Plaintiffs v Defendants

1 Bagshot Investments Pty Ltd (Bagshot) is the current trustee of the Re Consult Trust. Henry Kaye (Kaye) is the former trustee of the Re Consult Trust. Bagshot claims to be entitled to be registered as the proprietor of lots 6A and 7 in a real estate development at Bagshot, Victoria (Bendigo Land). In this proceeding Bagshot seeks declarations that it has a caveatable interest in those lots, and orders that the defendants take various steps to facilitate Bagshot's registration as proprietor.

2 Huntly Property Holdings (Huntly) is the current registered proprietor of lots 6A and 7. Huntly opposes Bagshot's application and has filed a counter-claim, seeking orders that Bagshot deliver up to Huntly the certificates of title for lots 6A and 7 and the transfer in respect of lot 7. Huntly also seeks orders for the removal of caveats lodged by Bagshot on the titles of lot 6A and 7.

3 On 18 September 2024 the Registrar of Titles, the second defendant, wrote to the Court indicating that it did not intend to appear in the proceeding.

4 Abovo Investments Limited (Abovo), the third defendant, holds a registered mortgage over lot 6A. It has not filed an appearance.

5 This ruling concerns summary judgment applications made by both Bagshot and Kaye and by Huntly. For the reasons that follow I have decided that both summary judgment applications should be dismissed because the number and nature of the factual disputes between the parties means that only a full hearing on the merits is appropriate. In my view, the interests of justice require the parties' claims to proceed to a full hearing.

6 The plaintiffs, Bagshot and Kaye, relied on the affidavits of:

(a) Henry Kaye sworn 16 November 2022;

(b) Henry Kaye affirmed 17 April 2024;

(c) Wendy Iacobozzi affirmed 18 April 2024;

(d) Ronen Atzmon affirmed 19 April 2024;

(e) Taras Kolyasa affirmed 19 April 2024;

(f) Kishunda Swanston sworn 11 June 2024;

(g) Kishunda Swanston sworn 24 September 2024; and

(h) Graeme Efron affirmed 8 October 2024.

(a) James Dwight Ross Morrow affirmed 24 September 2024; and

(b) Colin Michael Almond sworn 23 September 2024.

8 Since 15 November 2021 Bagshot has been, and continues to be, the trustee of the Re Consult Trust. The second plaintiff, Kaye was the previous trustee.

9 The Re Consult Trust beneficially owned all shares in a company, Bourke & Queen Mortgages Pty Ltd (BQM). In July 2013, BQM lent money to Foscari Holdings Pty Ltd (Foscari) to enable it to acquire a property at 99 Palmers Road, Truganina (Truganina Land). Foscari became the registered proprietor of the Truganina Land. BQM's loan to Foscari was secured by a registered mortgage over the Truganina Land (BQM Mortgage). Over time the amount of BQM's loan facility increased. On 15 June 2015 Foscari acknowledged the debt was $5,163,224.95 (Foscari debt).

10 The plaintiffs' case is that in late 2015 Kaye was looking to sell the BQM Mortgage and the Foscari debt. Daniel Clarke, a solicitor at the firm Clamenz Lawyers, introduced Eric Krecichwost (also known as Eric Kay) as a prospective purchaser. Mr Krecichwost agreed to purchase the BQM Mortgage and the Foscari debt for $3 million. Mr Krecichwost nominated TPC (Vic) Pty Ltd (TPC) as the purchaser. Daniel Kay, presumed by the plaintiff to be Mr Krecichwost's brother, was the sole director of TPC.

11 On 14 February 2016 BQM and TPC entered into a deed of assignment. The deed provided for the assignment of the BQM Mortgage and the Foscari debt to TPC in return for which TPC would pay Kaye, as the trustee of the Re Consult Trust, the sum of $3 million from the sale of the Truganina Land. TPC lodged a caveat on the title to the Truganina Land, which was registered on 4 March 2016. The transfer of the BQM Mortgage to TPC was registered on the title to the Truganina Land on 23 June 2016.

12 On 24 December 2013 two companies, Adelaide Properties Pty Ltd (Adelaide) and Lezak Nominees Pty Ltd (Lezak) became jointly registered as mortgagees of the Bendigo Land (Adelaide and Lezak Mortgage). At that time Bilkurra Investments Pty Ltd (Bilkurra) was the registered proprietor of the Bendigo Land.

13 The plaintiffs' case is that in around June or July 2016, Mr Clarke told Kaye that TPC was unable to pay the $3 million which it had agreed to pay to Kaye. According to the plaintiffs, Mr Clarke told Kaye that TPC, as mortgagee in possession, proposed to sell the Bendigo Land to Huntly, a related entity, and that Huntly would transfer two of the lots in the development, lots 6 and 7, to Kaye in lieu of paying the $3 million debt. Kaye agreed to accept the transfers of lots 6 and 7 to the Re Consult Trust in substitution for payment by TPC of its $3 million debt to BQM (July 2016 Agreement).

14 The caveat which TPC lodged on the title to the Truganina Land and which was registered on 4 March 2016 was also registered on the title to the Bendigo Land. On 1 August 2016 TPC removed its caveat from the Bendigo Land after TPC entered into a contract of sale with Huntly dated 18 July 2016 for $6,050,000. That contract of sale was conditional upon TPC obtaining an assignment of the Adelaide and Lezak Mortgage within 21 days of the sale. Huntly did not lodge a purchaser's caveat on the Bendigo Land titles.

15 On 29 July 2016 Adelaide and Lezak executed a transfer of the Adelaide and Lezak Mortgage to TPC for consideration of $8,502,472.13. TPC funded this acquisition from the proceeds of sale of the Truganina Land, which it sold as mortgagee in possession. The transfer of mortgage and Huntly's proprietorship of the Bendigo Land were not registered on the titles to the Bendigo Land until 31 January 2017. The plaintiffs' case is that settlement of the sale of the Bendigo Land to Huntly occurred without any money being transferred to TPC. The plaintiffs concede there is an accounting book entry in relation to the settlement funds.

16 On 20 June 2017 the Bendigo Land was subdivided into 8 super-lots, including lots 6 and 7. Lot 6 was subsequently further subdivided into lots 6A and 6B.

17 The plaintiffs allege that pursuant to the July 2016 Agreement:

(a) on 18 July 2016, TPC, as mortgagee in possession, entered into a contract of sale of the Bendigo Land to Huntly for $6,050,000, payable by deposit of $50,000 and the balance at settlement 21 days later; and

(b) in or around November 2017 (after the registration of the subdivision in June 2017), the certificates of title and executed transfers of land in registrable form for lots 6 and 7 were hand delivered to Kaye's solicitor's office (Mr Atzmon's office) by a Mr Grochowski.

18 At the time of their delivery to Mr Atzmon, the titles were encumbered by a mortgage to Corvus Investments Limited (Corvus). The Corvus mortgage had been registered on the titles on 9 February 2017.

19 The plaintiffs' case is that in late 2017 or early 2018 Kaye instructed Mr Atzmon to arrange for the Corvus mortgage to be removed from the lot 6 certificate of title and that in March 2019 Kaye asked Mr Clarke to procure the removal of the Corvus mortgage over lot 7.

20 The plaintiffs allege that in late 2017 or 2018 Kaye had instructed Mr Atzmon to arrange for the removal of the Corvus mortgage from the lot 6 certificate of title. Mr Atzmon returned the certificate of title for that purpose. It has not been returned to the plaintiffs.

21 Bransgroves Lawyers represented Corvus. On 6 March 2019 Erin Couper of Bransgroves Lawyers, on behalf of Corvus, sent an email to Mr Atzmon, stating that Bransgroves Lawyers understood the title to lot 7 had been transferred to Mr Atzmon's client and requested Mr Atzmon provide the title deed so that the Corvus mortgage could be discharged. In response to Bransgroves Lawyers' request Mr Atzmon arranged for delivery of the lot 7 title to Bransgroves Lawyers by post.

22 Ms Couper sent a further email to Mr Atzmon on 22 March 2019 confirming receipt of the lot 7 certificate of title. The Corvus Mortgage was removed from the lot 7 title on 4 April 2019. Ms Couper then sent the unencumbered title to lot 7 to Mr Atzmon on 10 April 2019.

23 The plaintiffs' case is that it is inconceivable that a reputable firm of solicitors acting reasonably and responsibly would deliver an unencumbered certificate of title on the instructions of the former discharged mortgagee to a third party without the knowledge, consent and actual or ostensible authority of Huntly, the registered proprietor, thereby exposing itself to a negligence claim.

24 The plaintiffs' case is that Bagshot as trustee of the Re Consult Trust is entitled to be registered as the proprietor of lots 6A and 7 of the Bendigo Land. The plaintiffs' seek orders for specific performance of the July 2016 Agreement, which the plaintiffs allege is evidenced by relevant acts of part performance, being the delivery of the titles and executed transfers for the titles to lots 6 and 7 and redelivery of the unencumbered title to lot 7.

25 During the course of the hearing I granted Huntly leave to amend its defence and counterclaim. By its amended defence and counterclaim, in summary, Huntly:

(a) denies TPC was indebted to Kaye as trustee of the Re Consult Trust in the amount of $3 million;

(b) pleads that the Adelaide and Lazek Mortgage transfer to TPC stated that the consideration for the transfer was, 'Pursuant to a Deed of Assignment of Security dated on or about the date of this Transfer for the sum $8,502,472.13';

(c) does not admit that TPC held an equitable mortgage over the Bendigo Land pursuant to the Adelaide and Lezak Mortgage or the transfer;

(d) denies the July 2016 Agreement;

(e) admits it entered into the contract of sale of the Bendigo Land with TPC but denies TPC was acting in pursuance of the July 2016 Agreement;

(f) admits it became the registered proprietor of the Bendigo Land and that the land was subsequently subdivided;

(g) pleads that from April 2016 to May 2016 Adelaide and Lezak and/or TPC engaged Sutherland Farrelly to market and sell the Bendigo Land by a mortgagee's tender campaign that closed around 19 May 2016 that did not procure a purchaser;

(h) pleads that on 18 July 2016 TPC and Huntly executed the contract of sale and Huntly paid $50,000 by way of deposit;

(i) pleads that Huntly never had any communication with TPC about a transfer of any part of the Bendigo Land by Huntly to the plaintiffs after settlement of the contract of sale;

(j) pleads that on 10 August 2016 Huntly entered into a loan agreement with Corvus Investments Limited BVI Company No 1922682 (Corvus Investments) for an advance of $6,500,000 to finance the purchase of the Bendigo Land;

(k) says that on 27 January 2017 the contract of sale settled and Daniel Kay, director of TPC, declared to the State Revenue Office of Victoria that the consideration stated in the contract of sale was $6,050,000;

(l) on settlement, Corvus advanced approximately $6,000,000 to Huntly which Huntly paid to TPC and took possession of the certificate of title for the Bendigo Land;

(m) on 31 January 2017 Astuto Lawyers, for Huntly paid $332,750 in stamp duty to the State Revenue Office for the transfer of all the Bendigo Land including lots 6 and 7.

26 Huntly's case is that if Huntly agreed to sell an interest in the Bendigo Land to either plaintiff as they allege, that agreement was not in writing and so pursuant to s 126(1) of the Instruments Act 1958 (Vic), an action against Huntly, including this proceeding, cannot be brought. Further Huntly pleads that the July 2016 Agreement as pleaded by the plaintiffs does not specify the terms of the agreement with sufficient certainty, nor identify the consideration payable by Huntly and is therefore void for uncertainty and unenforceable. Alternatively Huntly pleads that the terms of the July 2016 Agreement were inconsistent with the terms of the contract of sale of the Bendigo Land in that TPC would not be selling the whole of the Bendigo Land to Huntly for $6,050,000 as it excluded lots 6 and 7.

27 In relation to Huntly's delivery of the lot 6 and 7 certificates of title along with the executed transfers of those lots to Kaye as trustee of the Re Consult Trust, Huntly pleads:

(a) in January 2017 Eric Krecichwost of Corvus Investments requested Huntly execute transfers of land in respect of the Bendigo Land to provide Corvus Investments with additional security but Huntly did not execute any transfers at that time;

(b) when the plan of subdivision of the Bendigo Land was registered on 20 June 2017, Huntly became the registered proprietor of the eight lots;

(c) in mid to late 2017 Corvus Investments repeated its request for Huntly to execute transfers of land in respect of the eight lots as additional security for the loan;

(d) at the time of that request Corvus Investments was in possession of all eight certificates of title;

(e) in response to the request Mr James Morrow, Huntly's director signed the forms of transfer and left the transferee blank and in each case stated the consideration was $1 and returned the signed forms to Corvus Investments;

(f) on 15 November 2017 Corvus Investments asked Huntly to sign fresh transfers for all eight lots due to a mistake in the earlier documentation signed by Mr Morrow;

(g) Huntly signed the fresh transfers and returned them to Corvus Investments for the sole purpose of permitting Corvus Investments to hold them in escrow to be used in the event of an unremedied default by Huntly of their loan agreement;

(h) Huntly did not authorise possession and has no direct knowledge of how the plaintiffs came to be in possession of the certificates of title to lots 6 and 7 and the lot 6 and 7 transfers.

28 Huntly pleads that on 9 February 2017 a mortgage in favour of Corvus Investments was registered over the Bendigo Land, which as at 26 November 2017 encumbered lots 6 and 7. The Corvus mortgage over lot 7 was discharged on 14 April 2019. Huntly says that on 14 April 2019 Corvus Investments retained the certificate of title and signed transfers of land for all eight lots and Huntly did not authorise or instruct Corvus Investments to deliver the lots 6 and 7 certificates of title or transfers to the plaintiffs.

29 Huntly's counterclaim pleads that it is entitled as owner to immediate possession of the certificates of title for lots 6A and 7, which, since April 2019 have been in the possession of the plaintiffs, as has the lot 7 transfer document. Huntly seeks declarations that the plaintiffs have no caveatable interests in respect of the Bendigo Land and in particular lots 6A and 7. It asks the Court to make orders for the removal of the caveats and delivery of the lot 7 transfer.

30 Section 61 of the Civil Procedure Act 2010 (Vic) (CPA) provides that a plaintiff in a civil proceeding may apply to the Court for summary judgment in the proceeding on the ground that a defendant's defence or part of that defence has no real prospect of success.

31 Section 62 of the CPA provides that a defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.

32 References in these sections to a plaintiff include a reference to a plaintiff by counterclaim. References to a defendant similarly include a reference to a defendant by counterclaim.

33 The Court is empowered by s 63, subject to s 64 of the CPA, to give summary judgment in any civil proceeding if satisfied that a claim, defence or counterclaim has no real prospect of success.

34 Section 64 of the CPA provides that:

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

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

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

35 An application for summary judgment under s 62 of the CPA must be made in accordance with Part 2 and 3 of Order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules).

36 The principles relevant to an application for summary judgment were set out by the majority of the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (Lysaght v Blanalko).[1] There the majority said:

(a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a "real" as opposed to a "fanciful" chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the "hopeless" or "bound to fail" test essayed in General Steel;[2]

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

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

37 Section 90(3) of the Transfer of Land Act 1958 (Vic) (TLA) provides that any person who is adversely affected by a caveat lodged under s 89 of the Act may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit.

38 In Giurina v Greater Geelong City Council,[3] the Victorian Court of Appeal considered the approach taken by the Court to applications brought under s 90(3) of the TLA:

Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. In so far as their registration is an administrative act, it is when application is made for their removal that the onus falls on the caveator to satisfy the two-stage test used by the court when deciding whether to exercise its discretion to grant interlocutory injunctive relief. This approach has been established law in Australia since the decision of Lord Diplock in Eng Mee Yong v Letchumanan was approved by the Full Court of the Queensland Supreme Court of Appeal in Re Jorss' Caveat. This two-stage approach requires the caveator to establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question, and having done so, to establish that the balance of convenience favours the maintenance of the caveat on the Register of Titles until trial. This is still the approach taken by the courts in Victoria when deciding applications under s 90(3) of the Act.

[citations omitted].

39 The July 2016 Agreement was oral. Section 53 of the Property Law Act 1958 (Vic) (Property Law Act) provides that no interest in land can be created or disposed of except in writing signed by the person creating or conveying the interest, or by operation of law. Section 55(d) of the Property Law Act provides that s 53 does not affect the operation of the law relating to part performance.

40 Under the doctrine of part performance, equity will compel performance of a contract notwithstanding that it is otherwise unenforceable at law or in equity where there have been acts of part performance of the contract such that to deny enforcement would be to allow a fraud on the plaintiff.[4] The acts relied upon as part performance, however, must be 'unequivocally, and in their own nature, referable to some such agreement as that alleged'.[5] The requirement of unequivocal referability is not concerned with proof of the particular contract in question, but rather with the dealings between the parties which in their nature establish that the parties are in the midst of an uncompleted contract for the sale or other disposition of land.[6] The acts must be unequivocally and inherently referable to a transaction for the sale or other disposition of the land.[7]

41 In Pipkos v Trayans, the majority of the High Court explained:

The equity to have the transaction completed arises where the acts that are proved are consistent only with partial performance of a transaction of the same nature as that which the plaintiff seeks to have completed by specific performance. At that point, regard may be had to the terms of the oral contract in order to ascertain the appropriate orders by way of specific performance. So, in Maddison v Alderson, Lord Selbourne stated that the terms of the parol contract may be taken into account only when the equity to have the transaction carried to completion has been established and it becomes necessary to establish the terms of the order to be made.[8]

[citations omitted].

42 The plaintiff submitted that the following constituted acts of part performance which are unequivocally, and of their own nature, referable to an agreement such as the alleged July 2016 Agreement:

(a) delivery to the plaintiffs of the executed transfers of land for lots 6 and 7, together with certificates of title;

(b) the discharge of the Corvus mortgage over lot 7; and

(c) the subsequent redelivery of the lot 7 unencumbered title to Mr Atzmon acting as solicitor for Kaye.

43 The plaintiffs said that Huntly's defence to the plaintiffs' case is so lacking in merit and plausibility that the Court should regard it as having no real prospect of success. In this regard the plaintiff submitted:

(a) Huntly's assertion that paragraph 8 of the second further amended statement of claim (SFASOC) does not disclose a cause of action and that the plaintiffs have not pleaded a discharge and release of TPC, the absence of which allegation means that consideration for the alleged agreement fails, is wrong. The release of TPC, or the substitution of Huntly's obligation to transfer lots 6 and 7 for TPC's obligation to pay $3 million is pleaded as a term of the agreement and nothing more is required;

(b) Huntly has not responded to the plaintiff's part performance case. It has offered no explanation why Corvus, as mortgagee of lots 6 and 7, delivered the titles and transfers to the plaintiffs' solicitor, beyond Mr Morrow's statements that he has never met Mr Grochowski and does not know how Mr Grochowski obtained the documents;

(c) Huntly has offered no evidence about what steps Mr Morrow has taken to ascertain why Corvus purported to deal with Huntly's property in 2017 by handing over the titles to lots 6 and 7 and the executed transfers of land to Mr Grochowski; nor why Huntly did not query the removal of the Corvus mortgage from the lot 7 title; nor why Huntly has taken no action in response to Corvus' solicitor, Bransgroves Lawyers, redelivering the unencumbered title to lot 7 to Mr Atzmon in 2019;

(d) Mr Morrow's explanation that the Mr Krecichwost requested the preparation and execution of the transfers of land as security to be held in escrow and used in the event of default is commercially nonsensical because Corvus already held mortgages over the lots and is not supported by any contemporaneous written evidence;

(e) The relationship between TPC, Huntly, Corvus and Mr Krecichwost renders Huntly's position in this litigation unsustainable and hopeless because the relationships cannot be reconciled with (and render implausible) Huntly's position that it cannot explain why Corvus, in 2017, delivered the lot 6 and 7 titles and transfers to Kaye's solicitor. In making this submission, the plaintiffs rely on the following:

(i) Huntly pleads that TPC engaged Sutherland Farrelly to market and sell the Bendigo Land. TPC never in fact engaged Sutherland Farrelly and Sutherland Farrelly deny any involvement in this sale. Sutherland Farrelly had prepared the marketing documents for the purposes of an earlier sales campaign by Adelaide and Lezak;

(ii) there is no evidence that the deposit of $50,000 was in fact paid to TPC;

(iii) Huntly did not lodge a purchaser's caveat on the titles;

(iv) Corvus loaned Huntly, a company formed shortly before it purchased the Bendigo Land, $7,052,500 for a land purchase of $6,050,000, which is patently uncommercial;

(v) Huntly claims the purchase was funded by a loan of $6,500,000 from Corvus but has acknowledged the amount of $6 million was not in fact paid but rather debited to a loan account opened by Corvus (now Abovo) for Huntly on 27 January 2017;

(vi) Huntly's case is that TPC purchased its mortgage from Adelaide Pty Ltd and Lezak Pty Ltd for $8,502,472.13 and then proceeded to sell the land, as mortgagee in possession to Huntly for no money, in circumstances where TPC had an obligation as mortgagee in possession to exercise its power of sale in good faith;

(vii) Mr Morrow has deposed that Corvus was a mortgagee 'common' to both TPC and Huntly which appears to acknowledge that Corvus, TPC and Huntly are related entities;

(viii) the sale by TPC of the Bendigo Land to Huntly at a significant loss is commercially incomprehensible unless TPC and Huntly were related entities;

(ix) despite Huntly's previous denials, Mr Morrow has now deposed that Mr Krecichwost is behind Corvus and its purported funding of Huntly's purchase of the Bendigo Land; and

(x) notwithstanding an obvious interest in the proceeding, Abovo has chosen not to participate.

44 Huntly submitted that to be successful in its application, it must establish that the plaintiffs' defence to Huntly's counterclaim does not have a real prospect of success, and that the plaintiffs' case falls into the same category.

45 Kaye's assertion that he assigned by deed the debt owed by Foscari to BQM and mortgage over the Truganina Land to TPC is not evidenced by any copy of the deed of assignment. The only extrinsic evidence of the alleged assignment is the transfer of mortgage document lodged on 23 June 2016 which states the transfer was 'Pursuant to a Deed of Assignment dated 14 February 2016 with no monetary consideration'. This conflicts with Kaye's evidence that the consideration for the assignment was TPC's promise to pay $3,000,000 on the settlement of the sale of the Truganina Land as mortgagee in possession. The transfer of mortgage is evidence that no debt was owed to BQM at the time of the transfer.

46 Kaye's evidence that Clarke told him in early 2016 that he acted for TPC is contradicted by the evidence that Tisher Liner FC Law are recorded as TPC's solicitors on the transfer of the BQM mortgage and the contract of sale of the Bendigo Land.

47 At the time of the alleged July 2016 Agreement, Foscari did not own the Bendigo Land. This is inconsistent with Kaye's evidence that by the July 2016 Agreement TPC agreed to sell the Bendigo Land as mortgagee in possession and transfer lots 6 and 7 to the Re Consult Trust in lieu of the $3,000,000 payment.

48 Kaye refers to the caveat lodged over the Bendigo Land by TPC allegedly pursuant to a transfer of mortgage from BQM to TPC. In fact the caveat refers to a different mortgage to TPC from BQM and Laycon Investments Pty Ltd.

49 Bilkurra, the earlier owner of the Bendigo Land, was not a party to the facility agreement and there is no evidence it mortgaged the Bendigo Land to BQM as collateral security for a loan to Foscari.

50 At the time of the July 2016 Agreement Clarke was solicitor for the Re Consult Trust. Kaye's evidence that Clarke acted for both TPC and Huntly in making the July 2016 Agreement is not supported by any documentary evidence that Clarke acted for Huntly and would involve an obvious conflict of interest for Clarke.

51 The plaintiffs have not adduced any evidence from Clarke about the alleged July 2016 Agreement, about his authority to act for Huntly, or the formation of the July 2016 Agreement. No retainer has been produced and Mr Morrow's evidence is that Clarke never acted for Huntly in respect of the July 2016 Agreement.

52 The plaintiffs' case is implausible given that at the time of the alleged July 2016 Agreement neither TPC nor the Re Consult Trust obtained a valuation of the Bendigo Land. Huntly became the registered proprietor of the Bendigo Land when the contract of sale settled on 31 January 2017. There is no evidence that following settlement the plaintiffs made any enquiries about the progress of the subdivision or the valuation of lots 6A and 7.

53 In relation to the plaintiffs' part performance case, Huntly submitted that to the extent the plaintiffs relied on delivery of the lot 6 and 7 certificates of title and the executed transfers, those were not acts taken by the plaintiffs. The transfers were not in registerable form because the identity of the transferee had not been specified. There is no evidence that on receipt of those documents the plaintiffs actually released the TPC debt. Huntly's evidence, from Mr Morrow, is that Huntly released the certificates of title and transfers to Corvus as additional security for its loan on the basis that Corvus would hold those documents in escrow, to be used in the event of default by Huntly. That evidence is supported by a letter from Mr Gardas, director of Corvus Investments to Mr Morrow dated 15 November 2017. Further the signed transfers note consideration of $1, an amount that makes no sense in the context of the plaintiffs' alleged July 2016 Agreement.

54 The plaintiffs' evidence that Mr Atzmon received the lot 6 and 7 certificates of title and the signed transfers from Mr Grochowski conflicts with Mr Morrow's evidence that he has never met or spoken to Mr Grochowski or Mr Atzmon and did not provide those documents to Mr Grochowski. Huntly submitted this is plainly an issue that requires cross-examination.

55 Huntly submitted that as neither of the plaintiffs were a party to the contract of sale of the Bendigo Land there was no scope to identify the price of lots 6A and 7. According to Huntly, the result is that the plaintiffs' case must fail because there is no evidence of price, an essential term of any contract for the sale of land.

56 Huntly argued that the alleged July 2016 Agreement is a collateral contract to the contract for the sale of the Bendigo Land, which is impermissibly inconsistent with the main contract. The inconsistency arose because the plaintiffs allege that by the contract of sale Huntly agreed to purchase the Bendigo Land when the July 2016 Agreement in substance alleges that Huntly agreed to purchase all of the Bendigo Land except lots 6 and 7.

57 Finally, Huntly submitted that if its submissions that the plaintiffs' case has no real prospect of success is accepted by the Court, then Huntly's causes of action in conversion in respect of the lot 6A and 7 certificates of title and the transfer of lot 7 are made out, entitling Huntly to delivery of those documents and an order that the plaintiffs' caveats be removed.

58 The plaintiffs submitted that the central plank of Huntly's defence to the plaintiff's part performance case, is that Huntly did not authorise and has no direct knowledge of how the plaintiffs came to be in possession of the certificates of title to lots 6 and 7 and the transfers. The plaintiffs submitted that is unsustainable and fanciful given the ongoing relationship between Mr Krecichwost, Corvus and Huntly.

59 The plaintiffs' assert their entitlement to lot 6 and 7 of the Bendigo Land derives from the July 2016 Agreement. By that agreement Huntly agreed to purchase the Bendigo Land from TPC and to transfer lots 6 and 7 to the Re Consult Trust in lieu of TPC's prior obligation to pay $3,000,000 for the assignment of the BQM Mortgage over the Truganina Land. TPC's obligation to pay the $3,000,000 arose under an agreement made in February 2016 by which BQM assigned its $5,160,000 debt and mortgage over the Truganina Land to TPC in return for TPC's promise to pay $3,000,000 to the Re Consult Trust. BQM and TPC executed a deed of assignment dated 14 February 2016 which was implemented by and expressly referred to in the formal transfer of mortgage registered on 23 June 2016.

60 The plaintiffs submit that Huntly does not dispute that the registration of the transfer of mortgage occurred pursuant to the deed of assignment. Huntly argues that Kaye's evidence that the assignment was in consideration of TPC's promise to pay $3,000,000 to the Re Consult Trust contradicts and is inconsistent with the handwritten notation on the transfer of mortgage of 'no monetary consideration'. However, Huntly does not plead that the transfer of the mortgage from BQM to TPC was a gift and does not dispute the transfer had significant commercial value. The plaintiffs submitted that it does not matter what TPC agreed to pay for the mortgage, only that it agreed to pay something, which obligation was discharged and satisfied by the subsequent July 2016 Agreement for the delivery of lots 6 and 7. The plaintiffs submitted the handwritten notation is not inconsistent with the fact that at the time of the transfer TPC paid BQM no monetary consideration.

61 The plaintiffs submitted that there is nothing unusual in the fact that although Clarke told Kaye he acted for TPC and Huntly, he did not act in the conveyance that occurred in June 2016. Mr Clarke's firm was based in Sydney and Tisher Liner, the firm that acted in the conveyance is based in Victoria. Nothing flows from the fact that TPC engaged different lawyers at different times to undertake different tasks.

62 The plaintiffs said that Kaye's evidence and primary documents demonstrate:

(a) in December 2013 Adelaide and Lezak were registered as joint mortgagees of the Bendigo Land;

(b) in August 2013 BQM lodged a mortgage over the Truganina Land to secure its loan to Foscari;

(c) BQM never held a mortgage over the Bendigo Land;

(d) on 14 February 2016 BQM assigned its $5,160,000 mortgage over the Truganina Land to TPC in consideration for TPC's promise to pay $3,000,000 to the Re Consult Trust;

(e) notwithstanding that BQM did not hold and did not assign an interest in the Bendigo Land to TPC, on 4 March 2016 TPC lodged a caveat on both the Truganina Land and the Bendigo Land purporting to rely on the assignment to it of the BQM Mortgage;

(f) on 18 July 2016 TPC entered into a contract for the sale of the Bendigo Land to Huntly, purporting to act as mortgagee in possession while at that time TPC had not acquired rights over that land from Adelaide and Lezak;

(g) the contract of sale of the Bendigo Land acknowledged that TPC did not then have an assignment of the Adelaide and Lezak Mortgage and the contract was conditional on TPC obtaining an assignment of that mortgage within 21 days;

(h) on 29 July 2016 TPC acquired the assignment of the Adelaide and Lezak Mortgage for $8,500,000 from the Truganina Land sale proceeds;

(i) the transfer of the Adelaide and Lezak mortgage to TPC and the transfers of the Bendigo Land to Huntly were registered on 31 January 2017.

63 Huntly's observations that Bilkurra, the registered proprietor of the Bendigo Land was not a party to the BQM loan to Foscari and that the deed of acknowledgment makes no reference to the Bendigo Land being security for the BQM loan demonstrates the non-arms length nature of the relationship between TPC and Bilkurra.

64 Foscari and Bilkurra share a common director, Mr Ian Stephens and each company had knowledge of the other's affairs. Bilkurra did not protest when TPC lodged a caveat on the Bendigo Land on 4 March 2016 notwithstanding BQM had no interest in the Bendigo Land to assign. TPC as mortgagee in possession of the Bendigo Land owed Bilkurra a duty to act in the sale of the land in good faith and without wilfully or recklessly sacrificing the interests of Bilkurra. TPC had a duty not to sell the land for less than market value. Bilkurra took no issue with the sale process.

65 TPC entered into the contract to sell the Bendigo Land to Huntly for $6,050,000 subject to an obligation to acquire the Adelaide and Lezak Mortgage within 21 days. It acquired that mortgage for $8,500,000 which makes no commercial sense as it resulted in an immediate $2,450,000 loss to TPC. Huntly became the registered proprietor of the Bendigo Land without paying the $6,050,000 purchase price other than by a book entry.

66 Bilkurra's silence regarding these matters supports an irresistible inference that it consented not only to TPC lodging the caveat over the Bendigo Land but also to the sale of the Bendigo Land to Huntly without any accounting to Bilkurra.

67 The plaintiffs submitted that the fact that the submissions in support of their application for summary judgment involve a detailed analysis of the documents and facts is not a basis for refusing the application.

68 In Lysaght v Blanalko the majority of the Court of Appeal cautioned that the power to terminate proceedings summarily should be exercised with caution and should not be exercised unless it is clear that there is no real question to be tried.[9] In my view, neither party has established that in relation to their case, there is no real question to be tried. I have reached that view for the following reasons.

69 First, there are many instances of inconsistencies in the evidence that would benefit from a full hearing on the merits. Some of these inconsistencies are in a particular witnesses evidence. For example, Kaye has sworn two affidavits which on their face appear to differ in relation to the alleged July 2016 Agreement. In other cases the inconsistencies are in the evidence of different witnesses. For example, Kaye's evidence is that he was told by Clarke that Clarke acted for TPC and Huntly in the negotiation of the July 2016 Agreement. Mr Morrow's evidence was that he, as director of Huntly, never instructed Clarke to act on behalf of Huntly. In yet other cases there are inconsistencies between the evidence of witnesses and the documentary record. For example, Mr Almond's evidence was that Sutherland Farrelly was engaged to market the Bendigo Land but could not find a buyer. The documentary evidence suggests that in response to the campaign Sutherland Farrelly received various offers to purchase the Bendigo Land including at least one that, on its face, was for a sum greater than Huntly eventually paid for the Land. Another example is that Mr Morrow deposed that Huntly obtained the purchase funds from Corvus Investments Limited, a company incorporated in the British Virgin Islands. The mortgage registered on the title to the Bendigo Land references a Corvus entity registered in Australia. These are but a few examples of the many discrepancies in the evidence. Given my decision that the proceeding should continue to trial where the evidence can be tested, so as not to embarrass the trial judge, I have deliberately avoided listing each and every known evidential discrepancy and have not offered commentary on the relative versions of the evidence.

70 Second, the plaintiffs' summary judgment application relies on the Court finding that Huntly's defence has no real prospect of success because it is implausible and bound to fail. This submission relied on the Court finding that Huntly was not an arm's length purchaser of the Bendigo Land. That proposed finding is said to flow from inferences available from numerous pieces of evidence said to suggest that TPC, Huntly and Corvus are related entities and from the lack of evidence of Huntly taking any actions to ascertain how or why Mr Grochowski and then Huntly's solicitor provided the title documents and transfers to Kaye.

71 There is no doubt that a finding can be made in the absence of direct evidence. However, in order for the Court to make that finding the plaintiffs must demonstrate that the inference they contend for is the most probable in all the circumstances. As observed by Beach J in Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8),[10] 'Generally, the proper inference to be drawn on the balance of probabilities depends on a practical and reasonable assessment of the evidence as a whole.' On a summary judgment application the Court does not have the benefit of all of the evidence, tested by cross-examination.

72 Third, the plaintiffs submitted that in order to succeed on their part performance case, they did not require evidence of the terms of the particular contract alleged. Even if the Court was satisfied that the plaintiffs had established their part performance case, it would be necessary for the plaintiffs to establish the terms of the contract. In circumstances where Kaye is principal witness of the terms of the July 2016 Agreement and there are inconsistencies in his evidence about that Agreement, should it become necessary for the Court to construe the terms of the contract, the Court would be assisted by Kaye's oral evidence, tested by cross-examination.

73 Fourth, I am not satisfied that the plaintiffs' defence to Huntly's crossclaim has no real prospect of success. The plaintiffs' defence relies on its claim that the contract of sale of the Bendigo Land was entered into in pursuance of the July 2016 Agreement. The inconsistencies in the evidence referred to above, necessarily also apply to Huntly's crossclaim. Accordingly, the interests of justice require both the claim and crossclaim to proceed to a full trial on the merits.

74 For the reasons given above I have decided that the interests of justice require that both the plaintiffs' claim and Huntly's counterclaim proceed to a full trial on the merits. Accordingly, I will dismiss both the plaintiffs' summons seeking summary judgment and Huntly's summons seeking summary judgment.

75 Given my decision, my preliminary view, subject to any submissions the parties wish to make, is that the parties' costs of the summonses should be their costs in the proceeding. I request that the parties confer on the question of costs. If the parties are unable to reach agreement on the terms of any costs order within 7 days of the date of this judgment, the proceeding will be relisted for an oral costs argument.

ABOVO INVESTMENTS LIMITED (BVI COMPANY NUMBER 1987282)

[1] [2013] VSCA 158; (2013) 42 VR 27, 40 [35].

[2] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.

[3] [2023] VSCA 148, [15] (Osborn & Kaye JJA).

[4] Cooney v Burns [1922] HCA 8; (1922) 30 CLR 216, 233 (Isaacs J).

[5] Maddison v Alderson (1883) 8 App Cas 467, 479.

[6] Pipikos v Trayans [2018] HCA 39; (2018) 265 CLR 522, 537 (Kiefel CJ, Bell, Gaegler & Keane JJ).

[9] Lysaght v Blanalko (n 2) 40 [35].

[10] [2022] FCA 1404, [299].