Plaintiff v Defendant

RECTIFICATION - Common intention - Mistake - Evidentiary burden - Franklins Pty Ltd v Metcash Trading Pty Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 - Perpetual Ltd v Myer Pty Ltd [2019] VSCA 98 - Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 260 CLR 85.

ESTOPPEL - Estoppel by convention - Estoppel by representation.

MISLEADING OR DECEPTIVE CONDUCT - Whether vendor made misleading or deceptive representations - Whether reasonable person would find representations to be misleading or deceptive - Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592.

1 By a contract of sale made 13 March 2022 (the 'Contract'), the plaintiff, GLP Batesford Holdings Pty Ltd ('GLP'), as purchaser agreed to purchase a property at 205 Ballan Road, Moorabool (the 'Property') from the defendant, 68 Bridge Road Land Pty Ltd as trustee for the 68 Bridge Road Land Unit Trust ('68 Bridge') as vendor. The purchase price was $176 million plus GST. The deposit of $17.6 million was paid in accordance with the terms of the Contract and is held by the vendor's solicitors in a trust account as stakeholder.[1] GLP declined to agree to the early release of the deposit under s 27 of the Sale of Land Act 1962 (Vic) (the 'Sale of Land Act').[2] The balance of the price is payable at settlement which is due at the earlier of nine months from satisfaction or waiver of a rezoning condition or the sunset date which is 6 years and 6 months after the day of sale, being 13 September 2028. Settlement is required to take place irrespective of whether the Property is rezoned.

2 The Contract makes clear that 68 Bridge was not the registered proprietor of the Property at the date of sale. The Contract contemplates 68 Bridge's completion of a contract of sale for the Property dated 18 July 2018 (the '2018 Contract') between Drumgold Pty Ltd ('Drumgold') as vendor and BCJ No 1 Australia Pty Ltd ('BCJ') as purchaser which was to settle on about 18 July 2023. BCJ had nominated 68 Bridge as the purchaser under the 2018 Contract pursuant to a deed dated 24 March 2019 (the 'Nomination Deed'). By the terms of the Contract, GLP acknowledged the existence of the 2018 Contract and confirmed that it had read and understood its terms which included covenants by 68 Bridge that it would comply fully with its obligations under the 2018 Contract and the Nomination Deed until completion of the 2018 Contract. The Contract contains a definition of Head Contract which comprises the 2018 Contract and the Nomination Deed.

3 The terms of the Contract are otherwise set out in a series of general conditions ('GCs') which include warranties by 68 Bridge that at settlement it would be the holder of an unencumbered estate in fee simple in the Property. The effect of the conditions, among other things, means that 68 Bridge is required to deliver clear unencumbered title to GLP at settlement.

4 The terms of the Contract also include a number of special conditions ('SCs') including SC 17 and 32 which read:

The vendor may at any time prior to Settlement, mortgage, assign, charge or otherwise deal in any of its rights, privileges, benefits or obligations under this Contract or all or part of the Property without reference to the purchaser.

32.1 The vendor acknowledges and agrees that the Purchaser may lodge a caveat over the title to the Property in respect of its interest under this Contract.

32.2 If the Purchaser lodges a caveat in respect of its interest under this Contract, the Purchaser must permit registration of any dealings at the Titles Office contemplated by this Contract including those required for the vendor to:

(a) become the registered proprietor of the Property; and

(b) grant a Security Interest to a Financier for purpose of settling the Head Contract or refinancing thereof,

by providing a consent to those dealings in the form required by the Titles Offices within 3 Business Days of request by the Vendor.

32.3 If the Financier requires the Purchaser's caveat to be removed to facilitate the dealings contemplated in special condition 32.2, then the purchaser must withdraw its caveat within 3 Business days of request by the Vendor and may lodge a new caveat in respect of the same interest following registration of the relevant dealings.

32.4 The Purchaser agrees to indemnify the Vendor and hold indemnified the Vendor against any claim incurred as a direct or indirect result of any breach by the Purchaser of this special condition 32.2

32.5 For the purpose of this clause Financier means any person to whom the Vendor grants any Security interest over any of the Vendor's rights, privileges, benefits or obligations under this Contract or all or part of the Property or any other present or future acquired asset or property of the Vendor and/or any person from whom the Vendor incurs, borrows or obtains financial indebtedness.

5 On 15 March 2022, GLP lodged a caveat on title asserting an interest in the Property as purchaser under the Contract.

6 Settlement of the 2018 Contract took place on 20 July 2022, about one year earlier than the date specified in the 2018 Contract. In order to finance the performance of its obligations under the Head Contract, 68 Bridge entered into a syndicated facility agreement (the 'Facility Agreement') with Loan Agency Services Pty Ltd ('LAS') among others pursuant to which 68 Bridge borrowed $60 million. Interest payable under the Facility Agreement is capitalised and payable at the termination date which is 24 months after the financial close (20 July 2024). The facility limit is $75.1 million with the capitalised interest representing the difference between the $60 million and the facility limit.

7 68 Bridge's obligations under the Facility Agreement are secured by a mortgage over the Property which was registered on title at settlement (the 'Mortgage'). Clause 20.1 of the Facility Agreement has the effect that 68 Bridge must ensure that the loan to value ratio does not exceed the LVR maximum percentage of 48 % of the price payable pursuant to the Contract ($176 million less the deposit of $17.6 million), that is, it cannot exceed $76.03 million ($76.03 million being 48% of $158.4 million).

8 The Mortgage in favour of LAS was registered after GLP had consented to registration of the transfer from Drumgold and the Mortgage.

9 On 26 October 2022, GLP commenced this proceeding by writ seeking declaratory and injunctive relief to the effect that on the proper construction of the Contract, GLP was not obliged to consent to the registration on title of the Property of any mortgage or other security interest given by 68 Bridge save and except to the extent that such mortgage or other security interest was being granted by 68 Bridge for the Permitted Purpose described in the indorsement of claim in the following way:

Special Condition 32 of the Contract of Sale (SC32) provides inter alia that in respect of the caveat, the plaintiff must permit registration of any dealings at the Land Titles Office contemplated by the Contract of Sale, including those required for the defendant to become the registered proprietor of the Property and grant a security interest to a financier for the purpose of settling the head contract or financing thereof by providing a consent to those dealings in the form required by the Titles Office.

10 Shortly after the originating process was served, 68 Bridge undertook that it would not, without giving 14 days' prior written notice, use the Mortgage for any purpose other than in relation to financing the acquisition of the Property under the Head Contract or refinancing it. The undertaking has been extended and remains in place. 68 Bridge has not sought, and, relatedly, GLP has not offered, any accompanying undertaking as to damages or other cross-undertaking.

11 In the course of the proceeding, GLP has advanced evolving versions as to what it contends is the proper construction of SC 32. It also advances a claim for rectification of SC 32.2 so as to delete the words 'contemplated by this Contract including those' from the clause.

12 GLP also advances ancillary claims for injunctive relief pursuant to s 232 of the Australian Consumer Law (the 'ACL') contained in Scheule 2 to the Competition and Consumer Act 2010 (Cth) (the 'CCA') as it applied pursuant to s 12 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) and/or s 131 of the CCA. GLP also seeks relief under the ACL pursuant to s 243 varying SC 32 of the Contract.

13 Separately but relatedly, GLP brings estoppel claims in reliance upon the doctrine of conventional estoppel and separately estoppel by representation.

14 As events have unfolded, GLP's complaint appears to be two-fold. First, that $9,415,375 of the $60 million borrowed by 68 Bridge secured by the Mortgage was used by 68 Bridge to refinance or in some way repay loans or return equity that had been advanced by 68 Bridge's shareholders or unitholders and that this use of the funds borrowed was impermissible. Secondly, that it was impermissible for 68 Bridge to in effect borrow the capitalised interest by way of entering into a facility limit of $75.1 million but drawing down $60 million.

15 The burden of the declaratory and injunctive relief sought by GLP is to the effect that on refinance, 68 Bridge is not able to borrow on the security of a registered mortgage, such amounts as constitute a refinance of the $9,415,375 or the capitalised interest due on 20 July 2024 or borrow a further sum equivalent to the capitalised interest payable on the principal sum borrowed on any refinance effected on 20 July 2024.

16 The proceeding has some distinctive features; at the time the proceeding was commenced, GLP had recently provided the consent sought by 68 Bridge to registration of the transfer from Drumgold and the Mortgage, which did not have to be refinanced or paid out until 20 July 2024. The indorsement of claim contained no allegation of any breach of contract although it did assert a breach of the ACL by reason of an alleged representation that the Mortgage was for the Permitted Purpose which by implication suggested that it was not. No claim for damages was made then or subsequently. Settlement of the Contract is not required to take place until 2028.[3] There has never been any allegation that GLP will be unable to convey title to the Property free of encumbrance at settlement. The deposit paid by GLP is held in trust, where it will remain until settlement takes place. Since the proceeding has been on foot, the only changed circumstance of any significance is that the time for refinance is soon approaching, but there is no allegation that 68 Bridge will be unable to refinance the Facility Agreement when it falls due on 20 July 2024.

17 In order to explore the parties' competing submissions as to the proper construction of SC 32 and to understand the way in which GLP brings the balance of its claims, it is necessary to set out the relevant evidence in a little more detail.

18 GLP is part of the Villawood Group of companies founded by Rory Costelloe over 30 years ago and carries on business as a land development company. It is one of the largest broad acre residential land development companies in Australia. Villawood Group's business model involves purchasing rural land and developing it into multiple residential lots with associated infrastructure. The Growland Group of companies chaired by Chi Ping (Bruce) Chan is also a sophisticated and prominent actor in the property and development industry. 68 Bridge is part of the Growland Group.

19 There were four witnesses who gave oral evidence. Each of the four witnesses gave evidence-in-chief by way of the tender of a witness statement. Each was cross-examined. The witness statement of a fifth witness, Bridget Costelloe was tendered by consent. She was not cross examined.

20 GLP called John Yuen, who is the national acquisitions manager of the Villawood Group and Mr Costelloe.

21 68 Bridge called its former general counsel Drisha Natarajan and Mr Chan.

22 The use of witness statements for the purposes of adducing evidence-in-chief has certain advantages particularly insofar as it facilitates the efficient elucidation of non-controversial evidence. In some respects however it can be problematic as the statements seek to contain the witness's purported recollection of events but often formulate that recollection in the language of the drafter of the statement. This can have the effect that the evidence which stands as the evidence-in-chief of the relevant witness contains language which bears little relationship to the language used by the relevant witness or amounts to a reconstruction of events infected by the legal issues which have arisen in the case. Such features are part of the reason as to why the Commercial Court of this Court in the recent Practice Note issued 26 February 2024, noted that evidence-in-chief will generally be given orally (with notice given by way of an outline of evidence) rather than via the tender of a witness statement.

23 These features in the giving of evidence-in-chief by witness statement were present here. In Mr Costelloe's witness statement, he set out an account of a conversation with Mr Yuen which was quite different to the account that he gave in his evidence-in-chief when the relevant paragraph in the witness statement was ruled inadmissible. Mr Yuen's account set out in the witness statement also differed to that tested in cross-examination. Mr Chan's witness statement was drafted in a manner which suggested he had a fluency and understanding of English which contrasted markedly with his oral evidence. These observations should not be taken to suggest that there was anything improper about the way in which the witness statements were prepared. They simply reflect some of the features which can be present when witness statements are used in this way. These observations notwithstanding, each of the witnesses sought to give their evidence for the most part candidly and honestly, although I consider that their evidence was to varying extents influenced unwittingly by the legal controversy that has resulted. There was a degree of vagueness about the evidence of Mr Costelloe and Mr Chan in particular and to some extent Mr Yuen. Although Mr Yuen gave his evidence fluently and honestly, for reasons set out below I consider that it is likely that his recollection as to his state of mind at the relevant time was in some respects unwittingly infected by subsequent events. This was also the case to a limited extent with one aspect of Mr Costelloe's evidence. In the case of Ms Natarajan, I formed the view that she was generally a careful witness who sought to take care to answer the questions correctly and accurately. However, that general assessment is subject to one important exception which is adverted to below. Much as is the case with aspects of the evidence of Mr Yuen and Mr Costelloe, I consider it likely that Ms Natarajan's evidence in this respect has been affected by subsequent events.

24 As noted above, on 18 July 2018, BCJ and Drumgold entered into the 2018 Contract for a purchase price of $49.76 million with settlement to take place 60 months from the day of sale (18 July 2023). The 2018 Contract is a terms contract which, inter alia, required the payment of $4,976,000 at the completion of a due diligence period; a payment of $2,488,000 within seven days after the registration of a plan of subdivision or the first anniversary of the date of the 2018 Contract, whichever is the later and then three payments of $4,976,000 on each of the second, third, or fourth anniversary of the date of the 2018 Contract with the balance of the purchase price due at settlement.

25 By the Nomination Deed, BCJ nominated 68 Bridge as the purchaser under the 2018 Contract. The Nomination Deed included provisions to the effect that 68 Bridge would pay an amount of $70 million less the Stamp Duty Credit (defined as the 'Initial Purchaser Payment') payable as follows:[4]

(a) $20,000 non-refundable which was paid by 68 Bridge to BCJ upon signing a heads of agreement entered into between them on 11 February 2019 (cl 4.1(a));

(b) $6,980,000 to BCJ which represented reimbursement of the full 10% deposit paid by BCJ under the 2018 Contract plus an uplift payment of $2,024,000 (cl 4.1(b));

(c) $3,500,000 on 18 June 2019 of which $2,488,000 was to be paid to Drumgold and $1,012,000 to BCJ (cl 4.1 (c));

(d) $7,000,000 on or before the later of 17 June 2020 or notification of registration of the plan of subdivision of which $4,976,000 was to be paid to Drumgold and $2,024,000 to BCJ (cl 4.1 (d));

(e) $7,000,000 on or before the later of 18 June 2021 or notification of registration of the plan of subdivision of which $4,976,000 was to be paid to Drumgold and $2,024,000 to BCJ (cl 4.1 (e));

(f) $7,000,000 on or before the later of 18 June 2022 or notification of registration of the plan of subdivision of which $4,976,000 was to be paid to Drumgold and $2,024,000 to be paid to BCJ (cl 4.1 (f));

(g) $38,500,000 less an amount equal to the Stamp Duty Credit on or before 18 July 2023 subject to settlement occurring under the 2018 Contract (of which $27,368,000 is paid to Drumgold and the balance to BCJ) (cl 4.1 (g)).

26 'Stamp Duty Credit' is defined as the amount of duty chargeable on the dutiable value of the 2018 Contract as if it had been completed by BCJ calculated in accordance with the Duties Act 2000 (Vic).

27 The effect of the Nomination Deed was that 68 Bridge acquired the right to purchase the property for $70 million less the Stamp Duty Credit, of which money Drumgold would receive the amount due under the 2018 Contract with BCJ exiting the transaction in return for receipt of the difference between the $70 million less the Stamp Duty Credit and the $49.76 million purchase price specified in the 2018 Contract.

28 It is common ground that between about May and August 2021, Mr Yuen engaged in discussions with Ms Natarajan, in relation to the proposed sale of the Property along with an adjacent property at 675-775 Evans Road, Lovely Banks, Victoria (the 'Lovely Banks Land').

29 Relevantly during these discussions, Mr Yuen was provided with redacted copies of the Head Contract and the Nomination Deed. The copies redacted, among other things, the price specified in the Head Contract and the Nomination Deed such that Mr Yuen did not know the price that 68 Bridge was required to pay in order to acquire the Property.

30 The sale of the combined land holding comprising the Property and the Lovely Banks Land did not proceed for reasons that are not material.

31 In around November 2021, 68 Bridge advertised the Property for sale by expressions of interest.[5] By late 2021, Mr Yuen had become aware that 68 Bridge had entered into a contract of sale to sell the land to Stockland subject to the completion of due diligence.

32 On 10 March 2022, Mr Yuen had a telephone conversation with Michael Gardiner, an estate agent at Colliers International estate agents who were selling the Property on behalf of 68 Bridge. Mr Gardiner said words to the effect that Stockland's due diligence period was due to expire at midnight. He said that if Stockland did not proceed with the purchase of the Property, he would send Mr Yuen a proposed contract of sale in respect of the Property in order to ascertain whether the Villawood Group was interested.

33 On Friday 11 March 2022, Mr Gardiner emailed Mr Yuen a proposed contract. The contract set out the formal details and included a price of $176 million payable as to a deposit of 10%. The settlement date was the earlier of nine months from the satisfaction of the rezoning condition or the sunset date of 13 September 2028. The contract also included a series of general conditions as well as special conditions which relevantly included SC 17 but not SC 32. The vendor's legal practitioners were identified as Maddocks. Later on the same day, Colliers sent Mr Yuen a copy of the vendor's statement required by s 32 of the Sale of Land Act. The vendor's statement included a copy of the title search which showed no encumbrances on the title to the Property save for caveats which had been lodged by BCJ (recording its interest under the 2018 Contract) and 68 Bridge (recording its interest under the Nomination Deed).

34 In the evening of 11 March 2022, Mr Yuen sent Colliers a copy of the contract of sale that had been signed by GLP. Various changes had been made to the version earlier provided. There was no change to SC 17 and SC 32 had not yet been included. The version executed by GLP now included details in the section headed 'Particulars of Sale' recording that the purchaser's legal practitioner was Clayton Utz and an email address for Alison Kennedy of that firm was provided.

35 In the afternoon of Saturday 12 March 2022, Ms Natarajan sent an email to Mr Gardiner and Mr Chan (among others) in which she wrote (the 'Natarajan Email'):

Afternoon gents, as discussed, we would need some comfort around the caveat that [GLP] will be lodging. We do not oppose to them putting a caveat on to protect their rights but we do need some comfort that they would not impede the mortgage we will need to grant for the purpose of settling our head contract or refinancing such mortgage if required.

Please see attached proposed additional special condition to be inserted into the contract. Can you please confirm [GLP] is agreeable to it and if yes we will attend to incorporating the attached special condition and execute the contract once we are also satisfied with the guarantee that they have provided. The guarantee is more of the question our lender has asked as we have informed them this afternoon that we are now dealing with a different party and their comment was that they had to be satisfied with the quality of the guarantee.

36 Attached to the Natarajan Email was a one page document headed FURTHER SPECIAL CONDITION:

32.1 The vendor acknowledges and agrees that the Purchaser may lodge a caveat over the title to the Property in respect of its interest under this Contract.

32.2 If the Purchaser lodges a caveat in respect of its interest under this Contract, the Purchaser must permit registration of any dealings at the Titles Office contemplated by this Contract including those required for the vendor to:

(a) become the registered proprietor of the Property; and

(b) grant a Security Interest to a Financier for purpose of settling the Head Contract or refinancing thereof,

by providing a consent to those dealings in the form required by the Titles Offices within 3 Business Days of request by the Vendor.

32.3 If the Financier requires the Purchaser's caveat to be removed to facilitate the dealings contemplated in special condition 32.2, then the purchaser must withdraw its caveat within 3 Business days of request by the Vendor and may lodge a new caveat in respect of the same interest following registration of the relevant dealings.

32.4 The Purchaser agrees to indemnify the Vendor and hold indemnified the Vendor against any claim incurred as a direct or indirect result of any breach by the Purchaser of this special condition 32.2

32.5 For the purpose of this clause Financier means any person to whom the Vendor grants any Security interest over any of the Vendor's rights, privileges, benefits or obligations under this Contract or all or part of the Property or any other present or future acquired asset or property of the Vendor and/or any person from whom the Vendor incurs, borrows or obtains financial indebtedness.

37 At 4:02pm, the Natarajan Email and the text of SC 32 were sent by Mr Gardiner to Mr Yuen. Within 6 minutes of receipt of Mr Gardiner's email, Mr Yuen forwarded the email and text of SC 32 to Ms Kennedy from Clayton Utz. Ms Kennedy replied at 10:34pm in an email addressed to Mr Yuen in the following terms:

Hi John, I'm happy with the new special condition except for special condition 32.3, for reasons set out below:

1. A withdrawal of caveat is not necessary because all a Financier needs is a consent to register its dealing in order to obtain priority;

2. If you agree to special condition 32.3, the vendor could technically request a withdrawal of caveat as soon as you lodge the caveat and you would not be able to lodge another until after settlement of the head contract and lodgement of the financier's dealings, leaving you exposed; and

3. Even if there was only a short period of time between withdrawal and lodgement of a new caveat, you would still be exposed unnecessarily given that a consent will suffice.

If Growland does not accept this, you could agree to withdraw your caveat immediately prior to lodgement of the financier's dealings and relodge it immediately after by amending special condition 32.3 to read as follows:

If the Financier requires the Purchaser's caveat to be removed to facilitate the dealings contemplated in special condition 32.2, then the Purchaser must withdraw its caveat immediately prior to lodgement of the relevant dealings and may lodge a new caveat in respect of the same interest immediately following lodgement of the relevant dealings.

However, given this gives rise to an unnecessary risk, I would prefer removal of special condition 32.3 altogether.

Can Drisha accept 32.3 to be amended to 'If the Financier requires the Purchaser's caveat to be removed to facilitate the dealings contemplated in special condition 32.3, then the Purchaser must withdraw its caveat immediately prior to lodgement of the relevant dealings and may lodge a new caveat in respect of the same interest immediately following lodgement of the relevant dealings'.

39 Although Ms Natarajan sent an email to Colliers confirming that the proposed insertion was acceptable, for some reason the proposed change did not make its way into the Contract as executed, although that omission was corrected by a deed of variation executed on 6 July 2022.

40 The Contract was executed the following day on 13 March 2022 and on 15 March 2022, GLP lodged a caveat specifying the interest claimed as a freehold estate arising pursuant to a contract entered into by it as purchaser with 68 Bridge dated 13 March 2022.

41 Although the settlement date of the 2018 Contract was 18 July 2023, 68 Bridge settled the purchase about 12 months earlier. To that end on 12 July 2022, in anticipation of settlement which had been arranged to take place on Friday 15 July 2022, the solicitor for 68 Bridge, Maddocks, emailed the solicitors for GLP, Clayton Utz, attaching a proposed letter of consent to be completed by GLP as caveator so as to facilitate settlement. The email referred to SC 32 and otherwise noted that as the exact mortgagee entity was not yet determined, the letter did not specify the name of the mortgagee.

42 Having heard no response, on 14 July 2022, Maddocks sent a further email requesting the return of the signed caveator consent letter noting that settlement was due the next day.

43 At 5:01pm on 14 July 2022, Clayton Utz emailed Maddocks as follows:

...

So that we can be in a position to provide you with the caveator's consent please:

1. Let us have your confirmation that the proposed mortgage to be granted at settlement is being granted for the purpose of settling the Head Contract; and
2. Provide us with the name of the mortgagee to be named in the caveator's consent (noting that given settlement is proposed tomorrow, you should now have these details).

44 Maddocks responded at 7:17pm advising that the name of the mortgagee was LAS confirming 'that the proposed mortgage to be granted at settlement is being granted for the purpose of settling the Head Contract'.[6] Later that night, Clayton Utz requested the provision of copies of the proposed transfer of land and mortgage together with confirmation of the amount to be secured by the mortgage.

45 At 10:17am on 15 July 2022, Maddocks emailed Clayton Utz as follows:

... I am instructed that the total facility limit is $75,100,000 but that at settlement funds will only be loaned for the purpose of facilitating settlement of the acquisition. A copy of the transfer of land is attached. The mortgage cannot yet be viewed in PEXA because of late document signing, but the mortgagee is as advised below.

Please forward the signed consent letter.

46 Clayton Utz replied shortly thereafter to the effect that it was seeking instructions and noting the difficulties of providing consent to a document that it had not seen. Clayton Utz's email continued by requesting a copy of the signed mortgage and facility agreement for urgent review.

47 A little under two hours later, Maddocks forwarded a copy of the mortgage to Clayton Utz who responded by reiterating a request for a copy of the Facility Agreement.

48 At 3:07pm, Maddocks requested clarification as to why a copy of the Facility Agreement was needed given that Clayton Utz had received a copy of the proposed mortgage and would receive a copy of the signed mortgage.

49 At 4:50pm, Clayton Utz emailed Maddocks in the following terms:

The facility agreement has been requested for the purposes of our client satisfying itself that the caveator's consent requested is in accordance with the terms of the Contract. However, we note by your comments below that the total facility limit is $75,100,000. We also note that the mortgage is an all moneys mortgage which could provide security for further advances and other indebtedness to the mortgagee.

Please therefore, as a matter of urgency, let us have a copy of the requested facility agreement.

The clear intent of the Contract is that our client provide a caveator's consent for a Security Interest for the purpose of settling the Head Contract. This is for the purpose of limiting the amount secured by such mortgage. A mortgage which secures a greater amount from the outset and which also could secure other indebtedness is contrary to the Contract.

Our client will comply with its obligations under the Contract. To that end, we attach a copy of caveator's consent to the Transfer of Land.

I understand that settlement under the Head Contract is not due until Tuesday. Our client is committed to working with your client to assist it to put in place arrangements to allow settlement to occur by that time. We suggest that what may assist your client is the entry into an appropriate Tripartite Agreement to facilitate the advance of additional funds as sought by your client in a manner that protects all parties. Let us know if you wish to pursue that course.

1. Your client is obliged under special condition 32.2 to 'permit registration of any dealings at the Titles Office contemplated by this Contract, including those required for the Vendor to become the registered proprietor of the Property; and grant a Security Interest to a Financier for the purposes of settling the head Contract or refinancing thereof. The mortgage will be granted for the exact purposes contemplated by special condition 32.2 - that is, to settle the Head Contract. The funds secured by the mortgage will be loaned for this purpose. Special condition 17 also expressly entitles our client to at any time mortgage all or part of the Property without reference to your client, and any such mortgage will be a dealing contemplated by the Contract for the purposes of special condition 32.2.
2. The $75,100,000 facility limit exists in case interest is capitalised into the loan. But the mortgage will be granted for the purpose of facilitating settlement under the Head Contract and as contemplated by special condition 17.
3. Special condition 32 does not entitle your client to receive a copy of the facility agreement.
4. Your client is protected against excessive indebtedness against the property (noting that the facility limit under the loan secured by the mortgage is $100,900,000 less than the GST exclusive purchase price under the contract with your client). The 1% deposit settlement paid by your client is held on trust and the 9% instalment due after settlement will be held on trust, pending any release authorised in accordance with section 27 of the Sale of Land Act 1962.
5. If your client frustrates settlement under the Head Contract it will cause our client to default under the Head Contract. Note that:

(a) a payment is imminently due under the Head Contract which has been agreed to be paid at settlement. Failure to make this payment at settlement will cause breach under the Head Contract;

(b) settlement has been brought forward such that any delay in our client settling may cause further breach of the Head Contract; and

(c) special condition 18 of the Head Contract contains an unusual default regime under which if an overdue payment is not paid with penalty interest within seven days after the due date, the Head Contract automatically ends for breach without any notice from the vendor under the Head contract.

1. Your client's consent as caveator to the transfer of land is insufficient for the purposes of special condition 32 and, will not facilitate settlement under the Head Contract without corresponding consent to the registration of the mortgage.
2. 68 Bridge Land Pty Ltd and the Growland Group will be extremely disappointed if settlement of this acquisition is complicated in this fashion by your client.

Please urgently seek instructions to consent to the registration of the mortgage.

50 On Monday 18 July 2022 at 5:38pm, Clayton Utz responded enclosing a copy of the caveator's consent letter. The accompanying email read:

As mentioned previously, our client will comply with its obligations under the Contract.

Whilst our client:

1. does not agree that any finance permitted under special condition 17 attracts the operation of special condition 32.2; and

2. does not consider that it has been given sufficient information to satisfy itself that the caveator's consent requested is in accordance with the terms of the contract, it is not in our client's interests to jeopardise settlement of the Head Contract. Our client is therefore left with no choice but to rely on your representations and/or the representations of your client that:

(a) the proposed mortgage is being granted for the purpose of settling the Head Contract;

(b) the funds secured by the mortgage will be loaned for that purpose;

(c) the $75,100,000 facility limit exists in case interest is capitalised into the loan; and

(d) funds will only be loaned for the purpose of facilitating settlement of the acquisition

A caveator's consent to the mortgage is attached on the above basis.

We put your client on notice that should any amounts be secured by the mortgage other than for the purpose of settling the Head Contract or refinancing thereof, our client reserves its right generally.

51 In the result, 68 Bridge's acquisition of the Property settled on 20 July 2022 and it became the registered proprietor of the Property and the Mortgage was registered on title specifying LAS as mortgagee. The Mortgage is an all moneys mortgage which incorporates the memorandum of common provisions contained in document reference AA3382 which, inter alia, defines secured money broadly by reference to all amounts that are payable or owing but not payable under or in connection with the 'Secured Documents' which in turn is defined as the memorandum of common provisions together with any document or agreement that the parties agree in writing is to be a secured document for the purposes of the MCP. The Mortgage does not specify the secured sum in dollar terms.

52 The obligations secured by the Mortgage include those set out in the Facility Agreement between 68 Bridge and LAS as agent and as security trustee, as well as CSV Lane Funding 138 Pty Ltd ('CSV Lane'). It provides for the making available to 68 Bridge of a loan facility in an aggregate amount equal to the total facility limit for the facility (of $75.1 million), with the principal outstanding to be repaid in full on the termination date which is two years after the date of the agreement. The principal outstanding in turn is defined as the aggregate principal amount outstanding of all Loans (including any Capitalised Amount) whilst Capitalised Amount has the meaning given in cl 9.3(a) which in effect provides for interest to be capitalised and paid. Relevantly, section 1 of the Facility Agreement, among other things, defines the total commitment as the aggregate of the Commitments under the facility being $60 million as at the date of the agreement and the total facility limit being the aggregate of the facility limits for the facility being $75,100,000

53 Clause 3.1(a) of the Facility Agreement provides that 68 Bridge shall apply all amounts borrowed by it under the facility towards financing:

(i) The balance of the purchase price to the Vendor for the acquisition of the Property under the Contract of Sale;[7]

(ii) Equity repatriation of costs expended by the borrower in respect of the Property (provided that any amount drawn down for this purpose shall be retained by the Agent in a bank account solely controlled by the Agent and only released by the Agent to the borrower following satisfaction of the conditions subsequent contemplated by clause 4.3(a) (condition subsequent);

(iii) The payment of the arranger fee payable under clause 11.1 (arranger fee);

(iv) Capitalised interest under and in accordance with this Agreement; and

(v) The payment of legal costs and expenses incurred under or in connection with clause 14.1(n) and 16.10 (transaction expenses), in an aggregate amount of up to the Total Facility Limit.

54 It appears that the conditions subsequent specified in clause 4.3(a), which comprised proof that the deposit had been paid in full and the provision of a valuation confirming that the as is value of the Property is not less than $107,600,000, were satisfied.

55 Clause 5 contemplates that 68 Bridge could utilise the facility by delivering to the agent and the lenders a duly completed utilisation request.

56 The utilisation request provided requested the provision of $60 million on 15 July 2022 with a request that the proceeds of the loan be credited to the following accounts:

Funds Required for PEXA Settlement

Amount: $49,520,000.00

Name: Ashurst Australia Practice Trust A/C Melbourne

BSB: [details provided]

Account Number: [details provided]

Ashurst legal fees

Amount: $30,000.00

Name: CSV Lane Capital Solutions Pty Ltd

BSB: [details provided]

Account Number: [details provided]

CSV Lane arranging fee (inc GST)

Amount: $1,032,625.00

Name: CSV Lane Capital Solutions Pty Ltd

BSB: [details provided]

Account Number: [details provided]

Equity repatriation (balance) to CSV Lane Funding 138 Pty Ltd

Amount: $9,417,375.00

Name: CSV Lane Funding 138 Pty Ltd

BSB: [details provided]

Account Number: [details provided].

57 The PEXA settlement completion record shows that $49,514,088.65 was paid at settlement, a little under the expected $49,520,000.00. This amount was made up of a payment to Drumgold of $32,343,683.67 which amount was payable pursuant to cl 4.1(g) of the Nomination Deed; $2,736,800 which represented the initial purchaser's stamp duty; and $10,415,777.02 which was the balance of the amount due to BCJ under the Nomination Deed. The balance of the payments made at settlement were $4,680.65 in council rates; $3,422.98 in legal fees; $62.04 to the lender's solicitors for PEXA fees; $4,005,622 in stamp duty based on the consideration of $72,829,490 provided for in the Nomination Deed; $123.97 to Wightons Lawyers (the solicitors for the vendor in the Head Contract in respect of their PEXA fees); $123.97 to Maddocks, 68 Bridge's solicitors with respect to the purchase under the Head Contract with respect to their PEXA fees; $33.55 to KMP Legal (BCJ's solicitors for their PEXA fees); and $3,758.80 to Ashurst, the lender's solicitors, in respect of the lodgement fee.

58 In addition to the amounts paid at settlement, 68 Bridge had previously made further payments under the Nomination Deed of $20,000 on 18 February 2019 (pursuant to cl 4.1(a) of the Nomination Deed); $1 million on 23 April 2019 (pursuant to cl 4.1(b) of the Nomination Deed); $1 million on 23 July 2019 (pursuant to cl 4.1(b) of the Nomination Deed); $6,011,140.41 on 16 September 2019 (pursuant to cl 4.1(b) of the Nomination Deed); $1 million on 21 June 2019 (pursuant to cl 4.1(c) of the Nomination Deed); $500,000 on 24 June 2019 (pursuant to cl 4.1(c) of the Nomination Deed); and $2 million on 1 July 2019 pursuant to cl 4.1(c) of the Nomination Deed). These payments made by 68 Bridge had been financed from loans or contributions made to 68 Bridge by the shareholders/unitholders in the 68 Bridge Road Land Trust.

59 The total payments made by 68 Bridge pursuant to the 2018 Contract and the Nomination Deed therefore totalled $72,827,401.

Relevant principles of constructional interpretation

60 The principles of interpretation of contracts are well established and were not in controversy. The rights and liabilities of parties under a provision in a contract are determined objectively, by reference to its text and context (the entire text of the contract as well as any contract document or statutory provision referred to in the text of the contract) and purpose.[8] The task involves determining what a reasonable businessperson would have understood the relevant contractual term to mean. This is done by reference to the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract.[9] Ordinarily, the process of construction is possible by reference to the contract alone. If an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.[10]

61 However, sometimes recourse to events, circumstances and things external to the contract may be necessary in identifying the commercial purpose or object of the contract where that task is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating. It may be necessary in determining the proper construction where there is a constructional choice.'[11]

62 Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.[12]

63 A court is entitled to approach the task of giving a commercial contract an interpretation on the assumption 'that the parties...intended to produce a commercial result'.[13]

64 As noted above, GLP's submission as to the proper construction of SC 32 has evolved over the course of the proceeding.

65 By its indorsement of claim accompanying the writ, dated 25 October 2022, GLP set out SC 32 and then identified a 'permitted purpose' in the following way:

[SC 32] provides, inter alia, that in respect of the caveat, the plaintiff [GLP] must permit registration of any dealings at the Land Titles Office contemplated by the contract of sale including those required for the defendant to become the registered proprietor of the Property and grant a security interest to a financier for the purpose of settling the Head Contract or refinancing thereof by providing a consent to those dealings in the form required by the Titles Office (Permitted Purpose) and that on the proper construction of the contract of sale:

(a) the plaintiff was not obliged to consent to the registration on the title to the property of any mortgage given by the defendant [68 Bridge] save and except to the extent that such mortgage was being granted by the defendant for the Permitted Purpose; and

(b) the defendant could not, without the consent of the plaintiff, obtain any registration of any mortgage over the property that was for a purpose other than the Permitted Purpose.

66 By its statement of claim dated 16 December 2022 ('the SOC'), GLP alleged that:

On a proper construction of SC32...the defendant was only entitled to register those dealings at the Titles Office that were required for the defendant to become the registered proprietor of the Property and to grant a mortgage for the purpose of settling the Head Contract or refinancing such mortgage if required.[14]

(version 2).

67 By its amended statement of claim dated 14 June 2023 (the 'ASOC'), which was filed after 68 Bridge had provided by way of discovery an unredacted copy of the Nomination Deed, which GLP had previously only seen in redacted form with the price among other things redacted, GLP alleged that:

On a proper construction of SC32 ... the defendant was (and is) only entitled to register those dealings at the Titles Office that were (or are) required for the defendant to become the registered proprietor of the Property and to grant a mortgage for the purpose of securing the Indebtedness or refinancing the Indebtedness if required.[15]

(version 3).

68 Indebtedness was introduced in paragraph 4B of the ASOC which read:

4B In the premises as at 20 July 2022, being the date of the settlement of the Head Contract as alleged in paragraph 37 below, the amount required to settle the Head Contract was the amount referred to in paragraph 4A(g) above (Amount to Settle under the Head Contract).

The Amount to Settle under the Head Contract was identified in paragraph 4A of the ASOC which read:

4A. The purchase price of the Property under the Nomination Deed was $70 million less the 'stamp duty credit' (as defined in the Nomination Deed) (stamp duty credit) payable or paid as follows (clause 4.1):

(a) $20,000 upon signing;

(b) $6,980,000 payable within two business days after the 'due diligence date' (as defined in the Nomination Deed), being 30 days after the date of the Nomination Deed;

(c) $3,500,000 payable on 18 June 2019;

(d) $7,000,000 payable on or before the later of 18 June 2020 and the 'contract condition date' (as defined in the Nomination Deed), being the date three days after BCJ notified the defendant that the proposed plan of subdivision PS820501E (plan) was registered (contract condition date);

(e) $7,000,000 payable on or before the later of 18 June 2021 and the contract completion date;

(f) $7,000,000 payable on or before 18 June 2022; and

(g) $38,500,000 less an amount equal to the Stamp Duty Credit payable on or before 18 July 2023 subject to settlement occurring under the Head Contract.

69 A sensible reading of the ASOC is that by version 3, GLP asserts that on the proper construction of SC 32, 68 Bridge was (and is) only entitled to register those dealings at the Titles Office that were (or are) required for 68 Bridge to become the registered proprietor of the Property and to grant a mortgage for the purpose of securing the amount of the cl 4.1(g) payment which was $38,500,000 less an amount equal to the Stamp Duty Credit payable on or before 18 July 2023. The record of the payments made at settlement show that the payment made to Drumgold at settlement was $32,343,683.67 which means that the payment referred to in paragraph 4A(g) is $32,343,683.67, or for convenience, $32.34 million.

70 To put it another way, the effect of GLP's version 3 construction is that 68 Bridge is and was only able to register a mortgage at the Titles Office required to become the registered proprietor of the Property and then only to the extent that it secures repayment of a maximum sum of $32.34 million.

71 In its written closing submissions, GLP advanced a submission as to the proper construction which was cast in different terms to version 3. In paragraph 27 of its closing submissions, GLP submitted that it was entitled to a declaration 'giving effect to what it says is the proper construction of SC 32, namely that the plaintiff must permit registration of any dealings at the Titles Office that are required for the defendant to become the registered proprietor of the Property and grant a security interest to a Financier for the purpose of settling the Head Contract or refinancing thereof.' This version, which I shall refer to as version 4, bears resemblance to versions 1 and 2.

72 Arguably, none of the versions engage directly with the burden of GLP's case advanced in oral submissions and that ascertainable from the oral evidence which is to the effect that the Mortgage was not permissible because it secured moneys which had been borrowed in part for purposes inconsistent with SC 32, insofar as the borrowing secured by the Mortgage was undertaken to fund the equity repatriation payment of $9,417,375 and $15.5 million for the capitalised interest payment due on the repayment date (version 5).[16]

73 Whether there is in fact any difference between the versions and whether anything flows from those differences is considered below.

74 GLP submits that the construction of SC 32.2 (however cast) and the identification of its commercial purpose require recognition of the following:

(a) First, a caveat is the means by which unregistered interests are protected. The purpose of a caveat is to prevent registration of any dealing inconsistent with the caveated interest.

(b) Secondly, a caveat may only be lodged to protect a proprietary interest in land and the equitable interest of a purchaser arising pursuant to a specifically enforceable contract of sale gives rise to an equitable interest in the land by the purchaser.

(c) Thirdly, a vendor retains a continuing legal interest in the land pending completion.

(d) Fourthly, in a priority dispute between equitable interests, the search is for the better interest in all the circumstances and the presence or absence of a caveat assumes considerable significance in such an enquiry not just between purchasers and equitable mortgagees but between two purchasers of the same land.

(e) Fifthly, the parties expressly recognised in SC 32.1 that GLP would lodge a caveat and that its interest in the land would prevent registration of and thereby outrank any subsequent interest granted in the Property.

(f) Sixthly, without more, and by reason of GLP's caveat, SC 17 can only be construed as applying to unregistered dealings.

(g) Seventhly, the parties recognised in SC 32.2 that certain registered dealings would be necessary to give effect to the parties' proposed transaction and in particular, 68 Bridge needed to become the registered proprietor of the Property and would likely need to secure its borrowings against the Property.

(h) Eighthly, 68 Bridge communicated the intention behind SC 32 to GLP in express terms as set out in the Natarajan Email. This intention was not to allow 68 Bridge to register any dealings mentioned in SC 17 but rather was to give 68 Bridge 'comfort that [GLP] would not impede the mortgage [68 Bridge] will need to grant for the purpose of settling our Head Contract or refinancing such mortgage if required'. GLP emphasises that no other purpose whether by reference to SC 17 or otherwise was ever mentioned.

75 GLP submits that the critical phrase in SC 32.2 is that GLP 'must permit registration of any dealings at the Titles Office contemplated by this contract.' It argues that this is a composite phrase that is directed to fulfilling (not detracting from) the commercial objective disclosed by its context. It argues that the reference to 'contemplated by this contract' requires a search for dealings in respect of which registration is contemplated by the Contract, of which there are only the two referred to in SC 32.2 (a) and (b). GLP submits that its construction of SC 32 is supported by the text of the provision, arguing that 68 Bridge's construction which is one which would also facilitate registration of dealings beyond those in SC 32.2 (a) and (b) and would pick up dealings in SC 17 and disaggregates the composite phrase into 'registration of any dealings' and '[dealings] contemplated by the contract'.

76 GLP submits that this requires the syntax to change such that SC 32.2 would read either 'registration of any dealings contemplated by this contract at the Titles Office' or 'registration at the Titles Office of any dealings contemplated by this contract', thus requiring the movement of the phrase 'at the Titles Office' so as to enable the clause to conform to anything like the natural meaning for which 68 Bridge contends.

77 GLP otherwise submits that SC 17 is not relevantly a source of dealings 'contemplated by the contract' within the meaning of SC 32.2 arguing that SC 17 does not refer to registration or registrable dealings. Secondly, and relatedly, it submits that dealings of the kind referred to in SC 17 were never intended to be registered in priority to GLP's interest and submits that those dealings (if registered) would detract from GLP's equity potentially to the extent of extinguishing its value.

78 Further, GLP argues that there is no need for SC 17 dealings to be registered to be effective, whether in priority to GLP's interest or otherwise.

79 GLP submits that without SC 32, 68 Bridge would have no right to have GLP's caveat lifted, and emphasises that SC 32 was added at the last minute and separately, which it submits is consistent with SC 17 being intended to operate without a purchaser caveat ever being lifted and for a different purpose.

80 GLP otherwise submits that 68 Bridge's reliance on SC 17 as a source of its right to mortgage the Property is misplaced as absent consent from GLP, 68 Bridge could take on excessive indebtedness with the attendant risk of early default which could lead to the premature sale of the Property by a mortgagee and the loss to GLP of the benefit of the transaction at the price referred to in the Contract.

81 Further, it argues that SC 17 would permit 68 Bridge to, among other things, 'assign...all...of the Property' which on 68 Bridge's construction would require GLP to permit registration of such an assignment putting an immediate end to GLP's interest in the Property. In such circumstance, GLP submits that the obligation imposed on 68 Bridge pursuant to the general conditions that require 68 Bridge to deliver clear title would provide no comfort or protection because the special conditions prevail over the general conditions.

82 GLP submits that 68 Bridge's reliance on the presence of the word 'including' in SC 32.2 does not assist and in context, the word 'include' is used in an exhaustive or limiting sense, not as a word of enlargement.[17] It submits that the evidence shows that the stipulated purposes in SC 32.2(a) and (b) were the only purposes. Finally, GLP submits that to the extent there is any residual ambiguity in SC 32, the provision should be construed against 68 Bridge contra proferentem.

83 68 Bridge submits that GLP has advanced varying and different versions of the proper construction of SC 32. However, insofar as any of the versions impose a limit on either the amount which 68 Bridge can borrow or the purpose for which the moneys can be borrowed, they are entirely unsupported by the text, context or purpose. 68 Bridge argues that SC 32 is not concerned with 68 Bridge's right to borrow against the security of the Property and does not impose any limit or fetter on the amount that can be borrowed. SC 17, headed 'Vendor Financing', is the applicable clause relating to GLP's right to borrow. GLP submits that SC 32 is concerned solely with GLP's ability to lodge a purchaser's caveat on title which ability exists in any event irrespective of the acknowledgment in SC 32.1 and sets out the circumstances in which GLP is required to lift the caveat, namely to permit the registration of any dealings contemplated by the Contract. This includes the two dealings then at the forefront of the parties' minds which are expressly identified in SC 32.2(a) and (b) as well as encompassing all other dealings contemplated by SC 17.

84 68 Bridge submits that SC 32 has a plain meaning; GLP may lodge a caveat on title but must facilitate the registration of dealings on title contemplated by the Contract including at any time prior to settlement, a mortgage or mortgages, securing borrowing against the Property. Such a construction operates harmoniously with SC 17 in that SC 17 provides for the creation of interests in land (whether registered or unregistered) and SC 32 provides for the registration of registrable interests. 68 Bridge emphasises the presence of the word 'including' which demonstrates that the intention is not to limit the registration of dealings to the matters set out in subparagraphs (a) and (b) of SC 32.2. GLP submits that such a construction is consistent with the text, context and objectively ascertainable purpose of SC 32 and makes good commercial sense. Such a construction does not mean that the purchaser's caveat has no work to do as GLP's caveat protects against 68 Bridge selling the Property to a second purchaser and third parties registering dealings on title outside the scope of the dealings contemplated by SC 17 which necessarily arise only with 68 Bridge's agreement.

85 68 Bridge submits that GLP's construction of SC 32:

(a) directly contradicts and is irreconcilable with SC 17;

(b) would result in SC 17 having no work to do or otherwise render part of the clause meaningless (because 68 Bridge could not mortgage all or part of the Property at all and could instead only register a mortgage for a narrowly defined purpose with no flexibility in the future as to how it could deal with its own interest in the Property pending settlement);

(c) is irreconcilable with the words 'contemplated by this contract including' in SC 32.2 and similarly results in those words having no work to do;

(d) ignores that SC 32.5 itself picks up some of the same language in SC 17;

(e) lacks commercial sense because:

(i) GLP is unaffected by 68 Bridge's conduct in borrowing against the security of the Property which remains owned by 68 Bridge which is obliged to convey clear title to the Property at settlement;

(ii) GLP already had (and continues to have) inherent protection against 'excessive indebtedness' being secured against the Property by reason of the fact that to its knowledge:

1 68 Bridge was a special purpose vehicle incorporated to acquire the Property (which is its sole asset);

2 68 Bridge has never had any intention by reason of its unique set of investors (who hold shares and units) to cross-collateralise the Property to secure debts owed by other entities in the Growland Group.

86 Further, 68 Bridge emphasises that both parties were represented by lawyers in the transaction and if it was the intention of the parties for 68 Bridge's ability to borrow against the security of the Property to be restricted either as to the amount borrowed or the use to which the moneys so borrowed would be put, a clause to that effect could readily have been drafted.

87 In any event, even if SC 32 is to be interpreted in the sense submitted by GLP, 68 Bridge submits that the Mortgage was granted for the purpose of settling the Head Contract.

88 The commercial purpose or object of the contract is apparent from the Contract itself. The purpose or object is for GLP to acquire the Property free of encumbrance from 68 Bridge at settlement (which may not be until September 2028) upon payment of the balance of the purchase price ($176 million less the deposit of $17.6 million). In order for this to occur, 68 Bridge must first complete the purchase of the Property from Drumgold pursuant to the Head Contract.

89 The Contract also discloses that the parties contemplated the following:

(a) prior to completion by 68 Bridge of the Head Contract GLP would lodge a caveat in its capacity as purchaser under the Contract;

(b) in order to complete its purchase from Drumgold pursuant to the Head Contract, 68 Bridge would need to borrow money on the security of a registered mortgage over the Property;

(c) the caveat would prevent the registration of the transfer and the mortgage and as such GLP would agree to lift the caveat so that 68 Bridge could become the registered proprietor of the Property;

(d) once 68 Bridge became the registered proprietor of the Property (by no later than June 2023) it would be entitled in the period up to settlement (potentially in September 2028) to mortgage, assign, charge or deal with the Property; and

(e) the $17.6 million deposit would be held in a trust account and not be released to 68 Bridge prior to settlement without GLP being provided with information as to the extent of the borrowing or generally unless released in accordance with the provisions of the Sale of Land Act or in the circumstances of GC 12.1(a).

90 There was no bright line separating the evidence relied upon by the parties in respect of the construction claim from that relied upon for the purposes of the rectification claim, although the focus of both parties' argument on the construction claim was understandably on the terms of the Contract itself. To the extent to which GLP seeks to rely on surrounding circumstances, most notably the Natarajan Email, as relevant to the construction task, and that this email and the response is admissible in the sense of being relevant to the task of construing the Contract, I do not consider that it makes any difference. The Natarajan Email attaches the text of SC 32. The fact that the disclosed motivation for its desired inclusion related to the settlement of 68 Bridge's purchase from Drumgold, when viewed in the context of the remaining provisions of the Contract and the text of SC 32 reveals nothing more than this was the initial circumstance which would fall within the ambit of the proposed SC 32.

91 As noted above, GLP's proffered proper construction has evolved over the course of the proceeding. Its evolving nature sits uneasily with the objective of determining what a reasonable person would have understood the contract to mean given that the understanding of the reasonable person has, on GLP's case, changed from time to time.

92 Versions 1, 2 and 4 impose an obligation on GLP to permit registration (only with respect to or limited to) dealings which fall within and relevantly comprise the 'grant of (a) security interest to a financier for the purpose of settling the Head Contract or refinancing that security interest'. The question of the limited nature of the obligation raises a question of construction but even if so limited, there is a factual enquiry as to whether or not the attendant circumstances present give rise to the obligation which turns on whether the security interest is granted 'for the purpose of settling the Head Contract (or refinancing thereof)'.

93 Version 3 in turn posits a construction of SC 32.2 which limits the purpose for which the Mortgage can be granted to the final payment due under the Nomination Deed, which necessarily limits the amount of the indebtedness to $32.34 million.

94 GLP denied that there was any difference in the various versions advanced. The real burden of its case is that there is a qualitative limit as to the scope of dealings in respect of which it is obliged to consent to registration and versions 3 and 5 are just illustrative of the quantifiable effect of the qualitative limits.

95 However put, I do not accept that the proposed construction of SC 32.2 accords with that (or those) advanced by GLP.

96 The objective theory of contract is predicated on the intention of the parties to the contract as being that revealed by the terms of the written contract as executed by the parties. The terms revelatory of that intention are the terms of the contract as a whole construed harmoniously,[18] and in a manner which is congruent with the operation of the contract as a whole.[19]

97 GLP's argument requires acceptance of the premise that a reasonable person in the position of the parties would read the words of SC 32.2, 'at the Titles Office contemplated by this contract including', as if they were not present and that the clause should be understood as reading 'the purchaser must permit registration of any dealings at the Titles Office for the vendor to (a) become the registered proprietor of the Property; and (b) grant a security interest to a financier for the purpose of settling the Head Contract or refinancing thereof'.

98 GLP's construction also requires the parties to have understood that the reference in SC 17 Vendor Finance, to the vendor at any time prior to settlement 'mortgag(ing), assign(ing), charg(ing) or otherwise dealing with the Property without reference to the purchaser' as being confined to dealings which are either unregistrable or registrable but which could not be registered.

99 I accept 68 Bridge's submission that SC 32.2 imposes an obligation on GLP to permit registration of such dealings as are contemplated by the Contract which include but are not limited to the dealings set out in SC 32.2(a) and (b). This may extend to the dealings with the Property specified in SC 17. Both GLP and 68 Bridge as sophisticated entities experienced in land transactions can be taken to be aware of the benefits of registration and of the associated likelihood that any financier falling within the ambit of SC 17 may well require the registration of its interest as mortgagee or charge. Such a construction accords with the plain meaning of the wording of SC 32.2; the presence of SC 17; the presence of the word 'including'; the absence of the word 'only'; and is otherwise consistent with the Contract as a whole including SC 4 which relates to the manner in which the deposit is to be held pending settlement.

100 Neither Dilworth v Stamps Commissioner ('Dilworth') or Customs and Excise Commissioners v Savoy Hotel Ltd ('Savoy Hotel') assist GLP.[20] Dilworth involved the interpretation of a provision of the Charitable Gifts Duties Exemption Act 1883 (NZ) (the 'Act') in the context of a bequest to a charity established by will with the object of affording maintenance and education of boys who are orphaned or the sons of parents without means. Section 3 provided that no duty would be payable 'in respect of any charitable device or bequest'. Section 2 defined a 'charitable purpose' as one which 'includes devices, bequests and legacies of real or personal property respectively of whatever description to public institutions such as libraries, museums, institutions for the promotion of science and art, colleges and schools or to hospitals, orphan, lunatic or benevolent asylums, dispensaries'.

101 The Privy Council observed that the word 'include' is generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of a statute. Where so used it comprehends not only such things as ordinarily fall within the scope of the primary thing to which reference is made but also those things that the interpretation clause declares that they should include. The Privy Council noted, however, that the word 'include' is also susceptible of another construction which may become imperative if the context of the Act is sufficient to show that it is not employed merely for the purpose of adding to the natural significance of the words or expressions defined. In such a case it may be the equivalent of 'mean and include' in which case it affords an exhaustive explanation of the meaning which, for the purposes of the Act, must attach to the words.

102 Although the Privy Council considered that it was not necessary to determine in which of the senses the word 'include' was used, it assumed for the purposes of argument that the word was used in an exhaustive sense meaning 'means and includes'.

103 In Savoy Hotel, the issue was whether orange juice delivered to guests at London hotels was a charitable good within the meaning of Group 35(a) of Part 1 of Schedule 1 to the Purchase Tax Act 1963 (UK), which relevantly defined the group as:

(a) manufactured beverages, including fruit juices and bottled waters and syrups, concentrates, essences, powders, crystals or other products for the preparation of beverages but not including beverages or products in the list set out at the end of this group.

(b) containers of gas for the preparation of carbonated beverages.

104 Sachs J sitting in the Queen's Bench Division noted the argument of counsel for the Commissioner to the effect that the word 'including' should be used in an 'extensory' sense and not in its more normal meaning of 'such as' thereby covering matters mentioned 'ex abundante cautela'.[21]

105 Counsel for the Commissioner then referred to the judgment of Lord Watson in Dilworth where his Lordship referred to the use of the word 'include':

as generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of a statute, and when so used the words must be construed as comprehending not only the things that they signify according to their natural input, but also those things that the interpretation clause declares that they shall include.

Counsel submitted that the effect of the extensory interpretation is to bring the most incongruous things within the operation of the statute.[22]

106 Neither of these cases assist here; they simply stand for the proposition that the word 'includes' when used in a statute may be interpreted in a variety of ways, depending on its context, varying from its normal meaning which is 'such as', to being used in an extensory sense which brings within its ambit matters that ordinarily would not appear to be within the scope of the words which precede the word 'includes' or in an exhaustive sense where the word is definitional and may be taken as conveying 'means and includes'.

107 There is no basis here to read the reference 'contemplated by this contract including' as being used in an imperative sense so as to confine it only to the two specific matters set out in SC 32.2(a) and (b). The far more natural and logical reading of the clause and the one usually deployed is that the use of the word 'includes' means 'such as'. The fact that the parties had specific dealings at the forefront of their mind and that those dealings were specifically referred to in the Natarajan Email does not mean that a reasonable person would have understood the clause to be confined to those dealings specifically brought to mind at the time. The presence of the word 'including' in the text of SC 32 which accompanied the Natarajan Email is to the exact contrary.

108 Nor do I consider persuasive the submission based on the grammatical structure of SC 32.2(a). Whilst a purist may prefer a sentence structure which read 'the Purchaser must permit registration at the Titles Office or any dealings contemplated by this contract', sub-optimal grammatical structure is an insufficient basis to deny the otherwise plain and ordinary meaning of the clause. Punctuation may be a relevant factor in determining the legal meaning of a clause where it is apparent that it has been used consciously and not haphazardly.[23] There is good reason to adopt the same approach with grammatical structure. Considered drafting with an eye to grammatical structure does not appear to be a particular feature of this Contract generally,[24] or SC 32 in particular. It is inconsistent with GLP's submission to the effect that the presence of the word 'include' is explained by the haste with which SC 32.2 was included in the contract concluded. More importantly, I do not accept that the construction favoured by 68 Bridge Road requires the syntactical alteration asserted.

109 Each of the versions advocated by GLP suppose that a reasonable person in the position of the parties would have interpreted a clause which is expressed in terms cast as obligatory on GLP as one which in substance gives rise to an implied negative stipulation by 68 Bridge that it would not raise moneys upon security of a registered mortgage beyond a particular limit, or that it would only raise moneys for a specific and limited purpose and not otherwise. There are a number of instances where courts have considered contracts involving an entitlement on the part of a party to access securities such as bank guarantees as giving rise to an implied negative stipulation that the party would not access the bank guarantee in any other circumstances.[25]

110 Here the implied negative stipulation is even more difficult to establish because the clause on its face imposes an obligation on GLP as opposed to conferring a benefit exclusively on 68 Bridge.

111 Further, any monetary limit whether as a matter of substance or effect, or arising indirectly or directly, obtains no assistance from the surrounding circumstances. As GLP observed in opening, the copies of the Head Contract and Nomination Deed provided by 68 Bridge prior to the Contract redacted the price and payments that had to be made by BCJ and by 68 Bridge. In circumstances where GLP did not know the price that 68 Bridge was required to pay to settle the Head Contract and only knew the price that GLP was paying under the Contract, it can hardly be said that reasonable persons in the position of the parties would have regarded 68 Bridge's ability to borrow against the security of the Property in the period between the date of the Contract and settlement as being subject to a particular ceiling.

112 It would have been a simple drafting exercise to impose a maximum amount that could be borrowed by 68 Bridge; likewise, it would have been a simple drafting exercise for a covenant to be drafted so as to impose an express restriction on borrowing by 68 Bridge aside from a clearly identified purpose.

113 An interpretation which has the effect of limiting the amount which can be borrowed by 68 Bridge is also at odds with the objective intention of the parties as disclosed by SC 4.2 and GC 12.

The Purchaser must pay the Deposit to the Vendor's Solicitors to be held in the Vendor's Solicitors' trust account upon the terms set out in this special condition as stakeholder for the parties until released in accordance with the Sale of Land Act.

115 Section 24 of the Sale of Land Act provides for deposit moneys that are held by a legal practitioner to be held by the practitioner as a stakeholder until the purchaser becomes entitled to a transfer of the land (in the case of a cash transaction) or until the purchaser becomes entitled to possession or receipt of profits (in the case of a terms contract).

116 Section 27 of the Sale of Land Act provides:

Release of deposit moneys in certain circumstances

(1) Where a legal practitioner, conveyancer or estate agent is holding deposit moneys as a stakeholder under section 24, the purchaser may by authorization in writing empower the legal practitioner, conveyancer or estate agent (as the case may be) to release those deposit moneys to the vendor in his own right or as the vendor directs.

(2) Subsection (1) shall only operate-

(a) where the contract is not subject to any condition enuring for the benefit of the purchaser; and

(b) where the purchaser has accepted title or may be deemed to have accepted title.

(3) An authorization in writing shall not be effective unless and until the vendor has given the purchaser a notice in writing setting out-

(a) if there is a mortgage over the land which is the subject of the transaction, the particulars specified in Schedule 1; and

(c) particulars of any caveat lodged under the Transfer of Land Act 1958 in respect of the land which is the subject of the transaction -

and the purchaser has given notice under subsection (4) that he is satisfied with those particulars.

(4) Where the purchaser is satisfied -

(a) that the particulars provided under paragraphs (a) and (c) of subsection (3) are accurate; and

(b) that the particulars provided under paragraph (a) of subsection (3) indicate that the purchase price is sufficient to discharge all mortgages over the property -

he shall give the vendor notice in writing to that effect within 28 days of receiving the particulars.

(5) A notice in writing under subsection (4) stating that the purchaser is satisfied with the particulars shall be deemed to be the authorization required by subsections (1) (2) and (3).

(6) Where the purchaser is not satisfied with the particulars he shall within 28 days of receiving them give notice in writing stating that he is not satisfied with the particulars and giving the reasons why he is not satisfied.

(7) Where the purchaser fails to give a notice under either subsection (4) or (6) within the time limited by the subsection he shall -

(a) be deemed to be satisfied with the particulars provided; and

(b) be deemed to have given the authorization required by subsection (1).

(8) Where a vendor knowingly or recklessly supplies false information to the purchaser regarding any particulars required to be given under subsection (3) -

(a) he shall be guilty of an offence against this Act and liable to a penalty of not more than 50 penalty units; and

(b) the purchaser shall be entitled to rescind the contract for the sale of the land and recover the deposit moneys.

117 Following the giving of a notice by 68 Bridge pursuant to s 27(3) of the Sale of Land Act, GLP did not agree to the release of the deposit. When 68 Bridge sought to rescind the Contract as a consequence, GLP successfully obtained declaratory relief that it was not in default of the Contract and 68 Bridge's rescission notice was invalid.

118 The Court of Appeal upheld the decision of the trial judge.[26] Additionally, in its reasoning the Court of Appeal noted that read as a whole, it is obvious that there are some mistakes in the drafting of the Contract.

119 The most obvious error identified by the Court of Appeal is in SC 4.8 which refers to GC 12(a) when there is no GC 12(a). The Court of Appeal held that it is clear that the parties intended to refer to some part of GC 12 and in context, it is obvious that a typographical error has been made by omitting '.1' such that the reference is to GC 12(a) rather than GC 12.1(a). A typographical error by omitting '.1' is far more likely than the addition of '(a)'. In any event, the Court of Appeal held that SC 4.8 was void as it was in contravention of s 27 of the Sale of Land Act.

120 The Court of Appeal otherwise noted that there was another error in the document in SC 2.1(d)(iv)which states that GC 12 is deleted. The Court of Appeal considered that it was objectively obvious that the parties did not intend to delete the whole of GC 12 because if that were the case, it would make a nonsense of SC 4.8. Reading the Contract as a whole it considered that in context, the proper construction of SC 2.1(d)(iv) is that GC 12 is deleted save and except for GC 12.1(a).

121 Thus, the Court of Appeal considered that GC 12.1(a) formed part of the Contract reading:

12. Stakeholding

12.1 The deposit must be released to the vendor if:

(a) the vendor provides particulars, to the satisfaction of the purchaser, that either -

(i) there are no debts secured against the property; or

(ii) if there are any debts, the total amount of those debts does not exceed 80% of the sale price; and

122 Relevant to the present dispute, SC 4.2 and GC 12.1(a), read in the context of ss 24 and 27 of the Sale of Land Act, recognise that the moneys secured by the Mortgage may be as high as, or even exceed, 80% of the sale price of the Contract (i.e. 80% of $176 million which is $140.8 million), but that the deposit would remain held in trust and would not be released unless GLP consented to its early release. Recognition of the fact that the borrowing may be of this magnitude which is referable to a price payable under the Contract in 2028 or upon rezoning, is at odds with a construction which imposes any ceiling on 68 Bridge's capacity to borrow which was not to exceed the last instalment of the amount payable under the Head Contract struck at prices agreed in 2018 and 2019 and due to settle in 2023. The parties recognised a possibility of such an outcome with the agreed mechanism to deal with the ensuing risk to GLP being that the deposit would remain in trust.

123 Further, insofar as SC 32.2(a) and (b) contemplate purpose (impliedly in the case of (a) and expressly in the case of (b)), the purpose is the purpose for which the registrable dealing comes about, i.e. the dealing by which 68 Bridge becomes registered proprietor (the Transfer) or the dealing granted to the financier (the Mortgage) by which settlement of the Head Contract occurs. The clause therefore focusses on the (registrable) dealings which bring about the desired outcome of 68 Bridge becoming the registered proprietor of the Property which is understandable as the focus of the sub-clause is to impose an obligation on GLP to permit the registration of those dealings by providing its consent. It does not impose a limit on the amount that 68 Bridge can borrow.

124 Whilst a reasonable person in the position of the parties would be taken to appreciate a relationship between the money being lent for purposes of settling the acquisition under the Head Contract, and the grant of the Security Interest to the Financier, provided it can be said that 'a' or even 'the' purpose of the grant of the Security Interest is to achieve such an outcome, any additional limitation on the use to which the moneys borrowed amounts to an implied limitation on the amount that can be borrowed is inconsistent with the Contract when read as a whole, and is lacking in commercial rationale.

125 In that respect, the absence of knowledge as to the upper limit that might be borrowed by 68 Bridge, which points against any monetary limitation, is also problematic for a more qualitative limitation. This is illustrated by the circumstances here; on any of GLP's proffered constructions it would have been open to 68 Bridge to borrow $60 million on security of a registered mortgage to complete the purchase under the Head Contract provided the entirety of the $60 million was paid to Drumgold and/or BCJ to settle the Head Contract, but 68 Bridge could not borrow $60 million and use $9 million of the $60 million to repay those who had funded the instalment payments due prior to settlement under the Head Contract. Yet in both cases, GLP's position is relevantly identical with the extent of indebtedness the same.

126 Overall, a number of the matters that GLP points to in support of its claimed proper construction are overstated or, in some cases, misstated.

127 Contrary to GLP's submission, a registration of a dealing over the Property does not detract from GLP's equity in the Property. At the time the Contract was entered into and the caveat lodged, GLP had no equity in the Property. Nor does it have any now; its $17.6 million deposit is held in trust. GLP retains the contractual right to have the Property conveyed to it free of encumbrance which right does not arise unless and until it pays the settlement sum in full at settlement. At that point and only then will GLP have any equity in the Property in the sense in which that word is usually understood. Equity in the Property is not the same as the equitable interest in the land which a court exercising equitable jurisdiction recognises as being held by a purchaser of land in respect of an enforceable contract of sale.

128 However, whilst 68 Bridge did not dispute that such an interest arose, it is somewhat artificial to assert that GLP's equitable interest arose prior to any pre-registration equitable interest of the lender to 68 Bridge and that GLP had to consent to the registration of the lender's interest and hence its elevation to a paramount registered interest over GLP's prior equitable interest. GLP's equitable interest was in the Property arising pursuant to the Contract and entirely dependent on 68 Bridge completing the Head Contract, which both GLP and 68 Bridge appreciated required the obtaining of a loan which would be secured by a registered mortgage. GLP had no rights enforceable against Drumgold whose interest as registered proprietor was paramount and had priority over any interest of GLP. Similarly, it is also something of an overstatement to assert that 68 Bridge would not have any right to have GLP's caveat lifted without SC 32. If GLP did not lift its caveat or otherwise consent to the transfer from Drumgold and the associated mortgage from the lender, it would mean that 68 Bridge would not be able to acquire title to the Property which would mean that GLP's equitable interest would be of illusory and uncertain benefit. Further, given that the Contract contemplates that 68 Bridge will complete the Head Contract and indeed obliges it to do so, it would be arguable that as an incident of GLP's implied co-operation obligation, it was obliged to consent to the lifting of the caveat so as to allow settlement of the Head Contract to take place.

129 The risk which GLP asserts is protected by SC 32 is that 68 Bridge will mortgage the Property as security for some 'excessive' amount and that 68 Bridge may default under the mortgage. Of course in this scenario, the lender would have to be complicit in the improvident loan, but in any event, GLP's fear is that the lender may upon default, take possession and sell the Property to another purchaser pursuant to its powers of sale as mortgagee. If that occurs, GLP will be entitled to the return of its deposit. Even putting that aside, this risk is not one which the parties saw fit to address in the Contract save for the protection accorded by the deposit being required to remain in trust absent GLP's consent. Further, for the risk to eventuate, 68 Bridge would have to default (which is not alleged) in which case it would lose all the equity contribution that is made; secondly, in the event of default it would be open to the mortgagee to step into the shoes of 68 Bridge and enforce the Contract against GLP thereby preserving the benefit that GLP apprehends may be lost. The only logical circumstance in which the mortgagee would not honour the Contract is if the value of the Property had risen such that it would be possible to sell the Property to a third party purchaser for a sum in excess of that payable by GLP under the Contract. Putting aside the possibility of the Property being proffered as security as part of a suite of securities for loans made to other entities in the Growland Group, which is considered below and developed into a non-issue, any increase in the value of the Property beyond the contract price is a circumstance which tends against the likelihood of default because the increase in the value of the Property would assist 68 Bridge in any refinancing that might be necessary.

130 GLP's submission that 68 Bridge's construction would enable GLP to transfer the Property by way of assignment to a third party pursuant to SC 17 and that in such event GLP would have to consent to registration of the transfer (or assignment) thereby depriving GLP of its interest in the Property and the benefit of the Contract, is also overstated. If this occurred, GLP's consent to the registration of the transfer from 68 Bridge to the third party would have to be sought. Presumably GLP would not provide such consent. On the scenario advanced by GLP, 68 Bridge would then have to apply for an order for the removal of GLP's caveat on the basis that SC 32.2 required GLP to permit registration of the transfer to the third party. For the caveat to be removed, 68 Bridge would have to assert in effect that it was entitled to specific performance of SC 32.2 which obliges GLP to remove the caveat. However, any sale or legal assignment of the Property to the third party and not to GLP despite the Contract, would be a paradigm case of a repudiation by 68 Bridge of the Contract. GLP's asserted fear that in that case SC 17 would prevail over the general condition requiring 68 Bridge to transfer the Property at settlement lacks substance. The purchase by GLP is at the heart of the Contract. Any purported attempt by 68 Bridge to dispose of it to a third party in the face of the subsisting contract would be as clear a case of repudiatory conduct as one could imagine. It is inconceivable that a court exercising equitable jurisdiction would enforce 68 Bridge's claim for specific performance of SC 32.2 by requiring the lifting of GLP's caveat in those circumstances.

131 Overall, none of GLP's proffered constructions accord with the ordinary meaning of the clause or have any textual support, much less accord with the reasonable interpretation of the parties. SC 32.2 means what it says. It does not limit the amount which 68 Bridge may borrow; rather it imposes an obligation on GLP to facilitate the registration of dealings at the Titles Office which are contemplated by the Contract, which dealings including those in SC 17 as well as those in SC 32.2(a) and (b).

132 The contra proferentem rule does not assist. As GLP accepted, it is a principle of last resort.[27] Its role is limited to enabling the Court to choose between alternative meanings where those alternative meanings are reasonably open. I do not accept that the versions proffered by GLP are reasonably open for the reasons earlier set out.

133 However, in case GLP is correct in its submission as to the proper construction of SC 32.2 it is also convenient to consider whether the Mortgage was a security interest granted 'for purpose of settling the Head Contract' within the meaning of SC 32.2(b).

134 The Mortgage was a security interest as defined in SC 1.1 of the contract granted to a Financier (as defined in SC 32.5) for the purpose of settling the Head Contract. The purpose of the Mortgage at least included as a component, in fact the dominant component, the settlement of the Head Contract. As stated above, the Mortgage secured a loan with a principal of $60 million of which $49,520,000 or thereabouts was paid by 68 Bridge as the balance due under the Nomination Deed and Head Contract with ancillary amounts paid by 68 Bridge to the lender's solicitors and to the arranger as an arranging fee with such expenses being payable so that the funds could be obtained for the purpose of settling the Head Contract.

135 The fact that some of the $60 million ($9,415,375) was utilised for the purpose of repaying contributions that had been made by the shareholders, presumably by way of loan to 68 Bridge which had itself been used by 68 Bridge for the purpose of making payments by 68 Bridge in settlement of the Head Contract by way of the requirement to make the earlier instalment payments, does not detract from that conclusion.

136 Certain aspects of the cross-examination of Mr Chan and Ms Natarajan were directed to establishing that the 'equity repatriation' which involved the repayment of the advances made by 68 Bridge to its unitholders/shareholders was contrary to the 68 Bridge unitholders agreement.

137 Even if this were the case, it would not mean that amounts paid by 68 Bridge for the purpose of repaying those advances sourced from funds borrowed by 68 Bridge from the lender and secured by the mortgage in some way breached the Contract. In any event, whilst the unitholders agreement does contain provisions to the effect that the unitholders agreed to make the Advances and Loans to fund the business and that those loans would be unsecured, and that the unitholders agreed to make advances and loans to fund the business on the dates specified in the loan schedule and adding up to $82,155,466.84, the Business is defined as comprising the operation of the unit trust, participation in and funding the acquisition of the Property and participating in any other business determined by the trustee by unanimous resolution after the commencement date. Paragraph 4 then provides that the business of the unit trust shall comprise the acquisition of the Property and the development of the Property and the sale of such developed lots pursuant to the development agreement. This is consistent with the definition of the Project which is the carrying out of required subdivisional works to subdivide the Property into mixed use residential lots suitable for retail sale.

138 In fact, it appears that 68 Bridge decided not to develop the Property itself and then sell the developed lots, but instead chose to sell the Property to GLP.

139 As I understood the evidence of both Ms Natarajan and Mr Chan, the decision by the unitholders to sell the Property to GLP and necessarily to not proceed with the Project included as a component that their existing advances which had been utilised to fund the payments due under the Nomination Deed be paid back by way of funds sourced by 68 Bridge to settle the purchase of the Property which in turn was an integral component of the sale to GLP which was at the heart of the Contract. Both Ms Natarajan and Mr Chan gave evidence to the effect that the unitholders wanted their money back. To put it another way, in order for the sale to GLP to proceed pursuant to the Contract and not the Project (as referred to in the 68 Bridge unitholders agreement), 68 Bridge had to first settle the Head Contract before it could be in effect on sold to GLP and this required the repayment of the earlier instalments that they had funded prior to settlement.

140 In any event, it remained open to the unitholders to vary the unitholders agreement in whatever mode they considered appropriate and to whatever effect. Accordingly, this issue is of no consequence.

141 The purpose for which the moneys were borrowed was for the purpose of facilitating the payment of the balance due at settlement of the Head Contract.

142 Accordingly, even on an interpretation of SC 32.2 which does not take into account the broader scope of dealings contemplated by SC 17, the Mortgage was granted for the purpose of settling the Head Contract. It follows therefore that GLP's claim for declaratory relief fails. Further, it also follows that the claim for injunctive relief insofar as it is founded upon acceptance of GLP's claim as to the proper construction of SC 32.2 also fails.

143 It is nevertheless useful in the context of this aspect of its claim for injunctive relief to consider the evidence as it pertains to the 20 July 2024 refinance.

144 Mr Chan, gave unchallenged evidence that he wishes to refinance with the existing lender. He also gave evidence, supported by Ms Natarajan, that 68 Bridge is a special purpose vehicle for the benefit of specific identified investors who own units in the 68 Bridge Road Land Unit Trust and that similar but differently constituted special purpose entities are utilised for the Growland Group's other property transactions. According to their evidence, the consequence of this structure is that the debts of one vehicle in the Growland Group are not cross-collateralised with other entities in the group. Mr Yuen accepted that he knew about the separate structure prior to the Contract being signed.

145 The only evidence is that the refinance will most likely be with the same financier and, in any event, even if that were not so, the only evidence is that 68 Bridge will not seek to borrow any more money than that which has already been borrowed save that I accept that it is possible that it may seek to capitalise the interest payable under the renewed loan and borrow that interest by effectively being obliged to repay a sum at the termination of the loan which includes the new principal borrowed circa $75 million and a further component of capitalised interest.

146 Mr Costelloe gave evidence of two conversations with Lambros Sioros of LAS and with Mr Gardiner from Colliers in about September 2022. Mr Sioros is alleged to have said that the Mortgage is not capped and that the Contract gives 68 Bridge the right to borrow up to 80% of the purchase price under the Contract which is $140.8 million and Mr Gardiner is said to have told Mr Costelloe that he had spoken with 68 Bridge (without identifying the name of the person) and 68 Bridge's expectation was to borrow up to 80% of the purchase price under the Contract which is $140.8 million because the Contract gave 68 Bridge that right.

147 Although Mr Costelloe was not challenged on his account of the conversations, I do not place any weight on the evidence insofar as it is said to establish that this is 68 Bridge's intention. The conversation with Mr Gardiner was admitted subject to a limitation under s 136 of the Evidence Act 2008 (Vic) that its use be limited to the fact of the conversation occurring between Mr Costelloe and Mr Gardiner and not as to the truth of the representation conveyed in that conversation. Neither Mr Chan or Ms Natarajan were parties to the conversations and Mr Chan was not challenged on his evidence to the effect that he only intends to borrow an amount sufficient to refinance the existing sums borrowed.

148 These prospective borrowings as apparently adverted to Mr Gardiner and Mr Sioros are inconsistent with the structure of 68 Bridge as a special purpose vehicle and, in any event, would require finding a lender willing to lend an amount substantially in excess of the limits identified in the Facility Agreement. Mr Sioros' alleged account to the effect that his understanding was that 68 Bridge had the right to borrow up to 80% of the purchase price of the Contract is inconsistent with the cap under the Facility Agreement to which his company LAS was party which specified a maximum LVR of 48%.

149 For those reasons, I place no weight on that evidence.

150 It is necessary to now turn to the rectification, ACL and estoppel claims.

151 As noted above, GLP seeks rectification of SC 32.2 as follows:

32.2 If the Purchaser lodges a caveat in respect of its interest under this Contract, the Purchaser must permit registration of any dealings at the Titles Office contemplated by this Contract including those required for the Vendor to:

(a) become the registered proprietor of the Property; and

(b) grant a Security Interest to a Financier for purpose of settling the Head Contract or refinancing thereof,

by providing a consent to those dealings in the form required by the Titles Offices within 3 Business Days of request by the Vendor.

152 The elements of a rectification claim are conveniently set out in the judgment of Gageler, Nettle and Gordon JJ in Simic v New South Wales Land and Housing Corporation:[28]

Rectification is an equitable remedy, the purpose of which is to make a written instrument "conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately". For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an "agreement" between the parties in the sense that the parties had a "common intention", and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the "agreement" because of a common mistake. Unless those elements are established, the "hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties" cannot be displaced.

The issue may be approached by asking - what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties' actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party.

153 The claim for rectification is based upon an alleged common intention of GLP and 68 Bridge 'that the defendant [68 Bridge] was only entitled to register those dealings at the Titles Office that were required for the defendant [68 Bridge] to become the registered proprietor of the Property and to grant a mortgage for the purpose of securing the Indebtedness or refinancing the Indebtedness if required'. Alternatively, GLP seeks rectification on the basis that it mistakenly held the common intention and that 68 Bridge knew of GLP's mistake but did not draw it to GLP's attention and unconscionably has sought to take advantage of GLP's mistake.[29]

154 The common intention relied upon for the purposes of the rectification claim accords with version 3 of GLP's proper construction. The rewriting sought for the purposes of rectification does not in terms seek to strike out the words of the Contract and replace them with the words that accord with the alleged common intention. Although the effect may be the same, the disconnect is problematic for GLP's rectification case because the effect of an order for rectification is to rewrite the contract so that it accords with the common intention. As Campbell JA, with whom Allsop P and Giles JA agreed, wrote in Franklins Pty Ltd v Metcash Trading Pty Ltd ('Franklins'),[30] the equitable remedy of rectification is achieved by 'rewriting the contract so that it no longer departs from the common intention of the parties. The rewriting is done in a quite literal sense - the proper form of order identifies the precise words of the contract that are to be struck out, the precise words that are to be inserted, and where those words are to be inserted'.

That this is the type of remedy that is granted has an effect on the sort of "common intention" that is relevant for rectification. The common intention of the parties has to relate to what the mutual rights and obligations of the parties will be, and has to be sufficiently well-defined and clear to be able to be stated in words that can be incorporated in a contract.

The rewriting should not do anything more than rewrite the contract to the minimum extent that is necessary for it to no longer fail to express the common subjective intention the parties had when the contract was entered. Thus, to the extent that the words of the contract cover some situation concerning which the parties had no common subjective intention, the words of the contract continue to govern that situation.

...

156 As his Honour further observed, it is 'elementary, that rectification is granted only upon 'clear and convincing proof' or 'convincing proof'.'[31] The need for convincing proof has been reiterated on numerous occasions including by the Court of Appeal in Perpetual Ltd v Myer Pty Ltd ('Perpetual').[32]

157 GLP relies upon a combination of the evidence of Mr Yuen, Mr Costelloe, the Natarajan Email and the post-contractual correspondence between 14 July 2022 and 18 July 2022 which it submits confirms the parties' common intention.

158 Turning first to Mr Yuen's evidence, in his witness statement which stood as his evidence-in-chief, he gave evidence as to a discussion with Mr Costelloe following Mr Yuen's receipt of the Natarajan Email which enclosed the text of SC 32. According to Mr Yuen, the conversation was to the following effect:

During that discussion with Mr Costelloe I said words to the effect that:

(a) I knew from seeing the certificate of title to the land in the vendor's statement that there was no registered mortgage on the title of the land;

(b) the First Natarajan Email and the defendant's proposed special condition 32 wording referred to the plaintiff lodging a caveat on the land;

(c) if we signed a contract to buy the land, we would immediately lodge a caveat on title to protect our interest as purchaser;

(d) because there was no mortgage on the title to the land, any caveat lodged by the plaintiff would have taken priority over any later registered mortgage and we would not be exposed to any mortgage debt of the defendant;

(e) this was important because of the wide business activities of the Growland Group and Villawood's lack of knowledge of the debt of the Growland Group including whether that debt might be cross-collateralised;

(f) it was impossible to predict the size of the defendant's mortgage debt between now and the proposed settlement which might not happen for up to 6½ years;

(g) we didn't want any priority mortgage debt to exceed the value of the land at any time and we did not know the amount the defendant paid for the land because we only had redacted copies of the head contract and the nomination deed;

(h) if the priority Growland mortgage debt exceeded the balance of the purchaser price at settlement, the settlement would be jeopardised;

(i) based on what was proposed in the First Natarajan Email and the defendant's proposed special condition 32 wording, the defendant would have the right to require the plaintiff to lift its proposed caveat to permit the registration on title of a mortgage, but only to the extent of the amount needed by the defendant to settle the head contract or to refinance that amount if necessary; and

(j) the defendant's proposed special condition 32 wording seemed fair and the plaintiff would be protected from the land being burdened by excessive debt.

159 The witness statement which had been prepared for Mr Costelloe referred to the conversation in briefer terms but to similar effect. However, 68 Bridge objected to the admissibility of that part of the witness statement on the basis of an objection as to form, which I accepted but gave leave to counsel for GLP to adduce further evidence-in-chief in relation to the conversation. When Mr Costelloe was asked to recall the substance of his conversation with Mr Yuen following the receipt of the Natarajan Email and the text of SC 32, he did not give evidence of a conversation along the lines of that the subject of Mr Yuen's witness statement. Rather, the evidence given by Mr Costelloe, which I accept, is that the conversation was to the effect that they had received a request from Ms Natarajan for the inclusion of a further special condition and that it was a reasonable request because 68 Bridge had to be able to do the transfer and have a mortgage. Mr Costelloe said that he accepted the clause because he wanted to exchange contracts.

160 Mr Costelloe's account of the conversation is the more consistent with reasonable inferences which can be drawn from objectively ascertainable facts First, Mr Yuen received a copy of the Natarajan Email and the text of SC 32.2 at 4:01pm on 12 March 2022. Mr Gardiner followed up with a text message sent to Mr Yuen at 4:52pm, 'mortgage clause is fine??' to which Mr Yuen responded by text at 5:03pm, 'yeah, should be okay'. Understandably, Mr Yuen also gave evidence that the clause remained subject to legal signoff from Ms Kennedy at Clayton Utz. As noted above, Ms Kennedy's response came at 10:34pm where she confirmed that she had read the clause and was happy with it except for SC 32.3 which she sought to remove or amend. Further, in cross-examination, Mr Yuen was asked, 'When you refer to the matters in paragraph 53 in your statement, those are not things that you actually told Mr Costelloe, are they?' Mr Yuen answered by saying, 'They're my thoughts but they're not things that I explicitly said to Rory'. Mr Yuen also accepted that he did not discuss those matters with anyone else other than Mr Costelloe, although he then said that, 'I would have had a discussion with Ms Kennedy as well'. Mr Yuen's evidence in cross-examination is inconsistent with the evidence in paragraph 53 of his witness statement although it is consistent with Mr Costelloe's evidence.

161 Although Mr Yuen gave evidence that he 'would have' discussed the clause with Ms Kennedy, Ms Kennedy's failure to address directly any of the matters in her email back to Mr Yuen means that there is nothing in her email which corroborates any suggestion that Mr Yuen passed on his views as set out in paragraph 53 of his witness statement to Ms Kennedy. Mr Costelloe's recollection does not support that it was passed on to him or that Ms Kennedy passed it on to him. Whilst I accept that Mr Yuen now believes that he had those matters in mind at the time that he was considering the content of SC 32.2, there is a very real chance that he has reconstructed matters given the issues that have evolved in this proceeding. In any event, there is no evidence that he disclosed the matters the subject of paragraph 53 of his statement to Mr Costelloe and I do not accept that he raised them with Ms Kennedy either given that the clause could have but does not directly address those matters, and Ms Kennedy's email in response makes no reference to them. The evidence therefore relied upon by GLP falls far short of establishing GLP's subjective intention for the purposes of its rectification claim.

162 It is possible that GLP focussed on the Natarajan Email to the exclusion of SC 32 and did not read or was unaware of SC 17 or SC 4 and accordingly believed that 'a' and perhaps even 'the' purpose of SC 32.2 was to allow for registration of the transfer and registration of any mortgage that was granted for the purposes of enabling the settlement of the Head Contract. For the rectification claim to succeed however, GLP must also be able to establish that it believed that SC 32.2 only allowed for registration of those dealings. That is the only state of mind which is consistent with the rectification claim which they make which deletes the words 'contemplated by this contract including those'. Further, as the deletion of the words 'SC 32.2' may impact on the apparent breadth of SC 17 with the effect that SC 17 will operate in a different way, rectification is only justified if GLP (and 68 Bridge) both understood that SC 17 would also have a limited sphere of operation. This was the very point made by Campbell JA in Franklins where his Honour stated the following:[33]

Crafting a remedy in rectification involves close attention to the words of the document. However, in the prior step of making a finding about a common intention, for the purpose of a rectification order, it is important that the court not confine itself to a narrow focus on particular words of the document. It is the document as a whole that is rectified, and the point of the exercise is that, once rectified, the document will not be contrary to the common intention of the parties to the document. Thus if a particular change to some words will result in some other words of the document operating in a different way, rectification will be justified only if that different operation of those other words is shown to be in accordance with the common intention of the parties.

163 To the extent to which GLP relies on the post contractual communications of July 2022 as evidencing its intention as at the date of entering into the Contract, I accept that the state of mind of Ms Kennedy from Clayton Utz at that point was that the purpose of SC 32.2 was to limit the amount secured by any mortgage granted by SC 32.2 and that a mortgage which secured other indebtedness or a greater amount than that necessary for settling the Head Contract, was contrary to the Contract. So much is clear from her email to Maddocks sent at 4:50pm on 15 July 2022. But the fact that there is evidence that Ms Kennedy apprehended the purpose of the clause as at 15 July 2022, does not establish, much less establish to the requisite standard of proof for a claim of this nature that her client GLP by reason of its guiding mind or will, Mr Costelloe had that state of mind as at March 2022, particularly given the absence of any evidence as to her communicating those matters to her client in the email of 10:34 pm on 12 March 2022; the presence of SC 17; the wording of SC 32, SC 4 and GC 12.1(a); and the fact that the limitations of the kind adverted to by Ms Kennedy could have been the subject of express covenants on the part of 68 Bridge had they been agreed.

164 The likelihood that the parties mis-recorded their common intention in circumstances where both parties had solicitors involved in a way which fundamentally rewrites the ambit of SC 32.2 is inherently unlikely and contains no support from the evidence of Mr Yuen or Mr Costelloe. In my view therefore, there is no satisfactory evidence that GLP executed the Contract under any mistake, much less that the mistake is of the nature that would justify the order for rectification as sought.

165 For completeness, there is also no evidence at all that 68 Bridge shared any mistaken intention or was aware of and acted unconscientiously in exploiting GLP's mistake.

166 Ms Natarajan who drafted SC 32 gave evidence-in-chief that:

(a) she intended SC 32 to enable 68 Bridge to lodge any dealings contemplated by the Contract (which included those dealings set out in SC 17 as well as those set out in SC 32.2(a) and (b);

(b) in drafting SC 32.5 she set out a broad definition of 'financier';

(c) she intended for 68 Bridge to have as much flexibility as possible given that the Contract was to be of a long duration and she was concerned about 68 Bridge being impeded by GLP's caveat;

(d) she intended that the words in SC 32.2(b) ('grant a security interest to a financier for the purpose of settling the head contract or refinancing thereof') enabled 68 Bridge to finance all the amounts that it had previously borrowed or had to borrow to acquire the land including amounts which it had already paid or was liable to pay; and

(e) she intended all of the amounts that had been paid or were payable under the Nomination Deed to be captured and she would not have put forward the clause had she understood that there was any risk that the amounts would not be able to be financed by lifting the caveat or obtaining GLP's consent to the dealings.

167 Ms Natarajan was not challenged in cross-examination about her use of the word 'including'. The burden of the cross-examination of Ms Natarajan was as to her understanding of the purposes for which 68 Bridge had granted the Mortgage in July 2022. To the extent to which Ms Natarajan gave evidence in cross-examination that she had specifically brought SC 17 to the attention of GLP prior to entering into the contract, I do not accept that evidence. It was offered for the first time in cross-examination; if it had been conveyed by Ms Natarajan to the representatives of GLP prior to entering into the Contract I would have expected that it would have been addressed in her evidence-in-chief given its importance to the issues in this case. I also accept GLP's submission to the effect that a fair reading of the July 2022 correspondence was that reliance on SC 17 was a matter that was first raised apparently without prompting by the solicitor from Maddocks. So much seems clear in the email from Maddocks' Mr Baker to Ms Natarajan sent 15 July 2022 at 7:08pm.

168 Much of the evidence given by Mr Chan in his witness statement must also be approached with caution as it speaks to a fluency and facility in written English which was not matched by his oral evidence. Nevertheless, I accept the evidence given by Mr Chan when cross-examined which was to the effect that he wanted flexibility so that 68 Bridge could borrow sufficient moneys to refinance the moneys that had gone towards the payments which had been made under the Nomination Deed which included the shareholder loans. This was consistent with Ms Natarajan's evidence and with what in fact occurred.

169 The necessary evidentiary hurdle that needs to be jumped in order for a rectification claim to succeed is a high one. GLP's evidence falls far short. The rectification claim fails.

170 GLP's estoppel by representation and estoppel by convention claims fail for substantially the same reasons. First, as to the estoppel by representation claim, GLP must establish that it made the alleged First Assumption which is that is that SC 32 was to be read as though it only entitled 68 Bridge to register those dealings at the Titles Office that were required for 68 Bridge to become the registered proprietor of the Property and to grant a mortgage for the purpose of securing the Indebtedness or refinancing the Indebtedness if required. This is another way of restating the common intention or version 3 of the proper construction.

171 GLP relies upon the provision of the Natarajan Email by which 68 Bridge is said to have induced GLP to adopt the First Assumption.

172 As noted above, the interpretation of SC 32 to the effect that 68 Bridge was only entitled to register a mortgage for the purpose of securing the Indebtedness is inconsistent with the words of the text of SC 32 which include the words 'contemplated by this contract' and 'including', and is the substantive equivalent of imposing a monetary limit on the amount that can be borrowed against the security. Given that GLP did not know the price that 68 Bridge was paying pursuant to the Head Contract, it could not possibly have formed an assumption to the effect that the amount borrowed would be limited to a particular dollar sum. Further, the provision of the Natarajan Email occurred at the same time as the provision of the text of SC 32. Because SC 32.2 is inconsistent with the First Assumption, 68 Bridge could not have induced GLP to adopt that assumption and in any event could not have known that GLP would execute the Contract only if it had adopted the First Assumption. Such a state of mind of 68 Bridge would require proof of 68 Bridge being aware that GLP had formed a state of mind, which I find it did not have, and, in any event, is at odds with the express words of the Contract. The estoppel by representation claim fails accordingly. The estoppel by convention claim likewise fails because it requires GLP to establish that both parties adopted the same alleged First Assumption or that 68 Bridge acquiesced in GLP's adoption of the First Assumption (labelled the alleged 'Mutual Assumption') or that both parties conducted their relationship on the basis of the Mutual Assumption or that each party knew or intended that the other was or would be acting on the basis of the Mutual Assumption or that departure from the Mutual Assumption could cause detriment to the plaintiff.

173 The fact that I do not accept that GLP had made the First Assumption is sufficient to dispose of that claim as well. Further, and as noted above, even if GLP did, I do not accept that 68 Bridge adopted that assumption, much less knew that GLP was acting on the basis of the Mutual Assumption. Further and although not necessary to decide, I do not accept that departure from the First Assumption or indeed the Mutual Assumption causes detriment to GLP. First, as noted above, on GLP's case it could have no complaint if 68 Bridge had in fact borrowed more money provided all the money borrowed was paid to Drumgold as the vendor. More particularly, GLP is unaffected by the grant or maintenance of a registered mortgage over the Property which secures something other than the alleged 'Indebtedness'.

174 GLP knew that it needed to consent to the Mortgage in order to allow settlement under the Head Contract otherwise 68 Bridge would be unable to sell the Property to GLP. At its worst, the fact that the Mortgage secures a sum greater than the Indebtedness exposes GLP to a hypothetical or contingent risk that 68 Bridge will be unable to convey unencumbered title of the Property when the time for settlement of the contract of sale arrives. This is not sufficient detriment to sound in the remedy sought.

175 Further, there is an absence of causality between any risk (even if it were detriment) and there is no element of unconscionability which is a necessary element of the estoppel by representation.

177 GLP also alleges that by reason of the provision of the Natarajan Email, the email from Maddocks to Clayton Utz sent 15 July 2022 at 10:17am[34] and Maddocks' email of 15 July 2023 sent at 6:53pm,[35] 68 Bridge made a continuing representation to the effect that 'the defendant [68 Bridge] could not and/or would not register a mortgage over the Property for a purpose other than securing the Indebtedness or refinancing the Indebtedness if required'.

178 It further alleges that that representation was misleading or deceptive because the Mortgage had not been granted only for the purpose for securing the Indebtedness, alternatively it was a representation as to a future matter that the mortgage would not secure any indebtedness beyond the Indebtedness or any refinancing of the Indebtedness in respect of which 68 Bridge did not have reasonable grounds and that accordingly 68 Bridge contravened s 18 of the ACL. GLP further pleads that but for the contravention of the ACL, GLP would not have executed the Contract or consented to the registration of the mortgage.

179 As a consequence, GLP submits that it is entitled to an order under s 232 of the ACL restraining 68 Bridge from registering any dealings beyond any mortgage 68 Bridge would need to grant for the purpose of settling the Head Contract or refinancing such mortgage if required and/or an order under s 243 of the ACL varying SC 32 of the Contract so that GLP must only permit registration of any dealings at the Titles Office that are required for GLP to become the registered proprietor of the Property and grant a security interest to a Financier for the purpose of settling the Head Contract or refinancing thereof.

180 It should be noted that the representation allegedly conveyed by the matters referred to above is also alleged to constitute a continuing representation that correlates with version 3.[36] As noted above, the substance of version 3 is that 68 Bridge is and was only able to register a mortgage at the Titles Office to the extent that it secures repayment of a maximum sum of $32.34 million.[37] Given that at the time the relevant documents were provided to GLP which are said to convey the representation, GLP was unaware of the amount payable by 68 Bridge under the 2018 Contract and the Nomination Deed and to whom, neither a reasonable person in the position of GLP or GLP itself would have understood the documents so provided to have conveyed that meaning.

181 Further, even if I were to take a broader view of the representation pleaded and construe the pleading as if it was a representation that 68 Bridge could not and/or would not register a mortgage over the Property that secured the repayment of any moneys beyond those required to settle the Head Contract or to refinance that same indebtedness (which is consistent with version 2), then I do not accept that the documents so provided conveyed such a meaning to a reasonable person in GLP's position. Whilst GLP relies upon the Natarajan Email as one of the constituent documents which give rise to that representation, the Natarajan Email was accompanied by the text of SC 32 and was provided in a context where 68 Bridge had previously provided GLP with a copy of the Contract which relevantly included SC 17.

182 Whether conduct is misleading or deceptive is a question of fact which requires assessment in the context in which such conduct took place at the time it took place having regard to surrounding facts and circumstances.[38] Further, in determining whether conduct is misleading or deceptive or likely to mislead or deceive, the conduct must be considered by reference to the class of ordinary and reasonable persons likely to be affected by that conduct. Where the conduct is directed to an individual (such as the case here, namely GLP), the relevant question is whether in an objective sense the conduct was misleading or deceptive when viewed in light of the person exposed to that conduct.

183 In the present case, a reasonable person in the position of GLP having received the Natarajan Email as well as the Contract and the text of SC 32 would not have read the provision of those documents as giving rise to a representation to the effect that 68 Bridge was only entitled to register those dealings at the Titles Office that were required for 68 Bridge to become the registered proprietor of the Property and to grant a mortgage for the purpose of settling the Head Contract or refinancing such mortgage if required. Such a representation is inconsistent with the text of SC 32 which accompanied the Natarajan Email and SC 17 in the sense in which a reasonable person would have understood that clause. Whilst the Natarajan Email made specific reference to the concern then at the front of mind of 68 Bridge, namely the need to grant a mortgage to settle the acquisition of the land pursuant to the Head Contract, the email cannot be considered in isolation without reference to the text of SC 32 which accompanied the email which references the dealings by which 68 Bridge would become the registered proprietor of the Property and grant a security interest to the financier as not being an exhaustive list of the dealings that fell within the ambit of SC 32.2.

184 Nor do I accept that GLP would not have entered into the Contract but for the misleading representation even assuming it was made.

185 The sequence of events and the haste with which GLP executed the Contract, coupled with the fact that there is no evidence that it conveyed any of the concerns now raised to its solicitor, Ms Kennedy, make clear that GLP wanted to acquire the Property at the price proffered in the Contract. This is entirely consistent with the reasonable inferences which can be drawn from the exchanges between Mr Yuen and Mr Gardiner, Mr Yuen and Ms Kennedy, the speed with which the contract was signed and, importantly, Mr Costelloe's oral evidence at trial.

186 The plea of a contravention of the ACL is drafted in an aggregated fashion to the effect that by the matters alleged, 68 Bridge made a continuing representation to the effect the subject of complaint. Because of my conclusion that the Natarajan Email did not give rise to that representation, the claim must necessarily fail. To the extent to which it is permissible, which I doubt, to rely only on the post-contractual aspect of that conduct as a discrete and separate representation, namely the emails from Maddocks to Clayton Utz sent 15 July 2022, (which is not the pleaded case), GLP's claim also fails. Any representation conveyed by those emails was not that 68 Bridge was only entitled to register those dealings at the Titles Office that were required for the defendant to become the registered proprietor of the Property and to grant a mortgage for the purpose of settling the Head Contract or refinancing such mortgage if required. Rather, the representation conveyed by those emails is nothing more than Maddocks had been instructed that the purpose of the grant of the particular mortgage was to secure a total facility limit of $75,100,000 and that loan funds of that amount were to be loaned for the purpose of facilitating settlement of the acquisition.

187 That is a qualitatively different representation to that alleged. Further, to the extent to which it may be open, which I do not accept, for GLP to advance a case based upon the alleged falsity of the representation conveyed by those emails to the effect set out above, I do not accept that the representations were relevantly misleading. There is no reason to doubt that Maddocks had been so instructed and in any event the $75.1 million limit facility was offered and accepted for the purpose of facilitating settlement of the Head Contract. To the extent to which part of the funds so advanced (the equity repatriation component of $9,415,375 was paid to the unitholders/shareholders in repayment of the loans that they had advanced to 68 Bridge which had in turn been used by 68 Bridge to make the payments due by it under the Nomination Deed), the evidence of Mr Chan and Ms Natarajan was to the effect that the investors wanted their moneys back as a component of the sale of the Property to GLP. Accordingly, I do not accept that any aspect of these non-pleaded representations were misleading or deceptive such as would entitle GLP to relief.

188 There is a further difficulty with GLP's claim for relief insofar as it relates to the conduct which occurred after the date of entering into the Contract. Notwithstanding that the conduct occurred after the entering into of the Contract, GLP nevertheless submitted that it was appropriate to make the orders sought under the ACL by way of injunction and variation of the Contract if it was otherwise in the interests of justice to do so.

189 I do not accept that it is appropriate to do so here. The gateway to the grant of an injunction under s 232 of the ACL is that the Court must be satisfied that the party against whom relief is sought has engaged or is proposing to engage in conduct that constitutes or would constitute a contravention of the ACL.

190 Whilst s 232 is cast in wide terms, there must be a nexus between the conduct alleged or found to constitute the relevant contravention and the injunction granted.[39] Whether there is a sufficient nexus is an evaluative judgment.[40]

191 I do not accept that the nexus exists in this case; particularly to the extent to which it relates to the post-contractual conduct.

192 The Contract bears a meaning consistent with that postulated by 68 Bridge. It did not confine 68 Bridge's capacity to borrow money against the security of the Property in the manner contended for by GLP. Therefore, any misleading and deceptive conduct which occurred after the entry into the Contract had no impact on GLP because 68 Bridge was in any event entitled to borrow money for purposes which went beyond payments due to be made to the vendor under the Head Contract.

193 Further, although Mr Costelloe gave evidence in re-examination to the effect that had he known that some $9 million of the amount to be borrowed under the Facility Agreement was to be used for the purposes of refunding investors' contributions, he would not have consented to the registration of the Mortgage; I do not accept that evidence. First, it was offered only in re-examination which is understandable as it was not the counterfactual which was pleaded. The fact that it was led in re-examination meant it was not tested. Secondly, had Mr Costelloe not consented to the registration then 68 Bridge would not have become the registered proprietor of the Property and as such GLP would not have been able to obtain the benefit of the Contract. Finally, it is illogical to conclude that whilst GLP was content to consent to a mortgage in respect of a facility limit as high as $75.1 million, it would not have consented to that amount had it known that part of the amount borrowed was going to be used for the purposes of refunding the moneys loaned by investors. There is no added risk to GLP arising from part of the $75.1 million facility being used for the purposes of repaying the investors as compared with the borrowed moneys being paid entirely to Drumgold or BCJ or a combination of the two.

194 Moreover and in any event, because of the view that I have formed as to the construction of SC 32, had GLP refused to provide consent it would have been open to 68 Bridge to have obtained appropriate relief for the removal of the caveat in any event.

196 Having regard to my conclusions with respect to the proper construction of the Contract, the rectification claim, the estoppel claims and the ACL claims, it is not necessary to consider in detail a number of ancillary matters which were touched upon.

197 68 Bridge submitted that the proceeding was misconceived and that there was no ripe controversy between the parties. I would not have declined relief on that basis; regardless of the status of the dispute when commenced, and even then I do not accept that there was no dispute between the parties as to the proper construction of SC 32, it is clear that by the time of hearing the parties were in dispute as to its proper construction as well as consequentially to whether 68 Bridge had breached the Contract by granting the Mortgage. Further, in the context of an impending refinance which falls due on 20 July 2024, the controversy assumed an importance which it might not have had if the term of the Facility Agreement expired at the same time as settlement of the Contract.

198 I do accept, however, that there is no evidence that 68 Bridge intends to do anything other than refinance the debt which falls due for repayment on 20 July 2024. Although Mr Yuen's evidence as to his concerns as at 12 March 2022 which related in part to cross-collateralisation of debt between various companies in the Growland Group, both Ms Natarajan and Mr Chan gave evidence that the particular structure used by the Growland Group is that each project undertaken by the Growland Group is effected through a special purpose vehicle comprising a discrete body of investors and that a cross-collateralisation was not something the companies in the Growland Group do or would seek to do. They were not challenged on this evidence. This evidence also contains some support from aspects of Mr Yuen's evidence insofar as he accepted that he was told prior to the Contract that each of the Growland Group's projects were separate from each other project and that 68 Bridge had a unique set of investors and its own separate borrowings. Although he said he raised cross-collateralisation with the agent, he accepted that he did not raise it with Ms Natarajan or Mr Chan.

199 Nor is it necessary to consider the relevance of the rule in Hopkinson v Rolt to the present circumstances.[41] GLP raised the rule in the context of seeking to rebut 68 Bridge's submission that the dispute was hypothetical with GLP arguing that acceptance of such a submission would circumvent 'the orthodox operation of tacking principles' as explained in Oversea-Chinese Banking Corporation Ltd v Richfield Investments Pty Ltd ('OCBC') in which Redlich J held that the rule in Hopkinson v Rolt applies for the benefit of a purchaser of Torrens land.[42]

200 The House of Lords held in Hopkinson v Rolt that a first mortgagee whose mortgage is taken to cover what is then due and who then makes further advances cannot claim the benefit of such further advances in priority to a second mortgagee of whose mortgage it had notice at the time of its execution and before it made the new advances.

201 68 Bridge dismissed this argument on the basis that Hopkinson v Rolt is confined to tacking as between the first mortgagee and puisne mortgagees. In light of Redlich J's reasoning in OCBC, where his Honour accepted that Hopkinson v Rolt was not limited to priority between first and second mortgagees but also applied for the benefit of a purchaser I do not consider that the relevance of the rule in Hopkinson v Rolt can be dismissed as easily as 68 Bridge suggests. However, it is something of an overstatement to describe the use of the principle here as an 'orthodox application'. Although I did not hear any real, much less detailed, argument on the question, there are with respect, some difficulties in applying the ancient English authority cited by his Honour, London and County Banking Co v Ratcliffe ('Ratcliffe'),[43] to cases such as the present involving Torrens title land and the position of a purchaser who not has completed.

202 Ratcliffe was a priority dispute between a purchaser who had completed the purchase of general law land and a lender who held the deed of conveyance, the deed having been deposited to the lender on an equitable mortgage. The lender had made advances to the vendor after the purchaser had made all payments to the vendor for the property. The House of Lords held in that case that the bank had no charge on the land as against the purchaser for the subsequent advances.[44]

203 The circumstances here are quite different: first, the purchaser has not completed the purchase; secondly, although his Honour noted in OCBC that there had been a number of cases in which courts had endorsed the application of the rule in Hopkinson v Rolt to Torrens land, those cases involved its application between mortgagees,[45] and the cases involving the application of the rule in Hopkinson v Rolt to Torrens title land were all cases involving registered mortgagees not a purchaser with an equitable interest and a registered mortgagee, who as a matter of orthodoxy is entitled to the protection and benefit which registration gives absent fraud in respect of Torrens title land. Moreover, given my conclusion as to the proper construction of the Contract, GLP acquired its interest in the Contract on a basis which acknowledged that it was open to 68 Bridge to continue to deal with the land in the manner contemplated by SC 17.

204 In any event, there is no need to consider this point further.

205 Another issue advanced in submissions which has no bearing on the outcome of the case is GLP's reliance on Wardley Australia Ltd v Western Australia ('Wardley') and Forster v Outred & Co ('Forster').[46] GLP relied upon these cases so as to rebut 68 Bridge's contention that the dispute was hypothetical. As noted above, I do not accept that it was hypothetical.

206 Nevertheless, in the course of its submission GLP also argued that Wardley and Forster illustrate how actual loss has been suffered by it in the present case (although it does not claim that loss in any action in damages for breach of contract). Although unnecessary to decide, I do not accept that Wardley or Forster have any relevance and I do not accept that GLP has suffered any loss.

207 In Wardley (which concerned misleading or deceptive conduct) the plurality stated that with economic loss, as with other forms of damage, there has to be some actual damage and that prospective loss is not enough.[47] Any detriment in a general sense to GLP which arose by the registration of the Mortgage is not the same as the legal concept of 'loss or damage as any disadvantage cannot be ascertained until some future date when events unfold'.

208 The present case is distinguishable from Forster. In that case, a mortgagor had suffered actual loss, not merely prospective loss when the mortgagor executed a mortgage over her property on the negligent advice of solicitors. The grant of the mortgage in those circumstances had an immediate effect on reducing the value of the equity of redemption in the property.[48] In the present case there is no immediate effect on GLP by the registration of the Mortgage.

209 GLP had (and still has) the right to acquire the Property and obtain clear title at settlement. As the High Court plurality explained in Wardley,[49] Forster is not authority for the proposition that a plaintiff sustains loss upon a contingency. Rather, that case 'turned on the plaintiff sustaining measurable loss at an earlier time, quite apart from the contingent loss which threatened at a later date'.

210 GLP's claim fails and will be dismissed. I shall hear the parties as to costs.

[1] Special Condition 4 of the contract of sale.

[2] In light of GLP's refusal to agree to the release of the deposit, 68 Bridge purported to rescind the Contract. The rescission was held to be ineffective; see GLP Batesford Holdings Pty Ltd v 68 Bridge Road Land Pty Ltd (2022) 68 VR 171 and on appeal in 68 Bridge Road Land Pty Ltd v GLP Batesford Holdings Pty Ltd [2023] VSCA 325.

[3] Absent earlier fulfillment of the Re-Zoning Condition.

[4] The Nomination Deed contemplated different payments if the July 2018 Contract was terminated which did not occur. For ease of reading these alternative payments have been disregarded.

[5] The proposed sale did not include the Lovely Banks Land.

[6] Head Contract is a defined term in the Contract and means the 2018 Contract and the Nomination Deed.

[7] 'Contract of Sale' defined in this judgment as the '2018 Contract'.

[8] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ) ('Mount Bruce').

[9] Ibid 116 [47]; Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 656 [35]; Ecosse Property Holdings Pty Ltd v GD Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544, [16].

[16] Two years from the date of the Facility Agreement.

[17] Dilworth v Stamps Commissioner [1898] UKLawRpAC 56; [1899] AC 99, 105-6 ('Dilworth'); Customs and Excise Commissioners v Savoy Hotel Ltd [1966] 2 All ER 299, 301 ('Savoy Hotel').

[18] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109.

[19] Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522, 529 [16].

[20] Dilworth (n 17); Savoy Hotel (n 17).

[22] Savoy Hotel (n 17) 953; Dilworth (n 17) 105-106.

[23] Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 89 NSWLR 633, 659 [106].

[25] See inter alia Fletcher Construction Australia Pty Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812; Dedert Corporation v Dalby Bio-Refinery (2017) 59 VR 607.

[26] 68 Bridge Road Land Pty Ltd v GLP Batesford Holdings Pty Ltd [2023] VSCA 325.

[27] CE Heath Underwriting and Insurance (Aust) Pty Ltd v Edwards Dunlop & Co Ltd [1993] HCA 21; (1993) 176 CLR 535, 548.

[28] [2016] HCA 47; (2016) 260 CLR 85, 117 [103]-[104].

[29] Tutt v Doyle (1997) 42 NSWLR 10, 12-13.

[30] [2009] NSWCA 407; (2009) 76 NSWLR 603, 710 [446] ('Franklins').

[31] Ibid [451], citing Rylander Pty Ltd t/a as Volume Plus v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603, 638; Pukallus v Cameron [1982] HCA 63; (1982) 180 CLR 447, 452; Australian Gypsum Ltd v Hume Steel Ltd [1930] HCA 38; (1930) 45 CLR 54, 64.

[32] [2019] VSCA 98, [103] ('Perpetual').

[38] Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592, [109].

[39] ACCC v Z-Tek Computer Pty Ltd [1997] FCA 871; (1997) 78 FCR 197, 201.

[40] ACCC v Real Estate Institute of Western Australia Inc [1999] FCA 18, [23].

[41] [1838] EngR 323; (1861) 11 ER 829.

[42] [2003] VSC 495, [76]-[78] ('OCBC').

[43] (1881) 6 App Cas 722, 731-732 ('Ratcliffe').

[45] See Edward I Sykes and Sally Walker, The Law of Securities (The Law Book Company Ltd, 5th ed, 1993) 461-463_;_ this arguable point of distinction does not appear to have been raised in OCBC.

[46] [1992] HCA 55; (1992) 175 CLR 514, 528-9 ('Wardley'); [1982] 1 WLR 86, 99-100 ('Forster').