Salta Constructions Pty Ltd v St George Bank [2014] VSCA 289

2 Subsequent to the grant of the mortgage to St George, in 2009 two further mortgages were granted over the property by FSDWA. These mortgages were granted to Salta Constructions. In the proceeding below, Salta Constructions sought orders the substance of which would have resulted in a payment to it of part of the proceeds of sale of the property pursuant to its mortgages.

3 The central issue at trial concerned the application of the principles in Hopkinson v Rolt.[1] There were also issues concerning the proper construction of the mortgage, and the construction and effect of a notice of default dated 3 August 2012 ('the notice of default') that had been served by St George on FSDWA.

4 After a two day trial, a judge of the Commercial Court rejected Salta Constructions' Hopkinson v Rolt case and upheld St George's argument concerning the construction and effect of the notice of default. In the result, the proceeding brought by Salta Constructions was dismissed.

5 In this appeal, Salta Constructions seeks an order setting aside the judgment below and a declaration that there be an accounting of the balance of the proceeds of sale of the property. No issue is taken with the judge's conclusions in respect of the Hopkinson v Rolt part of the case. The central issues in the appeal concern the proper construction of the mortgage, and the construction and effect of the notice of default.

6 The relevant background facts may be briefly stated as follows.[2] FSDWA was a member of a group of companies known as the First State Group. The Group was, from time to time, provided with financial accommodation by a number of banks, including St George. On 12 December 2003, FSDWA granted a first mortgage to St George over the property as security for the liabilities of Group members. The mortgage was registered on 17 March 2004.

7 Under the terms of the mortgage, FSDWA agreed to pay to St George on demand the 'amount owing' specified in a demand, although that obligation was subject to contrary agreement in writing for so long as the mortgagor was not in default. The 'amount owing' was defined in the mortgage to include all amounts that 'at any time' were 'payable, are owing but not currently payable, are contingently owing, or remain unpaid by you to us' or 'are reasonably foreseeable as likely, after that time,[3] to fall within any of the above paragraphs' (the reference to the above paragraphs being a reference to the three sub-paragraphs of the definition of 'amount owing' appearing immediately above the sub-paragraph of the definition in which these words are to be found).[4]

8 During 2006 and 2007, FSDWA also provided three guarantees to St George for liabilities incurred by Gallway Investments Pty Ltd ('Gallway Investments') and Tilley Properties (Qld) Pty Ltd ('Tilley Properties'). Under each guarantee, FSDWA agreed to pay 'the guaranteed money' to St George 'on demand', whether or not a demand was made on the customer. The expression 'guaranteed money' was defined in each guarantee in relevantly identical terms as the expression 'amount owing' was defined in the mortgage.

9 On about 19 September 2007, St George offered to provide FSDWA with a Commercial Bill Acceptance and Discount Facility ('the bill facility') with a limit of $14,062,000. This limit represented an increase over a previous limit under a facility granted in February 2006. The bill facility was to be granted pursuant to General Standard Terms, a copy of which was enclosed with the offer. Security for the bill facility included the mortgage over the property. The offer was accepted by FSDWA on 28 September 2007. The bill facility was to expire on 1 June 2009.

10 On 5 March 2009, the facility was extended to 30 June 2009. On 23 June 2009, the facility was extended to 31 July 2009. On 21 October 2009, it was again extended to 31 October 2009. There is an unexplained gap in the extension process from 31 July to 21 October 2009, when St George offered the extension to 31 October 2009.

11 On and between 31 October 2009 and 11 February 2010, St George accepted and discounted bills with a total face value of $14,062,000. There were various rollovers that occurred in October, November and December 2009, January 2010 and finally on 11 February 2010, at which point St George declined to accept any further bills. On 12 March 2010, St George debited the outstanding amount of $14,062,000 to an overdraft account in the name of FSDWA.

12 On 6 March 2012, St George appointed receivers and managers of the assets of FSDWA. By contract of sale dated 18 July 2012, novated in favour of St George by a deed dated 5 September 2012, receivers appointed by St George sold the property to a third party for $20 million. On 15 November 2012, the Supreme Court of Western Australia ordered the removal of Salta Constructions' caveat from the title of the property, and the sale was completed on the following day. The whole of the proceeds of sale have been applied by St George in reduction of the amounts due under its mortgage, which St George contended included the amount required to repay the overdraft, and the amount due under the guarantees given by FSDWA.

13 On 3 August 2012, St George served the notice of default on FSDWA. The notice of default was headed 'Notice of Default' and made reference in the heading to s 106 of the Transfer of Land Act 1893 (WA). The notice was addressed 'TO THE BORROWERS AND MORTGAGORS NAMED BELOW'. The 'Lender' was identified as St George and the 'Borrower(s)', also called 'you', was identified as FSDWA. The property was identified as the 'Mortgaged Property', and the 'Mortgage' was identified as the mortgage granted to St George over the property by FSDWA in 2003. The notice identified nine loan numbers, the amounts of the loans and the total of the loans ($54,215,174.50). These loans were all cross-collateralised and secured by the mortgage. While the first two loan numbers (totalling $16,911,069.05) represented facilities granted to FSDWA, the remaining seven (totalling $37,304,105.45) represented facilities granted to Gallway Investments and Tilley Properties which were guaranteed by FSDWA pursuant to the guarantees.

14 In the notice of default, the 'Loan Agreement' was described as:

Loan Agreement between the Borrower and the Lender dated 19 September 2007 as varied by letters dated 5 March 2009, 23 June 2009 and 21 October 2009, and unlimited Guarantee and Indemnity with respect to the obligations of Gallway Investments Pty Ltd as Trustee for the Gordon Family Trust and Tilley Properties (Qld) Pty Ltd as Trustee for the Tilley Properties Trust (Qld).

15 The 'Total Amount Due' was described in the notice of default as:

$54,215,174.50 as at 1 August 2012. This is the amount which is required to be paid to repay your loan in full; as at the date specified. The amount required to pay out your loan changes each day as interest and charges accrue and payments are credited.

1. This notice is given by the Lender as credit provider under the Loan Agreement and as mortgagee under the Mortgage.
2. You are in default of the terms of your Loan Agreement and Mortgage in that you did not repay all monies owing to the Lender pursuant to the Loan Agreement on the expiry date of the loan being 31 October 2009. You have also failed to pay interest due since that date.
3. To remedy this default, the Total Amount Due must be paid to the Lender no later than 10 August 2012 (Rectification Date). Interest, fees, and charges continue to accrue on this amount until paid. Additional enforcement expenses may also be incurred.
4. ...
5. If the Total Amount Due is not paid by the Rectification Date then (without the need for the Lender to give you further notice):

(a) pursuant to the terms of your Loan Agreement, the whole of the amount required to pay out the loan will become immediately due and payable; and

(b) the Lender may commence enforcement proceedings in relation to the default and, if relevant, repossession of Mortgaged Property may begin; and

(c) the Lender may exercise all or any of the other rights under the Loan Agreement, the Mortgage, or at law.

1. ...
2. ...
3. The default mentioned above should be remedied by the Rectification Date or enforcement proceedings may commence against you.
4. ...
5. ...

17 The judge commenced his analysis of the notice of default issues by noting that the 'Loan Agreement' mentioned in the notice was the bill facility and the guarantees given by FSDWA with respect to the obligations of Gallway Investments and Tilley Properties. The judge then set out the parties' competing submissions as follows:

St George contended that the amount owing included the amounts under the guarantees, even though a demand might not have been made for payment. [Salta Constructions] contended that in the absence of a demand under a guarantee, no amount was owing, contingently or otherwise.

St George further contended that, even if liability only crystallised under a guarantee on demand, it had the right to retain the proceeds of sale pending the amount becoming due and payable. Clause 27.2 of the mortgage provided:

'If, at the time we receive the money, any part of the amount owing is not then due for payment, we may retain an amount equal to that part. We must hold it in an interest bearing account. We may use it (and any net interest after tax - including income tax) to pay the amount owing when it becomes due for payment.'

Thus, St George contended, it could, were it necessary to do so, serve demands under each guarantee to crystallise the liability and draw down on the retained funds.

[Salta Constructions] argued that cl 27.2 did not prevail over s 61 of the Property Law Act 1969 (WA) that required the funds to be disbursed in the prescribed manner. Section 61 provides:

'The money that is in fact received by the mortgagee, arising from the sale, after discharge of prior encumbrances to which the sale is not made subject (if any) shall be held by him in trust to be applied by him -

(a) firstly, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale, or otherwise; and

(b) secondly, in discharge of the mortgage money, interest and costs, and other money (if any) due under the mortgage,

and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.'

[Salta Constructions] argued that the purpose of cl 27.2 was to regularise the interim retention of money properly received under the mortgage on account of money actually owing but not yet due for payment. It argued that in the absence of a proper demand under the guarantees there was no amount actually owing or due for payment. Thus, St George was not authorised under cl 27.2 to retain the excess amount on account of a liability under the guarantees.

St George did not suggest that it had retained the excess amount under cl 27.2. But insofar as St George might seek to avail itself of the retention power, there would be no difficulty in calculating the amount of interest that ought to have been earned and applied in reduction of the liability.[5]

18 The judge then dealt with the cl 27.2 issue in the following terms:

In my view, there is no tension between the operation of cl 27.2 and s 61. Clause 27.2 provides machinery for the management of funds in anticipation of an amount owing that is not yet due and payable. The amount to be set aside must be an amount owing under the mortgage. An event may be required, such as a demand, to make the amount due for payment. There may be other circumstances in which the clause might operate: where, for example, there is a number of commercial bills with different maturity dates. But the present case is not troubled by any need to rely on cl 27.2.[6]

19 The judge then concluded that the amount owing under the mortgage included the guaranteed money under each guarantee whether or not a demand for payment had been made. Additionally, the judge said he was satisfied that the notice of default was, in any event, a demand for payment on the guarantor under the guarantees. The judge said:

Whatever may be the scope of cl 27.2, I am of the opinion that the amount owing under the mortgage included the guaranteed money under each guarantee, whether or not a demand for payment had been made. Even in the absence of a demand, the guaranteed money is owing but not currently payable by FSDWA. Alternatively, the guaranteed money might fall within the category of money advanced or paid on behalf of FSDWA or at its express or implied request. I am not persuaded that until a demand has been made on FSDWA, St George was unable to apply the proceeds from the sale of the Delhi Street property in satisfaction of the guaranteed money.

In any event, I am satisfied that the notice of default, dated 3 August 2012, made a demand for payment on the guarantor under the guarantees. Even though the default mentioned in the notice was a failure to repay the bill facility on 31 October 2009, and not a failure to pay under the guarantees, the [mortgagee][7] was authorised to serve a notice in anticipation of exercising its power of sale. To remedy that default, the mortgagor was required to pay the total amount, including the contingent liability under the guarantees no later than 10 August 2012. On service of the notice, and expiry of the time for payment, the guaranteed money became due and owing.[8]

20 In this appeal, Salta Constructions contends that the judge:

(a) erred in construing the notice of default as a demand for payment on FSDWA as guarantor under the guarantees;

(b) erred in failing to find that the liability of FSDWA only arose under the guarantees 'on demand' first having been made pursuant to cl 2.1 of the guarantees;

(c) erred in failing to find that the notice of default was not a demand for the purpose of the guarantees, but was a notice given for the purpose of s 106 of the Transfer of Land Act 1893 (WA) in respect of 'other extant indebtedness secured by the ... mortgage';

(d) erred in failing to find that no demand having been made under the guarantees, FSDWA was not liable and did not owe any monies to St George under the guarantees at any relevant time;

(e) ought accordingly to have found that no monies referable to the obligations of FSDWA under the guarantees were secured by the mortgage at any relevant time;

(f) ought accordingly to have found that St George was obliged to remit to Salta Constructions as at the date of settlement of the sale of the property, the balance of the proceeds of the sale after recoupment of expenses and the amount of the secured indebtedness; and

(g) failed to give adequate reasons for his decision that the notice of default was a valid demand under the guarantees, or that St George would, in any event, have been entitled to the balance of the proceeds of sale without prior demand having been made under the guarantees.

21 Salta Constructions contends that, in the result, the judge erred in not declaring that St George was obliged to account for, and pay to Salta Constructions, the balance of the proceeds of the sale as properly adjusted, and in accordance with s 61 of the Property Law Act 1969 (WA).

22 St George contends that there was no error in the judgment below and there is no inadequacy in the judge's reasons. Additionally, by a notice of contention, St George:

(a) again put the argument it put below concerning the operation of cl 27.2 of the mortgage; and

(b) also contended that FSDWA's liability in respect of the guarantees did not arise only 'on demand'. St George supported this contention by reference to the definition of 'amount owing' in cl 43 of the mortgage whereby St George asserts that FSDWA agreed to pay St George, at any time, and in connection with the guarantees, amounts that 'are payable', or 'are owing but not currently payable', or 'are contingently owing', or 'remain unpaid by you [FSDWA] to us [St George]', or 'are reasonably foreseeable as likely ... to fall within [the above expressions]'.

23 This appeal must be dismissed if there was a valid demand for payment on the guarantor (FSDWA) under the guarantees. The only communication alleged by St George that constitute such a demand is the notice of default. Accordingly, it is convenient to examine first whether the service of the notice of default was a demand for payment from FSDWA under the guarantees.

24 In support of its submission that the notice of default was not a demand for payment under the guarantees, Salta Constructions relies upon the following matters:

(a) first, the notice of default was a notice served under s 106 of the Transfer of Land Act 1983 (WA), the purpose of which was to enliven a power of sale under s 108 of that Act;

(b) secondly, the notice of default was not addressed to FSDWA as a guarantor, but rather as a borrower and/or mortgagor;

(c) thirdly, FSDWA was only one of a number of guarantors under the guarantees, and the notice of default was not addressed to any of the other guarantors;

(d) fourthly, it was erroneous to refer to the existence of a loan debt of $54,215,174.50 as at 1 August 2012, in circumstances where FSDWA was only itself indebted for a fraction of that amount ($16,911,069.05), and was not so indebted by reason of a loan, but rather because of an obligation to pay the face value of bills of exchange that had matured; and

(e) fifthly, the language of the notice is passive rather than active, in the sense that rather than using active language of the sort one might expect when a demand is being made, the notice uses passive language, identifying a 'default' and then saying the default 'should be remedied' and then identifying steps that can be taken to remedy the default.

25 Plainly, the notice of default was served pursuant to the provisions of s 106 of the Transfer of Land Act 1983 (WA). Equally it may be accepted that the purpose for serving the notice was to enliven the power of sale referred to in s 108 of that Act. However, accepting such matters does not preclude the possibility that the notice also constituted a relevant demand for payment from FSDWA under the guarantees.

26 Salta Constructions' principal argument was that the notice of demand was not sufficiently clear and unambiguous to constitute a notice of demand for payment from FSDWA under the guarantees. In argument, Salta Constructions took the Court to the decision of Ryan J in Bank of Montreal v Agnew and Hawkes.[9] Ryan J said:

In my opinion it is essential in order to trigger the liability of the guarantor, to make an unequivocal demand for payment upon him. This in no way affects liability. The liability of the guarantor remains passive until it is triggered into action by the call for payment. I have used the word 'demand' merely because of its universal acceptance in banking fields. A request for payment is equally as valid. The important point is that it not be ambiguous.[10]

27 In Catley v Watson,[11] Brooking J (as his Honour then was) said in respect of a notice of rescission:

In my opinion, a notice ... is not valid unless it is, in relation to its essential features as required by [the particular contractual condition], clear and unambiguous. By this I mean, not that its import must be clear beyond the slightest peradventure, but that its terms must be such that a reasonable person, having given it fair and proper consideration, would be left in no doubt as to its meaning. A notice is not unequivocal, in the sense in which such notices are required to be unequivocal in relation to their essential contents, if a reasonable person, having considered the notice as a whole, fairly and properly, might entertain a doubt to its meaning in relation to some essential matter, even though he would form in his mind a preference for one view, rather than the other of what the notice was intended to convey. ...

The fact that a court finds itself able to resolve an ambiguity does not necessarily lead to the conclusion that the notice is valid in this respect.[12]

28 In MLW Technology Pty Ltd v May,[13] this Court had to consider whether a notice to acquire shares served in purported compliance with a contractual term was valid. The Court[14] said:

The law should strive to uphold a contract wherever possible to avoid the reproach of being the destroyer of bargains[15]. The principle applies not only to contracts but also to the actions of businessmen. The point has been recently reinforced in the House of Lords in relation to a notice given pursuant to a contract by Lord Steyn in Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd[16]. That case concerned a lease and the validity of a notice to determine the lease. The notice wrongly stated the date of termination and the question arose whether it was effective. The Court of Appeal, adopting a strict approach, held that it was not. On appeal, the House of Lords by a majority held that it was sufficient. Lord Steyn[17] formulated a number of propositions and stated with respect to proposition 2 the following:

'(2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene.'

His Lordship[18] posed the question as follows:

'... the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind. It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice.'

His Lordship[19] noted that the law had moved on from a strict technical approach and said:

'Since then there has been a shift from strict construction of commercial instruments to what is sometimes called purposive construction of such documents. ... It is better to speak of a shift towards commercial interpretation. About the fact of the change in approach to construction there is no doubt.'

His Lordship said[20]:

'In determining the meaning of the language of commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.'[21]

In my opinion, that is a proper approach to the issue concerning the notice sent on the evening of 25 September 2002. The approach also accords with authority in this Court.[22]

29 In our view, the notice of default was a demand for payment from FSDWA under the guarantees. While Salta Constructions also made complaint that the description of the loan agreement only referred to an or some 'unlimited Guarantee and Indemnity with respect to the obligations of [Gallway Investments and Tilley Properties]', without identifying whether it was all three or one or two of the guarantees that were being referred to, there is nothing in this point. All three guarantees guaranteed the obligations of Gallway Investments and Tilley Properties. Salta Constructions was not able to point to any relevant difference between the guarantees. Indeed, upon examination, the guarantees appeared to be in relevantly identical terms.

30 While the notice of default was not addressed to FSDWA as a guarantor, it is plain from the loan numbers referred to in it, the definition of 'Loan Agreement', the total amount claimed to be due and clauses 3, 5 and 8 of the notice (set out above) that St George required FSDWA to pay the amount of $37,304,105.45 under the guarantees in addition to the $16,911,069.05 due under the bill facility (a total of $54,215,174.50). The fact that the notice of default served the additional purpose of enlivening a power of sale did not hide or obscure the fact that St George required the amount owing under the guarantees to be paid in order to avoid the commencement of enforcement proceedings against FSDWA. In our view, this is the preferred construction to be given to the clauses of the notice to which we have referred, particularly in the light of the descriptions and material referable in the notice to the expressions 'Loan Number', 'Loan Agreement' and 'Total Amount Due'.

31 While Salta Constructions took us to a number of authorities (particularly from Canada), some of which we will refer to below, in support of its contention that the notice of default did not constitute a demand for payment, a distinguishing feature in respect of these cases is that, unlike the facts of the present appeal where FSDWA was both the mortgagor and a guarantor, there was no identity of parties of the kind present in this appeal.[23]

32 It is the fact, as Salta Constructions contends, that there were other guarantors, additional to FSDWA, who were jointly and severally liable for the indebtedness of Gallway Investments and Tilley Properties under the guarantees. However, nothing turns on this fact. There was no impediment in this case to St George making a demand for payment on FSDWA as guarantor under the guarantees, without making any demand on any other guarantor.

33 In support of its contentions that the notice of default did not constitute a valid demand under the guarantees, Salta Constructions relied upon the decision of the Prince Edward Island Supreme Court in Canadian Petrofina Ltd v Motormart Ltd.[24]

34 In that case, the respondent sought to enforce a guarantee against two directors of a defaulting company. Campbell CJ said:

There can be no question that the Clark brothers [the directors] had actual notice of their company's default. But all notices and demands had been addressed to them as officers of the company and none of them as guarantors is in evidence. The terms of the guarantee imply that they were to have such notice or demand as guarantors, and the authorities make it clear that their collateral liability does not arise until the giving of such notice and demand on them as guarantors. The onus is on the plaintiff to allege and prove the notice or demand.[25]

35 However, as we have already noted, a distinguishing feature between Canadian Petrofina and the present case is that the notices of which the guarantors had actual notice were directed to the defaulting company (a different party from its directors) even if addressed to those directors as officers of that company. Further, the facts of the present case are different, involving as they do a notice addressed to FSDWA, a guarantor under the guarantees in respect of the cross-collateralised facilities referred to in the notice. In any event, it is to be remembered that it is the principles for which relevant authorities stand that fall to be applied, rather than some attempt to liken the different facts of different cases to a particular conclusion.

36 In support of its submissions that the notice of default was not a demand because its language was too passive, Salta Constructions referred to a decision of the British Columbia Supreme Court in Royal Bank of Canada v Oram, Rowberry and Hoggard.[26] In that case a letter from the bank, containing phrases such as 'we are somewhat disturbed about this account ...', '[t]o resolve this situation we would suggest an immediate ... injection of cash ...' and '[i]t is imperative that this matter receive your prompt attention ...', was held not to constitute an immediate demand for payment. The facts of this case are of no assistance to Salta Constructions. On its face, the letter in that case[27] was in very different terms from the notice of default in the present case.

37 It follows from what we have said that we see no error in the judge's conclusion that the notice of default was a demand on FSDWA under the guarantees. That conclusion is sufficient to dispose of the present appeal. However, for the sake of completeness we should deal with two further matters that were argued before this Court (the adequacy of the judge's reasons and an issue arising from the notice of contention).

38 First, in our view there is nothing in Salta Constructions' complaint concerning the inadequacy of the judge's reasons. The judge's reasons disclose the path of reasoning by which he came to conclude that the notice of default constituted a demand on FSDWA under the guarantees. While the reasons were brief, it must be remembered that the main point at trial was the application of the rule in Hopkinson v Rolt.[28] The judge's reasons need to be seen in the context in which the case was conducted before him. That said, a path of reasoning having been disclosed by the judge, there is no substance in the ground of appeal complaining about the adequacy of the judge's reasons.

39 Secondly, St George's argument in its notice of contention that the definition of 'amount owing' in the mortgage obviated the need for any demand to be made should be rejected. Clause 1.3 of the mortgage provided that FSDWA agreed to pay St George 'on demand' that part of the 'amount owing specified in the demand', but provided that as long as FSDWA was not in default this obligation was subject to contrary agreement in writing between St George and FSDWA. Clause 24.1 of the mortgage then provided that if FSDWA was in default 'the amount owing is payable on demand'. The terms of the mortgage required a demand to be made, albeit that one might be made in respect of an amount not then payable until the demand was made. Whether the notice of default constituted a demand for payment from FSDWA under the mortgage (as distinct from under the guarantee) was a matter that was not fully argued by the parties. However, a number of the submissions put by Salta Constructions against the proposition that the notice was a demand under the guarantees could not be put against the contention that the notice was a demand under the mortgage.[29] That said, as the matter was not fully argued by the parties, we would not be prepared to uphold this part of St George's notice of contention, notwithstanding that the amount owing included 'amounts ... owing but not currently payable'.[30]

40 Finally, in the light of our conclusions concerning the notice of default, it is unnecessary for this Court to resolve the question of the construction and application of clause 27.2 of the mortgage.

[1] [1861] EngR 641; (1861) 9 HL Cas 514.

[2] Salta Constructions Pty Ltd v St George Bank [2013] VSC 685 ('Reasons') [2]-[6], [21], [23] and [30].

[3] The expression 'that time' presumably being a reference to the 'any time' at which an amount was payable or owing but not currently payable or contingently owing etc as provided for in the first three sub-paragraphs of the definition of 'amount owing'.

[4] amount owing means all amounts that:

for any reason or circumstance in connection with any agreement (including a loan agreement, guarantee, lease or other facility document), transaction, engagement, document, instrument (whether or not negotiable), event, act, omission, matter or thing whatsoever;

and whether or not of a type within the contemplation of the parties at the date of this mortgage:

• are payable, are owing but not currently payable, are contingently owing, or remain unpaid, by you to us; or

• we have advanced or paid on your behalf or on your express or implied request;

• are reasonably foreseeable as likely, after that time, to fall within any of the above paragraphs.

[5] Reasons [80]-[84] (italics in original).

[6] Reasons [85] (italics in original).

[7] While the judge referred to 'the mortgagor' this would appear to be a slip as the reference is to the exercise of the mortgagee's power of sale.

[8] Reasons [86]-[87] (italics in original).

[9] (1986) 72 NBR (2d) 276.

[13] [2005] VSCA 29.

[14] Gillard AJA, with whom Winneke P and Buchanan JA agreed.

[15] Hillas and Co Ltd v Arcos Ltd [1932] UKHL 2; (1932) 147 LT 503, 514 (per Lord Tomlin).

[16] [1997] UKHL 19; [1997] AC 749.

[22] MLW Technology Pty Ltd v May [2005] VSCA 29, [78]-[82] (citations in original).

[23] See for example Canadian Petrofina Ltd v Motormart (1969) 7 DLR (3d) 330, where the individual guarantors were directors of the defaulting company.

[24] (1969) 7 DLR (3d) 330 ('Canadian Petrofina').

[27] Set out in full at [1978] 1WWR 570-1.

[28] [1861] EngR 641; (1861) 9 HL Cas 514.

[29] For example, the argument about in what capacity the notice was addressed to FSDWA and the argument about the fact that the notice was not addressed to the other guarantors of the relevant facilities could not be put against the proposition that the notice was a demand under the mortgage. That said, some of Salta Constructions' arguments could be put against the contention that the notice was a demand for payment under the mortgage (for example, the passive language argument).

[30] It may also be that the amounts are 'amounts that ... are reasonably foreseeable as likely ... [subsequently to become owing]'. However, it is unnecessary to decide this point. Salta Constructions took issue before this Court about the ability of St George to rely upon that part of the definition of 'amount owing' containing the paragraph beginning with the words 'are reasonably foreseeable as likely ...' on the basis that this part of the definition was not relied upon by St George until it delivered a written submission (with the leave of the judge) at the conclusion of the trial. It submitted that it would have led evidence had the issue been raised at trial. We consider that it was open to Salta Constructions to make a complaint at trial and, if necessary, seek leave to re-open its case to deal with the point. It did not do this, and although it is now probably too late for it to make this complaint it is not a matter that this Court needs to decide.