Astill filed on 19 February 2024, at [21].

[20] See Affidavit of Gautam Rajamani sworn on 29 February 2024 at [126]-[129] and Exhibit GR-1, AB 4B:1746-1747.

[21] Transcript, Injunction proceedings, 01/03/24 at T2 (Delany J).

[22] Transcript, Injunction proceedings, 01/03/24 at TT2-4 (Delany J) (emphasis in bold italics added).

[23] Transcript, Injunction proceedings, 01/03/24 at TT6-11 (Delany J).

[24] Affidavit of Craig Astill filed on 5 April 2024, at [13] (AB 10:482 at 485).

[25] AB 9:347-366. A copy of these submissions was included in Exhibit LK-1 to the affidavit of Luke Owens filed on 5 March 2024.

[27] The defendant also relied on Ground three, arguing that the amount sought was inconsistent with the Deed of Settlement, however the defendant in its submissions filed on 9 August 2024 confirmed it did not press this ground.

[28] Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 77.06.

[29] Oswal v Carson [2013] VSC 355, [11].

[30] [2013] VSC 355, [11] at fn 7.

[31] [2000] HCA 40; (2000) 203 CLR 172, 180 [23] (Gaudron, McHugh, Gummow and Hayne JJ) (footnotes omitted).

[32] Oswal v Carson [2013] VSC 355, [11].

[45] At [19] of his Honour's reasons.

[49] Transcript 08/04/24, at T12 (Mr J Mereine): AB 12:517.

[50] See the defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [22].

[52] [2017] HCA 12; (2017) 261 CLR 544 (Ecosse).

[53] [2017] HCA 12; (2017) 261 CLR 544, at 551 (footnotes omitted).

[54] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [25].

[55] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [26].

[56] Adopting the process in Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd [1956] VicLawRp 21; [1956] VLR 555 at 562, 564 and 565; Seachange Management Pty Ltd v Pital Business Pty Ltd [2009] VSCA 139; (2009) 23 VR 396 at [40]; Bell v Knight 34 Langdon Road Pty Ltd [2022] VSC 497 at [46]-[57].

[57] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [27].

[58] Plaintiff's outline of submissions dated 31 July 2024, at [27].

[59] The plaintiff noted that cl 2(f) of the Deed of Settlement refers to the fact that should the debtors default in payment of the Settlement Sum, the plaintiff 'shall be entitled to continue with the SC proceedings ...'

[61] Plaintiff's supplementary submissions dated 13 August 2024, at [15].

[62] [1956] VicLawRp 21; [1956] VLR 555.

[63] [2009] VSCA 139; (2009) 23 VR 396.

[64] Plaintiff's outline of submissions dated 31 July 2024, at [29].

[65] Plaintiff's supplementary submissions dated 13 August 2024, at [12].

[66] Plaintiff's supplementary submissions dated 13 August 2024, at [10]-[11].

[67] Plaintiff's outline of submissions dated 31 July 2024, at [9].

[68] I note that the sum of $15,600,000 does not include the $6,450,000 that was realised on the sale of the livestock and other business assets which was undertaken contemporaneously with the sale of the land. See Transcript 15/08/24, at T47 (Mr Kirby).

[69] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [34].

[70] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [35].

[72] Willis SC submissions para 2(b)-(c).

[73] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [37].

[74] [1956] VicLawRp 21; [1956] VLR 555.

[75] [2009] VSCA 139; [2009] 23 VR 396.

[76] These authorities recently have been conveniently and comprehensively summarised by Daly AsJ in Bell v Knight 34 Langdon Road Pty Ltd [2022] VSC 497, [46]-[57]. (An application for leave to appeal on other grounds was dismissed.)

[77] [1985] 2 Qd R 6.

[78] [2009] VSCA 139; [2009] 23 VR 396, 407 [37].

[79] [2009] VSCA 139; [2009] 23 VR 396, 407 [37].

[80] Plaintiff's supplementary submissions dated 13 August 2024, at [19].

[81] [1972] HCA 74; (1972) 126 CLR 161 at 164-165.

[82] Rajamani Affidavit at [98]. AB 4B:1182 and 1597.

[84] Plaintiff's supplementary submissions dated 13 August 2024, at [22].

[85] Plaintiff's supplementary submissions dated 13 August 2024, at [22].

[86] Plaintiff's supplementary submissions dated 13 August 2024, at [23].

[87] Rajamani Affidavit at [83] and [97(d)].

[88] Aileron Station valuation, SAB 21:1917 (Reliance Period); Oolloo Farm valuation, SAB 22:2031 (Reliance Period).

[89] Plaintiff's supplementary submissions dated 13 August 2024, at [24]-[25] (emphasis in bold italics added).

[90] Rajamani Affidavit at [106]-[110], AB 4B:1185-1186.

[91] Transcript 15/08/24, at TT46-50 (Mr Kirby).

[92] Plaintiff's supplementary submissions dated 13 August 2024, at [26].

[93] Plaintiff's supplementary submissions dated 13 August 2024, at [27]-[28].

[94] Affidavit of Mr Craig Astill filed on 19 February 2024 at para [26], AB 2A:668.

[95] Rajamani Affidavit at [101]-[110]. AB 4B:1583-1603.

[97] Plaintiff's supplementary submissions dated 13 August 2024, at [29]-[30].

[98] Rajamani Affidavit at [103(c)]. AB 4B:1184.

[99] Rajamani Affidavit at [103(d)]. AB 4B:1184.

[100] [2014] VSC 423 at [200] (citations omitted).

[101] [2018] VSC 301 at [19]- [28].

[102] [2013] VSCA 158; (2013) 42 VR 27.

[103] Ibid, 40 [35] (per Warren CJ and Nettle JA, Neave JA agreeing in part (at 42 [40]-[42])).

[104] Rule 22.03 of the Rules.

[105] Plaintiff's supplementary submissions dated 13 August 2024, at [2(g)]-[2(i)].

[108] Transcript of 8 April 2024, AB 12:598 (line 22) - 599 (line 25).

[114] [1972] HCA 74; (1972) 126 CLR 161 at 164-165.

[115] Plaintiff's supplementary submissions dated 13 August 2024, at [19(d)].

[116] [1972] HCA 74; (1972) 126 CLR 161 (emphasis in bold italics added).

[117] Transcript 15/08/24, at TT10-11 (Ms Worsfield)

[118] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [40].

[119] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [41].

[120] Reasons of Efthim AsJ (6 May 2024), at [27].

[121] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [41].

[122] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [41].

[123] Defendant's outline of submissions (prepared by Mr Flory) dated 23 July 2024, at [13].

[124] Plaintiff's supplementary submissions dated 13 August 2024, at [33].

[125] [2016] VSC 620; (2016) 52 VR 610 (Webster Investments).

[127] Plaintiff's supplementary submissions dated 13 August 2024, at [36].

[131] Transcript 07/05/24, (Efthim AsJ), AB 15:651-665.

[132] [1991] VR 653 (Cellante) at 657.

[133] [2020] VSCA 269 (Yuanda) at [23] (McLeish, Niall and Sifris JJA).

[134] Defendant's outline of submissions( prepared by Ms Worsfield) filed on 9 August 2024, at [48].

[135] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [49].

[136] Defendant's outline of submissions (prepared by Ms Worsfield) filed on 9 August 2024, at [48].

[137] This Rule for appeals from Associate Justices is expressed in the same terms as appeals to the Court of Appeal - refer Rule 64.39. Rule 77.06.6 provides:

(a) an appeal referred to in Rule 77.06 shall not operate as a stay of execution, or of proceedings, under the judgment or order;

(b) no intermediate act or step shall be invalidated.

[138] Plaintiff's outline of submissions dated 31 July 2024, at [47].

[139] See Everest Project Developments Pty Ltd v Westpac Banking Corp [2009] VSC 563, cited by Dixon J in Snowball v Capital Securities XVII Pty Ltd [2018] VSC 588.

[140] Plaintiff's outline of submissions dated 31 July 2024, at [48].

[141] [2018] VSC 588 at [29] (footnotes omitted).

[142] [2009] NSWCA 350 at [27]; Basten JA and Handley AJA agreeing.

[143] [1972] HCA 74; (1972) 126 CLR 161 (Inglis).

[144] [1972] HCA 74; (1972) 126 CLR 161 at 164-165 (Barwick CJ, Menzies and Gibbs JJ agreeing).

[145] [1972] HCA 74; (1972) 126 CLR 161 at 169.

[147] Refer Owens 14 March Affidavit: AB 7:52-56 at paragraphs [19]-[22]; Owens 11 July Affidavit: AB 17:1767-1770 at paragraphs [16]-[22].

[148] Plaintiff's outline of submissions dated 31 July 2024, at [55].

[149] Plaintiff's outline of submissions dated 31 July 2024, at [56].

[150] Plaintiff's supplementary submissions dated 13 August 2024, at [38].

[151] Plaintiff's supplementary submissions dated 13 August 2024, at [39]-[40].

[152] Paras [19] and [20] of the Owens 11 July Affidavit, AB 17:1770 and 1877-1878.

[154] A copy of the General Security Agreement is at pages 8 to 78 of Exhibit LKO-3. (AB 17:1779-1849).

[155] Affidavit of Luke Owens filed on 11 July 2024, at [5]-[9]. At pages 1 to 7 of Exhibit LKO-3 are copies of a current and historical company search for Casada, and a copy of the appointment documents for the receiver (AB 17:1777-1778). As noted above, there was an earlier Instrument of Appointment, dated 13 February 2024 whereby the plaintiff appointed Mr Brent Kijurina of Hall Chadwick as receiver to Casada, but only in respect of the investment held by Casada with MLC, described in the Schedule as 'Units held by the Grantor in the MLC Private Equity Co-Investment Fund 1': see Affidavit of Gautam Rajamani sworn on 29 February 2024 at [126]-[129] and Exhibit GR-1, AB 4:1746-1747.

[156] Exhibit LKO-3 at AB 17:1777-1778.

[157] Clause 1.1 contains the following relevant defined terms:

(8) Collateral means all PPSA Personal Property and all Other Property;

(37) Other Property means all present and after acquired property of the Grantor which is not PPSA Personal Property;

(41) PPSA means Personal Property Securities Act 2009 (Cth);

(a) all of the Grantor's present and after acquired property in which the Grantor can be a grantor of a PPSA Security Interest including property in which a Grantor has, or may in the future have, rights or the power to transfer rights;

(c) PPSA retention of title property (as that term is defined in the Corporations Act);

(43) PPSA Security Interest has the meaning given to the term 'security interest' in the PPSA;

[158] Exhibit LKO-4 at SAB 23:2148 at 2159.

[159] [2012] NSWSC 1134 (Great Australian Operations) at [95]-[110].

[160] (1992) 7 ACSR 415 at 428-432.

[161] Plaintiff's submissions filed on 31 July 2024, at [44].

[162] Plaintiff's submissions filed on 31 July 2024, at [45].

[163] Transcript 06/08/24 at T3 (Ms Worsfield).

[164] The correspondence is exhibited to the Affidavit of Luke Owens filed on 31 July 2024, Exhibit LKO-4 at SAB 23:2157.

[167] [2013] VSC 355 at [11] (Ferguson J).

[168] Transcript 08/04/24, at T69 (Mr J Mereine).

[169] Transcript 08/04/24, at T69 (Mr J Mereine).

[170] [2023] VSC 179 (Re Lifestyle Residences) at [16] (Hetyey AsJ).

[171] Transcript 08/04/24, at T69 (Mr J Mereine).

[172] [2023] VSC 179 at [22] (Hetyey AsJ).

[173] Transcript 08/04/24, at T71 (Mr J Mereine).

[174] Transcript 08/04/24, at T112 (Mr P Willis SC).

[175] Transcript 08/04/24, at T112 (Mr P Willis SC).

[176] [2012] NSWSC 1134, at [95]-[110].

[177] Transcript 06/08/24, at T24 (Ms Worsfield).

[178] Transcript 06/08/24, at T39 (Mr Kirby).

[179] For e.g., at paragraph 6 of his affidavit, Mr Astill complains about 'the constant trespass onto the family home by agents of the Receiver and Plaintiff in attempting to force out the family before the Appeal is heard from our family home.'

[180] At the directions hearing on 12 July 2024, the plaintiff informed the Court that it would agree to instruct the Sheriff not to execute the warrant of possession (that was issued pursuant to the orders that were made on 7 May 2024 following the judgment of Efthim AsJ) before 5pm on 6 August 2024, when the appeal would be heard. On 6 August 2024, counsel for the plaintiff informed the Court that all indications were that the Sheriff would not enforce the warrant before 30 August 2024.

[181] Transcript 06/08/24, at T47 (Mr Kirby).

[182] Transcript 06/08/24, at T46 (Mr Kirby).

[183] Transcript 06/08/24, at T41 (Mr Kirby).

[184] (1992) 7 WAR 496, at 511; (1992) 7 ACSR 415, at 430 (emphasis in bold italics added).

[185] (1992) 7 WAR 496, at 513-4; (1992) 7 ACSR 415, at 432.

[186] Transcript 06/08/24, at T48 (Mr Kirby).

[187] Transcript 06/08/24, at T54 (Mr Kirby).