Plaintiffs v ICELAND COLD STORAGE AUSTRALIA PTY LTD

1. This proceeding concerned the dissolution of a business relationship between 2 sets of parties. The business in question is a cold storage and logistics business ("the Iceland Business"). Each side held a 50 percent interest in the Iceland Business and claimed that the other had engaged in oppressive conduct sufficient to enliven the court's jurisdiction to make orders under section 233 of the Corporations Act 2001 (Cth). Both sides sought relief so as to take control of the Iceland Business and its relevant corporate entities and unit trusts.
2. The trial commenced on 14 June 2022 but was unable to proceed beyond the first day for reasons outside the parties' control. It was due to resume on 22 August 2022.[1] The proceeding was settled on 25 August 2022 upon the completion of the execution of a deed of settlement ("the Settlement Deed"). It is common ground that completion of the settlement was due on 1 March 2023. However, there was no accord that this occurred. A number of issues have now arisen in relation to the performance of the Settlement Deed.
3. For the reasons to follow, a declaration will be made in substantially the form sought by the plaintiffs, namely that completion under the Settlement Deed occurred on 1 March 2023.

1. A significant number of entities are relevant to the dispute. Presently, it is convenient to describe only some of the relationships between them.
2. The first defendant, Iceland Cold Storage Australia Pty Ltd ("Iceland Australia"), the second defendant, Iceland Holdings Pty Ltd ("Iceland Holdings"), the third defendant, Iceland Logistics Pty Ltd ("Iceland Logistics"), and the fourth defendant, Gateway 81 Pty Ltd ("Gateway 81"), are and were at all material times each a trustee of a unit trust ("the Iceland Trusts"). Jointly and severally, in their own capacities and their capacities as trustees of the Iceland Trusts and otherwise, these 4 entities comprise "the Iceland Group" (also referred to below as "the Iceland Group Companies").
3. The first plaintiff, LD Family Holdings Pty Ltd ("LD Family"), and the second plaintiff, RHS Management Pty Ltd ("RHS Management"), at all material times collectively:

(1) Prior to 1 March 2023, were the owners of 50 percent; and
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> (2) Since 1 March 2023, are the owners of 100 percent (following transfers, the validity of which are disputed by the fifth to ninth defendants)
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of the shares and units in the Iceland Group as trustee for the LD Family Trust and the RHS Management Trust, respectively.

1. The fifth defendant, Iceland Properties Pty Ltd ("Iceland Properties"):

(1) Is and was at all material times the registered proprietor of the property situated at 81 Gateway Boulevard, Epping, Victoria ("the Gateway Property"), being the property upon which the premises of the Iceland Group is located.
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> (2) Was until approximately September 2019 the trustee of the Iceland Property Unit Trust.[2]
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> (3) Is and was at all material times from September 2019 holding the Gateway Property as bare trustee for Gateway 81 (the current trustee of the Iceland Property Unit Trust).

2. The sixth defendant, Ekgill Investments Pty Ltd ("Ekgill"), was at all material times before 1 March 2023 the undisputed owner of 50 percent of the shares and units in the Iceland Group as trustee for the Ekgill Investments Trust.
3. The eighth defendant, Natural Produce & Wholesale Pty Ltd ("Natural Produce"), or the ninth defendant, Iceland Cold Storage Pty Ltd ("Iceland Cold"), was at all material times:

(1) The registered proprietor of 27 vehicles used by the Iceland Business, comprising 11 rigid trucks, 5 prime movers and 11 trailers ("the Vehicles").
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> (2) Holding the Vehicles as bare trustee for the Iceland Group.

Until around July 2019, Iceland Cold, as trustee of a discretionary trust known as the Iceland Cold Storage Trust, operated the Iceland Business, including by using the Vehicles.

1. The Vehicles are subject to registered security interests in favour of the Commonwealth Bank of Australia ("the Commonwealth Bank"). Further, Accelerated Loans Pty Ltd ("Accelerated Loans") holds specific security interests over some, but not all, of the Vehicles. As at 1 March 2023, the amount of the debt secured by Accelerated Loans' security interests was $271,413.64.
2. The seventh defendant, Chashampal Singh Gill ("Gill"), is and was at all material times the sole director and company secretary of Iceland Properties, Natural Produce and Iceland Cold and the controlling mind of Ekgill. (Collectively, these parties are referred to as "the Gill Parties".)
3. The thirteenth defendant, Lakhwinder Singh ("Lakhwinder"), is and was at all material times the sole director of LD Family. The tenth defendant, Rupinder Brar, the eleventh defendant, Sarabjot Dhillon, and the twelfth defendant, Harmandeep Virk, are and were at all material times the directors of RHS Management. (Collectively, these parties are referred to as "the Lakhwinder Parties".)
4. Gill and Lakhwinder have known each other since Gill moved to Australia in 2003. Lakhwinder's cousin was Gill's classmate when Gill was growing up in India.
5. The fourteenth defendant is Kamal Seghal ("Seghal"). Seghal is no longer an active party in the proceeding for reasons that will become apparent.[3]
6. Some further elaboration of the ownership structure of the Iceland Trusts and the Iceland Group Companies from July 2019 onwards is called for. After the plaintiffs agreed to acquire a 50 percent interest in the Iceland Group,[4] the following occurred:

(1) Iceland Holdings was incorporated and the Iceland Holdings Trust was established as a unit trust. Iceland Holdings was appointed its trustee, and the units in this trust together with the shares in Iceland Holdings were held in equal parts by the plaintiffs and Ekgill.
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> (2) Iceland Australia was incorporated and the Iceland Cold Storage Australia Trust was established as a unit trust, with Iceland Australia as trustee and all units held by Iceland Holdings. Iceland Australia is and was at all material times wholly owned by Iceland Holdings.
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> (3) Iceland Logistics was incorporated and the Iceland Logistics Trust was established as a unit trust, with Iceland Logistics as trustee and all units held by Iceland Holdings. Iceland Logistics is and was at all material times wholly owned by Iceland Holdings.
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> (4) Gateway 81 was incorporated and appointed the new trustee of the Iceland Property Unit Trust. The plaintiffs and Ekgill were equal shareholders. Half of the units in this trust, previously held by Iceland Cold, were transferred to the plaintiffs and their related entities, and the other half were retained by Iceland Cold.
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> (5) Gill and Lakhwinder were appointed as the directors of each of the Iceland Group Companies.

7. The plaintiffs did not acquire any interest in Iceland Cold, Natural Produce or Iceland Properties, these entities having remained at all material times under the ownership and control of Gill.

1. In 2008, Gill started Natural Produce as a transport company.[5] The business slowly grew. By 2014, it had approximately 14 temperature-controlled trucks. Gill then decided to expand the business to include temperature-controlled warehousing. On 27 August 2014, Iceland Cold was incorporated with Gill as its sole director and shareholder.
2. In September 2014, Gill began work to develop the Gateway Property (which was purchased by Iceland Properties in its capacity as trustee of the Iceland Property Unit Trust for $15.54 million), together with a smaller property located at its rear, being 60 Scanlon Drive, Epping, Victoria ("the Scanlon Property"). The Scanlon Property was agreed to be purchased by way of a 10 percent deposit, with immediate occupancy and 18 months to settle. Construction was completed on both sites by August 2015.
3. Gill was unable to settle on the Scanlon Property. He sought assistance from a potential investor, Rakesh Palta ("Palta"). Gill and Palta orally agreed that for a total investment of $3 million, Palta would acquire a 25 percent interest in the Iceland Business. As part of this agreement, Palta was required to fund part of the settlement of the Scanlon Property.
4. In December 2016, the Scanlon Property was settled for $2.9 million, of which Palta contributed $800,000. It was purchased in the name of Supriya Investments Pty Ltd, a company under Palta's control. There was no transfer of any shares or units in the Iceland Group to Palta. In this proceeding, Gill gave uncontested evidence about Palta's conduct on various issues. It is unnecessary to elaborate. Suffice to say for present purposes, there is an ongoing dispute in the County Court of Victoria between Palta and Gill.
5. In May 2019, Lakhwinder met with Gill for the first time in 3 or 4 years. They had a general chat about their respective businesses. Lakhwinder expressed an interest in investing in the Iceland Business. He told Gill that he knew of others who would also be interested. Further discussions took place over subsequent months, including with others. After various proposals were considered, in around July 2019 it was agreed that 50 percent of the Iceland Business would be sold by the sale of 50 percent of the shares in Iceland Holdings (which held all the issued shares in Iceland Australia and Iceland Logistics) and 50 percent of the shares in Gateway 81, together with 50 percent of the units in the Iceland Property Unit Trust. The purchase price was $3.45 million, being 50 percent of the agreed net value of the Iceland Business (calculated by reference to a value of $23 million, less liabilities of $16.1 million).

B.3 Underlying arrangements before this proceeding was commenced

1. Prior to July 2019, the Iceland Business (now conducted by the Iceland Group at the Gateway Property) was conducted by Iceland Cold.
2. Iceland Cold has at all material times been the principal debtor under a trade finance and overdraft facility, an equipment finance facility and a corporate credit card facility with the Commonwealth Bank. Iceland Properties has at all material times been the principal debtor under a market rate loan mortgage facility with the Commonwealth Bank. (Collectively, these facilities are referred to as "the Bank Facility".[6]) Amongst other things, the Bank Facility is secured by a mortgage over the Gateway Property and an "all present and after-acquired property" security interest over Iceland Cold, Natural Produce and Iceland Properties.[7]
3. The Bank Facility expired in around November 2019. In 2020, an application was made to the Commonwealth Bank for refinancing. It was intended that Iceland Australia and Gateway 81 would replace Iceland Cold and Iceland Properties as the principal debtors. In October 2020, letters of offer were issued by the Commonwealth Bank. The following month, these were executed by Gill for and on behalf of Iceland Australia and Gateway 81. Gill and his wife, Eashwarpreet Kaur Gill ("Eashwarpreet"), are guarantors under the Bank Facility. The refinancing did not occur as conditions precedent were not met. As a result no funds were drawn down. The Bank Facility remains in default, with arrears of approximately $950,000. To date, no refinancing has been achieved.
4. Despite not being the debtor of the Commonwealth Bank, from approximately September 2019 until at least late August 2022, Iceland Australia serviced the repayments due under the Bank Facility.
5. The current balance of the Bank Facility is approximately $14.2 million in debit.
6. Over time, dispute arose in relation to the Iceland Group. Essentially, it was between the respective shareholders of the Iceland Group, the plaintiffs and Ekgill. The breakdown of relations resulted in this proceeding commencing in 2021. It is common ground that the differences between the parties are irreconcilable.
7. In March 2022, the Lakhwinder Parties approached the Commonwealth Bank regarding the possibility of obtaining finance in order to be in a position to purchase the remaining 50 percent of the Iceland Group. In May 2022, a meeting was held.[8] Although discussions followed, no offer of finance was made.

1. On 12 December 2019, Palta lodged a caveat over the Gateway Property ("the Palta Caveat"). In an affidavit filed in this proceeding in February 2022, Gill swore that if the Palta Caveat were removed, the Gateway Property would be transferred to the Iceland Property Unit Trust, of which Gateway 81 has been the trustee since September 2019.
2. On or about 28 or 29 November 2022, the Palta Caveat was removed in accordance with orders made after a contested hearing in this court.[9] It was ultimately conceded that Gill's signature on the loan agreement the alleged source of Palta's interest had been forged.[10] There has been no application for leave to appeal from this decision. The Gateway Property remains in the legal ownership of Iceland Properties.
3. In mid August 2022, Tim Kaine ("Kaine"), a solicitor and principal of Kainelaw Australian Lawyers ("Kainelaw"), commenced acting as a legal representative for the Gill Parties in this proceeding. On 12 January 2023, Kainelaw lodged a caveat over the Gateway Property asserting a caveatable interest on account of unpaid legal fees claimed to be approximately $387,026 ("the Kainelaw Caveat"). This event followed Gill appointing new solicitors on 9 January 2023.[11]
4. On 1 September 2022, Gill and Seghal executed an "Introducer Agreement" in their capacities as directors of Iceland Cold and Capital & Co Australia Pty Ltd ("Capital & Co") respectively. As a result, Iceland Cold became liable to pay certain fees. Capital & Co claimed Iceland Properties was also a party to this agreement and that it granted a charge in favour of Capital & Co over the Gateway Property. This was said to be disputed by Gill. However, under cross-examination Gill acknowledged that he executed the Introducer Agreement on behalf of Iceland Properties and that he knew that in doing so he was, on behalf of Iceland Properties, granting a charge over the Gateway Property in favour of Capital & Co at a time when Iceland Properties remained the registered proprietor of the Gateway Property.
5. More recently, a business relationship has been established between Lakhwinder and Sasidhar Maturu ("Maturu"). Together, Lakhwinder and Maturu control Hanzcold Pty Ltd ("Hanzcold"). Maturu described himself as the new director of the Iceland Group. However, under cross-examination he explained that Hanzcold was not to take over the Iceland Group's operations until after "settlement" had occurred.

B.5 The Settlement Deed and related events leading up to 1 March 2023

1. On 24 August 2022, the parties (with the exception of Seghal) finalised the Settlement Deed to resolve the dispute between them. The Settlement Deed was prepared and executed by all parties to it on that day (with the exception of Eashwarpreet, who executed the document the following day).
2. Broadly speaking, the Settlement Deed may be broken down into a number of parts. Depending upon how events unfolded after execution, it was contemplated that some of these parts may or may not have become operational. Pursuant to clause 3, the Gill Parties were given the first opportunity to purchase the 50 percent interest in the Iceland Business owned by the Lakhwinder Parties (at an agreed price). If the Gill Parties were unwilling or unable to do so within a specified time, then pursuant to clause 4, the Lakhwinder Parties were given the opportunity to purchase the 50 percent interest in the Iceland Business owned by the Gill Parties (albeit at a lower purchase price). If the latter of these scenarios were enlivened, a protocol was agreed for the management of the Iceland Business in the ordinary course consistent with its usual business practices and to preserve its goodwill and current business relationships pending completion. Further, on this scenario the Lakhwinder Parties were required to use their best endeavours to procure the release of certain third party guarantees previously provided by Gill and to provide evidence to the Gill Parties of any releases procured.
3. An important factor underlying the Settlement Deed was that, on either of the 2 scenarios referred to above, Lakhwinder and Gill both remained directors of each of the Iceland Group Companies until completion (however it was to occur). Finally, if neither the Gill Parties nor the Lakhwinder Parties completed a purchase in accordance with the opportunities provided under the Settlement Deed, then it was agreed that each of the Iceland Group Companies were to be wound up by the court.
4. The terms of the Settlement Deed were as follows:[12]

In this Deed the following words have the following meanings: > > ... > > Claims in relation to a party, means a demand, claim, Liabilities, action or proceeding made or brought by or against the party, however arising and whether present, unascertained, immediate, future or contingent. > > Completion Date means the Gill Completion Date or the Lakhwinder Completion Date, as applicable. > > ... > > Gill Completion [means] the settlement of any purchase by the Gill Parties of the Lahkwinder (sic) Equity Interests in accordance with clause 3 of this Deed. > > Gill Completion Date means 4pm on 1 December 2022. > > Gill Default Date means the date of any Gill Default Event. > > Gill Default Event means the Gill Interests[14] fail to pay the Gill Purchase Price (including payment of the Gill Deposit)[15] to the Lakhwinder Parties[16] strictly in compliance with clause 3.1(b) herein. > > Gill's Equity Interests[17] means all shares and units owned by the Gill Parties in the Iceland Group and otherwise set out in Schedule 1[18] including any interest in the Vehicles (whether held by the Iceland Group entities or by Natural Produce, [Iceland Cold] and/or Gill Refrigerated Transport),[19] any intellectual property, websites, phone numbers, IT infrastructure, email servers, customer lists and contracts associated with the Iceland Group business. > > ... > > Gill Guarantees means all personal guarantees and indemnities given by the Gill (sic) on behalf of the Iceland Group (or any member of the Iceland Group) including all guarantees given in favour of the [Commonwealth Bank]. > > Gill Parties means each of Gill, Ekgill, [Iceland Cold] and Natural Produce (jointly and severally). > > Gill Purchase Price means $6,500,000. > > Gill Securities means all security interests granted by or on behalf of the Gill Parties, including but not limited to securities granted to Spycy Pty Ltd and [Accelerated Loans]. > > Gill Trust Account means: > > Kainelaw Australian Lawyers Law Practice trust account > > BSB: ...163 > > Account number: .....439 > > ... > > [Iceland Cold] Credit Card means the credit card with the [Commonwealth Bank] no. ...484. > > Iceland Group means each of [Iceland Australia], [Iceland Holdings], [Iceland Logistics], Gateway 81 (jointly and severally) in their own capacities and in their capacities as trustees of the Iceland Trusts.[20] > > Iceland Trusts means the Iceland Cold Storage Australia Trust, the Iceland Holdings Trust, the Iceland Logistics Trust and the Iceland Properties (sic) [Unit] Trust. > > ... > > Lakhwinder Caveat means registered caveat AU835663W lodged over the Gateway Property by LD [Family]. > > Lakhwinder Completion means the settlement of any purchase by the Lakhwinder Parties of the Gill Equity Interests[21] in accordance with clause 4 of this Deed. > > Lakhwinder Completion Date means the later of 90 days after the Gill Default Date or 30 days after the Palta Caveat is withdrawn, in accordance with clause 4.1. > > Lakhwinder Equity Interests means all shares and units owned by the Lakhwinder Parties (or any one of them) in the Iceland Group and otherwise set out in the attached Schedule 1. > > ... > > Lakhwinder Purchase Price means $5,500,000. > > Lakhwinder Guarantees means all personal guarantees and indemnities given by the Lakhwinder Parties (or any one of them) on behalf of the Iceland Group including all guarantees given in favour of [Commonwealth Bank]. > > ... > > Liabilities includes losses, liabilities and costs or expenses of any kind and however arising. > > ... > > Palta Caveat means registered caveat AS806145C over the Gateway Property in favour of the Caveator.[22] > > Palta Caveat Claim means the claim which is the subject of the Palta Caveat. > > Palta Claims means all Claims by or on behalf of [Palta] and/or Supriya Investments Pty Ltd (ACN 614 897 326) against [the] Iceland Group or any entity forming part of that group including all Claims in relation to the Gateway Property. > > ... > > Purchaser means the Gill Parties in relation to a sale pursuant to clause 3 or the Lakhwinder Parties in relation to a sale pursuant to clause 4, as applicable. > > Security Interest means an interest or power:

(a) reserved in or over an interest in any asset including any retention of title; or

(b) created or otherwise arising in or over any interest in any asset under a security agreement, bill of sale, mortgage, charge, lien, pledge, trust or power or otherwise,

by way of security for the payment of a debt, any other monetary obligation or the performance of any other obligation and includes any agreement to grant or create any of the above and includes a security interest within the meaning of section 12(1) of the [Personal Property Securities Act 2009 (Cth)] ...

...

Vehicles means the vehicles listed in Schedule 3.[23]

Vendor means the Lakhwinder Parties in relation to a sale pursuant to clause 3 or the Gill Parties in relation to a sale pursuant to clause 4, as applicable.

...

1. Gill Parties to acquire Lakhwinder Equity Interests

3.1 Sale of Lakhwinder Equity Interests to Gill Parties

(a) The Gill Parties (or their nominee/s) hereby agree to purchase the Lakhwinder Equity Interests from the Lakhwinder Parties, and the Lakhwinder Parties agree to sell the Lakhwinder Equity Interests to the Gill Parties (or their nominee/s), for the Gill Purchase Price, on the terms set out below.

(b) The Gill Purchase Price must be paid by the Gill Parties in cleared funds to [a trust account of the Lakhwinder Parties' solicitors] as follows:

(i) a deposit of $650,000 by 7 September 2022 (Gill Deposit); and

(ii) [the] balance (Gill Balance) by the Gill Completion Date.

(c) In consideration for, and subject to, the payment by the Gill Parties of the Gill Purchase Price in strict compliance with clause 3.1(b) herein, the Lakhwinder Parties agree to transfer to the Gill Parties (or their nominee/s) the Lakhwinder Equity Interests on the Gill Completion Date.

(d) At the Gill Completion (and subject to payment by the Gill Parties of the Gill Purchase Price in strict compliance with clause 3.1(b) herein):

(i) the Lakhwinder Parties shall resign all directorships, other office holdings and employment from the Iceland Group;

(ii) the Lakhwinder Parties must sign all documents reasonably necessary to give effect to the transfer of the Lakhwinder Equity Interests to the Gill Parties (or their nominee/s);

(iii) the Gill Parties must provide evidence of the release of all Lakhwinder Guarantees procured from third parties in accordance with clause 3.2(a) herein;

(iv) the Lakhwinder Parties must:

(A) deliver to the Gill Parties:

1. duly executed and completed transfers of the shares and units in favour of the Gill Parties together with relevant share and unit certificates (if applicable);

2. duly executed instruments irrevocably waiving in favour of the Gill Parties all rights of pre-emption which any person has in respect of any of the shares and units;

3. evidence of the revocation, with effect from Gill Completion, of all authorities relating to bank accounts of the Iceland Group [C]ompanies;

4. the common seal (if any) of the Iceland Group [C]ompanies; and

5. all records of the Iceland Group [C]ompanies;

(B) ensure that a duly convened board meeting of the Iceland Group [C]ompanies is held at which the directors resolve that the transfer of shares to the Gill Parties (subject to the payment of any taxes applicable on the transfer) be approved and registered; and

(v) the Lakhwinder Parties shall withdraw the Lakhwinder Caveat.

(e) Lakhwinder will remain as a director and/or employee of each of the entities in the Iceland Group until the Gill Completion.

(f) Pending the Gill Completion Date, the following management regime with respect to the Iceland Group will apply:

(i) the parties shall carry on the business of the Iceland Group in the ordinary course consistent with its usual business practices;

(ii) the parties shall preserve the goodwill of the business of the Iceland Group and the current business relationships of the business;

(iii) the parties shall notify each other in writing of any fact, circumstance or matter which materially affects the business of the Iceland Group;

(iv) both Gill and Lakhwinder will remain as director and/or employee of each of the entities in the Iceland Group;

(v) both Gill and Lakhwinder must approve all payments made from the [Iceland Australia] bank account on behalf of the Iceland Group, and neither Lakhwinder nor Gill is required to approve any payment for goods or services rendered to any person or entity other than a member of the Iceland Group;

(vi) Gill shall not make any payments from the [Iceland Cold] Credit Card, without Lakhwinder's written consent;

(vii) Gill and Lakhwinder shall take any necessary steps to lodge any outstanding [business activity] statements for the Iceland Group and pay any outstanding liability pursuant to those [business activity] statements;

(viii) subject to the payment of the Gill Deposit strictly in accordance with clause 3.1(b), Lakhwinder will consent to the payment by the Iceland Group of monthly payments of $29,700 (inclusive of [goods and services tax]) to Palta. Should Gill fail to pay the Gill Balance, the amount of the payments approved pursuant to this clause shall be forfeited from the Gill Deposit to the Lakhwinder Parties.

3.2 Indemnity for Lakhwinder Guarantees

(a) The Gill Parties must use their best endeavours prior to the Gill Completion Date to procure the release by any third party (including the [Commonwealth Bank]) of all Lakhwinder Guarantees, prior to the Gill Completion Date.

(b) To the extent that any third party refuses to release any Lakhwinder Guarantee, from the Gill Completion, the Gill Parties and the Iceland Group, each jointly and severally indemnify the Lakhwinder Parties in relation to any amount owing pursuant to any Lakhwinder Guarantee.

1. Lakhwinder Parties to acquire Gill Equity Interests if there is a Gill Default Event

4.1 Sale of Gill Equity Interests to Lakhwinder Parties > > If any Gill Default Event occurs:

(a) Gill's right to purchase the Lakhwinder Equity Interests will automatically and immediately terminate;

(b) the Lakhwinder Parties (and/or their nominee/s) shall immediately be entitled to purchase the Gill Equity Interests, and the Gill Parties agree to sell the Gill Equity Interests to the Lakhwinder Parties (or their nominee/s), for the Lakhwinder Purchase Price on the terms set out below;

(c) the Lakhwinder Parties will return the Gill Deposit, if paid (less any amount paid by the Iceland Group to Palta pursuant to clause 3.1(f)(v) of this Deed[)], to the Gill Parties within 2 Business Days from the Gill Default Date.

(d) the Lakhwinder Purchase Price must be paid by the Lakhwinder Parties in cleared funds to the Gill Trust Account as follows:

(i) a deposit of $550,000 within 14 days of the Gill Default Date;

(ii) the balance (Lakhwinder Balance) by the Lakhwinder Completion Date, subject to clauses 4.1(e) to (h).

(e) an amount of the Lakhwinder Balance determined in accordance with sub paragraphs (f) and (g) below (Palta Amount) will be set aside and held in a trust account to be opened by Madgwicks Lawyers for the purpose of:

(i) resolving the Palta Caveat Claim; or, alternatively,

(ii) providing replacement security for the Palta Caveat Claim to procure the withdrawal of the Palta Caveat;

(f) within 14 days of the Gill Default Date, the Lakhwinder Parties and the Gill Parties shall seek to engage in good faith negotiations with Palta to agree on the Palta Amount for the purposes of the removal of the Palta Caveat;

(g) if no such agreement with Palta is reached within 28 days of the Gill Default Date, the Lakhwinder Parties shall commence a proceeding against Palta, Gill, [Iceland Properties] and [Iceland Cold] for the determination of the Palta Amount and the removal of the Palta Caveat pursuant to s.90(3) of the Transfer of Land Act 1958 (Vic);

(h) upon withdrawal of the Palta Caveat, [Gill] shall:

(i) cause [Iceland Properties] to forthwith transfer the registered title of the Gateway Property to Gateway 81; and

(ii) upon such transfer being effected, receive the Lakhwinder Balance (less the Palta Amount if any) at the Lakhwinder Completion Date;

(i) in consideration for, and subject to, payment by the Lakhwinder Parties of the Lakhwinder Purchase Price in strict compliance with clause [4.1(d)][24] herein, the Gill Parties agree to transfer to the Lakhwinder Parties (or their nominee/s) the Gill Equity Interests on the Lakhwinder Completion Date;

(j) at the Lakhwinder Completion (and subject to payment by the Lakhwinder Parties of, the Lakhwinder Purchase Price in strict compliance with clause [4.1(d)][25] herein):

(i) the Gill Parties shall resign all directorships, other office holdings and employment from the Iceland Group;

(ii) the Gill Parties must sign all documents reasonably necessary to give effect to the transfer of the Gill Equity Interests to the Lakhwinder Parties (or their nominee/s);

(iii) the Lakhwinder Parties must provide evidence of the release of all Gill Guarantees procured from third parties in accordance with clause 4.5(a) herein; and

(iv) the transfer documents described in clause 4.2 of this Deed shall be immediately released from escrow and the Lakhwinder Parties shall be immediately authorised to lodge the transfer documents with [the Australian Securities and Investments Commission];

(v) the Gill Parties shall:

(A) deliver to the Lakhwinder Parties:

1. duly executed and completed transfers of the shares and units in favour of the Lakhwinder Parties together with relevant share and unit certificates (if applicable);

2. duly executed instruments irrevocably waiving in favour of the Lakhwinder Parties all rights of pre-emption which any person has in respect of any of the shares and units;

3. evidence of the revocation, with effect from Lakhwinder Completion, of all authorities relating to bank accounts of the Iceland Group [C]ompanies;

4. the common seal (if any) of the Iceland Group [C]ompanies;

5. all records of the Iceland Group [C]ompanies;

(B) ensure that a duly convened board meeting of the Iceland Group [C]ompanies is held at which the directors resolve that the transfer of shares to the Lakhwinder Parties (subject to the payment of any taxes applicable on the transfer) be approved and registered;

(vi) the Gill Parties shall cause the transfer of the title to the Gill Parties Equity Interests (sic), including the Vehicles to [Iceland Holdings]; and

(vii) the Gill Parties shall provide evidence of the release of security over the Vehicles in favour of Accelerated Loans and Spycy Pty Ltd;

(k) pending the Lakhwinder Completion Date, the following management regime with respect to the Iceland Group will apply:

(i) the parties shall carry on the business of the Iceland Group in the ordinary course consistent with its usual business practices;

(ii) the parties shall preserve the goodwill of the business of the Iceland Group and the current business relationships of the business;

(iii) the parties shall notify each other in writing of any fact, circumstance or matter which materially affects the business of the Iceland Group;

(iv) both Gill and Lakhwinder will remain as director and/or employee of each of the entities in the Iceland Group;

(v) both Gill and Lakhwinder must approve all payments on behalf of the Iceland Group and neither Lakhwinder nor Gill is required to approve any payment for goods or services rendered to any person or entity other than a member of the Iceland Group;

(vi) Gill shall not make any payments from the [Iceland Cold] Credit Card, without Lakhwinder's written consent; and

(vii) for the avoidance of any doubt, Lakhwinder shall not be required to consent to any payments to Palta.

4.2 Escrow documents

(a) The Gill Parties shall sign the following on execution of this Deed:

(i) transfer of their shares and units in the Iceland Group to the Lakhwinder Parties;

(ii) a resignation as director and secretary of the Iceland Group; and

(iii) power of attorney in favour of Lakhwinder limited to such acts as are reasonably necessary to give effect to the sale of the Gill Equity Interests to the Lakhwinder Parties in accordance with clause 4,

(Transfer Documents)

which will be held in escrow by Madgwicks pending payment of the Gill Deposit and the Gill Balance and Gill Completion;

(b) Upon a Gill Default Event (if any) the Transfer Documents shall be released in accordance with clause 4.1(j)(iv); and

(c) The Transfer Documents will otherwise be returned to the Gill Parties upon Gill Completion (if any).

4.3 Warranties by Gill Parties given upon the occurrence of a Gill Default Event

Each of the Gill Parties shall warrant to the Lakhwinder Parties from the Execution Date until Completion as follows:

(a) the Gill Parties will not cause the Iceland Group entities, or any one of them, to incur any debt or liability outside the ordinary course of business in respect of the Iceland Group, without the prior written consent of the Lakhwinder Parties (which consent may be refused or withheld in the sole and absolute discretion of the Lakhwinder Parties);

(b) the Gill Parties will trade the Iceland Group entities in the ordinary course of business from the Execution Date until the Lakhwinder Completion Date and will not take any steps other than in the best interests of the Iceland Group entities;

(c) any insurances held by the Iceland Group prior to the Execution Date will be maintained until the Lakhwinder Completion Date; and

(d) [Iceland Properties] holds the Gateway Property as bare trustee in favour of the Iceland Properties (sic) [Unit] Trust.

4.4 Indemnity for Palta Claims and old company liabilities

The Gill Parties hereby agree that if, (sic) upon a Gill Default Event, and from Lakhwinder Completion, the Gill Parties indemnify the Lakhwinder Parties and each of the entities in the Iceland Group jointly and severally from all Palta Claims and from any liability incurred by or on behalf of the Iceland Group prior to 30 June 2019.

4.5 Indemnity for Gill Guarantees

(a) The Lakhwinder Parties must use their best endeavours prior to the Lakhwinder Completion Date to procure the release by any third party (including the [Commonwealth Bank]) of all Gill Guarantees, prior to the Lakhwinder Completion Date.

(b) To the extent that any third party refuses to release[26] any Gill Guarantee, from the Lakhwinder Completion, the Lakhwinder Parties and the Iceland Group, each indemnify the Gill Parties in relation to any amount owing pursuant to any Gill Guarantee.

The Parties agree that if completion does not occur on the later of the Gill Completion Date or the Lakhwinder Completion Date:

(a) the following entities shall be wound up by the Court:

(i) [Iceland Australia];

(ii) [Iceland Logistics];

(iii) [Iceland Holdings]; and

(iv) Gateway 81;

(b) the parties agree to do all things necessary to give affect (sic) to paragraph (a) above, including voting in favour of a resolution to wind up the companies pursuant to s.491 of the Corporations Act 2001 (Cth).

(a) Upon execution of this Deed, the Lakhwinder Parties and the Gill Parties release and forever discharge each other (and any of their respective Related Entities[27]) from any Claim (other than a Claim brought under, or in relation to an obligation owing pursuant to, this Deed) in relation to one or more of the following: > > > (i) the Iceland Group; > > > > (ii) the subject matter of [this proceeding]; > > ...[28]

(b) Upon the:

...

(ii) Lakhwinder Completion (if any) the Iceland Group entities release and forever discharge the Gill Entities[29] in relation to any Claim arising directly or indirectly in relation to the matters described in clause 6(a);

...

The Lakhwinder Parties (upon a sale to the Gill Parties pursuant to clause 3) or alternatively the Gill Parties (upon a sale to the Lakhwinder Parties pursuant to clause 4), as Vendor make the warranties to the Purchaser set out in Schedule 2.

8.1 Restraint of Trade > > In this clause 8: > > Business means the business of the Iceland Group as at the Completion Date. > > [E]ngage in means to carry on, participate in, provide finance or services or otherwise be directly or indirectly involved as a shareholder, unitholder, director, consultant, adviser, contractor, principal, agent, manager, employee, beneficiary, partner, associate, trustee or financier. > > Prohibited Person means:

(ii) the Vendor;

(iii) any Related Body Corporate[30] of the Vendor;

(iv) any persons controlled by any of the persons referred to in the preceding sub-paragraphs.

8.2 Covenants

The Vendor undertakes to the Purchaser that the Prohibited Persons will not:

(a) engage in any business or activity under the name or guise "Iceland" or any similar name[;]

(b) solicit, canvass, approach or accept any approach from any person who was at any time during the twelve month period ending on the Completion Date a customer of the Business with a view to obtaining the custom of that person in a business which is the same or similar to the Business and is in competition with the Business;

(c) interfere with the relationship between the Business and its customers, licensors, employees or suppliers; or

(d) induce or assist in the inducement of any employee of the Purchaser or of a related body corporate of the Purchaser, to leave their employment.

...

(a) constitutes the entire Deed between the parties as to its subject matter; and

(b) in relation to that subject matter, supersedes any prior understanding or deed between the parties and any prior condition, warranty, indemnity, agreement or representation imposed, given or made by a party.

...

14.11 Mutual Assurances

The parties mutually covenant and agree that they will each do all acts and things and execute all deeds and documents and other writings as are reasonably required for the purposes of or to give effect to this Deed.

...

14.13 Time

Time is of the essence to this Deed.

...

Schedule 1[31]

...

Schedule 2 - Warranties

(a) The Vendor is the registered and beneficial owner of the shares and units and has complete and unrestricted power and right to sell and transfer the shares and units to the Purchaser. > > (b) There are no Security Interests over or affecting the shares and units. > > (c) There is no shareholder agreement, voting trust, proxy or other agreement or understanding relating to the voting of the shares. > > (d) There are no agreements, arrangements or understandings in place under which the Iceland Group [C]ompanies are obliged at any time to: > > > (i) issue, allot, create, sell, transfer or otherwise dispose of any shares or other securities in those companies; > > > > (ii) enter into any agreement in respect of the rights to vote which are conferred in respect of any shares or other securities in those companies; or > > > > (iii) grant any option or right of first refusal or offer in respect of any shares or other securities in those companies. > > (e) There are no restrictions on the sale or transfer of the shares to the Purchaser. > > (f) The transfer of the shares by the Vendor to the Purchaser will not result in any supplier or customer of the Iceland Group [C]ompanies being entitled to cease its business with those companies or otherwise materially reduce it.

(a) The Vendor has full authority and all necessary consents to enter into and perform its obligations under this agreement and to carry out all transactions contemplated by this agreement. > > (b) The entry into and performance of this agreement by the Vendor does not: > > > (i) result in a breach of any provision of the constitution of the Vendor; > > > > (ii) constitute a breach of any obligation (including but not limited to any statutory, contractual or fiduciary obligation), or default under any agreement or undertaking, by which the Vendor is bound; or > > > > (iii) result in a breach of any order, judgment or decree of any court or governmental agency to which the Vendor is a party or by which the Vendor is bound and which is material in the context of the transactions contemplated by this agreement. > > ...

3. Because some of the issues raised concerned the ongoing conduct of 1 or both of the Lakhwinder Parties and the Gill Parties after 25 August 2022, it is desirable to provide an overview of the steps taken before 1 March 2023.
4. Shortly after the execution of the Settlement Deed, the Lakhwinder Parties again approached the Commonwealth Bank, informing it that they may need to pursue finance in December 2022 depending on how things unfolded. In late August 2022, the Lakhwinder Parties were told a new application for finance would need to be made, which was confirmed by email on 1 September 2022. That email was sent to Lakhwinder and asked how he was going with "the litigation". It referred to a list of 11 separate pieces of information that Lakhwinder needed to provide which had previously been sent in mid April 2022. The email concluded by inviting Lakhwinder to "reach out to me at any time" and with thanks. The Lakhwinder Parties provided business plans, financial statements and cash flow forecasts as a result in late October 2022.
5. On 21 November 2022, Lakhwinder and Maturu attended a further meeting with the Commonwealth Bank. A week later, as part of a "flurry of activity via emails",[32] additional financial information was provided. The Lakhwinder Parties were informed that if it became apparent that they were the purchasing parties, the Commonwealth Bank would fast-track the application for finance.
6. The Gill Parties failed to pay the Gill Balance by the Gill Completion Date in cleared funds or otherwise.[33] Accordingly, a Gill Default Event occurred on 1 December 2022 (being the Gill Default Date). As a result of the Gill Default Event, the Lakhwinder Parties became immediately entitled to purchase Gill's Equity Interests, and the Gill Parties agreed to sell Gill's Equity Interests to the Lakhwinder Parties for the Lakhwinder Purchase Price on the terms set out in clause 4 of the Settlement Deed.[34] A further consequence of these events was that the Lakhwinder Completion Date was fixed as 1 March 2023.[35]
7. Following requests, in the first week of December 2022, the Lakhwinder Parties provided the Commonwealth Bank with financial statements for Iceland Australia. On 8 December 2022, Lakhwinder was told by the Commonwealth Bank that he could not swap out Gill's personal guarantee with a guarantee from Maturu and that Gill would not be removed as a guarantor until the refinance had been approved and put in place. On 9 December 2022, the Lakhwinder Parties provided financial information for LD Family, as well as personal financial information. On 12 December 2022, quotes were provided for a valuation of the Gateway Property, which were accepted and a valuer was retained. The valuation was provided on 17 January 2023. The following day, the Lakhwinder Parties provided updated financial statements for December 2022 to the Commonwealth Bank.
8. Returning to the previous month, on 8 December 2022 (being within 14 days of the Gill Default Date), the Lakhwinder Parties paid the deposit of $550,000 in cleared funds.[36] This was credited to the Gill Trust Account (being the trust account of the Gill Parties' former solicitors, Kainelaw).
9. By this time, it had become apparent that the income to date for the 2023 financial year was down 25 percent against the forecast because invoicing was 7 weeks behind. In light of this, the Lakhwinder Parties gave assurances to the Commonwealth Bank that, once they were in control of the Iceland Business, invoicing procedures would be rectified and forecasted sales were expected to be achieved.
10. Sometime between 8 and mid December 2022, Lakhwinder and Maturu instructed the Iceland Group's general manager, Grant Peters ("Peters"), to search the books and records of the Iceland Group to locate personal guarantees provided to suppliers by Gill. Peters also had a discussion with Gill around this time. Gill instructed Peters not to communicate anything to the customers, suppliers or staff about any change to the status quo of the Iceland Business. As a result of this discussion, Peters decided not to assist in identifying suppliers and customers at this time. Peters gave evidence that he did not ask about matters relating to the dispute between the warring parties in this proceeding. His evidence, which I accept, was that he stayed focused on the Iceland Business as it was his job to manage it rather than get involved in disputes between shareholders.
11. Pausing here, some observations about the managerial relationships between Peters, Gill, Lakhwinder and the former accounts manager of the Iceland Group, Amanjeet Kaur ("Aman"), are instructive. Both Peters and Aman reported directly to Gill. This arrangement continued up until 14 February 2023. Further, Lakhwinder gave uncontested evidence that Aman would only take instructions directly from Gill and not from Lakhwinder.
12. Returning to the relevant events, from the week commencing 12 December 2022, Lakhwinder commenced discussions with several suppliers to ascertain how much was owed to them. Having not been involved in the day-to-day management of the Iceland Business,[37] he was unable to determine precisely who all the major suppliers were. He could also not ascertain whether any of them held personal guarantees provided by Gill because Aman was uncooperative. In addition, Peters explained to Lakhwinder that Gill had instructed him not to communicate anything to customers, suppliers or staff about any change to the status quo of the Iceland Business.[38]
13. Despite these difficulties, Lakhwinder continued to make enquiries of suppliers up until February 2023. Of the 13 suppliers Lakhwinder spoke to either in person or on the telephone, only 1 supplier, Energy Lease Pty Ltd ("Energy Ease"),[39] stated it held a guarantee from Gill.[40]
14. In mid December 2022 and with the assistance of a finance broker, the Lakhwinder Parties approached the National Australia Bank for the purpose of obtaining finance.[41] In response, a number of queries were raised, including about the dispute the subject of this proceeding. On 21 December 2022, the Lakhwinder Parties authorised a valuation of the Gateway Property to be conducted for the National Australia Bank in support of their application for finance.
15. Also on 21 December 2022, the Gill Parties' former solicitors Aitken Partners obtained an order from the duty judge of this court requiring the Gill Parties to do all things necessary to instruct their lawyer to pay $806,758.51 from the Gill Trust Account into court within 3 business days of receipt.
16. On 9 January 2023, solicitors recently appointed by Gill wrote to the Lakhwinder Parties' solicitors informing them that they now acted for him.[42] The letter noted that $5 million was due to be paid to Gill on 1 March 2023, with details of the proposed bank account for the moneys to be deposited (which was not the Gill Trust Account). There was no suggestion in this letter that there was any impediment to settlement occurring.
17. In response to this letter, the Lakhwinder Parties' solicitors sent a number of emails to Gill's newly appointed solicitors between 10 January 2023 and 1 February 2023. Except for a brief response on 18 January 2023 regarding the filing of a notice of appearance in this proceeding, no substantive response was provided to these emails.
18. On 10 January 2023, the National Australia Bank requested clarification in relation to certain financial information provided by the Lakhwinder Parties.
19. On 12 January 2023, the Commonwealth Bank sent emails to the finance broker acting for the Lakhwinder Parties and to Lakhwinder stating it did not have good news in relation to the request for finance. The Commonwealth Bank had formed the view that the debt level was too high based on actuals for the 2022 financial year and projections for the 2023 financial year. It was suggested the Lakhwinder Parties needed to approach another lender if they had not already, although it was noted a possible solution might be found at a "much smaller debt load".
20. On 18 January 2023, a confidential indicative terms sheet was sent by a private lender to the "Director(s) Gateway 81 ...". This terms sheet proposed the possible refinance and pay-out requirements of the Gateway Property in the amount of $19.25 million. A payment of $10,000 was required if Gateway 81 intended to proceed to formal credit approval. Amongst others, it was proposed corporate guarantees would be provided by Hanzcold. This opportunity was not pursued, in part due to the Kainelaw Caveat.
21. On 25 January 2023, the Lakhwinder Parties' accountant and tax agents wrote to the Commonwealth Bank stating that in their opinion the group of companies associated with the Lakhwinder Parties were solvent, profitable and financially independent of each other. Further, it was stated that Lakhwinder did not require any additional financial support to fund his endeavours and was able to do so personally, without further support from the Iceland Group.
22. On 30 January 2023, the Lakhwinder Parties sent to the National Australia Bank a statement of financial position, resumés of relevant employees and aged receivables for Iceland Australia. Further information was provided over the following days up until around mid February 2023.
23. In response to further requests, on 10 and 13 February 2023, the Lakhwinder Parties provided further financial and operational information for the Iceland Group Companies to the Commonwealth Bank.
24. In early to mid February 2023, Peters was again instructed to search the books and records of the Iceland Group to, amongst other things, locate personal guarantees provided by Gill. Peters had regular meetings with both Lakhwinder and Maturu where his progress in this regard was discussed.
25. On 14 February 2023, the Lakhwinder Parties paid the Lakhwinder Balance of $4.95 million in cleared funds to the Gill Trust Account, thus being payment by the Lakhwinder Completion Date. Accordingly, for the purposes of the Settlement Deed, the Lakhwinder Parties had paid the Lakhwinder Purchase Price in strict compliance with clause 4.1(d).[43] Upon receipt of the Lakhwinder Balance, Kainelaw withdrew the Kainelaw Caveat.[44] The Commonwealth Bank was informed of these developments, including that the Lakhwinder Parties were in the process of updating "[Australian Securities and Investments Commission] records to reflect the change of directors and shareholders". It was further stated that they were in the process of seeking the transfer of legal ownership of the Gateway Property, suggesting it would take a week or so and might require a court order. It was tentatively proposed that any letter of offer for finance could be made conditional on the transfer occurring.
26. The Lakhwinder Purchase Price is presently held on trust in the Gill Trust Account, pending agreement between the parties or further court order. The current balance is $4,906,437.[45]
27. Consistent with their communications with the Commonwealth Bank, the Lakhwinder Parties purported to effect a transfer of the shares and units held by Ekgill in Iceland Holdings and Gateway 81, and a transfer of the units held by Iceland Cold in the Iceland Property Unit Trust. This was done by utilising the documents held in escrow under clause 4.2 of the Settlement Deed. It was acknowledged at trial that the Lakhwinder Parties had no right to do so.[46]
28. Also on 14 February 2023, the plaintiffs' solicitors wrote to Gill's then solicitors asking them to provide details of the personal guarantees that Gill had signed. Gill's solicitors did not respond to this correspondence before 1 March 2023. Also from this time, Gill was not given the same access to the Gateway Property or the Iceland Business that he had previously enjoyed.
29. On 15 February 2023, the Commonwealth Bank emailed the Lakhwinder Parties' solicitors expressing its gratitude for updated information that had recently been sent to it. It was stated that further information was needed "via the client and accountant" and, notwithstanding what had been said on 12 January 2023,[47] that then things could certainly be moved along.
30. From 15 February 2023 to 1 March 2023, Lakhwinder, Maturu and Peters met for approximately 1 hour each day to discuss "burning" issues with the Iceland Business, including any guarantees given by Gill. During 1 of those meetings, Peters stated that he had been looking through the Iceland Group's computer system and had not located any personal guarantees, including in the shared folder in which all supplier and customer contractual documents were stored. Maturu also looked through the shared folder without sighting any guarantees.
31. On 16 February 2023, the National Australia Bank noted by email that the request by the Lakhwinder Parties for finance had been submitted. Seven days later, the application was sent to its credit department.
32. Also on 16 February 2023, Lakhwinder posted on Facebook a statement to the effect that Hanzcold had begun its journey as "Iceland melted away ... after a prolonged and unwarranted legal battle with a lot of turbulence". Gill read this post and was concerned about the effect it would have on the Iceland Business.
33. On 21 February 2023, the Commonwealth Bank informed the Lakhwinder Parties that it needed the financials of Lakhwinder and Maturu, as well as an update on the current status of the settlement. The email referred to the fact that an application had been lodged with the court by Lakhwinder and Maturu concerning settlement. It was stated that, amongst other things, details were required of the next steps to take over 100 percent ownership of the Iceland Business and confirmation of "post settlement ownership". The Commonwealth Bank stated its legal and credit risk teams would again be engaged once this information had been received.
34. On 24 February 2023, Gill wrote to the Commonwealth Bank stating, amongst other things, that he would not hand over his rights in relation to the Gateway Property until he was released from all his guarantees with the Commonwealth Bank and that the moneys payable were paid into his own personal account. He also stated that his wife had been neglected in the Settlement Deed and this would be followed "up to the highest court". Gill expressed a fear that the value of the Iceland Business was deteriorating quickly and that there would be hardly any value left. He advised the Commonwealth Bank to recall its loan under the Bank Facility and relieve him of his responsibility and guarantees.
35. On the same day, the Commonwealth Bank's solicitors responded to a letter sent by the Lakhwinder Parties' solicitors. The Commonwealth Bank confirmed that it required the Gateway Property to be transferred "presumably to Gateway 81" before any restructure of the loan, that the personal guarantee by Gill would remain in place until the existing loan was restructured "at which time it will be released", and that any offer of finance to Gateway 81 would not require a personal guarantee or security from Gill. The response also recorded that an indicative offer had been made to Gateway 81 in October 2020 but, despite a number of requests, the material sought had not been provided. It was specifically stated that the Commonwealth Bank would not consent to a transfer of the Gateway Property to Gateway 81 unless and until all facilities secured against the Gateway Property were refinanced or repaid (or both) in full. It was repeated that once all facilities provided to Iceland Properties and Iceland Cold had been repaid in full, the Commonwealth Bank would release Gill from his guarantee.
36. On about 25 February 2023, Seghal lodged a caveat over the Gateway Property with the intention of securing a debt of $250,000 claimed to be owing by Iceland Cold in favour of Capital & Co ("the Seghal Caveat"). Issues concerning the Seghal Caveat have now been resolved.[48] The proceeding against him has been discontinued.
37. On 27 February 2023, applications made by the Lakhwinder Parties were before the court. During the hearing, criticism was made by the Gill Parties about the transfers that the Lakhwinder Parties had purported to effect on 14 February 2023.[49] It was submitted that these steps had been taken in breach of the Settlement Deed. Later that day, these transfers were "undone". Orders made that day recorded that the Gill Parties:

(1) Agreed that, subject to the plaintiffs not being in unremedied breach of an essential term of the Settlement Deed, the plaintiffs could waive any non-compliance by the Gill Parties of the obligations in clauses 4.1(h)(i) and 4.1(j)(vi) and (vii) at Lakhwinder Completion, in which event the plaintiffs reserved the right to claim on the Lakhwinder Purchase Price such moneys as necessary to remedy such non-compliance.
>
> (2) Gave undertakings to the court to take certain steps to give effect to the transfer of the Gateway Property from Iceland Properties to Gateway 81, including to invite Gateway 81 and the Commonwealth Bank to the relevant Property Exchange Australia platform (commonly referred to as "PEXA") and to request the Commonwealth Bank to prepare a discharge of its mortgage over the Gateway Property; to request the removal of a security interest registered over the Vehicles; to "use their best reasonable endeavours" to obtain the release of funds held in the Gill Trust Account for the payment of claims and to procure the release of security interests registered over the Vehicles; and to transfer the Vehicles from Natural Produce to Iceland Holdings.

38. The orders made on 27 February 2023 also recorded that the plaintiffs gave undertakings to reinstate Gill as director of the each of the Iceland Group Companies and to amend the Australian Securities and Investments Commission company register to reflect that Ekgill was a shareholder of the Iceland Group Companies until such time as Lakhwinder Completion.
39. On the same day, in a letter addressed to Lakhwinder and Maturu in respect of refinancing, the National Australia Bank acknowledged receipt of the "required information" to process the application and confirmed that the approval process was underway subject to some "minimum" conditions. These conditions included that the Gateway Property was required to be transferred prior to the loan being restructured and prior to any drawdown. It was noted that any offer of finance would not require a personal guarantee from Gill, but that other conditions would need to be satisfied. The next day, discrepancies in some of the information provided were raised by the National Australia Bank and clarification was sought.[50]
40. Also on 27 February 2023, at the request of Gill, Peters telephoned Aman and asked her for assistance in locating any potential personal guarantees provided by Gill. Aman was the person in charge of keeping all the supplier agreements and guarantees. Peters was unable to speak with Aman. Soon after, he received an email from Aman's solicitors alleging her employment had been terminated by the Iceland Group and directing him not to contact her directly. Peters acted accordingly.
41. Having received no assistance from Aman, Peters furthered his search for guarantees by reviewing the accounts system of the Iceland Business without finding any evidence that he considered amounted to documented guarantees. He also conducted a search of a file system maintained by Aman, in which he found a folder of supplier and client contracts. Again, relevantly, his searches were unsuccessful. Finally, Peters reviewed hard copy records of contracts stored in the finance office at the premises of the Iceland Group. After personally reviewing approximately 40 contracts, Peters was unable to locate any guarantees signed by Gill.
42. On 28 February 2023, Gill's solicitors sent an invitation on the PEXA platform for the transfer of the Gateway Property to both the plaintiffs' solicitors and the Commonwealth Bank. On the same day, the Commonwealth Bank sent an email to Gill confirming that the relationship manager responsible for the Iceland Group had not been provided with "any request for releases/refinance" and all guarantees remained in place, including that of Gill's wife, Eashwarpreet. In addition, the Commonwealth Bank sought an update on the settlement so that this information could be provided internally to "Credit Risk and Legal" to progress the application.
43. Concurrently, the National Australia Bank enquired in relation to the Palta Caveat and the treatment of rental expenses paid by Gill to Palta. It sought written confirmation about related-party transactions and "underhand" expenses for Gill's benefit. A response to these queries was promptly provided.
44. Also on this day, Peters sent an email to each supplier of the Iceland Business. Amongst other things, the email advised these suppliers that a "change of business ownership [had] come into effect". Peters' email stated that "Iceland and related entities [would] cease trade as the new organisation, [Hanzcold] commences operations of the site". He invited the suppliers to amend their records accordingly, starting on 1 March 2023.[51] He requested from each supplier a copy of the Iceland Group's creditor application and any personal guarantees. He also asked each supplier whether they were agreeable to releasing Gill from any personal guarantees in exchange for a personal guarantee from Maturu.
45. At the time of trial, none of the suppliers had responded to suggest that they held any personal guarantees in relation to the Iceland Business.[52] That said, some of the guarantees previously signed by Gill had not been located by the Lakhwinder Parties by 1 March 2023.[53]
46. Also around this time, Peters met with Gill and Eashwarpreet and they attempted to locate guarantees signed by Gill. Peters directed Gill to the 3 search points he had previously investigated.[54] They conducted the searches together. Peters gathered approximately 40 to 50 supplier agreements from various sources, printed and stapled them, before handing them to Gill in a folder.
47. Gill's belief was that there were around 50 to 60 suppliers of the Iceland Business and that he gave a guarantee to most of them. He gave evidence that it was rare that a supplier did not require a personal guarantee. Gill also gave evidence of his concern that suppliers might contact him in the future and take action against him in relation to debts of the Iceland Business pursuant to guarantees he had previously given.

1. On 1 March 2023, the plaintiffs' solicitors wrote to the Gill Parties' then solicitors[55] informing them that Lakhwinder Completion under the Settlement Deed had occurred. They stated that the Lakhwinder Parties elected to complete the purchase of Gill's Equity Interests despite Gill's failure to comply with his obligations to cause the transfer of the Gateway Property to Gateway 81 and to provide clear title to the Vehicles. The Lakhwinder Parties' rights to compel the discharge of outstanding obligations were expressly reserved.
2. Also on 1 March 2023, Gill signed transfer forms to transfer the title to some of the Vehicles to Iceland Holdings.
3. On 2 March 2023, Lakhwinder instructed his solicitors to remove Gill as a director and shareholder of the Iceland Group Companies on the Australian Securities and Investments Commission register. This was duly implemented.
4. On around 3 March 2023, the Gill Parties provided the Lakhwinder Parties with executed transfers for each of the Vehicles to Iceland Holdings. Gill also attended the Gateway Property, supervised by Maturu. With the assistance of Peters,[56] Gill located documents recording personal guarantees granted by him in favour of suppliers of the Iceland Group, being Bonney Energy Victoria Pty Ltd ("Bonney Energy"), Cold Xpress Refrigerated Transport Vic Pty Ltd ("Cold Xpress"), Energy Ease, Krueger Transport Equipment Pty Ltd ("Krueger Transport"), Fork Force Australia Pty Ltd ("Fork Force") and Fuji Xerox Australia Pty Ltd ("Fuji Xerox"). Each of those documents was stored on the local drive of the computer formerly used by Aman and was not saved on the Iceland Group shared file drive.[57] Before this time, Lakhwinder, Peters and Maturu were not aware that supplier and customer contracts had been saved on this local drive and not on the shared drive.
5. With respect to Bonney Energy, the Iceland Group's account had been closed and all equipment had been returned. There were no outstanding Bonney Energy invoices.
6. In relation to Cold Xpress, there was no outstanding debt and there had been no business between Cold Xpress and Iceland Australia for some time.
7. Lakhwinder held discussions with Energy Ease, a company that financed the installation of solar panels at the Gateway Property, when the issue of a guarantee by Gill in its favour was brought to his attention on 5 March 2023. He was informed by the person who installed the solar panels that if Gill ceased to be a director then there would be no further liability for him and alternate arrangements could be put in place.[58]
8. As at mid March 2023, approximately $65,000 was owed to Krueger Transport in relation to the purchase of a trailer.[59] At the time of the trial, Iceland Australia was repaying this debt in instalments of $2,233 per month. Lakhwinder spoke with a representative of Krueger Transport on 23 January 2023 and proposed that a new contract be entered into to replace the existing contract which incorporated a guarantee from Gill. Lakhwinder was told that Krueger Transport agreed to this course. On 1 March 2023, Lakhwinder was told a new proposal would be sent in line with the discussions held in January 2023. At the time of trial, this proposal had not been received.
9. In respect of Fork Force, there was no ongoing business or any outstanding invoices.[60]
10. Lakhwinder has been in negotiations with Fuji Xerox since 24 February 2023. Those negotiations culminated in a discussion on 7 March 2023 during which the managed services consultant informed Lakhwinder that Fuji Xerox would enter into a new contract for the Iceland Business that would exclude Gill's personal guarantee. The new contract was forwarded by Fuji Xerox to Lakhwinder on 15 March 2023. Lakhwinder gave evidence that Hanzcold would pay the outstanding amount of $23,556.40, being Fuji Xerox's condition of agreeing to the new arrangement, if the Lakhwinder Parties were successful in this proceeding.[61]
11. The evidence referred to in the preceding paragraphs concerning guarantees given by Gill reflects the matters raised at the time the trial commenced on 30 March 2023. On 3 April 2023, being the day that Gill was to give evidence, he served a further affidavit raising matters concerning 2 additional suppliers.[62]
12. In July 2020, a solar power purchase agreement was entered into between Iceland Australia and Green Squares Energy Pty Ltd. This agreement was signed by both Gill and Lakhwinder, both as directors and as guarantors. There was no evidence to suggest this agreement was anything other than ongoing. No release had been provided in relation to it. Further, in April 2022, another agreement was entered into by Iceland Australia. However, this agreement need not be referred to any further. Despite the agreement referring to a separate guarantee and indemnity, there was no evidence to suggest any such separate document was ever signed by Gill or anybody else.
13. Returning now to the events after 1 March 2023, on 5 March 2023, the Gill Parties' then solicitors wrote to the plaintiffs' solicitors asserting that completion had not occurred under the Settlement Deed.
14. Between 6 and 9 March 2023, LD Family provided $60,000 to Iceland Logistics and $11,000 to Iceland Australia to assist with working capital.[63] In rejecting a suggestion put to him in cross-examination that from December 2022 Gill was intent upon the Iceland Group being wound up, Gill gave uncontested evidence that just before Christmas 2022 he gave the Iceland Group's transport planner access to his personal credit card for a few days to enable fuel to be purchased for some of the Vehicles. He said he did this to prevent what he perceived to be a serious risk of the Iceland Business being placed in jeopardy.
15. On 15 March 2023, the Commonwealth Bank repeated its position by email that it would not consent to a release of the personal guarantee given by Gill until the Bank Facility was repaid in full. This email was sent in response to a further request made the previous day by the Lakhwinder Parties.
16. On 20 March 2023, the Commonwealth Bank forwarded a letter to the directors of Iceland Cold and Iceland Properties ("the Forbearance Letter"). After setting out its account of the history of the matter, concern was expressed about the failure of the parties to implement and complete the Settlement Deed or to arrange for refinance of the Bank Facility. It was recorded that the Commonwealth Bank had little appetite to continue to forbear from taking action under the Bank Facility, but was willing to do so for a further 30 days subject to certain conditions (including the Iceland Group paying $50,000 per week towards the repayment of "missed scheduled repayments" and there being no further breaches or events of default). Further, by 24 March 2023, Iceland Australia was required to execute a guarantee in favour of the Commonwealth Bank in respect of Iceland Cold's and Iceland Properties' obligations under the Bank Facility and provide a general security interest over its assets and undertakings. This was demanded in order to "regularise" the Commonwealth Bank's security position on the understanding that there had been a transfer of business and assets from Iceland Cold to Iceland Australia.[64] The letter concluded:

If the above conditions are satisfied, the Bank will consider its position further in 30 days ... It is the Bank's expectation that the [Iceland] Group will, at that point in time (or shortly thereafter), be in a position to:

(a) confirm whether the [S]ettlement [D]eed is to be implemented or not; and

(b) if it is to be implemented, arrange for the immediate refinance of the [Bank Facility] (whether via loan facilities sought from the Bank or otherwise).

If it is apparent that there is no clear pathway forward acceptable to the Bank that will enable refinance of the [Bank Facility], the Bank reserves all its rights to take enforcement action under its securities.

1. On 23 March 2023, the Commonwealth Bank sent a letter to the Gill Parties' solicitors referring to various pieces of correspondence it had recently received. Confirmation was again given that the Commonwealth Bank would not consent to a transfer of assets or property the subject of its securities, including the Gateway Property, until all loan facilities provided to Iceland Cold and Iceland Properties were repaid or refinanced in full. After referring to other matters raised in the correspondence, the Commonwealth Bank stated it was not a party to this proceeding and that it was for the parties to approach the court if any relief was required in relation to recent events. Finally, it was noted that all rights in connection with the Bank Facility were reserved.
2. As at the close of evidence on 3 April 2023, neither the Commonwealth Bank nor the National Australia Bank had accepted or rejected the Lakhwinder Parties' applications for finance. On this day, the Lakhwinder Parties received a further non-binding indicative offer from another financier for the sum of $13.975 million using only the Gateway Property as security.
3. During the course of 3 April 2023, the Commonwealth Bank sent 2 further letters to the plaintiffs' solicitors. The first of those letters referred to earlier correspondence, including the Forbearance Letter. It was noted that the Lakhwinder Parties had indicated they were willing to pay $12,000 per week towards the reduction of the missed scheduled repayments, which was materially less than the $50,000 demanded.[65] All rights were reserved in this regard and it was noted that, if the amount of $12,000 were to be accepted, this would not to amount to a waiver. The letter then referred to evidence filed in this proceeding and suggested various consequences if in fact the evidence was correct. A complaint was made about the apparent transfer of the Iceland Business away from operating entities in further breach of the Commonwealth Bank's securities. It was stated that the issues raised continued to impact the Commonwealth Bank's appetite to restructure the Bank Facility and to provide funding to the Iceland Group in future. However, it was noted that it was possible the Commonwealth Bank had overlooked certain matters or misapprehended recent transactions or the manner in which the Iceland Business was being conducted. A further explanation was welcomed.
4. The second letter referred to a letter that had been sent the previous day by the plaintiffs' solicitors. The Commonwealth Bank noted that this letter had asked whether, if an incoming mortgagee agreed to provide sufficient funds to pay out the Bank Facility, in substance it would attend to allowing the transfer of the Gateway Property. The Commonwealth Bank stated it would allow this to occur, but noted that to date there had been no sufficient refinancing.
5. In relation to the ability of the Lakhwinder Parties to continue to finance the Iceland Business, Lakhwinder gave evidence that Iceland Australia was continuing to operate under the pre-existing arrangements and that he considered Iceland Australia was in a position to continue to service the Bank Facility until it had been refinanced. He also gave evidence of his familiarity with different forms of finance available in the market and his success in raising finance in the past.
6. In relation to the Lakhwinder Parties' prospects of obtaining finance, evidence was adduced on behalf of the Gill Parties from Tracey Rothwell ("Rothwell"), the principal of the solicitors now acting for them. Although this evidence was not independent expert evidence, it was established that Rothwell had a significant level of experience as a solicitor in relation to commercial finance. Rothwell's evidence was uncontroversial and she was not the subject of any cross-examination. In essence, Rothwell's evidence was concerned with commenting on the status of financial negotiations, including how it is "extremely easy" to obtain indicative terms sheets for finance and the non-binding nature of those terms sheets. It was also suggested by Rothwell that the use of a broker would provide access to many lenders.
7. As it was common ground that at the time of the trial there was no binding arrangement between any of the Lakhwinder Parties and any financier to refinance the Bank Facility, presently, it is unnecessary to elaborate further on the evidence given by Rothwell.

C.1 Was it an express[67] or implied term of the Settlement Deed that Lakhwinder Completion could not be validly effected unless and until the Lakhwinder Parties ensured that the Bank Facility was satisfied or refinanced or procured from the Commonwealth Bank its consent to the transfer of the Gateway Property from Iceland Properties to Gateway 81, and its consent to the transfer of the Vehicles to Iceland Holdings?

Answer: no.

Alternatively, was it an implied term of the Settlement Deed that in the event that the Lakhwinder Parties achieved Lakhwinder Completion under clause 4.1 of the Settlement Deed without the Bank Facility having been satisfied, then upon completion the Lakhwinder Parties and the Iceland Group, as between them and Iceland Cold and Iceland Properties, would become primarily liable for the obligations of Iceland Cold and Iceland Properties under the Bank Facility, until such time as the Bank Facility was discharged?

Answer: unnecessary to decide.

1. The principles applicable to the construction questions that arose in this proceeding were not in controversy. The Settlement Deed should be construed in accordance with the principles applicable to construing a commercial contract; that is, objectively by reference to the text of the document and its ordinary meaning, together with the context, being the entire text of the Settlement Deed and matters referred to in it, and the purpose of the document.[68] Often these matters will be identified by reference to the contract alone, however, identification of purpose may involve consideration of the genesis of the transaction, the background, the context and the market in which the parties are operating.[69] Further, evidence of surrounding circumstances is admissible to assist in the interpretation of a contract if the language is ambiguous or susceptible of more than one meaning.[70]
2. There was also no controversy about the principles applicable to determining whether any terms ought to be implied to give business efficacy to a particular contract. All parties relied upon the 5 criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings[71] as necessary for the recognition of an implied term_,_ namely:[72]

(1) It must be reasonable and equitable.
>
> (2) It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it.
>
> (3) It must be so obvious that "it goes without saying".
>
> (4) It must be capable of clear expression.
>
> (5) It must not contradict any express term of the contract.

1. Before turning to the specific issues, a number of observations should be made about the Settlement Deed. Although there was no evidence of when the negotiations or drafting of the document commenced, it was prepared in a context where the resumption of a trial was imminent. Further, Gill had only recently retained a new solicitor.[73] The Settlement Deed contained numerous obvious errors on its face. Thus, when seeking to divine the objective common intention from the express words used, it is necessary to keep in mind that the document contained obvious mistakes.

1. The meaning of Gill's Equity Interests is of critical importance.[74] The language used in defining this term was ambiguous, particularly the meaning to be afforded to the words "all shares and units owned by the Gill Parties in the Iceland Group and otherwise set out in Schedule 1 including any interest in the Vehicles" (emphasis added). As noted above,[75] in addition to details of the shareholders and unitholders of the 4 Iceland Group Companies, Schedule 1 set out details of the shareholders and unitholders of Iceland Cold and Iceland Properties, as well as the particulars of the Gateway Property.
2. Until closing submissions, no real issue was raised about this. In the Gill Parties' written closing submissions, a distinction was drawn between the property of the Iceland Business (including the Gateway Property) and Gill's Equity Interests. They also stated that clause 4 "contemplate[d] more than the payment of [the Lakhwinder Purchase Price] in exchange for the transfer of shares and units", thereby acknowledging that the transfer of shares and units was what the payment was for.[76] When the question was raised by the court as to whether the definition of Gill's Equity Interests might include the Gateway Property because it was expressly referred to in Schedule 1, the Gill Parties' senior counsel initially rejected the suggestion. However, the position changed and ultimately it was contended that the definition did include the Gateway Property. Further, as Schedule 1 also referred to Iceland Cold and Iceland Properties, the Gill Parties adapted their position and submitted that Gill's Equity Interests included these 2 companies as well.
3. In contrast, the plaintiffs submitted that Gill's Equity Interests was confined to the shares and units of the Iceland Group Companies (namely, Iceland Australia, Iceland Holdings, Iceland Logistics and Gateway 81), together with the Vehicles (as listed in Schedule 3). In support of this, the words "and otherwise" in the definition were contended to mean "as". Although it was accepted an ambiguity existed, it was submitted that other provisions in the Settlement Deed indicated that Gill's Equity Interests did not include the Gateway Property or the shares in Iceland Cold and Iceland Properties.
4. Clearly, contrary to the plaintiffs' submissions, on their plain meaning, the words "and otherwise" cannot be understood to mean "as". Rather than operating in a descriptive or explicatory manner, the word "and" is conjunctive, and the word "otherwise" serves a contrasting function. In this sense, "and otherwise set out in Schedule 1" could possibly be understood, as contended for by the Gill Parties, to have the effect of expanding the scope of Gill's Equity Interests beyond the Iceland Group Companies and the Vehicles to include all entities and assets set out under Schedule 1 owned by the Gill Parties. Such a construction would be supported by the fact that, if the definition of Gill's Equity Interests was intended to be limited to the Iceland Group Companies and the Vehicles, the words "and otherwise set out in Schedule 1" would have little work to do, beyond identifying those parts of Schedule 1 that provided the details of the shareholding and unitholding of each of the Iceland Group Companies and the Iceland Trusts.[77]
5. Nevertheless, in my view, the construction of Gill's Equity Interests contended for by the plaintiffs ought to be preferred. The surrounding circumstances leading up to the execution of the Settlement Deed and remainder of the document are consistent with such a construction.
6. Dealing first with the question of which companies were included within the definition of Gill's Equity Interests, and without being exhaustive, clause 4.2 only provided for the transfer of the shares and units in the Iceland Group, together with the resignations of the directors and secretaries of each of the 4 Iceland Group Companies. Had it been intended that there was to be a transfer of the shares in Iceland Cold and Iceland Properties, together with accompanying resignations, it would be expected that those companies would have been expressly referred to in clause 4.2(a)(i) and (ii). While it may be accepted that the power of attorney provided for in clause 4.2(a)(iii) might have been used to give effect to the transfer of the shares and the signing of resignations in relation to these 2 additional companies if they fell within the definition of Gill's Equity Interests, there was no apparent reason for them to have not been included in clause 4.2(a)(i) and (ii) if it had been intended they were to be the subject of the transfer (and none was suggested by the Gill Parties in closing submissions).
7. Further, in order for the Lakhwinder Parties to take control of the Iceland Group, there was no need for them to acquire any interest in Iceland Cold or Iceland Properties. In contrast to the Iceland Group Companies, these companies had always been companies wholly owned by and under the control of the Gill Parties.[78] Leaving aside the somewhat unsatisfactory definition of Gill's Equity Interests, there was nothing in the Settlement Deed or in the underlying issues of the proceeding to suggest that it was intended that Gill would relinquish ownership of these 2 companies, over which the Lakhwinder Parties had never claimed any interest.
8. Furthermore, that these 2 additional companies were not the subject of the definition of Gill's Equity Interests was reflected in the fact that clause 5 of the Settlement Deed provided that if neither the Gill Parties nor the Lakhwinder Parties were able to complete a purchase in accordance with its terms, then only the 4 Iceland Group Companies were to be wound up.[79]
9. In relation to whether Gill's Equity Interests included the Gateway Property, a number of clauses demonstrated that this was not intended and that these 2 subject matters were treated as separate. Clause 4.1(h)(i) contemplated the immediate transfer of the Gateway Property to Gateway 81 upon the withdrawal of the Palta Caveat. Further, pursuant to clause 4.1(j)(ii), it was contemplated that subsequently, at Lakhwinder Completion on the Lakhwinder Completion Date, the Gill Parties were required to transfer Gill's Equity Interests (as opposed to the remainder of Gill's Equity Interests, the Gateway Property transfer having already occurred if the terms had been complied with). On the Gill Parties' construction, if Gill's Equity Interests included the Gateway Property, then nonsensically the Settlement Deed would have contemplated documents to effect the transfer of ownership of the Gateway Property being executed twice (including on the second occasion after it had been contemplated it would have already occurred).
10. Furthermore, it must have been contemplated that, as between the Gill Parties and the Lakhwinder Parties, no consideration would be required to transfer the Gateway Property to Gateway 81 in circumstances where the Gateway Property was held by Iceland Properties as bare trustee, Gateway 81 was the new trustee and the Lakhwinder Parties had already paid for a half interest in Gateway 81 in 2019.[80] The relevant transfer for consideration was instead the remaining 50 percent of the shares and units in Gateway 81 and the Iceland Property Unit Trust (which was to occur at Lakhwinder Completion).
11. In other words, in the Gill Parties agreeing to sell Gill's Equity Interests to the Lakhwinder Parties,[81] it was unnecessary for the Gateway Property to be included in this definition as it had already been agreed in 2019 that Gateway 81 was to hold that property as the new trustee. Equally, the Lakhwinder Purchase Price being the payment for Gill's Equity Interests also suggested the Gateway Property was not included in the definition of Gill's Equity Interests, when no consideration could have been properly claimed by Iceland Properties or the Gill Parties for its transfer.
12. Moreover, it was expressly provided that Gill's Equity Interests were to be transferred on the Lakhwinder Completion Date.[82] For such an event to include the Gateway Property would have been inconsistent with the requirement in clause 4.1(h) that the transfer of the Gateway Property occur forthwith upon the withdrawal of the Palta Caveat (which was necessarily at least 30 days before the Lakhwinder Completion Date).[83]
13. The above analysis still begs the question of why Iceland Cold, Iceland Properties and the Gateway Property were referred to in Schedule 1. No answer can be provided with any certainty in circumstances where no evidence was adduced by any party on the issue. Perhaps the document was used because, in addition to containing information concerning other matters, it contained all the details necessary for the purposes of the definition of Gill's Equity Interests. Perhaps (although it appears unlikely) it was contemplated at some stage in the negotiations that "the Iceland Group" was to be defined to include all items the subject of Schedule 1.[84] However, there could be no controversy that the term Iceland Group as agreed was confined to the 4 Iceland Group Companies expressly the subject of that definition. In this circumstance, in spite of their plain meaning, the words "and otherwise set out in Schedule 1" must be taken to have been a convenient means of referring to the relevant details of the 4 Iceland Group Companies as set out in Schedule 1, rather than encompassing all of the companies and assets referred to therein.

1. There was also a difference between the parties in relation to the meaning of Lakhwinder Completion. The plaintiffs submitted the reference in the definition of the term to the purchase by the Lakhwinder Parties of Gill's Equity Interests occurring "in accordance with clause 4" was a general reference, but specifically was, in effect, confined to clause 4.1(j). This was put on the basis that other provisions within clause 4 were not concerned with the settlement of the purchase of Gill's Equity Interests. In my view, consistent with the Gill Parties' submissions, the reference to clause 4 should not be read down as suggested by the plaintiffs. Although there may be some aspects of clause 4 that might be said to be dealing with a subject matter other than settlement specifically, there are many other parts of clause 4 that clearly relate to steps involved in any Lakhwinder Completion.
2. Further, this definition may be contrasted with the definition of Lakhwinder Completion Date. Rather than also referring generally to clause 4, specific reference was made in that definition to the relevant part of clause 4, namely clause 4.1. Presumably, if the definition of Lakhwinder Completion was also intended to be restricted to a specific part of clause 4, a similar approach to that taken with respect to the definition of Lakhwinder Completion Date would have been adopted.
3. Proceeding on this basis, the remainder of the submissions on this issue will be addressed accordingly.

1. Returning now to the question of whether Lakhwinder Completion could be validly effected without the Lakhwinder Parties ensuring that the Bank Facility was satisfied or refinanced or procuring the Commonwealth Bank's consent to the transfer of the Gateway Property and the Vehicles, uncontroversially,[85] the Gill Parties noted that clause 4.1(h) required Gill to cause the transfer of the Gateway Property to Gateway 81 forthwith upon the withdrawal of the Palta Caveat. Thus, it was submitted, because this withdrawal was 1 of the methods of determining the time for Lakhwinder Completion, it followed that it was contemplated the transfer of the Gateway Property was an expected precondition to settlement of Lakhwinder Completion.[86] It was submitted that recognising the implied term in the form set out above was a sensible and commercial construction of the Settlement Deed because the Lakhwinder Parties did not intend to purchase Gill's Equity Interests only for the Gateway Property to remain in the registered proprietorship of Iceland Properties.[87] Further, it was submitted that there could be no Lakhwinder Completion (being settlement of any purchase ... of Gill's Equity Interests in accordance with clause 4 (emphasis added)) without performance of the obligations under clause 4.1(h). Accordingly, it was contended there could be no settlement until there had also been the necessary conveyance of the Gateway Property.
2. It was further submitted that compliance with clause 4.1(h) was of substantial importance and was necessary to give effect to a real separation of the parties' interests. The Gill Parties contended that it was obvious the Settlement Deed could have no commercial efficacy unless the purchase by the Lakhwinder Parties required them to take possession, valid title and ownership of the crucial assets of the Iceland Business (namely the Gateway Property and the Vehicles) at Lakhwinder Completion. Therefore, it was submitted it must follow that ownership of the key asset of the Iceland Business (namely the Gateway Property) by Gateway 81 was a necessary precondition to settlement. Further, it was submitted it was reasonable and equitable to require the Lakhwinder Parties to obtain the Commonwealth Bank's consent to the transfer, and that this requirement did not contradict any express term of the Settlement Deed.
3. In such circumstances, the Gill Parties submitted that it followed that the implied term contended for by them (namely, that Lakhwinder Completion could not be validly effected unless and until the Lakhwinder Parties ensured that the Bank Facility was satisfied or refinanced or the Lakhwinder Parties procured the Commonwealth Bank's consent to the transfer of the Gateway Property from Iceland Properties to Gateway 81 and the transfer of the Vehicles to Iceland Holdings) met the 5 criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.[88]
4. In opposing any such implied term, the plaintiffs referred to the related allegations in the Gill Parties' defence that there could be no Lakhwinder Completion unless and until the Bank Facility was satisfied or refinanced and that it had been alleged that it was the Lakhwinder Parties' responsibility to promptly and diligently ensure the Bank Facility was satisfied or refinanced. The plaintiffs submitted that the alleged implied term was substantially reformulated by the Gill Parties after it was first pleaded and that this went against the requirement that, in order to establish the existence of an implied term, it must be so obvious that it goes without saying.[89] It was also noted as part of the submission that the express terms of the Settlement Deed precluded drawing the necessary inferences to establish the implied term asserted by the Gill Parties and that there was no express term in the Settlement Deed to the effect alleged.
5. Further, the plaintiffs relied upon the definition of Gill's Equity Interests as being confined to Ekgill's shares in Iceland Holdings[90] and its units in the Iceland Holdings Trust, Ekgill's shares in Gateway 81 and Iceland Cold's units in the Iceland Property Unit Trust, and Natural Produce's and Iceland Cold's interest in the Vehicles.[91] Consistent with this submission, it was noted that the transfer of the Gateway Property as contemplated by clause 4.1(h) was not concerned with Gill's Equity Interests. Therefore, so it was submitted, the only clause dealing with the requirements imposed upon the parties for Lakhwinder Completion was clause 4.1(j). In this regard, it was noted that Lakhwinder Completion was not expressed to be subject to the satisfaction or refinancing of the Bank Facility by any party, which could have easily been stated if that was the intention.

1. All of the 5 criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings[92] must be satisfied before a term will be implied, including that it is so obvious it goes without saying. Although not determinative, it is material that when the Gill Parties first filed their defence, no implied term was alleged. In fairness, this might be explained by the time pressures under which the parties were acting.
2. However, having turned their minds to the question, the Gill Parties pleaded an implied term in substance that:

Lakhwinder Completion could not be validly effected unless or until the Lakhwinder Parties procured from the [Commonwealth Bank] its consent (the need for such consent arising because of the securities in favour of the [Commonwealth Bank] pursuant to the [Bank] Facility...) to: (a) the transfer of the Gateway Property from [Iceland Properties] to Gateway 81; and (b) the transfer of the Vehicles to [Iceland Holdings].

3. The Gill Parties were subsequently granted leave to amend their defence by which the words in parentheses above were deleted and 2 additions were made.
4. By the first addition, the Gill Parties alleged the implied term included that the Lakhwinder Parties could either obtain the Commonwealth Bank's consent (as had previously been pleaded) or ensure that the Bank Facility was satisfied or refinanced. Secondly, the following was added after the reference to the transfers in (a) and (b):

... the need for such satisfaction, refinance or consent arising because of the securities over those assets in favour of the [Commonwealth Bank] pursuant to the [Bank] Facility...

5. Accordingly, the position of the Gill Parties changed from contending for an implied term that required the consent of the Commonwealth Bank for Lakhwinder Completion to be able to be validly effected to contending for an implied term that required Lakhwinder Completion to be effected either by such consent or by the Bank Facility being "satisfied or refinanced".
6. In my view, the term as ultimately alleged was unnecessary to give business efficacy to the Settlement Deed. In other words, the Settlement Deed was effective without it, and on that basis alone the term ought not be implied. Further, the term was not reasonable and equitable, was not so obvious that it went without saying, and contradicted an express term of the Settlement Deed.
7. In relation to business efficacy, it is critical that, at the time the Settlement Deed was executed and at all times from around September 2019, Iceland Properties was holding the Gateway Property as bare trustee. In that capacity, Iceland Properties had neither beneficial ownership nor the general powers of a trustee, and accordingly had no ability to do anything other than maintain registered proprietorship.[93]
8. Although in August 2022 it may be presumed that the parties did not envisage any real difficulty with the Commonwealth Bank agreeing to the transfer of the registered title from the bare trustee to Gateway 81 (being the actual trustee of the trust property), the mere fact that there was a real possibility that the Commonwealth Bank might not agree would not objectively give rise to any presumed intention that the remainder of the transaction contemplated by the Settlement Deed could not go ahead. There are a number of reasons for this.
9. First, the fact that Iceland Properties remained the registered proprietor of the Gateway Property did not inhibit or interfere with the ability of the Lakhwinder Parties to conduct the Iceland Business upon Lakhwinder Completion taking place. Indeed, from September 2019 onwards, the Iceland Business had been conducted in this manner despite the fact that Gateway 81 was the trustee of the Iceland Property Unit Trust. It must have been understood that upon the transfer of Gill's Equity Interests, the Lakhwinder Parties owned and were able to conduct the Iceland Business regardless of whether legal title to the Gateway Property had been transferred to Gateway 81.
10. Secondly, the fact that the transfer to Gateway 81 had not occurred by the Lakhwinder Completion Date did not preclude it from occurring at some later time. Indeed, as bare trustee, Iceland Properties would have no basis for resisting the transfer once satisfactory arrangements had been made with the Commonwealth Bank.[94]
11. Thirdly, by clause 4.5 of the Settlement Deed, the parties had expressly dealt with the possibility that the Lakhwinder Parties would be unable to secure a release of the Gill Guarantees (or some of them), including the guarantee in favour of the Commonwealth Bank.[95] Realistically, it could not have been thought that the Commonwealth Bank's guarantee would have remained in place if the Bank Facility had been paid out in full before (or even at) Lakhwinder Completion. Further, the indemnity agreed to in clause 4.5(b) was not only from the Lakhwinder Parties but also from the Iceland Group, a substantial and viable business. In August 2022, the parties perceived the Iceland Group to have a net value in an amount in the order of $11 million to $13 million, reflected by the willingness of the respective parties to pay the amounts agreed under the Settlement Deed. Alternatively, based on the assets alone, the net value of the Iceland Group was approximately $10 million.[96] In these circumstances, the indemnity was of substance.[97]
12. Fourthly, the parties must be taken to have understood that, if the appointment of liquidators to each of the Iceland Group Companies were to occur, it would not only be harmful to the Iceland Business but would also likely result in diminished returns to the ultimate stakeholders.
13. In conclusion, it was far more efficacious that the parties would have presumed that any difficulty with the transfer of the legal ownership of the Gateway Property held by Iceland Properties as bare trustee would not have resulted in the collapse of the Iceland Business; a business considered by all parties to be viable and valuable and in respect of which both sets of parties were willing to pay significant amounts in order to become outright owners.
14. In any event, the proposed implied term is neither reasonable nor equitable. Based upon what was expressly agreed in the Settlement Deed, there is nothing unreasonable or inequitable in Gill remaining liable under the Gill Guarantees, including the Commonwealth Bank's guarantee.
15. To elaborate, it was expressly contemplated that the Lakhwinder Parties may have been unable to secure the release of the Gill Guarantees in circumstances where none of the Gill Parties were to retain any beneficial interest in relation to the Iceland Group and the Gateway Property, even if Gateway 81 became the registered proprietor of the Gateway Property.[98] Further, in circumstances where the Lakhwinder Parties might have been willing and able (as they ultimately were) to pay the full amount of the Lakhwinder Purchase Price on the Lakhwinder Completion Date, it would not appear to be reasonable or equitable to prevent the transaction from completing. Again, this is particularly so in circumstances where it was contemplated that, if Lakhwinder Completion were not to occur despite the Lakhwinder Parties proffering the Lakhwinder Purchase Price, then the Iceland Group Companies were to be placed into liquidation with a likely consequence of destroying (or at least seriously harming)[99] the Iceland Business and having a flow-on effect on the value of the underlying shares and units.
16. Leaving aside the history of the pleaded defence, the matters referred to above also indicate that the proposed implied term was not so obvious that it went without saying.
17. As to the last of the 5 criteria, and again in any event, the proposed implied term was inconsistent with an express term of the Settlement Deed. The proposed term sought to impose an obligation entirely upon the Lakhwinder Parties to either satisfy or refinance the Bank Facility or procure the Commonwealth Bank's consent. In contrast, clause 4.1(h)(i) imposed the mandatory obligation solely upon Gill. Naturally, if Iceland Properties had been the legal and beneficial owner of the Gateway Property, there might have been some basis for contending that a term such as the proposed term would be implied so as to operate in conjunction with Gill's obligations. However, the position was materially different in relation to a bare trustee, Iceland Properties, in circumstances where the beneficial ownership together with the position of trustee of the trust property had already been transferred, and the current trustee was an entity of which the Lakhwinder Parties were to take ownership upon the payment of the Lakhwinder Balance at Lakhwinder Completion.
18. Although not inconsistent with the proposed implied term, consideration of this issue would not be complete without referring to clause 4.1(e)(ii) of the Settlement Deed. In contrast to clause 4.1(h)(i), clause 4.1(e)(ii) expressly provided that if a dispute concerning the Palta Caveat could not be resolved (and the Palta Caveat was consequently not removed) then replacement security was to be provided to procure the withdrawal of the Palta Caveat. There was no provision in clause 4.1(h) for any part of the Lakhwinder Balance to be set aside and held in trust as part of causing the transfer of the registered title to the Gateway Property.
19. In summary, the proposed implied term would impose the suggested obligations exclusively upon the Lakhwinder Parties, which would be in conflict with the express term the operation of which it was alleged to effect.
20. Further, in considering whether the implied term was inconsistent with clause 4.1(h)(i), the conclusion referred to above is supported by the wording of clause 4.1(i), which stipulated that, if the Lakhwinder Parties paid the Lakhwinder Purchase Price strictly in accordance with clause 4.1(d),[100] then the Gill Parties agreed to transfer Gill's Equity Interests on the Lakhwinder Completion Date (without any reference being made to whether there had been compliance with clause 4.1(h)(i)).
21. None of what is stated above should be taken as suggesting that it was not clearly contemplated upon execution of the Settlement Deed that if the prerequisites were in place (namely, a Gill Default Event had occurred, the deposit of $550,000 had been paid within 14 days,[101] and the Palta Caveat had been withdrawn) Gill would have acted forthwith in accordance with clause 4.1(h)(i) so as to have the registered title to the Gateway Property transferred to Gateway 81; and Gill so acting at a point in time before the Lakhwinder Completion Date. So much was clear from the opening words of clause 4.1(h)(ii). However, the fact that this was contemplated does not answer the question of whether or not the proposed term ought to be implied.
22. The above discussion does not address the fact that according to the definition of Lakhwinder Completion, settlement was to be in accordance with clause 4, which obviously included what was contemplated in clause 4.1(h)(i), which did not occur. It also does not address the opening words "upon such transfer being effected" in clause 4.1(h)(ii). These matters are addressed in more detail below.[102] Suffice to say for present purposes, neither the existence of the terms of this definition nor the preface to clause 4.1(h)(ii) gave rise to an implied term as alleged for the reasons set out above.
23. Before leaving this issue, a further point should be made, although not relevant to the question of construction raised. The obligation under clause 4.1(h) was upon Gill (alone) to cause Iceland Properties to forthwith transfer the registered title to the Gateway Property to Gateway 81. In fact, upon the Palta Caveat being removed in late November 2022, Gill took no steps in that regard at that time despite his express obligation to act forthwith.[103] In essence, Gill was seeking to assert a position upon a consequence of his failure to act in accordance with the terms of the Settlement Deed. Although the Commonwealth Bank's position at the time of trial was that it would not permit a transfer without payment of the outstanding balance under the Bank Facility, there was no evidence to suggest that this would have been the Commonwealth Bank's position in late November 2022 if Gill had only sought consent to the transfer of the registered title in circumstances where all the securities were to remain in place and all the parties to the Settlement Deed supported the transfer occurring.
24. In relation to the implied term contended for by the plaintiffs, it is unnecessary to consider this issue in any detail. If the term alleged were implied, it would plainly be implied to protect the interests of the Gill Parties (who submitted it should not be implied). During closing submissions, the plaintiffs stated that the court did not need to form a view on whether the implied term was established as the plaintiffs were willing to give an undertaking to the court to that same effect.[104] In light of the conclusions expressed above and the undertaking offered, this issue need not be considered further.
25. For completeness, the position whereby the Lakhwinder Parties, as the ultimate owners of the Iceland Business, assume primary responsibility for the liabilities to the Commonwealth Bank and trade creditors may be properly characterised as a continuation of the status quo (subject of course to the change in ultimate ownership of the Iceland Group Companies). From around July 2019, despite Iceland Cold and Iceland Properties having direct responsibility to the Commonwealth Bank under the Bank Facility, the obligations were met by the Iceland Business (or more specifically, Iceland Australia).[105]

C.2 As at 1 March 2023, were the Lakhwinder Parties in breach of their obligations under clause 4.5(a) of the Settlement Deed in respect of any guarantee to which the obligation attached?

Answer: no.

1. Clause 4.5(a) imposed an obligation upon the Lakhwinder Parties to use their best endeavours to procure the release by any third party of all Gill Guarantees prior to the Lakhwinder Completion Date. It was common ground that this obligation only arose on 1 December 2022, being the Gill Default Date.

1. The meaning of "best endeavours" has been judicially considered on numerous occasions. The nature and extent of the obligation is not absolute and is conditioned by the terms of the contract in question and what is reasonable in the circumstances.[106] The nature, capacity, qualifications and responsibilities of the person upon whom the obligation is imposed, viewed in light of the contract, are factors to be taken into account in measuring the standard of endeavour required.[107]
2. It has been held that best endeavours imposes an obligation to do all that reasonably can be done to achieve the contractual obligation, but no more.[108] Further, depending on its context, a term imposing best endeavours may impose a higher standard than reasonable endeavours. It has been suggested that best endeavours imposes an obligation to do everything that is reasonably possible to bring about the stated end, whereas reasonable endeavours simply requires a person to take steps that a reasonable person in the circumstances would take to achieve that end.[109]
3. For the purpose of addressing this issue, I will proceed on the assumption that best endeavours imposes such an obligation (being a more onerous obligation than that imposed by reasonable endeavours).

1. In submitting that best endeavours had been used, the plaintiffs referred to the Lakhwinder Parties' lack of knowledge of the number or form of guarantees in existence, together with the various difficulties encountered by them in seeking to ascertain the relevant details.[110] They also relied upon the positive steps taken by Lakhwinder and others from December 2022,[111] together with the absence of any assistance from Gill.[112] They referred to the fact that the Gill Parties failed to call Aman as a witness to rebut the evidence that had been led about the efforts of the Lakhwinder Parties and Peters, submitting that the court should draw an inference that her evidence would not have assisted the Gill Parties.[113]
2. With respect to the guarantee provided to the Commonwealth Bank by Gill, the plaintiffs referred to various communications unequivocally indicating that the Commonwealth Bank was unwilling to release the personal guarantee unless and until the Bank Facility was repaid or refinanced under a new arrangement.[114] In this context, they relied upon the existence of the various caveats to demonstrate that the Lakhwinder Parties' ability to repay or refinance the Bank Facility was materially impaired by these interferences with the title to the Gateway Property. Further, they submitted that it was reasonable for them to continue negotiations with the Commonwealth Bank throughout the relevant period (rather than taking the course of refinancing with second-tier lenders at a greater commercial cost) given its positive history of dealings with the Iceland Group. In this regard, it was also submitted it was reasonable to assume ultimate success in obtaining the necessary finance from either the Commonwealth Bank or the National Australia Bank given Lakhwinder's track record and the fact that the combined equity in the Gateway Property and the Vehicles was such that any loan would be in the order of 58 percent of the total asset value.
3. In all the circumstances, it was submitted best endeavours had been used and that the reason refinancing had not occurred to date was not due to any failure on the part of the Lakhwinder Parties.
4. The Gill Parties contended that the Commonwealth Bank notified the Lakhwinder Parties in late August 2022 that the personal guarantee provided to it by Gill would not be released until the Bank Facility was satisfied or refinanced.[115] It was submitted that, even though it was accepted that the obligation to use best endeavours did not arise until 1 December 2022, it should be assessed in this context.
5. The Gill Parties relied upon the fact that, despite ongoing discussions, no actual application for finance had been made. It was submitted that mere discussions amounted to a lack of best endeavours, particularly in light of the knowledge of the necessity of refinancing to procure Gill's release from his guarantee to the Commonwealth Bank. They also referred to the fact that the Commonwealth Bank was seeking further information in late February 2023 as patent evidence that the necessary information had not been provided for reasons that it was submitted were unexplained. In this regard, it was submitted that Lakhwinder's evidence lacked specificity.
6. It was submitted that the same conclusion ought to be reached in relation to applications made by the Lakhwinder Parties to the National Australia Bank and other financiers. They referred to the absence of any explanation for the delay in "press[ing] in earnest" the application with the National Australia Bank until January 2023. Again, they submitted Lakhwinder's evidence lacked specificity concerning the dealings with the National Australia Bank.
7. In relation to trade creditors, the Gill Parties submitted only several of the 50 to 60 suppliers to whom Gill believed he might have given guarantees had been spoken to. They contended that the first real attention paid to this issue was on 14 February 2023 when Gill was asked to advise the Lakhwinder Parties of the guarantees that may have been given. They also contended the fact that Aman had stopped attending the premises of the Iceland Business from 15 February 2023 did not prevent her from having been asked about guarantees before her departure.
8. In circumstances where Gill did not know what guarantees he had signed, it was submitted it was too late for him to have been given access to the Gateway Property to search for guarantees on 28 February 2023. In any event, the Gill Parties submitted the Lakhwinder Parties left the issue of trade guarantees until a fortnight before completion, which amounted to a failure to use best endeavours, as more than 14 days was necessary for the task. They submitted the evidence demonstrated it was not until 27 February 2023 that Peters approached this issue in a systematic way, again demonstrating lack of best endeavours.
9. Finally, the Gill Parties relied upon the evidence given by both Peters and Maturu to the effect that they conducted searches looking for stand-alone guarantees rather than guarantees that formed part of a supply agreement.

1. It is convenient to deal initially with the guarantee provided to the Commonwealth Bank by Gill, as distinct from the guarantees provided to trade suppliers.
2. Before turning to the facts concerning the endeavours used, clause 4 of the Settlement Deed must be considered as part of the relevant context.
3. On its face, clause 4 was not activated unless there was a Gill Default Event. Accordingly, as was conceded, the obligation to use best endeavours contained in clause 4 was not enlivened until after 4.00 pm on 1 December 2022.
4. It must follow that the conduct of the Lakhwinder Parties after 1 December 2022 was most relevant. However, although the obligation to use best endeavours did not arise until clause 4 was triggered by the Gill Default Event, it was material that the Lakhwinder Parties had no ability to give any assurance about unencumbered title to the Gateway Property before late November 2022 in light of the registration of the Palta Caveat. It was also significant that until the removal of the Palta Caveat was ordered, there was no certainty as to whether the Palta Caveat would be removed or withdrawn in the foreseeable future.[116] This unavoidable uncertainty that arose from the Palta Caveat concerning the timing of any transfer of title to the Gateway Property was acknowledged in the terms of clause 4.1(h) of the Settlement Deed. Accordingly, before 1 December 2022 (or more accurately 29 November 2022), in any approach by the Lakhwinder Parties seeking finance from a bank on the basis that a Gill Default Event might occur in the future, it was difficult to foreshadow reliably that there would be an ability to deal with the Gateway Property free of the Palta Caveat and in a manner that would have enabled the Lakhwinder Parties to obtain such finance by a satisfactorily secured arrangement.
5. To compound these difficulties, upon the removal of the Palta Caveat, the absence of a caveat lodged by a third party on the Gateway Property title was short-lived. Having engaged in discussions in December 2022 and early 2023, the Lakhwinder Parties' ability to deal with the title to the Gateway Property was impeded once again when, without any warning, the Kainelaw Caveat was registered on 12 January 2023. This re-enlivened restrictions on the ability of the Lakhwinder Parties to put forward any proposal with certainty of clear title to the Gateway Property. When the Kainelaw Caveat was finally removed on 15 February 2023, a like obstacle arose once more with the registration of the Seghal Caveat on 25 February 2023. Yet again, the title was affected for over a month until around 29 March 2023.
6. In summary, the registration of the various caveats gave rise to an inability, or at least a serious impairment, on the part of the Lakhwinder Parties to deal with any proposed financiers on the basis that unencumbered title to the Gateway Property would be provided if the necessary finance was made available. In this regard, no conduct on the part of the Lakhwinder Parties could be considered to have contributed to this difficulty. Leaving aside whether there was any proper basis for the registration of any of the caveats, each registration was the result of dealings had by the caveators with Gill.
7. It must also be kept in mind that the obligation to use best endeavours ceased on 1 March 2023.[117] The fact that finance has not been secured since this time is not relevant to this issue. In any event, given the present uncertainties raised very recently by the Gill Parties, it would seem unlikely finance would be secured until there has been a determination of whether the Lakhwinder Parties are entitled to a transfer of the remainder of the Iceland Group.
8. It was common ground between the parties that a successful application for finance of the size and nature in question would take a number of weeks to put in place. The Gill Parties submitted that so much was apparent to the Lakhwinder Parties as early as March 2022. Further, Gill's evidence was that when he was seeking to obtain finance from the National Australia Bank before 1 December 2022 in order to achieve Gill Completion, he was told that the National Australia Bank would require 6 to 8 weeks, or even up to 10 weeks, after removal of the Palta Caveat before finance would be available. This was in circumstances where Gill had commenced his dealings with the National Australia Bank in June 2022, and the bank had subsequently been told by Gill that he only had a 90 day window under the Settlement Deed in which to raise the necessary finance.
9. Gill also gave some evidence at trial about the position of the Commonwealth Bank being similar in requiring 2 to 3 weeks to settle a second mortgage, but the context of that evidence was unclear and was not further explored. Whatever the precise timing required, the irrefutable fact was that over a period stretching from 25 August 2022 to 1 December 2022 (being a total of 14 weeks) and despite Gill being very keen to purchase the Iceland Group by paying the Gill Balance, he was unable to raise the finance in the time available (albeit that the Gill Purchase Price was for a total sum of $1 million more than the Lakhwinder Purchase Price).
10. It follows from all the evidence on this topic that, in the particular circumstances that confronted the Lakhwinder Parties, it was unlikely that there was a period of time between 1 December 2022 and 1 March 2023 where clear title was available (obviously leaving aside the mortgage held by the Commonwealth Bank) for a sufficiently extended period of time to allow an application for bank finance to be processed, approved and settled. With respect to the period from 1 December 2022 to 12 January 2023, when no caveat was on the title to the Gateway Property, obviously the Christmas period intervened. Accordingly, no inference could be drawn properly to the effect that there was an absence of best endeavours simply from the fact that finance was not obtained before 1 March 2023.
11. Further, in circumstances where there was a large net equity position in relation to the assets of the Iceland Group,[118] it was perfectly reasonable and commercially sensible for the Lakhwinder Parties to pursue bank finance (rather than second-tier finance at a considerably greater cost). That said, enquiries were and continue to be made with second-tier lenders,[119] no doubt as a contingency in the event that bank finance ultimately does not become available within a reasonable period of time.
12. Significantly, in the event that clause 4 were to become activated because a Gill Default Event occurred and the Lakhwinder Parties elected to proceed to Lakhwinder Completion, there was nothing in the Settlement Deed that imposed any express obligation upon the Lakhwinder Parties to obtain finance to either repay or otherwise satisfy the Bank Facility. In circumstances where the transfer contemplated under clause 4.1(h)(i) did not necessarily involve any refinancing but might have occurred simply with the consent of the Commonwealth Bank, there was nothing in the Settlement Agreement that impliedly imposed an obligation upon the Lakhwinder Parties to have refinancing in place by 1 March 2023. Indeed, by clause 4.5(a) expressly referring to the release from the Commonwealth Bank being sought as part of the obligation to use best endeavours in relation to the Gill Guarantees, and the Commonwealth Bank's guarantee then potentially being the subject of the indemnity in clause 4.5(b) if its release was refused, it was apparent that the parties expressly contemplated that refinancing may not be in place at the time of Lakhwinder Completion.
13. In concluding on the issue of the absence of refinancing by 1 March 2023, although it was obvious to all that the Commonwealth Bank would not release Gill as a guarantor until the Bank Facility had been dealt with satisfactorily, it did not follow that a failure to have that finance in place equated to an absence of best endeavours for the purposes of clause 4.5(a). On the contrary, the evidence demonstrated that all reasonable steps were being taken in the difficult circumstances with which the Lakhwinder Parties were confronted.[120] Further, in rejecting the Gill Parties' submission that best endeavours were not used, it must be noted that whatever endeavours were used, unless and until refinancing was put in place, the Commonwealth Bank was steadfast in its position (as was its entitlement) that it would not release Gill from his personal guarantee. In these circumstances, there could be no failure to use best endeavours if the reasonable steps taken pursuant to that obligation indicated unequivocally and repeatedly that any further steps would be futile absent the successful refinancing of the Bank Facility.
14. Turning to some of the more specific submissions made by the Gill Parties, the fact that the Lakhwinder Parties may not have formally made an application for finance was a matter of form over substance. It was made clear to the Commonwealth Bank that refinancing was sought. With so many uncertainties confronting the situation at various times, the nature of the dealings with the Commonwealth Bank did not demonstrate an absence of best endeavours. It also needs to be borne in mind that in January 2023 an alternative source of finance was being sought and "pressed in earnest" (to adopt the Gill Parties' submission) from the National Australia Bank.
15. Further, the fact that further information was being sought by the Commonwealth Bank in late February 2023 was not indicative of any lack of best endeavours. Naturally, as time moved on, information needed to be updated, particularly in the volatile situation at hand. Although Lakhwinder and Maturu had not provided their personal financial information despite numerous requests, there was little point in doing so until the requisite conditions could be met. By this time, the Commonwealth Bank was concerned about the steps in place to enable the Lakhwinder Parties to be able to take outright ownership in circumstances where it was aware that a court application was already on foot.[121] No doubt its concerns were heightened by the position adopted by Gill, as reflected in his letter to the Commonwealth Bank sent on 24 February 2023.[122]
16. To the extent that criticism was made of the lack of specificity of Lakhwinder's evidence, much of the communications between the banks and the Lakhwinder Parties was recorded in writing. It was unnecessary for Lakhwinder to elaborate in his affidavit or oral evidence on matters that were recorded in this way in various documents which were tendered. Further, in assessing this submission, it is significant that Lakhwinder was cross-examined with full opportunity to challenge his account. His evidence under cross-examination did not suggest anything other than best endeavours had been used.
17. The criticism with respect to the number of suppliers spoken to proceeds on the basis that Gill's belief that he had signed up to 50 to 60 guarantees was soundly based. In my view, the evidence did not establish that the number of guarantees executed was anything of that order. To elaborate, when the searches were conducted in late February 2023 with the assistance of Peters, approximately 40 to 50 contracts were produced, copied and provided to Gill.[123] Having gone through these contracts, Gill was only able to produce 6 guarantees.[124] In such circumstances, there was no probative evidence that the number of guarantees signed was anything like 50 to 60 in number.[125] Further, with 1 exception explained by inadvertence rather than any lack of endeavour,[126] the evidence suggested that all suppliers who might have previously required a guarantee of Gill were contacted before 1 March 2023.
18. Finally, the Gill Parties' submissions to the effect that there was an absence of any real attention to this issue until 14 February 2023 did not reflect the evidence. Both Lakhwinder's and Peters' enquiries commenced in December 2022.[127] The fact that the steps taken at that time did not uncover much was explained not so much by their lack of endeavour, but from the idiosyncratic way in which the documents were stored, which was unknown to both of them (and could have been disclosed by or on behalf of Gill but was not). Further, there was no substance to the criticism that the Lakhwinder Parties failed to make enquiries of Aman before she ceased attending work in mid February 2023. Lakhwinder's uncontested evidence was that Aman reported to Gill and would only take instructions directly from him. Further, Gill's instructions to Peters in early December 2022 precluded him from speaking to other staff about the issue.[128]
19. In such circumstances, it would have been readily apparent to Gill that if he wanted Aman to be the source of information in this regard, he could have instructed her to disclose the relevant information to the Lakhwinder Parties or Peters. Although the onus was plainly on the Lakhwinder Parties to use their best endeavours, the absence of any information provided by Gill or Aman up until late February 2023 was relevant to any assessment of whether or not the obligation to use best endeavours was met. It was somewhat anomalous that, given the significance now sought to be placed upon this issue, Gill failed to provide any response whatsoever concerning the relevant information when expressly asked to do so.[129]
20. Equally, the complaint made by the Gill Parties that Gill was not given access to the relevant information until 28 February 2023 was entirely hollow. Gill had had complete access, either directly or with the assistance of Aman, to all the information within the books and records of the Iceland Business from 1 December 2022 to at least 13 February 2023. There was nothing available to him in late February 2023 that he could not also have obtained during this earlier period either by himself or with the aid of Aman.
21. In relation to the submission that Peters did not approach the issues concerning the guarantees in a systematic way until 27 February 2023 (which included sending emails to each of the suppliers the following day), Gill's instructions to Peters in December 2022 thwarted all of the available steps that could have been taken at that time. Further, the systematic production of each of the documents by Peters for Gill in late February 2023 was only possible after it had been revealed to Peters that the relevant documents were available on Aman's hard drive. Furthermore, there was no evidence to suggest that either Peters or Maturu ever had knowledge before late February 2023 that there were guarantees forming part of supply agreements rather than existing by way of standalone documents. During their cross-examination, it was put to them that they might have missed guarantees previously executed by Gill because a number of the guarantees were contained in the documents constituting supply agreements. However, it was not put to them that they knew before late February 2023 that was where the guarantees were likely to be located.
22. It follows from what is set out above that the Gill Parties have failed to establish that there was any breach of clause 4.5(a) by reason of a failure to use best endeavours. On the contrary, I am satisfied that best endeavours were in fact used.

C.3 If the answer to the previous issue is "yes", did the breach prevent the Lakhwinder Parties from effecting or seeking to effect Lakhwinder Completion on 1 March 2023?

Answer: unnecessary to decide, but in any event, no.

1. It is not strictly necessary to answer this question in light of the findings made in respect of the previous issue. However, in case there is any remaining doubt concerning whether best endeavours were used by the Lakhwinder Parties, it is appropriate to address this issue as well.

1. If a party is in breach of a contract, this may prevent that party from enforcing the contract unless the breach is remedied. However, not all breaches (no matter how trivial) give rise to such a consequence. As explained in Mehmet v Benson,[130] for a party to be disentitled from an award of specific performance, they must be in breach of a substantial obligation:[131]

The question as to whether or not the plaintiff has been and is ready and willing to perform the contract is one of substance not to be resolved in any technical or narrow sense. It is important to bear in mind what is the substantial thing for which the parties contract and what on the part of the plaintiff in a suit for specific performance are [her or his] essential obligations. Here the substantial thing for which the defendant bargained was the payment of the price: and, unless time be and remain of the essence, [she or he] obtains what [she or he] bargained for if by the decree [she or he] obtains [her or his] price with such ancillary orders as recompense [her or him] for the delay in its receipt. To order specific performance in this case would not involve the court in dispensing with anything for which the vendor essentially contracted. > > ... > > But it is the essential terms of the contract which [she or he] must be ready and willing to perform. [She or he] seeks a transfer of the interest in land, the subject of the contract: the counterpart obligation is the payment of the price. In considering the question of the plaintiff's readiness and willingness in this respect in this case there are many factors. [Her or his] default in paying the instalments of the price, whilst not conclusive, is amongst these factors. > > (Emphasis added.)

2. The test for whether a term is essential is:[132]

...whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that [she or he] would not have entered into the contract unless [she or he] had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor.

3. This test is to be read in light of other relevant factors, including the common intention of the parties, expressed in the language of their contract, understood in the context of the relationship established by that contract and the commercial purpose it served.[133]

1. The plaintiffs' primary submission was that the obligations imposed on the Lakhwinder Parties to achieve Lakhwinder Completion were to pay the Lakhwinder Purchase Price in strict compliance with clause 4.1(d) and to provide evidence of any releases of the Gill Guarantees procured pursuant to clause 4.1(j)(iii). In any event, the plaintiffs submitted that the Lakhwinder Parties had complied with their essential executory obligations under the Settlement Deed. Further, they relied upon the absence of any express obligation to refinance the Bank Facility or to obtain releases of the Gill Guarantees prior to Completion. They submitted that the common intention apparent on the terms of the Settlement Deed was that any failure to procure a release of a guarantee was to be the subject of an indemnity under clause 4.5(b) (or, if applicable, a claim for damages) rather than to prevent Lakhwinder Completion from going ahead.
2. Furthermore, they denied breaching clause 4.1(k), but submitted that the obligations under that clause arose "pending the Lakhwinder Completion Date" rather than "pending Lakhwinder Completion". In short, it was submitted that these provisions were for the benefit of the Lakhwinder Parties, intended to protect the Iceland Business until they took ownership of it upon Lakhwinder Completion. In any event, they submitted any breaches of that clause were not breaches of essential terms, and were alleged to have occurred on 14 February 2023 (with the use of the documents held in escrow), which was after the Lakhwinder Purchase Price had been paid.
3. The Gill Parties simply submitted that the Lakhwinder Parties' failure to use best endeavours prevented the Lakhwinder Parties from effecting Lakhwinder Completion, without elaboration. When invited to expand on this, they submitted this followed from the fact that the definition of Lakhwinder Completion included all parts of clause 4, including clause 4.5(a).

1. In deciding this issue, it is essential to consider the nature of the obligation under clause 4.5(a) and the impracticalities that would potentially arise if the Gill Parties' submission were accepted. If, as was the case here, endeavours had been used pursuant to clause 4.5(a) which the Gill Parties contended on 1 March 2023 were not best endeavours, but the Lakhwinder Parties took a contrary view, how might the parties have intended such an issue be determined for the purposes of Lakhwinder Completion? No mechanism may be found in the Settlement Deed.
2. Naturally, if the Gill Parties had been able to contend that no endeavours had been used pursuant to clause 4.5(a), then that would have given rise to a very different set of circumstances. However, no such contention was made, nor could it have been made on the facts as known to all parties on 1 March 2023. During the Gill Parties' opening, the following exchange took place:

HIS HONOUR: What do you say are the consequences of a party not using best endeavours? > > MR GRONOW: We shouldn't have to complete. > > HIS HONOUR: But how is that to be ascertained looking at it practically? How were the parties to ascertain whether or not there had been best endeavours or not? > > ... > > HIS HONOUR: Yes. I'm going back to 1 March. > > MR GRONOW: Yes. > > HIS HONOUR: And [the Lakhwinder Parties] saying well, we've used our best endeavours. [And the Gill Parties are saying] [n]o, you haven't. > > MR GRONOW: Yes. > > HIS HONOUR: Is that something that can realistically be thought to have been something where the parties are going to either come to an agreement they had been used or that there was some way of them determining that that had occurred or not occurred? > > MR GRONOW: Well, they would have in a clear case. In my submission, it's a clear case where they weren't. > > HIS HONOUR: Of course, clear [cases] are easy. If they'd made no attempt at all, you could say, "Well, you haven't used your best endeavours", and they'd have to say, "Well, you're right". But if there has been some steps taken, how were the parties to ascertain ‑ ‑ ‑ > > MR GRONOW: Well, I accept that's the difficulty of this course. > > (Emphasis added.)

3. Turning to the facts of the case, even if the findings in relation to the previous issue were not accepted such that it ought to be found that best endeavours had not been used, it is difficult to see how it was open to find on the balance of probabilities that this was a clear case where best endeavours were not used. For reasons already stated concerning the evidence about what was done pursuant to clause 4.5(a) by the Lakhwinder Parties,[134] the approach adopted by the Gill Parties as reflected in their opening must be rejected.
4. Regardless of these factual matters as they stood at 1 March 2023, the fact that the parties did not intend for an analysis to take place on 1 March 2023 as to whether or not the steps that had been taken pursuant to clause 4.5(a) amounted to best endeavours was not only to be inferred from the obvious difficulties of such an exercise being determined definitively for the purposes of Lakhwinder Completion (including that the concept involved what would have been reasonable in the circumstances, about which reasonable minds might have differed). The common intention that such a position was not contemplated was also apparent from the wording of the relevant clauses.
5. Clause 4.1(j) expressly stated what was required at Lakhwinder Completion. The parties turned their minds to the evidence the Lakhwinder Parties were required to produce to the Gill Parties so that Lakhwinder Completion could occur. On the very issue of what was required as a result of the existence of clause 4.5, only evidence of any releases procured was required. In short, the parties did not contemplate that anything was required to be produced concerning best endeavours.
6. Naturally, as is reflected in the exchange above, it does not follow from this that the Lakhwinder Parties were entitled to ignore their obligations under clause 4.5(a) and still insist upon Lakhwinder Completion. To have taken no steps to procure the release of the Gill Guarantees, or for that matter to have taken hopelessly inadequate steps, may well have amounted to repudiatory conduct which may have prevented the Lakhwinder Parties from being able to properly insist upon Lakhwinder Completion.[135] However, this position did not reflect the facts. Further, the fact that the parties expressly provided for indemnities to arise under clause 4.5(b) in the event that releases were not procured, which indemnities were to continue on an ongoing basis after any Lakhwinder Completion, gave further weight to the conclusion that any failure to strictly comply with the obligation to use best endeavours would not have precluded the Lakhwinder Parties from complying with clause 4.1(j) and enabling Lakhwinder Completion to occur.[136]
7. For the above reasons, it cannot be said that a failure to use best endeavours in accordance with the obligation set out in clause 4.5(a) (despite having used some substantial relevant endeavours)[137] would have amounted to a breach of an essential obligation. Accordingly, even if there had been a failure by the Lakhwinder Parties to use their best endeavours pursuant to clause 4.5(a), that would not have prevented them from properly effecting or seeking to effect Lakhwinder Completion on 1 March 2023.

C.4 Did the fact that some or all of Gill's Equity Interests were subject to registered security interests in favour of the Commonwealth Bank and others at 1 March 2023 prevent Lakhwinder Completion from occurring on 1 March 2023?

Answer: no.

1. The reasons given in answer to the first issue above are repeated.[138] The existence of registered securities in favour of the Commonwealth Bank and others did not prevent Lakhwinder Completion from occurring. There was no term to this effect in the Settlement Deed. Further, all parties were aware of the existence of such securities in late August 2022 and made no suggestion in the Settlement Deed that, as between them, the transaction could not proceed as contemplated under the terms of the Settlement Deed.
2. Before leaving this topic, it should be noted that the Commonwealth Bank was made aware of the proposed transactions under the Settlement Deed long before 1 March 2023, being the Lakhwinder Completion Date.[139] Not only has the Commonwealth Bank not sought to prevent the Lakhwinder Parties from taking ownership of the Iceland Group, but rather it has at times sought details of how it could be satisfied that ownership would be transferred to the Lakhwinder Parties, as had been agreed.[140]
3. Further, it is material that, for the purposes of the transactions contemplated under the Settlement Deed, the Gill Parties warranted that they had full authority and all necessary consents to enter into and perform their obligations under the Settlement Deed and to carry out all transactions contemplated by the Settlement Deed.[141] It was also warranted that entry into and performance of the Settlement Deed by the Gill Parties did not constitute any breach or default under any agreement to which the Gill Parties were bound.[142] The only manner by which such warranties could have been given by the Gill Parties was on the basis that the transactions could be carried out as between the parties to the Settlement Deed, notwithstanding the position of the Commonwealth Bank.

C.5 Did the facts that, by 1 March 2023: (1) the Bank Facility had not been satisfied or refinanced; and (2) the Commonwealth Bank had not given its consent to the transfer of the Gateway Property from Iceland Properties to Gateway 81 and its consent to the transfer of the Vehicles to Iceland Holdings prevent Lakhwinder Completion from occurring on 1 March 2023?

Answer: no.

1. A party to a contract may act in a manner that affirms the existence of a contractual right or rights by exercising what is commonly described as an election between an inconsistent set of rights.[143] In order to make a choice, the non-defaulting party responding to the breach of contract must have some knowledge of the circumstances giving rise to the inconsistent set of rights.[144] An election may be communicated verbally or by other conduct and must be unequivocal.[145]
2. Historically, an election by affirmation of a contractual term arose in circumstances in which the performance of an obligation by 1 party was seen to be a condition precedent to the existence of an obligation of the other party.[146] As will become apparent, on the facts of this case, it is unnecessary to traverse the development or underlying principles in this area of the law.[147]

1. The plaintiffs submitted that on 1 March 2023 it was open to the Lakhwinder Parties to elect to purchase Gill's Equity Interests despite the Gill Parties' breaches of their obligations to transfer the Gateway Property and the Vehicles, and despite their failure to obtain a release of the security held by Accelerated Loans over the Vehicles.[148] In relation to the last of these matters, it was noted that there was an obligation upon the Gill Parties to provide evidence of the release of the security in favour of Accelerated Loans.[149] Accordingly, it was submitted the Gill Parties could not take advantage of their own wrong.[150]
2. The Gill Parties simply relied upon their previous submissions in contending that, absent consent from the Commonwealth Bank, Lakhwinder Completion could not occur on 1 March 2023.

1. In addressing this issue, not much needs to be said beyond what is set out above in relation to the proper construction of clause 4 and how it was intended to operate if the triggering events occurred.[151] However, as already acknowledged,[152] further consideration needs to be given to the opening words of clause 4.1(h)(ii), which expressly provided that clause 4.1(h)(ii) became operative upon the transfer referred to in clause 4.1(h)(i) being effected.
2. As observed above, it was expressly provided that if clause 4 was triggered and the Palta Caveat was withdrawn, Gill was required immediately to cause Iceland Properties to transfer the registered title to the Gateway Property to Gateway 81. Such a step, which was only agreed to occur within the operation of clause 4, was plainly for the benefit of the Lakhwinder Parties as they were to become the outright owners of Gateway 81 and thus the beneficial owners of all of the Gateway Property. Although it was possible that, as part of Gill causing Iceland Properties to transfer the registered title to the Gateway Property to Gateway 81, the Commonwealth Bank might have agreed to release Gill from his guarantee, no part of the Settlement Deed provided for such a release to be a prerequisite of the agreed transfer of the registered legal ownership of the Gateway Property.
3. Further, it cannot be overlooked that Gill swore and filed an affidavit in this proceeding in February 2022 (which was relied upon at trial) in which he deposed that "as soon as" the Palta Caveat was removed, the Gateway Property would be transferred.[153] This sworn evidence was unconditional. There was no evidence to suggest that his position was any different in late August 2022 when the Settlement Deed was executed. On the contrary, by Gill agreeing to the terms of clause 4.1(h)(i), he unequivocally indicated that it was not.
4. Accordingly, what was contemplated under clause 4.1(h)(i) was for the benefit of the Lakhwinder Parties; and the Gill Parties would have been precluded from insisting upon Lakhwinder Completion taking place if the Lakhwinder Parties had required performance of clause 4.1(h)(i).[154] Equally, the Lakhwinder Parties were perfectly entitled not to insist upon that benefit and to elect to proceed to Lakhwinder Completion notwithstanding that the transfer of the registered title to the Gateway Property (together with the transfer of title to the Vehicles and the absence of evidence of a release of the security over the Vehicles) had not been effected. As already stated,[155] this conclusion is entirely consistent with the language of clause 4.1(i), which required the Gill Parties to agree to transfer Gill's Equity Interests on the Lakhwinder Completion Date in return for no more than payment of the Lakhwinder Purchase Price strictly in accordance with clause 4.1(d).
5. The fact that Lakhwinder Completion as defined in the Settlement Deed was to be "in accordance with clause 4" did not necessitate strict fulfilment of each subclause of clause 4 in order for a settlement to occur. Instead, as outlined above,[156] each subclause must be construed in the context of the relevant clause and the Settlement Deed as whole. On the correct construction of clause 4, the Lakhwinder Parties were entitled to elect to pay the Lakhwinder Balance despite the Gill Parties' non-compliance with their obligations under clause 4.1(h)(i). Therefore, settlement on this basis was not inconsistent with the definition of Lakhwinder Completion.
6. Furthermore, there was nothing uncommercial or unreasonable about a conclusion that the Settlement Deed may operate in this way upon the Lakhwinder Parties electing to pay the Lakhwinder Balance despite registered title not being transferred to Gateway 81, and the Bank Facility remaining in place and in default. Although Gill still had exposure under the Commonwealth Bank guarantee (and the other trade guarantees), it had been expressly agreed that if releases could not be obtained the guarantees would remain in place despite Lakhwinder Completion occurring. Moreover, Gill's exposure under the guarantees was the subject of a complete indemnity which was of substance. Under the course that they elected to take, it was the Lakhwinder Parties who ran the risk of the Iceland Business being taken out of their control and sold by the Commonwealth Bank, despite having irrevocably paid $5.5 million to the Gill Parties to take ownership.

C.6 Did Lakhwinder Completion occur on 1 March 2023?

Answer: yes.

1. In light of the reasons above,[157] there is little need to elaborate.
2. Despite the fact that the Gill Parties had not performed in accordance with their obligations pursuant to clauses 4.1(h)(i) and 4.1(j)(vi) and (vii), the Lakhwinder Parties clearly and unequivocally elected to proceed to Lakhwinder Completion on 1 March 2023 and satisfied each of the obligations imposed upon them under clause 4.[158]

C.7 If Lakhwinder Completion did not occur on 1 March 2023, on the proper construction of clause 5 of the Settlement Deed, has the condition for the operation of clauses 5(a) and 5(b) of the Settlement Deed been satisfied?

Answer: unnecessary to decide.

C.8 If the answer to the preceding issue is "no", is it unconscionable conduct by the Gill Parties (within the meaning of section 21 of the Australian Consumer Law or section 12CB of the Australian Securities and Investments Commission Act 2001 (Cth), or both) in all the relevant circumstances for them to rely on the breaches by the Lakhwinder Parties of the Settlement Deed prior to or as at 1 March 2023 as a basis for seeking orders winding up the Iceland Group Companies?

Answer: unnecessary to decide.

1. In light of the findings made above, these issues do not arise.

C.9 What is the value of the net assets of the Iceland Group available to meet the indemnity given to the Gill Parties under clause 4.5(b) of the Settlement Deed, and were they sufficient to meet that indemnity?[159]

Answer: unnecessary to decide, but in any event, approximately $10 million.

1. This question arose in the context of allegations concerning whether it would have been unconscionable for clause 5 of the Settlement Deed to operate according to its terms. This is a simple factual matter and by the conclusion of the trial the net asset position was common ground. Accordingly, although this issue does not arise, it is convenient to record the position as it also provides some context for the contractual issues referred to above.
2. Based on a valuation provided for bank refinancing purposes, the Gateway Property was valued at $21.5 million.[160] The value of the Vehicles was independently assessed as at 22 April 2023 at $3.163 million.[161] There was no evidence adduced to suggest that the liabilities of the Iceland Business were of any significance beyond the debt owed to the Commonwealth Bank of approximately $14.2 million and the sum in the order of $272,000 owed to Accelerated Loans in relation to the Vehicles. No doubt these debts would be increasing on a daily basis, but there was no evidence concerning by what amount this might be.
3. Accordingly, the net assets of the Iceland Group are valued at approximately $10 million.[162] As to the sufficiency of this amount, it is inappropriate to answer this as the question arose in the context of a series of other matters concerning unconscionability that were unnecessary to decide.

C.10 Should the court in any event make orders for the winding up of the companies listed in clause 5(a) of the Settlement Deed pursuant to the just and equitable ground under section 461(1)(k) of the Corporations Act?

Answer: unnecessary to decide.

1. In light of the findings made above, this issue does not arise.

1. In the circumstances of this case, it is appropriate to exercise the court's discretionary power to grant declaratory relief.[163] For the reasons set out above, a declaration will be made substantially in the form sought by the plaintiffs, namely that the Lakhwinder Parties validly effected Lakhwinder Completion under clause 4.1 of the Settlement Deed on 1 March 2023.
2. The parties will be invited to make any further submissions in relation to the undertaking that has been proffered by the Lakhwinder Parties regarding the liability of the Lakhwinder Parties and the Iceland Group Companies for the obligations of Iceland Cold and Iceland Properties under the Bank Facility, as well as the trade creditors of the Iceland Group, until such time as the Bank Facility is discharged.[164]

[1] At this time, a short adjournment was sought arising out of issues with legal representation.

[2] After this time, Iceland Properties ceased to be the appointed trustee, but has remained on the title of the Gateway Property as the registered proprietor.

[5] This company was the trustee for the Gill Family Trust and traded as Gill Refrigerated Transport.

[6] On 25 June 2018, the Bank Facility was increased with respect to Iceland Properties from $8.3 million to $12.5 million; and with respect to Iceland Cold's trade finance facility from $500,000 to $1.5 million.

[7] The all present and after-acquired property security registered over Iceland Cold was granted on 14 November 2016; over Natural Produce was granted on 15 November 2016; and over Iceland Properties was granted on 24 July 2017.

[8] The Commonwealth Bank relationship manager engaged to manage the interests of the Lakhwinder Parties was different and kept separate from the relationship manager that handled the affairs of the Iceland Group.

[9] Iceland Properties Pty Ltd v Palta [2022] VSC 734. An ex tempore ruling was given on 28 November 2022 and a revised ruling was given the following day.

[10] Ibid, [21], [26]-[33], [39]-[40] (McDonald J).

[11] See further par 51 below.

[12] Headings in the Settlement Deed were for reference only and did not affect its construction: cl 2.2.

[13] Some further definitions were contained in the operative clauses of the Settlement Deed.

[14] There was no definition of Gill Interests in the Settlement Deed, but self-evidently this was a reference to the Gill Parties.

[16] The definition of the Lakhwinder Parties used in the Settlement Deed was broader than the definition provided in par 12 above and included various other related entities.

[17] Although this term was defined as Gill's Equity Interests, the term used throughout the Settlement Deed was instead the Gill Equity Interests.

[18] Schedule 1 contained details of the shareholders and unitholders of the Iceland Group, together with details of the shareholders and unitholders of Iceland Cold and Iceland Properties and particulars of the Gateway Property (these particulars included details of the mortgage held by the Commonwealth Bank, the Palta Caveat and the Lakhwinder Caveat, which were each listed as encumbrances).

[19] There was no definition of Gill Refrigerated Transport in the Settlement Deed, but see fn 5 above.

[20] The Iceland Group is also referred to as the Iceland Group Companies in the Settlement Deed.

[21] This was a reference to Gill's Equity Interests: see fn 17 above. For consistency, except in relation to the terms of the Settlement Deed itself, in this judgment reference will be made to Gill's Equity Interests.

[22] There was no definition of Caveator in the Settlement Deed.

[23] Schedule 3 contained an itemised list of the Vehicles.

[24] The Settlement Deed here referred to cl 4.2(a), but the parties agreed that this was in error and was instead intended to be a reference to cl 4.1(d).

[26] Somewhat paradoxically, the Gill Parties submitted that unless there was an express refusal to release a Gill Guarantee then there was no obligation upon the Lakhwinder Parties to provide an indemnity under this clause. No doubt, this was perceived to be in their interests as the absence of an indemnity might have suggested an overall operation of the Settlement Deed in line with their case. The plaintiffs did not accept this clause was so confined. In my view, the construction contended for by the Gill Parties would leave the potential for a lacuna that could not reasonably have been intended. This potential eventuality could arise even if best endeavours had been used, whereby the Gill Parties would not have the benefit of an indemnity despite the fact that a guarantee remained on foot for which Gill may be potentially liable simply because there had not been a formal refusal to release by the supplier or the Commonwealth Bank. Given the obvious common intention that cl 4.5 would operate to protect Gill in relation to any ongoing liability arising from the Gill Guarantees, this more restricted construction must be rejected. In short, in this context (and leaving aside what was required by the obligation to use best endeavours), "refuses to release" in this context must be understood to mean "has not provided a release".

[27] Related Entity was defined to have the same meaning as under the Corporations Act.

[28] Various other loans, claims and representations were listed under this clause, the subject matter of which is not relevant for present purposes.

[29] There was no definition of Gill Entities in the Settlement Deed, but self-evidently this was a reference to the Gill Parties.

[30] There was no definition of Related Body Corporate in the Settlement Deed.

[31] See fn 18 above.

[32] To quote from the Gill Parties' solicitor's summary of the events at that time.

[33] As contemplated by the Settlement Deed, cl 3.1(b)(ii).

[34] In accordance with the Settlement Deed, cl 4.1(b).

[35] The Palta Caveat having already been removed: see par 30 above.

[36] In accordance with the Settlement Deed, cl 4.1(d)(i).

[37] There was differing evidence about the level of Lakhwinder's involvement in the day-to-day administration of the Iceland Business. Nothing turned on this as the evidence of Lakhwinder's knowledge or otherwise of various matters referred to above was not the subject of challenge. Up to July or August 2022, either Gill or Lakhwinder could individually authorise bank transactions. After this time, dual authorisation was required.

[38] See par 45 above.

[39] While registered as Energy Lease Pty Ltd, the business traded under the name Energy Ease.

[40] See further pars 86, 89 below.

[41] It was unclear on the documents tendered when it was that finance was sought to refinance the Bank Facility. Email correspondence between the National Australia Bank and the Lakhwinder Parties in January 2023 suggested that the initial application for finance was made in respect of the Lakhwinder Purchase Price, however, it is unclear when the scope of the application changed. This uncertainty was not the subject of cross-examination.

[42] It was not suggested that the solicitors were acting for anyone other than Gill.

[43] Payment was made to the Gill Trust Account in accordance with the Settlement Deed, cl 4.1(d)(ii), but was inconsistent with the direction given by Gill on 9 January 2023 both as to the bank account and the timing: see par 51 above.

[44] This occurred as a result of the Lakhwinder Parties agreeing with Kaine that the Kainelaw Caveat would be withdrawn if the Lakhwinder Balance was paid into the Gill Trust Account as agreed in the Settlement Deed. As part of the agreement, Kaine undertook that he would not transfer any funds out of the Gill Trust Account except by order of the court. There was no suggestion that any of the Gill Parties were privy to this agreement.

[45] There has been non-compliance with the order made on 21 December 2022: see par 50 above. This matter will be addressed upon delivery of these reasons.

[46] See further par 72 below. Lakhwinder's unchallenged evidence was that at the time he believed he was entitled to act as he did.

[47] See par 54 above.

[48] On 1 March 2023, Seghal agreed to withdraw the Seghal Caveat if $250,000 was paid into court. On 29 March 2023, the solicitor acting for both Seghal and Capital & Co agreed to withdraw the Seghal Caveat and to undertake on behalf of Capital & Co not to lodge any further caveat over the Gateway Property upon payment of $240,00 into court. Orders were made with the consent of all parties to reflect this position.

[49] See par 62 above.

[50] An affidavit sworn by the solicitor for the Gill Parties and relied upon by them at trial referred to correspondence in late February 2023 by which the Lakhwinder Parties appeared to procure a self-serving letter from the National Australia Bank. Nothing in this correspondence altered the underlying facts.

[51] An issue raised on the pleadings by the Gill Parties was whether the Lakhwinder Parties had breached the Settlement Deed by transferring ownership or control of the Iceland Group to Hanzcold before 1 March 2023. It is unnecessary to refer to all the evidence on this issue. In closing submissions, the Gill Parties accepted that this breach had not been established.

[52] Only 2 suppliers had responded at the time Peters gave evidence, but neither had referred to Gill having given a guarantee.

[53] See further par 86 below.

[54] See par 76 above.

[55] The solicitors in question were, at this time, acting only for Gill, Ekgill, Iceland Cold and Natural Produce. A notice of appearance in respect of Iceland Properties was filed on 6 March 2023.

[56] According to Peters, nothing was located that had not already been prepared and handed to Gill previously.

[57] Aman had not attended the Gateway Property since 15 February 2023 and produced a doctor's certificate to explain her absence. Although the evidence was not entirely clear, it appears her employment ceased on 15 March 2023.

[58] There was no objection to this hearsay evidence, which remained unchallenged. The discussion was corroborated by a subsequent email sent on behalf of Energy Ease.

[59] Inadvertently, Krueger Transport was not the subject of the email sent to suppliers by Peters on 28 February 2023 enquiring as to whether or not Gill had provided guarantees in their favour: see par 79 above.

[60] Peters gave evidence that it was expected that a small invoice would be received in the future in relation to some missing components of a forklift that had been returned. It was not suggested by the Gill Parties that this was likely to give rise to any liability under any guarantee.

[61] There was evidence in relation to some other debts, the detail of which is not necessary to go into in light of the conclusion reached on the contractual issues raised under the Settlement Deed.

[62] The lateness of this evidence was explained by Gill on the basis that he did not properly review the documents until 1 and 2 April 2023. Gill was unable to say whether these documents were provided to him on 28 February 2023 or 3 March 2023 or what the original source of these documents was (including the possibility that they came from Aman's computer). There was no objection to the further evidence being relied upon.

[63] These amounts are in addition to moneys paid to finance and replace ageing equipment and infrastructure, in the order of $1.164 million.

[64] See par 62 above.

[65] During cross-examination, Lakhwinder acknowledged this was the position, but explained he did not want to over-commit in the current circumstances.

[66] Two further issues were initially put forward by the parties for determination, however these issues were ultimately conceded by the Gill Parties in closing submissions.

[67] This was the issue as agreed by the parties, but no party contended there was an express term to this effect.

[68] Adaz Nominees Pty Ltd v Castleway Pty Ltd [2020] VSCA 201, [70] (Whelan JA and Riordan AJA, with whom McLeish JA agreed), citing Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544, 551 [16] (Kiefel, Bell and Gordon JJ).

[69] Ibid, citing Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 116 [46], 117 [49] (French CJ, Nettle and Gordon JJ).

[70] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352.2 (Mason J, with whom Stephen and Wilson JJ agreed). See also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 134 [118]-[120] (Bell and Gageler JJ); Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45, 62-63 [39] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

[72] Ibid, 283.1 (Lord Simon, Viscount Dilhorne and Lord Keith). These criteria have been endorsed by the High Court on numerous occasions: see, for example, Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39; (2022) 406 ALR 678, 705 [113]-[114] (Edelman and Steward JJ); Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 422.2 (Brennan CJ, Dawson and Toohey JJ), 441.6 (McHugh and Gummow JJ); Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 65.8 (Gibbs CJ); Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 347.2 (Mason J, with whom Stephen and Wilson JJ agreed), 404.2 (Brennan J).

[73] The Gill Parties' solicitors at the time of the trial in June 2022, Aitken Partners, had ceased to act before the trial resumed in August 2022: see par 2 above.

[74] As already noted, the Settlement Deed is inconsistent in its reference to this term. It is referred to interchangeably as Gill's Equity Interests and the Gill Equity Interests.

[75] See fn 18 above.

[76] See also fn 87 below.

[77] See also par 121 below.

[78] See par 16 above.

[79] See par 37 above.

[80] See par 7 above.

[81] See par 37 above, cl 4.1(b).

[83] Ibid, definition of "Lakhwinder Completion Date".

[84] Schedule 1 was headed "Iceland Group - Officeholdings, Shareholdings, Unitholders".

[85] For completeness, on an interlocutory application on 27 February 2023, the Gill Parties contended that the transfer of the Gateway Property was required to occur at Lakhwinder Completion. Correctly, this position was not adopted at trial.

[86] No express term to the effect alleged was contended for by the Gill Parties.

[87] This submission implicitly acknowledged that Iceland Properties was not to come under the control of the Lakhwinder Parties and that Gill's Equity Interests did not include the Gateway Property.

[88] (1977) 180 CLR 266: see par 107 above.

[89] See par 107(3) above.

[90] Which held all the issued shares in Iceland Australia and Iceland Logistics, together with all the units in the Iceland Cold Storage Australia Trust and the Iceland Logistics Trust: see par 15 above.

[91] See pars 111-112 above.

[92] (1977) 180 CLR 266, 283.2 (Lord Simon, Viscount Dilhorne and Lord Keith).

[93] Herdegen v Federal Commissioner of Taxation [1988] FCA 419; (1988) 84 ALR 271, 281.3-282.5 (Gummow J).

[94] Ibid. See also Pitard Consortium Pty Ltd v Les Denny Pty Ltd (2019) 58 VR 524, 527-534 [10]-[38] (McDonald J). However, a bare trustee may retain a right of indemnity with respect to any liabilities properly incurred in the conduct of the affairs of the trust: Pitard Consortium Pty Ltd v Les Denny Pty Ltd (2019) 58 VR 524, 527 [9], citing Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226, 245 [47] (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ).

[95] Issues relating to what was involved in the Lakhwinder Parties using their best endeavours to procure a release of these guarantees are discussed below: see pars 155-189.

[96] See pars 220-222 below. Although the evidence dealt with the assets at the time of trial, it was not suggested that there had been any material change in the net asset position between late August 2022 and early April 2023.

[97] For completeness, the Lakhwinder Parties had also agreed to this arrangement under cl 3, and it follows that all parties considered the indemnities to be of substance at the time the Settlement Deed was entered into, and anticipated them to be of substance at the time of any completion: see par 37 above, cl 3.2(b).

[98] Such a scenario must have been contemplated and would have occurred if the Commonwealth Bank consented to the transfer of the registered ownership upon the Palta Caveat being withdrawn, but only on the basis that its securities remained in place.

[99] The liquidators would have had an obligation to wind up the Iceland Group Companies, but it might have been possible for the Iceland Business to be sold if liquidators were appointed.

[100] Being the clause that all parties agreed was the clause intended to be referred to in cl 4.1(i): see fn 24 above.

[101] See par 37 above, cl 4.1(d)(i).

[102] See pars 211-215 below.

[103] In an affidavit sworn on 24 March 2023 (which was relied upon at trial), Gill affirmed that, if the Commonwealth Bank agreed for whatever reason to consent to the transfer of the Gateway Property from Iceland Properties to Gateway 81 and to release him from his personal guarantee in its favour, he would instruct his solicitors to undertake any steps necessary to cause this transfer to occur. He further stated that unless the Commonwealth Bank agreed to these matters, he was unwilling to take any such steps.

[104] The proposed undertaking was in the following form: The Lakhwinder Parties undertake that, in the event that they achieved Lakhwinder Completion under cl 4.1 of the Settlement Deed without the Bank Facility having been satisfied, then, upon completion, the Lakhwinder Parties and the Iceland Group, as between them and Iceland Cold and Iceland Properties, will become primarily liable for the obligations of Iceland Cold and Iceland Properties under the Bank Facility, as well as the trade creditors of the Iceland Group, until such time as the Bank Facility is discharged.

[105] See par 25 above. The evidence was unclear as to whether or not this ceased sometime after the Settlement Deed was executed, but the reference to the status quo is a reference to the position prior to 25 August 2022. A letter from the Commonwealth Bank suggested the cessation occurred on 31 August 2022, but under cross-examination Gill did not accept this. The underlying evidence was not before the court.

[106] See, for example, Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 659-660 [41]-[43] (French CJ, Hayne, Crennan and Kiefel JJ); Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 91.9-92.1 (Mason J).

[107] Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83, 101.6 (Mason J).

[108] See Altis PropCo2 Pty Ltd v Majors Bay Development Pty Ltd [2022] NSWSC 403, [72] (Ball J), and the cases there cited.

[110] See pars 45, 47, 59, 63, 65, 75-76, 81 above.

[111] See pars 45, 48, 59, 63, 65, 76, 81 above.

[112] See pars 47, 63 above.

[113] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, 320.10-321.2 (Windeyer J), quoting from Wigmore on Evidence, vol 2 (3rd ed, 1940) s 285, 162. See also 308.5-308.7 (Kitto J) and 312.6-312.8 (Menzies J); Kuhl v Zurich Financial Services Australia Limited [2011] HCA 11; (2011) 243 CLR 361, 385 [64] (Heydon, Crennan and Bell JJ).

[114] See pars 42, 70, 97, 99 above.

[115] On the evidence before the court, it was unclear whether such a notification was in fact given in the context of the discussions that took place between the Lakhwinder Parties and the Commonwealth Bank in August 2022: see par 39 above.

[116] For completeness, some uncertainty necessarily remained until the expiry of a further 28 days, being the time during which Palta could have applied for leave to appeal.

[117] See par 37 above, cl 4.5(a).

[118] See pars 220-222 below.

[119] See pars 55, 100 above.

[120] See pars 45, 48, 59, 63, 65, 76, 81 above.

[121] See par 68 above.

[122] See par 69 above.

[123] See par 81 above.

[124] See par 86 above. A further guarantee was later identified by Gill and referred to in an affidavit served during the trial on 3 April 2023, but it was unclear whether the document containing this guarantee as identified by Gill was obtained before or after 1 March 2023: see pars 93-94 above.

[125] On the first day of trial it was accepted that Gill did not know whether in fact there were any guarantees beyond those produced as part of the process he engaged in with Peters in late February 2023. Further, even on Gill's estimate, there were around 50 to 60 suppliers and he believed he had given a guarantee in relation to "most of them": see par 82 above. Self-evidently, this itself suggested the number of executed guarantees may have been significantly less than 50.

[126] See fn 59 above.

[127] See pars 45, 47-48 above.

[128] See par 45 above.

[129] See par 63 above.

[130] [1965] HCA 18; (1965) 113 CLR 295.

[131] Ibid, 307.8-308.4 (Barwick CJ, with whom McTiernan J agreed).

[132] Associated Newspapers Ltd v Bancks [1951] HCA 24; (1951) 83 CLR 322, 337.2 (Dixon, Williams, Webb, Fullagar and Kitto JJ), citing Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632, 641.8 (Jordan CJ). See also Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, 642.3 (Brennan J).

[133] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115, 138 [48] (Gleeson CJ, Gummow, Heydon and Crennan JJ).

[134] See par 180 above.

[135] Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 409.8 (Mason CJ), 422.1 (Brennan J), citing Fercometal SARL v Mediterranean Shipping Co SA [1989] 1 AC 788, 805.7 (Lord Ackner); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, 634.1 (Mason CJ), citing Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, 625.8 (Gibbs CJ). It is unnecessary to consider whether this would merely have given rise to a right on the part of the Gill Parties to terminate the Settlement Deed, or whether they would have been entitled to insist upon cl 5 coming into operation.

[136] It is unnecessary to address the plaintiffs' submissions concerning cl 4.1(k) and whether these provisions were solely for the benefit of the Lakhwinder Parties as the allegations in the defence concerning alleged breaches of this clause related to the allegation that the Iceland Group was sold in February 2023 to Hanzcold, which allegation was not pursued: see fn 51 above. However, for completeness, any breach of cl 4.1(k) alleged was remedied before 1 March 2023 and accordingly did not provide a basis for preventing Lakhwinder Completion from occurring.

[137] In contrast to using no endeavours at all or using hopelessly inadequate endeavours.

[138] See pars 130-154 above.

[139] The Commonwealth Bank was informed of the Settlement Deed shortly after it was executed (see par 39 above) and had not objected to that course, albeit it was envisaged that a new application for finance would need to be made. Further, a possibility in the change of the ultimate ownership of the Iceland Business had been foreshadowed as early as March 2022, and again in May 2022.

[140] See pars 68, 98 above; also noting par 101 above and the Commonwealth Bank's acknowledgment that it considered the transfer of the Iceland Business in February 2023 (which in fact had not occurred) to be a further breach of its securities.

[141] See par 37 above, schedule 2, cl 2(a).

[143] Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38; (2022) 406 ALR 632, 643 [38] (Kiefel CJ, Edelman, Steward and Gleeson JJ).

[147] But see ibid, 646-647 [51]-[53].

[148] For completeness, it should be noted that the Vehicles were also subject to registered security interests in favour of the Commonwealth Bank: see par 10 above.

[149] Referring to cl 4.1(j)(vii): see par 37 above.

[150] Mitchell v Pattern Holdings Pty Ltd [2002] NSWCA 212; (2002) 11 BPR 20,241, 20,258-20,260 [55] (Powell JA, with whom Stein and Rolfe JJA agreed), citing New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1, 8.5 (Lord Findlay LC), 9.2 (Lord Atkinson) and Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180, 188.9-189.3 (Lord Diplock); TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, 147B (Hope JA, with whom Meagher and Priestley JJA agreed).

[151] See pars 109-124, 137-152, 169-171 above.

[152] See par 151 above.

[153] See further par 29 above.

[154] See par 191 above.

[155] See par 149 above.

[156] See pars 199-203 above.

[157] See pars 130-154, 204-206, 211-216 above.

[158] This conclusion does not ignore the breach of cl 4 that occurred on 14 February 2023: see par 62 above. This breach had been rectified before the Lakhwinder Completion Date: see par 72 above.

[159] The parties agreed for the purposes of this issue that only assets relevant to its determination was the Gateway Property and the Vehicles.

[160] There was no evidence to suggest there had been a material change in value since the valuation was conducted on 17 January 2023, nor that there had been a material change between late August 2022 and 17 January 2023.

[161] Although not a valuer, evidence was adduced from Gill that he accepted the valuation of the Vehicles as a going concern at at least $3.2 million.

[162] Of course, the indemnities agreed to under cl 4.5(b) are not confined to the assets of the Iceland Group as the Lakhwinder Parties also agreed to indemnify the Gill Parties in relation to any amount owing pursuant to any Gill Guarantee: see par 37 above, cl 4.5(b).

[163] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 581.9-582.5 (Mason CJ, Dawson, Toohey and Gaudron JJ).

[164] See fn 104 above. It is noted that, in opposing any finding about the implied term which the Lakhwinder Parties alleged ought to be found, the Gill Parties submitted the wording of the alleged implied term was unworkable. In light of the findings above (see pars 153-154), it has not been necessary to address this question directly in considering whether the alleged term ought to have been implied. However, nothing raised in the Gill Parties' submissions would give rise to any material difficulty in an undertaking being given to the court in terms substantially as formulated by the Lakhwinder Parties. Accordingly, the parties will be directed to consider the most appropriate form of undertaking to achieve an outcome where, as between Iceland Cold and Iceland Properties on the 1 hand and the Lakhwinder Parties and the Iceland Group Companies on the other hand, it will be the latter that will be required to meet obligations arising both under the Bank Facility and as a result of trading with the Iceland Group's trade creditors (noting that there is already an indemnity in place in favour of Gill in relation to the Gill Guarantees).