Sayed v National Australia Bank

Procedural history

1. The Bank had security for financial accommodation advanced to the appellant over both the Corrimal land and a residential property owned by the appellant and his wife, Nicole Sayed, at Woonona. The Bank's proceedings sought possession of the Woonona property. The appellant's cross-claim was filed on 2 September 2010. It sought relief in respect of both the loan facility agreements and mortgages entered into between the appellant and his wife on the one hand, and the Bank on the other. The claims mirrored those contained in a defence to the Bank's summons for possession of the Woonona property. The pleadings with respect to Woonona took shape over some months.
2. On 29 November 2011 Davies J directed that a proposed amended defence and cross-claim be served by 15 December 2011. [2] The matter was relisted before Davies J on 31 January 2012 for further directions with respect to the proposed pleadings. [3] The appellant and his wife were directed to provide draft amended pleadings by 7 February, with an opportunity for the Bank to indicate its response by 10 February and for amended pleadings to be filed by 13 February if agreed, or otherwise to be brought back for further directions. The appellant filed a defence on 13 February 2012 and, separately, an amended cross-claim, naming only himself as cross-claimant and the Bank as cross-defendant. At that time Swaab Attorneys were acting for the appellant.
3. The amended cross-claim of February 2012 raised, for the first time, a claim that the Bank had undertaken the sale of the Corrimal property in breach of its duty to act in good faith to the mortgagor; it was alleged that the conduct of the Bank was unconscionable. The cross-claim particularised the allegations, stating that the Bank (i) failed to properly advertise the property prior to sale, (ii) failed to obtain adequate valuations and/or disregarded previous valuations, (iii) arranged a sale by private treaty rather than by tender or public auction and (iv) failed to have regard to the development approvals relating to the land. [4] The cross-claim further alleged that fair market value of the land was $750,000, so that the sale at $545,454 involved a discount of almost 30%. [5]
4. On 28 March 2012 Swaab Attorneys served on the Bank a notice to produce seeking, amongst other documents: 1. all property valuations for the Corrimal property obtained by the Bank between 1 January 2006 and 28 May 2010; 2. all documents relating to the sale or proposed sale of the Corrimal property between 13 March 2009 and 28 February 2010, including correspondence between the Bank and MMJ North Pty Ltd, Greg Ellul and Realta Enterprises Pty Ltd; 3. all documents referring or relating to the marketing for sale by any person or entity of the Corrimal property during the period 13 March 2009 to 28 February 2010, and 4. all documents evidencing the extent to which the Bank had considered any development approval and any valuation relating to Corrimal during the same period.
5. By letter dated 5 July 2012 Swaab Attorneys noted that the Bank had produced six folders of documents. The production of those documents was material to the appellant's assertion that he had not had access to certain materials until some years later.
6. On 18 July 2012 Swaab served a further notice to produce on the Bank seeking specific documents relating to communications between the Bank and Mr Ellul.
7. The proceedings in relation to the Woonona property were settled in 2015. On 18 August 2015 an amended first cross-claim was filed, the appellant then being represented by Paul Bard Lawyers. The amended cross-claim deleted reference to the Woonona property but maintained the grounds relating to the Corrimal property. The amendments expanded the claims with respect to the activities of MERC, MMJ North and the Bank's use of valuation reports. The particulars characterised the Bank's conduct as wilfully and recklessly sacrificing the appellant's interests, including by selling the property at a time when it had been advised that there was no activity by developers in the Wollongong area. [6]
8. Mr Sayed failed to make a payment required under the settlement with respect to Woonona. That led the Bank to seek possession of that property. The matter was next before the Court on 6 October 2015, at which stage the appellant was unrepresented. Mr Sayed sought, by notice of motion dated 4 September 2015, a stay of the enforcement proceedings with respect to the settlement. The notice of motion was dismissed. [7]
9. On 13 May 2016 the matter came back before Davies J, the appellant being represented by senior counsel. The appellant sought leave to file a "revised first cross-claim", which had been annexed to an affidavit, unhelpfully, with unmarked amendments. The judge was informed that the critical additions (being particulars 14-19 of par 40) alleged that the sale process for the Corrimal property had been undertaken on the basis that lot 42 was "landlocked", and required an easement to obtain access to a public road.
10. Counsel for the Bank pointed out that the material on which the "landlocked" issue was based "was not contained in the material produced last year. It was, in fact, material in the original discovery …". [8] That appears to have been a reference to the material supplied in response to Swaab's notice to produce of March 2012. In response, Mr Hall SC for the appellant stated: [9] "If it's necessary from the point of view, on the last point my friend made, my instructions, which are clear, are that the first time that the land-locking documents came to the attention of Mr Sayed was in the material produced in our served subpoena sent to [MERC], the company that was acting as agent. I can't assist you whether they may have been contained in some box of documents produced earlier but they were not known to Mr Sayed until the subpoena to [MERC] was produced."
11. Davies J delivered judgment in National Australia Bank v Sayed (No 5) [10] on 27 May 2016. There is no appeal from that decision, but as it led to a subsequent judgment delivered four months later, from which there is an appeal, it is necessary to note the result of Sayed (No 5). The judge described the second of two substantive issues raised by the proposed amendments as follows: "[9] … The other substantive matter concerned an issue about Lot 42 (one of the two lots of the Corrimal land) which was believed by NAB at the time of sale of the Corrimal land to be landlocked. The proposed cross-claim pleaded that information subsequently showed that Lot 42 was not landlocked. [10] In one sense the claim concerning Lot 42 was simply another basis for suggesting that the Corrimal land was sold at an undervalue. NAB did not oppose that claim being added but took issue with the form of the pleading that introduced it." The substantive order made was to dismiss Mr Sayed's notice of motion filed 4 March 2016, seeking to file the further amended cross-claim.
12. A further amended first cross-claim was filed on 6 June 2016. The contested amendments were as follows: [11] "25 In obtaining the quote dated 1 June 2009 Merc as agent for NAB wrongly instructed Mr Ellul that lot 42 was landlocked, in that access to lot 42 could only be obtained via lot 41. Mr Ellul was instructed to confirm that lot 42 was landlocked. Particulars Email 26 May 2009 MERC (Rosemary Decker) to MMJ North (Ellul) 26 The quote dated 1 June 2009 included a statement by Mr Ellul that Lot 42 was 'landlocked' and Mr Ellul, to the knowledge of NAB and of Merc, made his appraisal on the false basis that it was so landlocked. 27 NAB knew that both Merc and Mr Ellul were proceeding on the basis that Lot 42 was so landlocked. Particulars Telephone conversation on 22 July 2009, believed to have been at 1.40 pm, between 'Alex from NAB' and an employee of Merc. Alex asked, in substance 'if we were selling as one property (ie both lots together)'. The employee of Merc said in substance 'yes as large parcel at rear is landlocked and can only be accessed by small parcel at front'. … 42 NAB wilfully and recklessly sacrificed Mr Sayed's interests (and Mrs Sayed's interests) as mortgagors in the Sale and the circumstances surrounding the Sale in that it failed to take reasonable precautions to obtain a proper price for Corrimal. … (i) Placing the property with the agent who provided the lowest estimate of the price achievable knowing, or recklessly failing to inform itself, that that estimate was given on a false basis, namely 'landlocking' and failing to instruct that agent to seek to sell the property within the range indicated by the independent valuations. … (l) Failing to obtain advice from someone qualified and capable of ascertaining whether lot 42 was landlocked, or disregarding such advice if obtained. (m) Failing to check the claims that Lot 42 was landlocked, even after the selling agent identified it as a significant reason why the property should be sold at a price well below the valuation advice received by NAB."
13. On 8 August 2016 the Bank filed an outline of argument opposing leave to amend. That led to a claim on the appeal that the Bank had changed its position, in that it had originally agreed to the amendment with respect to the land-locking allegation, but had withdrawn that consent immediately the draft amended cross-claim was produced.
14. The basis of the Bank's objection was set out in the first paragraph of its outline of argument, in the following terms: "1 Mr Sayed's application to further amend his cross-claim to now allege NAB breached its duties as mortgagee by wrongly assuming Lot 42 was 'landlocked' ought not be permitted because NAB has lost the ability to cross claim against those agents who gave NAB that (allegedly) wrong advice, as all such cross claims are now statute barred. NAB's loss of rights to bring viable cross claims seeking a full indemnity for any damages payable to Mr Sayed, coupled with the fact that Mr Sayed has had the relevant 'landlocked' evidence for four years, precludes the proper exercise of the discretion to allow the amendments." [Emphasis in original.]
15. Davies J heard argument on the matter on 5 September 2016 and delivered judgment in Sayed (No 6) on 13 September 2016. The judge granted limited leave, excluding the contested passages set out above. He stated: "[11] NAB submitted that, as a matter of discretion, leave should not be given to Mr Sayed to include the landlocked land claim. Matters that informed the exercise of that discretion included the fact that Mr Sayed had had available to him since 2012 documents showing that it was NAB's understanding that lot 42 was landlocked, that NAB had arguable claims against MERC and MMJ for breach of contract and negligence respectively and that by reason of the Limitation Act 1969 (NSW) NAB was now statute barred from making such claims."
16. As to the appellant's state of knowledge of the issue, the judge held: "[16] The affidavit of Emma Jane Hodgman sworn 19 July 2016 identified documents produced by NAB in answer to a Notice to Produce dated 28 March 2012. A selection of those documents was identified in the affidavit, and the affidavit disclosed that Mr Sayed and/or his then solicitors Swaab Attorneys had these documents in April 2012. These documents demonstrate that NAB and its agents believed in 2009 and 2010 before the sale of the Corrimal land that lot 42 was landlocked. The documents discussed the need to sell the two lots together for that reason. [17] Mr Sayed said that when Swaab Attorneys ceased to act for him they retained his documents. The inference was that these particular documents were amongst those retained although that was not expressly said. Nor did Mr Sayed submit that he had not seen these documents in 2012 after they were sent to Swaab Attorneys or at any time thereafter. Indeed, his written submissions say this: 19 Mr Sayed relies on the MERC journal which was obtained in late January 2016 and other material evidence to form amendments to the cross-claim now before the Court. 20 Mr Sayed may have had some material in his possession which contained 'landlocking' references for a period of three years however there were no proceedings on foot whereby it was necessary to collate it for evidence in a cross- claim. [18] During oral submissions Mr Sayed said that the only time he got the documents referring to the landlocked land was just before the proceedings that were heard by Adams J in August 2012. He said, however, that landlocking 'was not an issue at that point'. I do not understand what that means because it is Mr Sayed who has chosen to make it an issue in the proposed pleading. He could have made it an issue at any time from August 2012. He placed some significance on obtaining the MERC journal in January 2016 but the part he relied on when making submissions was the email from MERC to NAB dated 26 May 2009 (Tab 3 to the affidavit of Ms Hodgman). [19] I am entirely satisfied that Mr Sayed was aware of the landlocking issue before late January 2016 when he obtained the MERC journal. There is no doubt that relevant documents and information were in the possession of Swaab Attorneys who were then acting for Mr Sayed. On his own admission he saw the documents by August 2012. He could have sought to amend his cross-claim at any time thereafter. His assertion that it was not until he saw the journal that he realised the landlocking issue was something of substance is not an adequate explanation for failing to make the claim earlier when the documents he had seen clearly identified the issue."
17. In this Court, the appellant relied on the fact that he had obtained an affidavit from a registered surveyor, Mr Murray Smith, in November 2015 to establish when he first "signalled" the landlocking issue to the Bank. [12] Mr Murray Smith had available to him the key documents referred to at [14] above.
18. Davies J accepted that the Bank could have cross-claimed against MERC (in contract) and MMJ North (in negligence) had the appellant's proceeding been brought when it should have been. [13] Those claims were statute-barred. Davies J referred to the decision of this Court in Tekno Ceramics Pty Ltd v Zdenko Milat [14] and continued: "[48] The position in the present matter is relevantly identical to that in Tekno Ceramics. In my opinion, the fact that Mr Sayed had the material available to him to amend his cross-claim to bring a claim based on the landlocked land, the fact that there is no satisfactory explanation for not having done so prior to a date after the expiry of the Limitation Act for any cross-claim by NAB against potential tortfeasors, and the prejudice and injustice that will be suffered by NAB in those circumstances means that leave should not be given to Mr Sayed to include the portions in the proposed pleading which were objected to."
19. A further application, dealt with on 23 September 2016, involved a challenge to a subpoena issued by the appellant to Design Workshop, which was the architect acting for Realta Enterprises, which had purchased the Corrimal land. Some documents were produced, but objection was taken to documents said to demonstrate collusion and fraud between the Bank, Realta and Design Workshop. As no such issue had been pleaded, the motion seeking further production was dismissed. The judge noted that if the appellant were given leave to amend his cross-claim to plead the new issues he could again seek leave to issue any further subpoena which identified with specificity the documents said not to have been produced. [15]
20. A further amended first cross-claim in terms permitted by Davies J in Sayed (No 6) was filed on 25 October 2016. The document contained an allegation in par 32 that in taking four specified steps: "NAB by its agent MERC proceeded on the false basis that Lot 42 was landlocked or alternatively failed to amend or disregard an appraisal that had been made on the false basis."
21. At a directions hearing on 10 February 2017 the Bank took objection to the inclusion of par 32, while conceding that it appeared to have "gone under the radar" during the course of the earlier hearing. [16] Objection was also taken to an allegation of unconscionability on the basis of the cross-collateralised home loan over the Woonona property. By a further judgment (Sayed (No 8)) Davies J directed that the offending paragraphs be removed. [17] There was no appeal from that judgment.
22. On 28 March 2017 the appellant filed a notice of motion which appears to have sought further amendments to the pleadings. It was heard by Davies J on 7 and 10 April 2017. In Sayed (No 9), delivered on 13 April 2017, the judge granted the appellant leave to amend the further amended cross-claim filed on 25 October 2016 in the form attached to the appellant's affidavit of 28 March 2017 (which was not before this Court) subject to a number of omissions. [18] The nature of the omissions may, nevertheless, be gathered from the judgment of Sayed (No 9) and the notice of appeal which challenged aspects of the judge's rulings. Thus, the judge noted at [30] that the appellant wished to insert two paragraphs in the cross-claim numbered 32A and 32B in the following terms: "32A. NAB's Agent MMJ Greg Ellul proceeded on a fraudulent and deceptive basis, moreover engaged in collusive tendering with Realta Enterprises and Design Workshop Australia for the purpose of securing Corrimal for Realta Enterprises well below its market value (a) Falsely described Lot 42 as 'Land Locked' (b) Falsely state that access between the Corrimal lots was only via a temporary wooden foot bridge (c) Deceive by stating that Wollongong City council would 'insist on a great deal of work to be undertaken on the creek' and then stating that the discovery of the completed Corrimal remedial works D/A 'Third D/A' was a disadvantage rather than an advantage of considerable value to any prospective purchaser of Corrimal. (d) Provided a property appraisal lower than market value (e) Provided a false market estimate of the completed units with a net profit to be lower than 10% (f) Provided a false statement concerning the unit/land ratio value (g) Instructed Greg Truebody to provide a low property appraisal in line with his own (h) Falsely stating that Lot 41 and Lot 42 could not be sold separately because it would cause Lot 42 to become Landlocked (i) Falsely stated that he had communicated with other potential buyers for Corrimal and then indicating that the developers have left the market (j) Purported that there were two (2) tender bidders (k) Purported that the Realta Enterprises tender bid was fair and reasonable when it was grossly under the market value (l) Concealed the close relationship between the tender bidders. 32B. NAB proceeded with gross negligence; (i) by not carefully assessing each piece of information received from its agents (ii) by not cross-referencing that information with its own independent file on Corrimal (iii) by accepting unqualified technical advice from its agents rather than obtaining independent expert advice when it was duly required (iv) by not carrying out any due diligence or risk assessments concerning the information received from its agents was on false, fraudulent and/or on a deceptive basis (v) by not assigning Corrimal to an experienced Commercial Property Development Agent after it was informed that Corrimal was identified as a large development property with current development approvals for 12 dwellings (vi) by classifying Corrimal as a problem site and then accepting an offer it earlier rejected in order to close a protracted case file."
23. As noted above, in Sayed (No 6) similar claims had been rejected on the basis of unfairness to the Bank which could no longer cross-claim against those responsible for the misconduct, if established. The claims were now pleaded in fraud for the explicit purpose of avoiding the limitation problem. The judge's reasons for rejecting these proposed amendments in Sayed (No 9) were as follows: "[32] … First, the courts take a strict view in relation to allegations of fraud. Criminality is being alleged. Rule 15.3 Uniform Civil Procedure Rules 2005 (NSW) says that the pleading must give particulars of any fraud that is pleaded. [33] In Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Kirby P (with whom Hope and Samuels JJA agreed) said (at 538) that particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires. The pleading must specifically allege the acts involved and that they were done in a manner that involves fraud: Redgrave v Hurd (1882) 20 Ch D 1 at 12. Particulars of the knowledge of the falsity of the facts or representation would be necessary. A statement or representation may be wrong without being false. [34] What are purportedly particulars under these two paragraphs are simply assertions or conclusions. They are not particulars sufficient to plead fraud. [35] Secondly, the paragraphs roll up a number of potential causes of action including conspiracy, deceit and negligence. [36] Thirdly, paragraph 32B is misconceived not only because there is no concept of gross negligence in the civil law but because negligence has no place in a claim against a mortgagee for not properly exercising its power of sale: Forsyth v Blundell (1973) 129 CLR 477; Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491. That fact had been recognised by the pleading in paragraph 33 of the cross-claim. [37] Fourthly, Mr Sayed is estopped from now attempting to plead the landlocking issue by assertions of fraud in the light of my judgment in Sayed (No. 6). Alternatively, it is an abuse of process for him to endeavour to do so: Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [24]-[26]. In Sayed (No. 6) I held that Mr Sayed was not able to make the landlocking claim partly because he had not brought forward the claim in a timely fashion and partly because the Bank would be statute barred from making any claim against its agents as a result of Mr Sayed's claim against it. Neither of those matters has changed. [38] Fifthly, Mr Sayed did not rely on fraud when he applied to amend his cross-claim in 2016. I specifically noted that he did not do so (Sayed (No 6) at [36]) and he has given the explanation I have referred to earlier. [39] In Nominal Defendant v Manning (2000) 50 NSWLR 139; [2000] NSWCA 80 the Court of Appeal was considering a situation where an interlocutory application had been made and rejected and a subsequent application was made on evidence not presented in the earlier proceedings. The issue was whether it was an abuse of process for an applicant to do that in interlocutory proceedings. [40] The Court by majority rejected the view that an applicant making a second interlocutory application is guilty of an abuse of process unless the other party is guilty of fraud or the application rests on evidence which could not reasonably have been relied on before. However, Heydon JA (one of the judges in the majority) went on to say: [72] Nothing in the above reasoning rejecting the Nominal Defendant's submission is intended to encourage litigants to avoid putting their best cases forward in any interlocutory application. … The Nominal Defendant's proposition that no second interlocutory application can be entertained unless there is a change of circumstances or unless evidence is relied on which could not reasonably have been obtained earlier is too extreme, but a litigant bringing a second application where circumstances have not changed on evidence available earlier is facing serious and self-created risks of an adverse exercise of judicial discretion. … [41] … [42] A matter that weighs heavily in the exercise of that discretion in the present case is the length of time that these proceedings have been on foot and the circumstances that gave rise to them. The loans secured by the mortgages were made on 21 June 2006. Default took place in October 2008 and the proceedings commenced on 28 May 2010. … A number of applications were made in 2016 to amend that cross-claim with the result that the present form of that pleading was filed on 23 October 2016. [43] Now, at a time eight and a half years after default occurred, more than seven years since the land was sold and almost seven years since the proceedings commenced Mr Sayed for the first time seeks to assert in a pleading that the Bank acted fraudulently in a manner not easy to discern from the pleading so that he can by a second means plead a cause of action that I rejected on one of his applications to amend in 2016. No satisfactory explanation has been given for the failure to bring this matter forward at an earlier time. It would undoubtedly have the effect of delaying further the hearing of the cross-claim which was otherwise at the point where a hearing date can be allocated."
24. The second further amended first cross-claim was filed, pursuant to leave granted in Sayed (No 9), on 28 April 2017. The Bank's defence was filed on 30 May 2017.
25. The remaining steps in the interlocutory proceedings do not need to be identified. Suffice it to say that there were four further interlocutory judgments between 15 February 2018 and 15 March 2018. Further amendments were made; the trial was fixed to commence on 30 April 2018. It proceeded over six days. Final submissions were made on 14 May 2018.

Issues on appeal

1. The extended history of pleading and repleading of the case prior to trial continued in this Court. A first notice of appeal was filed on 26 August 2019; the matter came on for hearing on 29 September 2020 on the basis of a further amended notice of appeal filed on 10 September 2020, pursuant to leave given four days earlier. The appellant was unrepresented throughout the appeal process, as he had been at the trial before McCallum J. The appeal proceeded on the basis of written submissions prepared by the appellant and for the Bank, and by counsel who appeared as amicus curiae. There was no oral argument, although counsel for the Bank made brief, largely pro forma, submissions on one point.
2. Ground 1 contained three parts, namely challenges to (a) the refusal of leave in Sayed (No 6) to include a claim that NAB proceeded with the sale of the Corrimal land under the misapprehension that lot 42 was landlocked; (b) refusal of leave to plead fraud against MMJ North and gross negligence against NAB and (c) refusal of leave to plead that the Bank had wrongly included the appellant's development documentation in its sale of the Corrimal land. Before dealing with those separate elements of ground 1 it will be necessary to consider the extent to which the appellant is entitled to challenge those rulings on an appeal against a final judgment delivered two years after the second of the two interlocutory judgments and, indeed, having been first introduced by a proposed amended notice of appeal dated 25 May 2020 being 11 months after final judgment was delivered.
3. Ground 2 in the notice of appeal alleges 22 specific errors made by the trial judge in her final judgment. The appellant's written submissions largely restated the errors as submissions, omitting one (par 2u in the notice of appeal). As the respondent submitted, par 2u had no substance and may therefore be disregarded. Otherwise, the specific grounds will be grouped according to their subject matter.

Challenge to interlocutory orders

1. Although the amicus submitted that the appellant had sought leave to appeal against two interlocutory decisions of Davies J, that was not so: the appellant sought to appeal as of right from those decisions.
2. Leave to appeal is not required from an interlocutory ruling if a challenge to that ruling can be mounted by way of an appeal against the final judgment. So much was accepted in Gerlach v Clifton Bricks Pty Ltd, [19] the joint reasons of Gaudron, McHugh and Hayne JJ stating: "[6] The proposition that any interlocutory order can be challenged in an appeal against the final judgment in the matter is often stated in unqualified terms. [20] The better view, however, is reflected in the formulation adopted in Spencer Bower, Turner and Handley [21] where it is said that 'on an appeal from the final order an appellate court can correct any interlocutory order which affected the final result' (emphasis added). [7] It is necessary to make the qualification, 'which affected the final result', at least to reflect the well-established principle that a new trial is not ordered where an error of law, fact, misdirection or other wrong has not resulted in any miscarriage of justice. … [8] Further, it may be that there are some kinds of interlocutory decisions made, other than in the course of the hearing which leads to entry of final judgment in the proceeding, which may present some other issues for consideration. There are circumstances in which an interlocutory decision must be treated as concluding an issue between the parties. [22] Whether all decisions of that kind may be challenged in an appeal against the final judgment in the proceeding is a question to which a general answer need not be attempted. It is enough to notice in this regard the decision of the Court of Appeal in New South Wales, in David Syme & Co Ltd v Lloyd. [23] It was held there that a ruling made in the separate trial of an issue (that the article published was capable of bearing the imputations pleaded in a claim for defamation) was open to challenge on appeal against a subsequent jury verdict. This conclusion is consistent with the qualified formulation of the relevant principle. It is, as we say, unnecessary to explore the limits of the principle."
3. The extent to which a final judgment can be challenged on the basis of an interlocutory ruling is by no means clear. The fact that relief cannot be granted unless an error is established as a result of which (i) the appropriate relief must be a retrial and (ii) the error has given rise to a substantial wrong or miscarriage, does little to identify circumstances in which an interlocutory judgment can be challenged. On an appeal by way of rehearing, the more common relief (where an appeal is allowed) is not a retrial but a determination of the issues in dispute by the appeal court. Secondly, whether such relief should be granted can, in many cases, only be addressed after the nature and extent of any alleged error has been determined. (In this respect, the ruling in Gerlach as to trial by jury or judge alone was an issue of an unusual kind.)
4. Further, in the context of a recusal application based on a reasonable apprehension of bias, the High Court noted in Michael Wilson & Partners v Nicholls, [24] that a party knowing of grounds for a disqualification application who does not seek recusal, [25] or, having sought it unsuccessfully does not bring an interlocutory appeal, may either acquiesce in the determination of the matter by the judge, or waive any right to reagitate the issue on appeal from the final judgment. [26]
5. Of the two interlocutory judgments under challenge, the earlier was decided some 18 months before the trial, the second more than a year before the trial and both involved refusal to allow the appellant to plead additional matters which would have affected the scope of the issues and evidence at the trial. A successful appeal against the final judgment based on such an interlocutory error would require a retrial. It is at least doubtful whether a party can stand by and let the trial run, and then allege error in the interlocutory rulings which precluded a reasonable opportunity to succeed at trial.
6. In circumstances where the appellant was unrepresented and both the amicus and the respondent submitted that the challenges to the interlocutory rulings lacked substance, the better course is to accept that the challenges to those rulings may be agitated as a basis for challenging the final judgment dismissing the proceedings and determine the challenges on their merits.

(a) challenge to Sayed (No 6)

1. The issue raised as to Sayed (No 6) was whether the appellant should have been allowed to plead that the respondent breached its duty as a mortgagee in possession because it permitted the land to be valued and marketed as if it were "landlocked", when in fact it was not. It is clear from the evidence and the judgment of Davies J that the term "landlocked" was used in at least two different senses. One was a legal statement denoting that lot 42 had access to Rothery Street only via an easement over lot 41; the second was a practical statement, namely that access was blocked by a watercourse. Both issues were raised in an email by Ms Decker of MERC dated 26 May 2009 to an officer of the Bank. That statement was repeated by Mr Ellul, of MMJ North, who provided an appraisal on 1 June 2009. Mr Ellul appears to have taken the view that it was the watercourse which provided the obstacle to development of lot 42. On 2 October 2009 Ms Robinson of MERC wrote to the Bank recommending that both properties be sold together because lot 42 required a right of way "to be created over lot 41".
2. It is true that all of these statements were erroneous in part. The plan of subdivision for DP 1106335 shows a strip of land 7.5 metres wide on the eastern boundary of lot 41 which is marked as subject to an easement. However, the instrument accompanying the plan setting out the details of the easement indicated that the burdened lot was lot 42 and the benefitted lot was lot 41. In other words, whilst the diagram may have been unclear, the language was not: lot 42 had a 7.5 metre frontage on Rothery Street. Perhaps because of the configuration or traffic flows on Rothery Street, the subdivision had provided for access to lot 41 from the 7.5 metre wide strip of lot 42 which ran alongside lot 41. (Ms Robinson was, of course, further in error in thinking that no easement existed: she cannot have had access to the subdivision plan.)
3. The reasons given by Davies J for refusing leave to amend have been set out above at [25]-[26]. There was no basis in the submissions in this Court for doubting the correctness of the conclusions reached by Davies J with respect to (i) the fact that the appellant had access to the documents upon which the claim was sought to be based for four years prior to the proposed amendment; (ii) that NAB would have had a reasonable claim against MERC for breach of contract and MMJ North for negligence if the appellant's allegations were upheld; (iii) that the limitation period for those causes of action had expired, and (iv) there was no basis for avoiding the effect of the limitation period by pleading fraud on the part of either MERC or MMJ North.
4. There were two further issues raised with respect to Sayed (No 6). First, the amicus raised an issue as to whether there had been procedural unfairness in failing to permit the amendments on the basis that in Sayed (No 5) the judge had determined, on the basis of a concession by the Bank, that the landlocking amendment could be permitted. The appellant was given an opportunity to formulate a pleading in appropriate terms in the next two weeks. When the matter came back before the Court, the Bank changed its position and opposed the amendment.
5. It is not entirely clear what prejudice was said to have flowed from the change of position; interlocutory rulings can usually be varied. The judge found that the relevant limitation period expired on 19 February 2016, three months before both the hearing and judgment in Sayed (No 5). In other words, the prejudice to the Bank did not arise from the two-stage process. In any event, there are other problems with the ground.
6. The concession appeared from the following statement by Mr Lucarelli, appearing for the Bank: [27] "LUCARELLI: Could I come at once to say that, subject to precision, your Honour won't hear opposition from me concerning the landlocked issue. HIS HONOUR: That was the first thing I was going to put to you, Mr Lucarelli. It seemed to me that that wasn't going to make much difference. LUCARELLI: And if we need to go into correspondence, our objections to this have not been to the landlock issue, but let me say what the qualification is there. It's not clear to me, … on the face of this document how the landlock issue screws into the mortgagee's breach of duty. We've heard it being said orally, orally that it might have something to do with affecting the mode of sale, tender rather than auction. If that's how they wish to plead it then they should plead it that way." [28]
7. It was true that the trial judge was then inclined to allow the amendment but saw that there was "force in what Mr Lucarelli says about the way the matter is pleaded." [29]
8. No estoppel runs against the Bank taking objection when the pleading is reduced to writing in a final form, where no ruling has been made by the Court and where, on further consideration, an issue is identified as to the Bank's ability to recover for what might be described as the negligence of its agents, where the negligence of the agents demonstrated breach of the Bank's obligations as a mortgagee in possession.
9. The second issue, raised by the Bank, was that the appellant did not demonstrate how any mistake on the part of MERC or Mr Ellul materially affected the price obtained for the land. It may have influenced the decision to sell the two lots in one line, but there appears to have been no evidence (certainly none relied on in this Court) to demonstrate that such an approach materially disadvantaged the sale process. (A possible offer with respect to lot 41 alone will be considered below.) Indeed, there was evidence that work on the watercourse would likely affect lot 41, as it ran along the southern boundary of lot 41. Completing those works was a condition of the dual occupancy approval for lot 41.
10. Having regard to these matters, no error has been demonstrated in the decision in Sayed (No 6) to refuse the proposed amendments. It may be noted that, although no new cause of action was proposed, the fresh particulars would have been added to the claim more than six years after the power of sale was exercised. Absent an established justification for such delay, there would need to be exceptional discretionary factors favouring appellate intervention, even on an interlocutory appeal.

(b) challenge to Sayed (No 9)

1. The application by the appellant to amend his cross-claim to plead fraud on the part of Mr Ellul, seven years after the proposed cause of action against the respondent had arisen, was curious. A claim for breach of duty by a mortgagee in possession does not require a finding of fraud. The concomitant attempt to plead "gross negligence" on the part of the Bank may have been intended to reflect the view that the worse the misconduct of the Bank's sub-agent, the stronger the case for breach of duty against the Bank. One acknowledged purpose was to avoid the finding in Sayed (No 6) that the attempt to expand the case against the Bank to include misconduct on the part of its agents had failed because the Bank was barred by the expiration of the limitation period from proceeding against its agents. That difficulty would be removed if the case against the agents were founded on fraud.
2. The grounds of appeal (apart from repeating the allegations sought to be raised against MMJ North and against the Bank) were contained in four paragraphs. The first alleged that if the basis for refusing the amendment were the failure to particularise the fraud, then the appellant should have been given leave to replead.
3. The reasons relied on by Davies J in Sayed (No 9) have been set out above. The judge correctly noted that the pleading rules require that particulars must allege the acts involved, and the manner in which they involved fraud. [30] Assertions and conclusory statements do not satisfy that standard. [31] Beyond the assertions, there was no material upon which the judge could have formed the view that a further opportunity would permit appropriate particularisation of the conduct relied upon. Rather, as the judge noted, [32] a year earlier the appellant had disavowed any intention to rely upon fraud. Furthermore, as the judge also noted it was, by April 2017, "eight and a half years after default occurred, more than seven years since the land was sold and almost seven years since the proceedings commenced". [33] The suggestion that the judge ought to have permitted time to replead (which he had done on earlier occasions when he perceived a possible basis for a claim) was without substance.
4. The second ground complained that the judge had dismissed the pleading of fraud in connection with the "landlocking allegation" because it was an abuse of process. That was indeed one way of characterising the application in the circumstances noted with respect to the first ground. Objection to the characterisation takes the appellant's case no further.
5. The third ground sought to overcome the issue of delay by stating that the judge did not appreciate "that more evidence had been obtained in 2016 from Design Workshop Australia" which led the appellant to "include fraud against MMJ North".
6. That statement was explained in the written submissions by saying that prior to obtaining documents pursuant to a subpoena served on MMJ North on 20 November 2015, the appellant did not know that Mr Gizzi of Design Workshop was not only acting for Realta as the architect designing the proposed development, but was the unsuccessful tender bidder. The arguments in this regard were put to McCallum J at the final hearing. As McCallum J explained: "[78] Mr Sayed spent some time at the hearing seeking to establish his theory that the two tenderers were acting in concert with each other (possibly aided by Mr Ellul). The suggestion was that two tenders had been submitted in order to give the appearance of competition whereas in fact those two parties always intended to acquire and develop the property together. It was faintly suggested that Mr Ellul participated in some way in this arrangement so as to keep the price of the property down. There was scant evidence to support this speculative theory which, in any event, was not pleaded. Even if it was true that the two tenderers acted in concert, there would be no basis for visiting the bank with the consequences of any such arrangement."
7. It is true that the matter was not pleaded, as a result of Sayed (No 9). However, the allegations had simply been that Mr Ellul had (i) "engaged in collusive tendering with Realta Enterprises and Design Workshop Australia for the purpose of securing Corrimal for Realta Enterprises well below its market value", (ii) "purported that there were two (2) tender bidders", and (iii) "concealed the close relationship between the tender bidders".
8. The submissions in this Court demonstrated that the underbidder, Design Workshop, had worked for Realta Enterprises on the design of a development on the Corrimal land prior to 3 December 2009. It allowed a possible inference that there was collusion between Realta and Design Workshop to give the impression that there was a competitive bid. (It was by no means the only inference available.) However, the only basis for inferring Mr Ellul's involvement in such a process was email communication from Design Workshop to Mr Ellul from which it may be inferred that he knew Design Workshop was undertaking work for Realta. When the material was obtained was by no means clear. The subpoena issued to MMJ North in November 2015 sought communications between MMJ and Design Workshop and Robert Gizzi.
9. Taking the appellant's case at its highest, there is no basis for concluding that allegations of collusion, at least between Realta and Design Workshop were not available until some time after June 2016. Ground 3 accordingly lacked substance.
10. Ground 4 merely noted that the judge "could have exercise[d] discretion and allowed the pleading": it took the matter no further.
11. The challenge to the rulings of Davies J with respect to proposed amendments to allege fraud of the agents in Sayed (No 9) must be rejected.

(c) Corrimal documents claim

1. Part of the application before Davies J which was determined in Sayed (No 9) sought an amendment to the cross-claim [34] which, somewhat obscurely, referred to: "(d) Failure by NAB to have proper regard to the development approvals … in relation to Corrimal." [35] The application to amend sought to substitute the following particular: "(d) Failure by NAB to have proper regard for Mr Sayed's interest's [sic] in the development approvals … by including Mr Sayed's D/A as an exhibit to the Corrimal sale contract." (The amendment is italicised.)
2. The judge rejected the application to amend in the following terms: "[47] In my opinion, this proposed amendment is misconceived. The development approval was in the public arena. Mr Sayed may have had a legitimate complaint if the Bank had failed to include with the contract the fact that there was a development approval. No basis is put forward for suggesting that the purchaser did not pay a figure taking into account the development approval. Further, it is not clear how Mr Sayed would have had the right to sell the rights to the development approval nor that a purchaser who had purchased the land would have had any interest in so doing because the purchaser already had the rights that came with the land."
3. The appellant's written submissions relied upon the proposition that the plans and drawings which were submitted with the development application were his, presumably on the basis that he had copyright entitlements in relation to them. He further stated that he had never given the Bank permission to make use of his "licences". In more detail, he described the relevant documents as architectural drawings of dwellings, land surveys and drawings, landscape drawings and plans and engineering drawings and plans. He stated that each of them was classified as an artistic work under the Copyright Act 1968 (Cth). He submitted that, for the Bank to provide these documents to the purchaser of the land with the development consent, was a breach of s 38 of the Copyright Act.
4. The architectural plans were not identified for the purpose of the pleading, but it may be inferred they were the plans in evidence obtained for the purposes of obtaining development consent, and carrying out the development. The appellant would have obtained a licence to use the plans, as explained by Jacobs J in Beck v Montana Constructions Pty Ltd. [36] The next issue is whether the Bank obtained the benefit of any licence to use the plans. In Torpey Vander Have Pty Ltd v Mass Constructions Pty Ltd, [37] Spigelman CJ said of the entitlement of a mortgagee to sell property with plans of a development, "[w]hether or not a mortgagee had a right to use the plans depends on whether or not the licence fell within the property the subject of the mortgage."
5. This issue was not explored on the application to amend. The standard terms of the Bank's mortgage appear not to have been in evidence. However, the Facility Agreement of November 2005 secured over the Corrimal land defined the term "security" to mean "all the mortgagor's estate and interest in the property and rights which may arise in connection with it…". That may well have included the appellant's interest in the development plans.
6. A prospective purchaser would have understood that the existence of development consent would be an appreciable benefit, for which the purchaser would be willing to pay. The purchaser would thereby avoid the delay and costs in obtaining development consent, which ran with the land. However, the appellant's argument appeared to be based on the proposition that the Bank had purported to sell rights which it did not have. How that arose was not demonstrated to Davies J, even belatedly.
7. Apart from these considerations, there were three problems with the ground of appeal challenging the reasoning of Davies J.
8. First, the appellant had undoubtedly authorised the copying of the plans for the purpose of lodging them with the Council. The documents then became part of the public record containing the development consent.
9. Secondly, to the extent that the appellant sought to claim damages for breach of his rights as copyright holder of the documents, there was no such claim for relief in the amended notice of appeal. Nor could there have been: an appeal from a claim for breach of the Copyright Act could only be taken in the Full Court of the Federal Court: Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 7(5).
10. Thirdly, there was no evidence that the Bank transferred a licence to use the plans simply by including them in a promotional package provided to prospective tenderers. If the plans were used without authority, the appellant's remedy lay against the purchaser, who might have had a claim for misleading conduct, if the value of the land was thereby reduced.
11. Ground 1(c) must be rejected.

Challenge to decision of McCallum J

1. Although ground 2 in the amended notice of appeal contained 22 particulars of errors allegedly made by the trial judge, and although each particular (bar 2u) was separately dealt with in the written submissions, the submissions were little more than a restatement of the ground. They can conveniently be dealt with by reference to the following topics: 1. inadequate advertising process; 2. failure to consider higher offers; 3. failing to deal adequately with the valuation evidence; 4. misuse of the development application and consents, and 5. misconstruing pleadings.
2. Before dealing with these matters it is convenient to note the basis upon which the trial judge addressed the claim. First, the judge accepted that the claim was based on an alleged breach of the equitable duty owed to the mortgagor by the Bank exercising a power of sale as mortgagee in possession. In a number of passages, the judge referred to the Bank's "fiduciary duty". [38] That slip was picked up by the appellant in parts of his submissions. There was no appealable error in that it stated the Bank's obligation in a manner too favourable to the appellant as mortgagor: the duty was not a fiduciary duty, the Bank being entitled to pursue its own interests in exercising the power of sale, even if they conflict with those of the mortgagor.
3. Secondly, as the trial judge correctly noted, the general law principles did not require assessment of the Bank's conduct on the basis of a common law duty to the mortgagor to take reasonable steps to achieve a sale at market value. [39] A standard reflective of the common law duty is now contained in s 111A of the Conveyancing Act 1919 (NSW), but, as the judge correctly noted, that provision did not apply to a sale which occurred before the section commenced on 1 November 2011. (The property was sold on 19 February 2010.)

(i) inadequate advertising process

1. There were, in effect, two challenges to the reasoning of the trial judge with respect to the advertising process undertaken on behalf of the Bank. Particular 2r asserted that the inadequacy of the process was evident from the lack of market response. Realta Enterprises and its architect, Design Workshop, had already been in touch with the selling agent, MMJ North, prior to the property being advertised by the Bank. Thus, in effect, no new potential purchasers were identified as a result of the advertising process.
2. The history of the process was set out in detail in the primary judgment at [63]-[76]. It is true that the response was limited; however, there were more than two responses. Mr Ellul gave evidence that he had received a total of six inquiries and had issued three "information packs" concerning the property. [40] As has been discussed above, two tenders resulted, the higher being that of Realta Enterprises.
3. Related to this complaint was particular 2m which asserted that there had been complaint before the trial judge of the inadequacy of the budget approved by the Bank for marketing. That complaint was dismissed in the following way by the primary judge: "[119] Particular (g) complains about the bank's 'reducing the marketing budget below that which had been recommended by MMJ at a time when there had been an upturn in the demand for development sites, when the reduced activity of developers indicated a need for more extensive exposure and marketing to obtain a proper price.' The assertion as to an upturn in the demand for development being the context in which MMJ had recommended the marketing budget was not established on the evidence. Nor was it established that there had been a reduction in the marketing budget. Mr Ellul explained that the actual expenditure on advertisement appeared to be less than the budget because a disbursement for one of the advertisements had evidently not been charged to the bank. In any event, whatever the budget was, for the reasons already explained, I am not persuaded that there was inadequate advertisement of the property."
4. Although not expressly addressed in the grounds of appeal, this issue should be addressed.
5. There were two facts which gave rise to concern on the part of the Bank with respect to the results of the sale process. First, the amount of the higher tender was in fact below the debt owed to the Bank. Secondly, there was a significant discrepancy between the offer and both the appraisals and the valuations obtained by the Bank prior to engaging in the sale process. The Bank in fact addressed these issues in a way which will be noted after dealing with the valuation material.

(ii) failure to consider higher offers

1. The first offer raised on the appeal which the appellant says the Bank ignored was from Mr Richard Taylor, from whom Mr Sayed had purchased a half interest in the property in June 2006. The proposed development was intended to be a joint venture; in 2009 Mr Taylor was asserting a caveatable interest In the property. In April 2009, when the appellant was in default and following the issue of a notice of demand by the Bank, Mr Taylor's solicitor wrote to the appellant stating that "Mr Taylor has identified a buyer who is prepared to proceed at the price of $750,000." On 4 August 2009 a solicitor acting for Mr Sayed responded, stating that he was "instructed to offer the property for sale for the sum of $830,000." The counter-offer was open for acceptance within seven days, and was accompanied by a threat to commence proceedings against Mr Taylor for recovery of 50% of the joint venture expenses incurred by the appellant. The statement that Mr Taylor knew of a proposed purchaser for the sum of $750,000 was conveyed by Mr Taylor's solicitor to the Bank on 15 September 2009. By that stage the Bank had taken possession of the property.
2. Ground 2c alleged that the Bank "had previously received an offer for lot 42 alone from the solicitor acting for Realta Enterprises in the sum of $750,000 on 15 September 2009." However, the letter of 15 September 2009 from the solicitors for Mr Taylor did not identify the potential purchaser, nor was the name of the proposed purchaser later revealed. The appellant did not pursue the matter either with Mr Taylor or with the Bank. There was no further contact with Mr Taylor after the property was put on the market.
3. The trial judge correctly concluded that there was no breach of duty on the part of the Bank in failing to pursue the unknown offeror. [41]
4. A second offer was identified by the appellant as having been made by Ms Stannard. A letter to the Bank stated that Mr Sayed had negotiated terms of sale for lot 41 with a price of $300,000. The sale was said to be conditional upon lodgement of a development application, noting that the prior consent had lapsed as a result of failure to comply with a condition of the deferred commencement consent. Completion was to occur within 14 days of the grant of development approval. Of the purchase price, $150,000 was to be paid to an engineer to complete the creek works prescribed by the development consent. The balance was "available for NAB." There were other conditions relating to a stay of the Bank's action under certain credit facilities.
5. There were obvious difficulties in selling lot 41 prior to the sale of lot 42. Further, the conditions rendered the offer unattractive to the Bank. There appears to have been no contact between Ms Stannard and the Bank. The fact that Ms Stannard was required to release the $30,000 deposit on lodgement of the development application rendered it unlikely that she would have proceeded. Ms Stannard gave evidence at the trial, the judge stating: "[44] Ms Stannard's evidence was that she had received the plans and 'probably the DA' but that she had not got to the stage where she had 'put any money down'. She proposed to go through all the documents with her solicitor and was not planning to proceed with the purchase unless 'all the due diligence stacked up'. [42] In circumstances where she was asked to release the deposit of $30,000 on a non-refundable basis upon lodgment of the further development application and take the risk as to whether it would be renewed …, it seems unlikely that the solicitor would have advised her to proceed."
6. Because the Bank did not approach the matter on that basis, nor did the trial judge. Rather, in a dispositive passage the judge noted: "[45] … that the complexity surrounding the failure to comply with the deferred commencement condition of the original dual occupancy DA would appear to vindicate the bank's later determination not to accept Mr Sayed's proposal for the separate sale of lot 41. [46] In any event, the proposal was not otherwise attractive for the bank. The terms of the contract of sale contemplated that settlement would be deferred for six months, at the conclusion of which no more than about $120,000 was to be paid towards the loan."
7. She therefore held that the Bank was not acting improperly in failing to accept Mr Sayed's proposal for the separate sale of lot 41. [43] No error was identified in this reasoning. The conclusion was correct.

(iii) failing to deal adequately with the valuation evidence

1. A major part of the appellant's case at trial was to demonstrate that the sale of the property was at a gross undervalue. Where the process of marketing the land is not manifestly deficient, it may be difficult for a mortgagor to establish that the price obtained did not reflect fair market value. Further, establishing that valuers had placed a higher value on the land than that obtained by the sale does not of itself demonstrate such a disregard of the mortgagor's interests as to establish a breach of the mortgagee's obligations in exercise of its power of sale. Nevertheless, evidence of a sale well below valuations of appropriate valuers may provide evidence of a breach of duty.
2. At the time the property was transferred into the appellant's name, in July 2006, a bank officer had valued the property at an amount in excess of $1 million. As the trial judge noted, there were doubts about assumptions made by the officer, who was not a registered valuer. [44] Further, the valuation pre-dated the global financial crisis of 2008.
3. Of some importance in relation to subsequent valuations, in March 2006 the Council had granted a conditional consent to undertake remedial work to the existing watercourse which bisected the land which was, after the subdivision, identified as lot 42, on lot 42, but close to the boundary with lot 41. When, in June 2008, the Council granted consent for development of lot 41 with a dual occupancy, the consent was conditional upon completion of the remedial watercourse work. The commencement of the dual occupancy consent was deferred for a period of 12 months to allow for completion of the watercourse work. That work was not completed by June 2009, with the result that the dual occupancy consent was described as having lapsed and a new development application was required.
4. In April 2007 a conditional consent had been given for the construction of 10 dwellings on lot 42. That consent did not refer to the need to undertake remedial work on the watercourse, but as a practical matter, it appeared that access to lot 42 by construction vehicles would not be possible until some, if not all, of the remedial work had been undertaken.
5. The existence and limitations of the development consents only became available to the selling agent over time. The result was that some valuations were obtained without accurate information as to the content and conditions of the consents.
6. Before commencing marketing the land, MERC obtained both appraisals and valuations from a number of sources. The sales agent, Mr Ellul made an appraisal at the time he took possession of the land (1 June 2009), in the range $600,000-$720,000. In early July another member of MMJ, Mr Truebody, gave an appraisal in a narrower range, namely $600,000-$660,000. In late July, Mr Sloane from Huxley & Partners Real Estate provided a figure of "around $700,000". Two more formal valuations were obtained in August and September which were above the range of those appraisals. First, there was a valuation by Ms Ward from Addisons, prepared on 13 June 2009, in an amount of $1.05 million. However, on 21 August 2009 the Addisons' report was revised to the lower range of $730,000-$835,000.
7. Secondly, on 18 September 2009 MERC obtained a valuation from Kohler Bird, identifying a range of $800,000-$900,000.
8. There could have been no complaint, as at the date that a bank officer authorised MERC to proceed with the sale process (7 October 2009) that the Bank had obtained ample valuation material upon which to proceed with marketing. It will be recalled that the appellant, some months earlier, had indicated his willingness to sell the property for $830,000.
9. The essential basis of the appellant's case was that the Bank accepted an offer of $545,000, which was significantly below the two valuations by Addisons and Kohler Bird and below the three more informal appraisals obtained from real estate agents. However, the discrepancy did not go unnoticed by the Bank, which took a number of steps to consider its position before accepting the offer from Realta Enterprises.
10. First, on 1 December 2009, two days before tenders closed, Mr Ellul advised MERC that he had under estimated the difficulty with building on the site, and was still awaiting information from the Council concerning the watercourse development consent. [45] On 8 December 2009 he advised MERC that in his view work on the watercourse would cost between $300,000 and $350,000. [46] He also recommended to MERC that the Bank should invite the valuers to reconsider their valuations on the basis of the material obtained in relation to the watercourse and the plans and specifications provided by Council. The Bank adopted that recommendation.
11. On 15 December 2009 Kohler Bird revised their assessment of fair market value to a range of $500,000-$600,000. The revised valuation was provided to the Bank on 13 January 2010.
12. On 27 January 2010 the Bank undertook an internal valuation review by a licensed valuer, Mr Anthony Lenord. His report raised questions as to the cost of the remedial work to the watercourse and whether the initial valuations had taken those costs into account. He noted that the value of development sites had reduced considerably over the last two-three years. He also noted the lack of sales evidence contained in the reports and the lack of calculations. He stated in his affidavit in evidence before the primary judge: "Having refreshed my memory from my report dated 27 January 2010 and the valuations prepared by Addisons and Kohler Bird, … I came to the conclusion that the market value given by Kohler Bird Report #2 ($500,000 - $600,000) was reasonable and that, accordingly, the highest offer received at $545,454 was within the range of market value for the Property."
13. He further stated that he agreed with the market value given by the second Kohler Bird valuation. He gave reasons for that view, including the shape of the property, its proximity to the freeway and the presence of the natural watercourse traversing the property.
14. On the basis of his opinion, the Bank accepted the Realta Enterprises offer and contracts were exchanged on 19 February 2010.
15. Mr Lenord was cross-examined at the trial, but no significant further opinion evidence was obtained from him concerning the exercise undertaken in January 2010.
16. On the basis of this material, the primary judge did not err in concluding that the Bank did not disregard the interests of the mortgagor in obtaining a fair price for the property, before accepting the higher offer. Indeed, the evidence did not demonstrate that the offer was not a fair price, given the factors to be considered and the doubts raised as to the basis of the higher valuations. [47]
17. On 9 March 2012, the appellant obtained a retrospective valuation from Mr Kenneth Jackson. Mr Jackson's valuation of the land as at 19 February 2010 was $750,000. He was critical of the methodology of the second Kohler Bird valuation. The Bank obtained a response from Mr White of Kohler Bird and a retrospective valuation from Mr David Lunney, dated 17 May 2017. Both Mr White and Mr Lunney confirmed the conclusion that the sale occurred at fair market value. Mr Lunney and Mr White were cross-examined; Mr Jackson was not. The judge ultimately did not rely upon the retrospective valuations, although she noted the conclusion reached by Mr Lunney. [48] The trial judge also referred to Mr White's evidence, not by reference to his response to the Jackson report, but by reference to his justification of the assessment of fair market value he had made on 15 December 2009. [49]
18. Subject to consideration of the relevance of the development consents, it is clear that the contemporaneous valuation evidence did not support a conclusion that the sale price was below the fair market value of the land.

(iv) misuse of the development application and consents

1. The complaint as to the use made by the Bank and its agents of the development consents was of limited significance. The appellant alleged that the Bank had obtained all relevant planning information from Wollongong City Council in early August 2009, but failed to provide it to the real estate agents who made appraisals of the land. However, the appraisals were generally lower than the valuations initially obtained. Accordingly, the inference underlying the appellant's complaint is that a better understanding of the development consents would have demonstrated that the value of the land was greater than the appraisals suggested. There are a number of difficulties with that inference.
2. First, as was clear from Mr Lenord's evidence, neither he nor the Bank placed much weight on "appraisals" undertaken by real estate agents who are not qualified valuers.
3. Secondly, with respect to a suggestion that the Bank (or rather its solicitors) had received information on 19 August 2009, and had failed to deal with it expeditiously, there was no discussion concerning this issue in the primary judgment, presumably because it was not a particular raised in the pleadings or argued at trial.
4. Thirdly, the notation relied on by the appellant is found in journal entries provided under subpoena by MERC. One note recorded that the Council material had been received directly by "the valuer", although the firm was not identified. However, six days later the revised valuation was received from Addisons reducing the range of fair value. It may be inferred that the disclosure of the conditions imposed for the development of the two lots required expenditure which lowered the value of the land, for reasons discussed further below. It is not possible to identify any error based on this complaint.
5. Other particulars of ground 2 took issue with the approach of the valuers to the question of access to lot 42. One complaint was that the judge had accepted Mr Ellul's "untrue statement about the access [to lot 42] via a wooden bridge" and the need to make it safe. The primary judge gave careful consideration to the information supplied by Mr Ellul to MERC with his initial appraisal, after taking possession of the land for the Bank. However, the suggestion that his description of the creek and the means of access over a temporary bridge was incorrect was not supported by a set of photographs obtained at that time. Those photographs supported the description, rather than demonstrating that it was untrue. [50]
6. The appellant submitted that the judge had failed to appreciate that the existence of a development consent with respect to the remedial works required for the watercourse added value to the project. However, the question was not so much whether the existence of the consent added value to the development, but whether the costs associated with complying with the conditions of the consent had been considered by the valuers. As to costs, the appellant contended that the cost of the remedial work was $100,000, based on an application for a building certificate filed by Realta Enterprises on 3 May 2010. However, as the Bank submitted, the figure in the building application provided no evidence of actual cost; nor did it demonstrate how the valuers assessed the likely cost in preparing their valuations. To the extent that it is relevant (it was admitted without objection), Mr Lunney's report recorded the actual cost of the remedial works as $430,000.
7. Although the Bank placed little weight on the appraisals, two further grounds of challenge may be noted. Ground 2h alleged that the judge failed to find that MERC "made a substantial error" in obtaining a second appraisal from MMJ North, to compare with that of Mr Ellul, also of MMJ North. It was inferred that they were not independent. In fact, Mr Truebody, who prepared the second appraisal, was from a different office of MMJ and there was no evidence of interaction between the two agents in undertaking the appraisals.
8. Secondly, the appellant read Mr Sloane's appraisal as valuing only one lot (lot 42) with a yield of 10 units. He complained that the primary judge had erred in treating it as valuing the two lots with a yield of 12 or 13 units. The judge did not make the mistake alleged, but dealt with the appraisal in the following terms: "[47] On 28 July 2009, the bank obtained a market appraisal from Tony Sloane of Huxley & Partners Real Estate. Mr Sloane described the property as one of 'unusual dimensions' which presented 'a few issues as to its usability'. Unlike the two agents from MMJ, Mr Sloane does not appear to have had access to any plans. He noted that council had confirmed consent for only 10 dwellings, which suggests the information he received concerned only lot 42. However, he did not give his appraisal on the basis of the number of approved dwellings, saying there were 'too many negatives to using such a formula'. Instead, he appears to have given a broad brush appraisal of the value of the land as a vacant lot. He said 'I do feel this vacant block with great potential whether as a development lot or otherwise would achieve a value of around $700,000'." The fact that Mr Sloane (without plans) did not know of the dual-occupancy approved for lot 41 did not mean he had only valued lot 42.

(v) misconstruing pleadings

1. The first allegation concerned a misconstruction of par 31(d) of the cross-claim, which read: "31 NAB wilfully and recklessly sacrificed Mr Sayed's interests as mortgagor in the Sale and the circumstances surrounding the Sale in that it failed to take reasonable precautions to obtain a proper price for Corrimal. Particulars … (d) Failure by NAB to have proper regard to the development approvals ('the DAs') by including Mr Sayed's D/A material as an exhibit in relation to the Corrimal."
2. Ground 2s is hard to read. Broken into parts, it stated, first, that the primary judge misconstrued par 31(d) as referring only to the watercourse development approval, rather than all approvals. Further, (i) "NAB obtained the files … from Wollongong City council on the basis to view them"; (ii) "what NAB actually did was to include Mr Sayed's documents it obtained from Council and included them in its sale of the Corrimal land," (iii) "in that regard it was an improper regard and abuse of those documents under the conditions that council provided them."
3. As noted above, ground 1c dealt with the refusal of Davies J to amend par 31(d) to identify an abuse of Mr Sayed's copyright interest in the plans by including them in the sale package. Ground 2s may be intended to give such a meaning to par 31(d), unamended. However, neither par 31(d), nor the ground of appeal have any clear content. There was no reference in the written submissions to any passage in the primary judgment which demonstrated error. The ground must be rejected as misconceived.
4. The primary judge construed particular (d) as reflecting the appellant's assessment that the watercourse DA added value to the property. It may well be that the judge was wrong in that construction; however, the alternative construction, based on the ground of appeal, demonstrates that, at some point, the appellant sought to rely on the unamended form of par (d) to argue the complaint articulated in the proposed amendment which was rejected. Nothing turns on this: the amendment itself was misconceived for the reasons set out above.
5. The second alleged misconstruction on the part of the trial judge concerning the pleadings was said to be the limiting of consideration to those matters particularised in par 31 of the cross-claim. That approach, it was submitted, ignored the allegations contained in 15 of the other paragraphs in the pleading.
6. This complaint involved a misconception as to the nature of the pleading and the approach taken by the primary judge. For example, the appellant stated that the judge had erred in not identifying pars 8, 9 and 10 of the cross-claim as supporting the valuation of $1.43 million and the sale at an undervalue. Paragraph 8 alleged that the Bank knew and approved of the subdivision in December 2006; par 9 alleged that the appellant had obtained a development approval for the erection of 10 dwellings on lot 42, and par 10 alleged that he had obtained a development approval for a dual occupancy dwelling on lot 41. None of those allegations was relevantly disputed; to the extent that they were relevant, those facts were taken into account. Other paragraphs, such as par 32 of the cross-claim pleaded that the Bank's conduct was not in good faith and was in breach of its equitable duty to the appellant, relying upon "actions pleaded at paragraphs 13-33 above". The numbers are clearly in error, the reference to "33" was probably intended to be a reference to par 31. The reference to "13" may be a reference to par 11, which alleged that the Bank had served a default notice under s 57(2)(b) of the Real Property Act 1900 (NSW) on the appellant. Paragraph 12 alleged that there had been a demand for payment by the Bank and par 13 alleged that the appellant did not pay moneys in response to the demand. These issues were not in dispute.
7. In short, the primary judge correctly identified those matters which the appellant had pleaded as demonstrating breach of the Bank's equitable obligation to take his interests into account. She dealt with each of them. There was no failure to understand the scope and content of the cross-claim, with the possible exception of par 31(d) which had no obvious content. These grounds were misconceived.

Conclusions

1. The appellant has failed to make good his challenge to any aspect of the reasoning of the primary judge. The appeal should be dismissed; the appellant must pay the respondent Bank's costs in this Court.
2. PAYNE JA: I agree with Basten JA.
3. EMMETT AJA: This appeal is concerned with the exercise of a power of sale by the respondent, the National Australia Bank Limited (the Bank), under a mortgage of land situated at Corrimal, New South Wales, then owned by the appellant, Mr Bilal (Bill) Sayed. Mr Sayed sought to impugn the exercise of power of sale by the Bank. He did so by way of a cross-claim filed in proceedings brought by the Bank for possession of another parcel of land, situated at Woonona, New South Wales.
4. For reasons published on 25 June 2019, a judge of the Common Law Division ordered that Mr Sayed's cross-claim be dismissed with costs. By further amended notice of appeal filed 10 September 2020, Mr Sayed appeals to this Court from the orders made by her Honour.
5. I have had the advantage of reading in draft form the reasons of Basten JA. I agree with his Honour for the reasons proposed that the appeal must be dismissed with costs.

Endnotes

1. National Australia Bank Ltd v Sayed [2019] NSWSC 653 ("primary judgment").
2. National Australia Bank Ltd v Sayed [2011] NSWSC 1414.
3. National Australia Bank Ltd v Sayed (No 2) [2012] NSWSC 20.
4. Cross-claim, par 22.
5. Cross-claim, pars 24 and 25.
6. Amended first cross-claim, par 36(e).
7. National Australia Bank v Sayed (No 3) [2015] NSWSC 1473.
8. Tcpt, 13/05/16, p 22(25).
9. Tcpt, p 23(30).
10. [2016] NSWSC 669.
11. National Australia Bank v Sayed (No 6) [2016] NSWSC 1253 at [9].
12. Appellant's written submissions, p 8.
13. Sayed (No 6) at [26]-[27].
14. [2003] NSWCA 254 at [41].
15. National Australia Bank v Sayed (No 7) [2016] NSWSC 1437 at [5].
16. Tcpt, 10/2/17, p 1(40).
17. National Australia Bank v Sayed (No 8) [2017] NSWSC 89, delivered on 15 February 2017.
18. National Australia Bank v Sayed (No 9) [2017] NSWSC 389.
19. (2002) 209 CLR 478; [2002] HCA 22.
20. See, eg, Nolan v Clifford (1904) 1 CLR 429 at 431: "all points … are open."
21. The Doctrine of Res Judicata, 3rd ed (1996), pp 79-80, par 170.
22. O'Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 245, per Mason CJ; Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 at 642.
23. [1984] 3 NSWLR 346.
24. (2011) 244 CLR 427; [2011] HCA 48.
25. Michael Wilson at [76].
26. Michael Wilson at [80]-[86].
27. Tcpt, 13/05/16, p 16(25).
28. See also tcpt p 22(24)-(41).
29. Tcpt, p 23(7).
30. Sayed (No 9) at [32]-[33].
31. Sayed (No 9) at [34].
32. Sayed (No 9) at [31].
33. Sayed (No 9) at [43].
34. It was par 33 in the proposed draft, but was par 31 in the operative pleading, discussed below.
35. Sayed (No 9) at [44].
36. [1964-5] NSWR 229 at 235; (1963) 5 FLR 298.
37. [2002] NSWCA 263 at [32].
38. Primary judgment at [1], [102], [127].
39. Primary judgment at [12]-[13].
40. Primary judgment at [75].
41. Primary judgment at [122].
42. Tcpt, 2 May 2018, p 190(13).
43. Primary judgment at [43]-[48].
44. Primary judgment at [20]-[21].
45. Primary judgment at [76].
46. Primary judgment at [80].
47. Primary judgment at [100].
48. Primary judgment at [101].
49. Primary judgment at [82].
50. Primary judgment at [29]-[32]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 December 2020