Taranto v Lopes & Lopes [2017] VCC 1613

• Can the Estate rely on the Deed of Loan as proof that Picarock was indebted to Joseph Taranto for $2.2 million? Answer: yes.

• Has the Estate in any event proved on the balance of probabilities that the $2.2 million was lent to Picarock by Joseph Taranto? Answer: yes.

• As a matter of construction, do the guarantees constitute security for the Deed of Loan? Answer: yes.

• Has Mrs Lopes made out a Garcia defence? Answer: no.

4 Mr Lopes has had extensive and diverse business interests over many years. ASIC records show him as having been a director of more than 60 companies. Those business interests were shared, at least in part, with Denis and Denny Ryan. Mrs Lopes gave evidence that she knew Denis Ryan and that he was a business partner of Mr Lopes. Relevantly for present purposes:

• the directors of Picarock since its registration on 31 October 2003 have included Denis Ryan, Denny Ryan and, for a brief time, Roseanne Ryan;

• entries in the financial statements for the PUP (notably, those identifying equity holdings) suggest that for at least the period 30 June 2005 to 30 June 2012, the unitholders in the PUP were Waymake Pty Ltd ("Waymake") (a company primarily associated with Mr and Mrs Lopes, but which also had Denis Ryan as a director) and Ryan;

• those financial statements also disclose a significant financial association with many other companies, relevantly including Code Up Pty Ltd ("Code Up")[2], and Wemear Ira Pty Ltd ("Wemear")[3]; and

• Code Up appears to have been jointly owned and controlled by Mr Lopes (through Waymake) and Denis Ryan.

5 The Estate submitted that the amount owing under the Deed of Loan originated from two sources. First, a loan of $1.2 million originally advanced by Joseph and Linda Taranto to Code Up on about 4 July 2003. Secondly, a series of five payments totalling $1 million originally made by Wemear to the PUP during late 2003 and early 2004. The directors of Wemear at this time were Vincent and Rossalyn Taranto. Rossalyn Taranto ceased as a director on 3 March 2004, leaving Vincent Taranto as sole Director until 2010. I understand it not to be in dispute that Vincent Taranto was Joseph Taranto's son, and that Vincent died in 2010, about two years before his father.

6 Turning first to the $1.2 million advance, bank statements for an account with Westpac in the name of Joseph and Linda Taranto show a cheque withdrawal on 4 July 2003 for $1.2 million. For reasons not explained, a loan from J & L Taranto first appears in the balance sheet of Code Up for the year ended 30 June 2003 (that is, for the financial year ending four days before the cheque withdrawal). However, there is no evidence of Joseph Taranto making any payment in this sum to interests associated with Mr Lopes any earlier than 4 July 2003. The Code Up financial statements show annual interest payments of $120,000 by Code Up to J & L Taranto commencing in the financial year ending 30 June 2004. From that time until 30 June 2008, the $1.2 million loan from J & L Taranto remained on Code Up's balance sheet each financial year.

7 On 1 July 2008, the PUP "Transaction Detail by Account" records a journal entry "transfer Taranto debt from Code Up". From that date Code Up's balance sheet ceased to show a $1.2 million debt to J & L Taranto. Instead, the PUP balance sheet showed a $1.2 million debt owed to J & L Taranto for each of the financial years ending 30 June 2009 to 30 June 2010 (inclusive). No more recent PUP financial statements were in evidence.

8 Moving next to the advances totalling $1 million by Wemear, these appear in a "Transaction Detail by Account" for Picarock for the year ended 30 June 2004 under the heading "Loans-Unsecured Wemear Ira Pty Ltd". There are five payments, with the first on 20 October 2003 and the last on 27 February 2004 in round amounts ranging from $100,000 to $300,000. The descriptors for each entry are not particularly illuminating; they include "Code Up", "Manstar" and "Poolmere". Manstar Pty Ltd and Poolmere Pty Ltd appear from the ASIC records to be further companies associated with either Mr Lopes or Denis Ryan (or both).

9 The balance sheet for the PUP recorded a loan of $1,000,000 from Wemear for the year ended 30 June 2004, but not thereafter. The balance sheets of Picarock continue to show a debt of $1 million to Wemear for each financial year ending 30 June 2004, 30 June 2005 and 30 June 2006. There were no balance sheets for Picarock after 2006 in evidence.

10 The Estate submits that various financial statements for the PUP and Picarock referred to above suggest that the Wemear loan was distributed in the accounts of the PUP to other loan accounts or otherwise adjusted as an accounting exercise within the PUP, but that it remained a liability of $1 million owed by Picarock to Wemear. The Estate concedes that it is not clear precisely how or when before May 2011, the Wemear loan to Picarock came to be considered a debt due to Joseph Taranto, rather than his son's company (noting that Vincent Taranto had died in 2010).

11 There is very little evidence of what precipitated the entry into the Deed of Loan in May 2011. However, what there is provides important context. By an email dated 11 May 2011, Mr Lopes (john@waymake.com.au) forwarded to Don Smarrelli of Lawcorp Lawyers, a valuation of Glenmore Shopping Village that had been sent to Mr Lopes by David Jahnke. Mr Jahnke's title was then Finance Manager, Ryan Group Queensland Pty Ltd. Mr Smarrelli was acting for Mr Taranto in relation to the loan and guarantee arrangements. The text of the email from Mr Lopes to Mr Smarelli is as follows (errors in the text below appear in the original):

"Don

Please find attached reports relating to the pickarock properties. The glenmore property has been strata titled and as previously shown will realize a value of approximate 6.5 to 7.0 mill. The farm st property will yield in the order of 14 mill a total of 21 mill.

I have enclosed the bill rollover account

The net proceeds will cover the loan repayment to Joseph Taranto

Our lawyer was out today but will be speaking to him early tomorrow morning and he will clarify the structure re the properties

Offered as further security will be a personal guarantee from Kay Lopes

Her personal assets are

Rembrandts distribution

Half family home net 500k

Half waterfront block net 400k

Waterfront duplex net 400k

There are other beneficial assets in pharmacies and the remaining equity in the pickarock properties

Also there will be charge over company triglow which owns property with my brother net 800k

Today I am asking for permission for a partial release of funds so as settlement can be effect on next Monday that amount is 1 million dollars

I asked Peter Carlei of Russo pellicano Carlei to draft personal guarantee but he said that that document needs to be drafted by you

I know this has been difficult for all parties for which I apologise but it would be appreciated if you could give it your urgent attention

Regards

John lopes

Sent from my iPad"

12 The following day Mr Lopes sent a further email to Mr Smarelli, forwarding another email from Mr Jahnke also sent on 12 May 2011. Mr Lopes' email said simply "Herewith the chronology of payments". Mr Jahnke's email stated:

"We have tracked and recorded the following payments from J & L Taranto:

The following payments were paid to Picarock Pty Ltd

• 20/10/03 $150,000
• 03/12/03 $250,000
• 17/12/03 $100,000
• 26/02/04 $300,000
• 27/02/04 $200,000

All of these transactions are recorded as loan funds against Picarock PL."

13 On 10 June 2011, the company Kaytiff Pty Ltd ("Kaytiff") was registered, with Mrs Lopes as sole director, shareholder and secretary. Mrs Lopes was familiar with the company Kaytiff, but gave evidence to the effect that she did not know anything about the circumstances of its registration nor its business or assets. Bank statements for Kaytiff show that a bank account was opened in Kaytiff's name on 20 June 2011. On 24 June 2011, $350,000 was deposited into that account and on 9 September 2011 a further $1,428,000 was deposited into the account. I am satisfied based on Mrs Lopes' evidence of her personal financial circumstances, lack of active involvement in Mr Lopes' business affairs and denial of knowledge of Katiff's registration or business, that none of those funds were contributed by her.

14 Finally, a letter from Griffiths Parry dated 15 March 2016 and a notice to admit served in the proceeding, establish that Griffiths Parry prepared the Deed of Loan on instructions received from Picarock's directors.

Is the Deed of Loan proof that Picarock was indebted to Joseph Taranto for $2.2 million?

15 The Estate argues that the Deed of Loan's status as a deed obviates the need for the Estate to prove that Joseph Taranto lent or agreed to lend $2.2 million to Picarock. Or, as the Estate submits, because the parties executed a deed in this case, it does not ultimately matter whether the loan said to constitute the consideration for the covenant to pay was in fact advanced.[4] Mr and Mrs Lopes oppose that argument on two bases. The first is procedural and the second is substantive.

16 The procedural basis is that the argument constitutes a "third version" of the Estate's case in respect of the Deed of Loan, which is "inconsistent with the plaintiff's pleaded case (as confirmed to the Judicial Registrar) and ought not to be permitted".[5] I disagree.

17 Relevantly for present purposes, by its amended statement of claim dated 26 April 2017, the Estate pleads:

1. "By a Deed of Loan dated 24 May 2011 between the Deceased and [Picarock] the Deceased agreed to lend and Picarock agreed to borrow the sum of $2,200,000 ("the Picarock loan").

Particulars

A copy of the Deed of Loan dated 24 May 2011 is in the possession of the Plaintiffs' solicitors and may be inspected at its office by prior appointment.

...

1. Pursuant to the Picarock loan the Deceased lent to Picarock the sum of $2,200,000."

18 Mr and Mrs Lopes' defence to paragraph 2 of the Estates' amended statement of claim includes the plea that they "do not admit that the loan was of the nature and effect of a deed as a fact of [sic] matter or [sic] law".[6] Their defence to paragraph 6 was that they did not admit that Joseph Taranto lent any money to Picarock, "as in the time available they remain uncertain as to the truth or otherwise of the allegation, and are unable to plead further until the provision of further and better particulars".

19 Mr and Mrs Lopes rely in support of their argument on an exchange that took place before the Judicial Registrar on the first day of trial while the proceeding was awaiting allocation to a Judge. In the course of debating differences in the parties' "statement of relevant issues", Mr and Mrs Lopes' counsel submitted to the Judicial Registrar that:

"The plaintiff's case as pleaded... is that monies were loaned pursuant to the deed of loan. It does not say that they were loaned prior to the deed of loan and incorporated by reason of the way the deed of loan is drafted. It's a prospective loaning of funds, not a retrospective loaning of funds."

20 Counsel for the Estate took issue with the way counsel for Mr and Mrs Lopes was characterising the Estate's pleading and submitted that the Estate's case was that funds advanced before the Deed were "the loan". The Estate's counsel went on to point to correspondence between the parties included in the court book that made clear that the advances constituting the loan predated execution of the Deed of Loan. After further discussion, the Estate's counsel agreed with the Judicial Registrar's suggestion that Mr and Mrs Lopes' pleading point could be addressed by treating the correspondence concerned as further and better particulars subjoined to paragraph 6. In the course of argument, counsel for the Estate also made the point that "it's a deed so it's not a consideration issue... The parties can of course by deed agree that the money that has been advanced is a loan".

21 In my view, Mr and Mrs Lopes' initial complaint about the Estates' pleading was misconceived. Paragraph 2 of the amended statement of claim in effect defines "the Picarock loan" as the loan made by the Deed of Loan. The Deed of Loan in turn states "in consideration of the [$1,200,000] (hereinafter called "the loan") lent or agreed to be lent". Thus, the loan as defined expressly encompasses past advances. Mr and Mrs Lopes argue that the advances relied on by the Estate did not in fact constitute money "lent" by Joseph Taranto to Picarock,[7] but do not appear to cavil with the notion that "lent" is to be construed as importing the past tense.[8]

22 Contrary to Mr and Mrs Lopes' submission to the Judicial Registrar, paragraph 6 of the Estates' amended statement of claim states: "Pursuant to the Picarock loan..." [emphasis added], not "pursuant to the deed of loan". Thus, paragraph 6 of the amended statement of claim is to be understood as saying, in effect, "pursuant to the loan as defined in the Deed of Loan". For the reasons above, the loan as defined in the Deed of Loan expressly encompasses past advances.

23 For completeness, I would add that even if the paragraph had been pleaded as Mr and Mrs Lopes' counsel asserted, I would have rejected the submission. It is well-established that the main purposes of pleadings is to give notice to the other party of the case it has to meet, to avoid surprise to that party, to define the issues at trial, to thereby allow any relevant evidence to be admitted at trial and for the trial to be conducted efficiently within permissible bounds.[9] However, courts do not take an unduly technical or restrictive approach to pleadings such that, among other things, a party is strictly bound to the literal meaning of the case it has pleaded.[10] In particular, a court will not consider a pleading with the same degree of scrutiny which the courts are required to give to an Act of Parliament.[11]

24 Counsel's submission requires the court to construe the words "pursuant to" strictly as if they mean "consequent and conforming to". While this construction is open, so is "in accordance with".[12] Given the reference in the opening words of the Deed of Loan to the past participle "lent", in my view, a past advance can be accommodated by the language a loan in accordance with the Deed of Loan. The pleading could perhaps have been more precise, but I consider that paragraphs 2 and 6 of the amended statement of claim were sufficient to convey the effect of what the Estate was contending. Namely, that the parties to the Deed of Loan agreed that $2.2 million had been lent by Joseph Taranto to Picarock, and the terms of the lending were to be found in the Deed.

25 Further, based on the correspondence between the parties and included in the court book, I consider that Mr and Mrs Lopes can have been in no doubt that the Estate's case was that the $2.2 million referred to in the Deed of Loan comprised past advances. And any doubt there may have been was resolved by the amendment approved by the Judicial Registrar on the first morning of trial. It follows from my findings above that I do not accept that the Estate was advancing two versions of its case prior to trial.

26 I also do not accept that the Estate's reliance on fact of the Deed of Loan being a deed is a further version of its case. The document is unequivocally identified in the amended statement of claim as a deed. More importantly for present purposes, Mr and Mrs Lopes expressly joined issue on the Deed of Loan's status as a deed, by not admitting that "the loan was of the nature and effect of a deed" as a fact or matter of law.

27 In my view, it is not inconsistent with an argument relying on the Deed of Loan being a deed and thus circumventing proof of consideration, for the Estate also to plead that the sum of $2.2 million referred to in the Deed of Loan had in fact been advanced. The pleading could have been more clearly expressed (such as by pleading consideration in the alternative) but, having regard to the terms of their own pleading, the argument cannot have taken Mr and Mrs Lopes by surprise. Mr and Mrs Lopes do not identify any relevant prejudice. I also observe that the argument was squarely raised by counsel for the Estate during argument before the Judicial Registrar, as discussed above. I therefore reject Mr and Mrs Lopes' submission that the Estate ought not be permitted to argue that it is sufficient for the Estate to rely solely on the Deed of Loan.

28 I turn next to Mr and Mrs Lopes' substantive argument on this issue. They contend that they are not precluded from challenging the "consideration alleged in the recitals in the Deed of Loan", relying primarily on the principles discussed by the House of Lords in Greer v Kettle.[13] The Estate has submitted in response that:

"In seeking to ascertain the scope of the obligation they have guaranteed, the defendants may be entitled to make submissions as to the proper construction of the Deed of Loan as between Picarock and Joseph Taranto. But where they have guaranteed Picarock's performance, they are not entitled to say that it operates differently for them than it does for Picarock. The submission that they are not bound to accept aspects of the Deed of Loan that otherwise bind Picarock is plainly wrong, because it is Picarock's performance of its obligations that they have guaranteed." [emphasis in original]

29 The first matter to note in relation to Mr and Mrs Lopes' submission is that the relevant statement is strictly speaking not made in a recital to the Deed of Loan. In fact, the Deed of Loan has no recitals, and nor do either of the deeds of guarantee. That said, it is clear that the principles articulated in Greer v Kettle are not confined to statements in recitals.

30 Estoppel by deed is a rule of evidence founded on the principle that a solemn and unambiguous statement in a deed must be taken as binding between the parties so that it does not admit any contradictory proof.[14] A more recent and authoritative discussion of the relevant principles can be found in the decision of Batt JA (Charles and Chernov JJA agreeing) in Cousens v Grayridge Pty Ltd ("Cousens").[15]

31 His Honour commences his discussion of the rule by confirming that estoppel by deed is not confined to statements in recitals but applies also, and indeed originally applied only to, statements in operative provisions. His Honour points out that even at common law, if estoppel by deed is now properly to be considered as a form of estoppel by convention, no estoppel can arise unless it can be shown that the alleged assumption concerning payment had been adopted by the parties as a basis of their relationship.[16] In Cousens, the evidence was that the parties had proceeded in a manner contrary to the assumption (that is, they proceeded as if the money had not been paid).

"Even if the last point were to be disregarded, the position in equity is and was always different in this respect, that where there are proper grounds for rectifying a deed, such as because it is based upon a common mistake of fact, then to the extent of the rectification there can plainly be no estoppel based on the original form of the instrument. Perhaps the pre-eminent example of that is the well-known rule of Chancery Courts in regard to a receipt clause in a deed not effecting an estoppel if the money has not in fact been paid. In a simple case of that kind it is unnecessary to counterclaim for rectification. Since the fusion of law and equity, the rule in equity prevails. All this is explained in the speech of Lord Maugham in Greer v Kettle".[17]

His Honour later examines whether, on the facts before him, equity would grant rectification and concluded that none of the factors relied on by counsel for the respondent would warrant refusal of rectification.

33 There is no doubt that Mr and Mrs Lopes are entitled to challenge the Deed of Loan, including in order to show that there is nothing owing or otherwise payable under the Deed. Any estoppel arising from the Deed cannot bind non-parties. However, Mr and Mrs Lopes' submissions tend to conflate this challenge, with their challenge to the respective guarantees.[18] I also note in passing that Mr and Mrs Lopes' assertion that the Estate's submission would mean that the transaction behind deeds could never be considered and deeds could be used as vehicles to facilitate fraud, is misconceived. Evidence of fraud has always operated as an exception to the rule of estoppel by deed, even at common law.[19]

34 I agree with the Estate that, in challenging the Deed of Loan, Mr and Mrs Lopes are not entitled to say that it operates differently for them than it does for Picarock. It is not relevant to the enforceability of the Deed to ask whether a third party (including a guarantor) does or does not know if there was actual money advanced.[20] In my view, if the Deed of Loan gave rise to a valid and enforceable debt repayable by Picarock to Joseph Taranto, then (subject to the question of construction of the guarantees discussed below) that is the debt that engaged those guarantees.

35 Thus the first question for present purposes is whether the relevant operative provision in the Deed of Loan gives rise to an estoppel by deed against Picarock. The provision is:

"WITNESSETH THAT in consideration of the sum [of $2.2 million] (herein called "the loan") lent or agreed to be lent to the borrower (upon and subject to the terms and conditions hereinafter set out) by the lender, THE BORROWER HEREBY COVENANTS with the lender as follows:-

1. The borrower will repay the loan together with interest calculated at 7% per annum as follows:..."

36 In the language of Greer v Kettle, is the provision a solemn and unambiguous statement in a deed that must be taken (as a matter of evidence) as binding between Joseph Taranto and Picarock so that it does not admit any contradictory proof? The second question is whether Picarock has grounds in equity for challenging the Deed of Loan.

37 In relation to the first question, Mr and Mrs Lopes argue that the term "lent" used in the Deed of Loan should be construed consistently with the dictionary meaning of "lend" and with authority, as encompassing only funds that were "delivered" by Joseph Taranto to Picarock, to be returned or repaid. And given the evidence that:

• the $1.2 million was in fact "delivered" by Joseph Taranto to Code Up (not Picarock); and

• the $1 million was in fact "delivered" by Wemear (not Joseph Taranto) to Picarock,

nothing was in fact "lent" by Joseph Taranto to Picarock within the meaning of the Deed of Loan.

38 In my view, this represents a back to front approach. The process of construction is not one of extracting a phrase (in this case, "sum...lent or agreed to be lent") from a deed, searching for a definition for that phrase in isolation from the surrounding language and then determining whether that definition matches the meaning ascribed by the contract. An inquiry into the meaning of a commercial contract requires consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. [21]

39 In this case, what the parties intended by the phrase "the sum...lent or agreed to be lent" could hardly be clearer. It is the sum of $2.2 million, expressly identified by reference to item 4 of the schedule. As the Estate has submitted, the position may have been different if a reference to funds "lent" was the sole or defining descriptor of the amount to be repaid. But in circumstances where the amount of $2.2 million is expressly identified, any ambiguity or uncertainty that might otherwise have attended the Deed, is eliminated. I also accept the Estate's submission that the cases cited by Mr and Mrs Lopes do not assist their case for the reasons the Estate identifies.[22]

40 Further, if there were uncertainty about what funds the parties had in mind in framing the provision, that uncertainty is to be resolved by reference to the surrounding circumstances and commercial purpose of the Deed.[23] What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context.

41 In this case, the surrounding circumstances (and notably the emails of 11 and 12 May 2011 referred to above),[24] show that each of Joseph Taranto and Picarock intended that the transactions totalling $2.2 million listed by Mr Jahnke in his email and asserted by him to be "recorded as loan funds against Picarock PL", were to be treated as such and be repayable by Picarock to Joseph Taranto. These documents (in contrast to the position in Cousens) also expressly support the conclusion that the covenant in the Deed of Loan concerning payment has been adopted by Picarock and Joseph Taranto as a basis of their relationship.

42 In relation to the second question, I see no basis for Picarock to raise an equitable challenge to the estoppel. In particular, there is no evidence of proper grounds for rectifying the Deed based on common mistake. The evidence (notably, again, the emails) points to the Deed of Loan unequivocally reflecting the mutual intention of the parties. Nor is there any evidence of, for example, any untrue statement by or on behalf of Joseph Taranto that might give rise to an equitable right to rescission.

43 As both Greer v Kettle[25] and Cousens[26] make clear, equity will not countenance enforcement of an estoppel arising from a receipt clause in a deed if money acknowledged to have been received, has not in fact been paid. Whether the provision: "Witnesseth that in consideration of the sum [of $2.2 million] lent or agreed to be lent to the borrower ...by the lender" is properly characterised as a "receipt clause" for this purpose, is far from clear.[27] Regardless, this principle too is founded upon the availability, on the facts of a particular case, of an equitable remedy (such as rectification or rescission) precluding the enforcement of an estoppel that would otherwise arise from the terms of the particular deed.[28] As discussed, there is no evidence to support such a remedy in this case.

44 In my view, therefore, there is nothing in the Deed of Loan itself, nor is there any relevant surrounding circumstance or evidence of common mistake or conduct on the part of Joseph Taranto, that operates to counter the evidentiary effect of Picarock's acceptance by the Deed of Loan of a liability to repay $2.2 million to Joseph Taranto. And because the estoppel operates as a rule of evidence, it is the responsibility of the party seeking to displace the rule (in this case Mr and Mrs Lopes) to adduce contrary evidence. On this issue at least, I consider that the Estate has correctly asserted that the Jones v Dunkel[29] inference arising from the failure to call Mr Jahnke and Mr Lopes is against Mr and Mrs Lopes.[30]

45 Contrary to what Mr and Mrs Lopes have submitted,[31] a third party will not be liable for a "fictitious" loan, in circumstances where the evidence shows that the fiction is a result of fraud or where, on the facts of the particular case, a remedy in equity is available. But where two parties freely and without misapprehension or other vitiating factors, enter into a deed pursuant to which one party assumes an obligation to pay a sum to the other party, that obligation will be enforced. And as the decision in Reid Murray Holdings Ltd (in liq) v David Murray Holdings Pty Ltd[32] ("Reid Murray") makes clear, by choosing a deed as the vehicle for the expression of that obligation, the obligee avoids the need to prove consideration. Further, if a third party freely agrees to stand behind that obligation, again absent vitiating factors, that agreement too will be enforced.

46 Mr and Mrs Lopes have submitted that the decision in Reid Murray is distinguishable from the present case: "as there is no evidence that both parties knew that the loan did not exist. In any event, as the defendants were not parties to the Loan they are not bound by the recitals"[33] (citing Greer v Kettle) [emphasis in original]. There are a number of difficulties with this submission:

• the evidence shows that both parties to the Deed of Loan knew exactly what "the loan" (within the meaning of the Deed) comprised;

• "the loan" within the meaning of the Deed of Loan did exist it was created by the Deed; and

• while Mr and Mrs Lopes were not parties to the Deed of Loan, they each agreed under the terms of their respective guarantees to pay whatever amount was payable under the terms of the Deed if Picarock failed to do so.

47 I otherwise agree with the Estate's submissions on the application of the decision in Reid Murray and more generally concerning the effect of Picarock's covenant to pay.[34]

Has the Estate proved that the advances were made?

48 This question arises only if I am wrong in finding that the Estate is not required to prove that the sums comprising the $2.2 million were a debt owing by Picarock to Joseph Taranto at the time Picarock and Joseph Taranto executed the Deed of Loan. I have set out above the evidence of the circumstances of the advance of those sums and their treatment in the accounts of Picarock at the time of the Deed. Mr and Mrs Lopes have asserted that the Estate could have done more to prove the transactions by electing to call witnesses with knowledge of the transaction. That is no doubt true, but the question for me is whether the Estate has done enough. In my view, this is a case where the rule in Jones v Dunkel is a critical consideration in assessing the sufficiency of the evidence adduced by the Estate.

49 In approaching this question, I am bound to bear steadily in mind that the rule in Jones v Dunkel is not a panacea for deficiencies or gaps in the case of the party bearing the burden of proof. In Trkulja v Markovic[35] the Victorian Court of Appeal held:

"[T]here are a number of limitations to the application of the rule in Jones v Dunkel. Relevantly for the purposes of this appeal, the rule does not permit an inference that the evidence not called by a party would have been adverse to the party. The rule also does not enable the absence of a witness to make up for any deficiency in a party's evidence. The rule will not support an adverse inference unless the evidence otherwise provides a basis on which that unfavourable inference can be drawn. It has therefore been said that the rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into inference." [citations omitted].

50 However, it has also been said that it is permissible to treat the failure to call evidence as a reason for increasing the weight of the proofs of the opposite party.[36] Further, where (as here) the absent witness is a party, an adverse inference may more readily be drawn against that party.[37] In Chong v CC Containers Pty Ltd,[38] the Court of Appeal summarised the authorities in support of these propositions (citations omitted):

"In Dilosa v Latec Finance Pty Ltd [No 2], Street J recognised that where the absent witness is a party then considerable importance may well attach to the inference that nothing which the party could say would assist his or her case. As Gleeson CJ said in Azzopardi, the judgments in Weissensteiner recognise that the inference that may be drawn from the silence of a party to civil litigation may be significant. Santow J drew such an inference in ASIC v Adler because the parties who were available and not called had a personal involvement in the transactions in question. Where a party elects not to give evidence 'the court is entitled to be bold'. As Heydon, Crennan and Bell JJ stated in Kuhl v Zurich Financial Services Australia Ltd, the rule has a particular application where it is the party which is the uncalled witness and may permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn."

51 Mr Lopes was available to give evidence - he even drove Mrs Lopes to court on the morning of the hearing. And as Mrs Lopes herself said in her evidence in relation to the $1,000,000 debt being a debt owed to Mr Taranto rather than to Wemear, "You would have to ask my husband these questions." While Mr Jahnke might also have been able to give evidence about the details of Picarock's debts at the time of the Deed of Loan, I accept the Estate's submission that he was in Mr and Mrs Lopes' camp. I do not agree with Mr and Mrs Lopes' submission[39] that there is no evidence of the relationship between the Ryan interests and Mr Lopes. That evidence is furnished by the ASIC records showing the numerous jointly held and controlled companies, and Mrs Lopes' evidence that Dennis Ryan was a "business partner" of Mr Lopes.

52 Turning to the evidence itself, I accept that there are significant gaps and inconsistencies in the various financial statements on which the Estate relies. Those financial statements alone do not supply the evidence on which a Jones v Dunkel inference could operate. However, in my view, the position changes with the two emails of 11 and 12 May 2011. There was no challenge to the admissibility of those emails. I am satisfied that the emails against the background provided by the financial statements, are at least strong circumstantial evidence that, by one means or another, the advance of $1.2 million originally made by Joseph Taranto to Code Up and the $1 million in advances by Wemear to Picarock, had come to be treated by those in control of Picarock as debts owing by Picarock to Joseph Taranto. That evidence is bolstered by the admission and evidence that Griffiths Parry prepared the Deed of Loan on instructions received from Picarock's directors.[40]

53 In my judgment, the combination of the evidence discussed above is a sufficient foundation for me to draw the inference that the debt existed and that any evidence that Mr Lopes and Mr Jahnke might have given, would not have assisted Mr and Mrs Lopes' case by proving otherwise. In particular, it is apparent from the emails themselves that Mr Lopes had an intimate and detailed knowledge of Picarock's financial affairs. He was also probably uniquely placed (following Joseph and Vincent Taranto's death) to explain the history of the dealings between the Lopes and Ryan entities and the Taranto family. He was a party to the proceeding and his failure to give evidence was unexplained. I am therefore satisfied that nothing Mr Lopes could say would have contradicted the inferences about the emails and related evidence that I am emboldened to draw.

54 I accept on the evidence supported by the Jones v Dunkel inference discussed that, as at the time the Deed of Loan was executed on 24 May 2011, Picarock Pty Ltd owed $2,200,000 to Joseph Taranto, by reference to the transactions described in the email of 12 May 2011.

As a matter of construction, do the guarantees constitute security for the Deed of Loan?

55 Mr Lopes makes three submissions about the liability created by his guarantee. His first submission relies on the fact that the "principal instrument" is identified in the schedule as the "Deed of Loan dated the 20th day of May 2011". The day, month and year are all inserted by hand, and match the date inserted by hand as the date of the deed of guarantee. Mr Lopes submits that as the Estate does not identify or rely upon a deed of loan dated 20 May 2011 (the Deed of Loan is dated 24 May 2011), "no liability can accrue" pursuant to his guarantee. I reject this submission.

56 The schedule to the guarantee also identifies the "borrower" as Picarock (as manager of the PUP) and "loan" as an amount of $2.2 million "and further advances, if any". Paragraph A of the guarantee states:

"[I the undersigned] Hereby request you to lend to the borrower the loan together with such further advances as you may in your discretion make to the borrower (the loan and such further advances, if any, been hearing called the "principal sum") pursuant to the principal instrument bearing or intended to bear even date herewith to be executed by the borrower in your favour".

57 I agree with the Estate that the date for the Deed of Loan inserted in Mr Lopes' guarantee is clearly an error, perhaps made on the assumption that the Deed of Loan would be executed on the same date as the guarantee. Indeed, the evidence establishes that the Deed of Loan was in fact executed at least by Picarock on 20 May 2011.[41] In any event, I am satisfied as a matter of construction based on the other items in the schedule to the guarantee and the surrounding circumstances, that the parties intended the guarantee to be collateral security for the Deed of Loan.

58 Further, the Deed of Loan meets the description in paragraph A of the guarantee of the "principal instrument bearing or intended to bear even date herewith to be executed by the borrower in your favour" (emphasis added). These words clearly contemplate that the "principal instrument" was to be executed after the guarantee, and that the date of the instrument may vary from the date the parties intended it to bear. There is no evidence of any document meeting that description apart from the Deed of Loan. It is well established that obvious errors can be corrected simply as a matter of construction.[42]

59 Mr Lopes' second submission is that, assuming (as I have found) the guarantee related to the Deed of Loan, "as there was no advance made pursuant to that document, Mr Lopes' guarantee is not engaged according to its terms". I have rejected already the submission that liability under the Deed of Loan is avoided because the $2.2 million was not advanced "pursuant to" (in the sense of consequent upon) the Deed of Loan. Further, I agree with the Estate that Mr Lopes' guarantee is by its express terms an agreement by him unconditionally to guarantee to Joseph Taranto the due and punctual payment of the money payable by Picarock under the Deed of Loan. For the reasons above, I am satisfied that money was in fact so payable by Picarock to Joseph Taranto.

60 Mr Lopes' third submission is that his guarantee was specifically conditioned upon the loan being made, on the basis that paragraphs A and B of his guarantee "require the loan to be made before the guarantee comes into effect". However, on my reading, paragraph A at least is expressed as a request "to lend to the borrower the loan... pursuant to the principal instrument... to be executed by the borrower in your favour" (emphasis added). That is, the provisions expressly contemplate a future advance. Further, the facts show that the Deed of Loan giving rise to Picarock's liability to Joseph Taranto to pay $2.2 million, was indeed executed at or after the signing of the guarantee.

61 Paragraph B of the guarantee does not take the matter any further. It merely articulates Mr Lopes' agreement to guarantee repayment of the "principal sum and interest, damages and all other monies payable by or recoverable from" Picarock "under or pursuant to" the Deed of Loan. I agree with the Estate that the terms of the guarantee are enlivened simply by a failure by Picarock to perform its obligations under the Deed of Loan. Again, I have held above that the sum of $2.2 million plus interest was payable by or recoverable from Picarock pursuant to the Deed of Loan and it is not in dispute that Picarock has failed to pay any of those sums to Joseph Taranto.

62 Mr Lopes relies on a number of authorities that confirm the principle that ambiguous provisions in a guarantee should be construed in favour of the surety, and also that a guarantor is relieved from liability when the creditor "does not do that in return for which the guarantee was given".[43] However, as I have been unable to identify any relevant ambiguity in the guarantee itself, nor any disconformity in the way in which the guarantee engages with the primary liability of Picarock under the Deed of Loan, the occasion for the application of those authorities does not arise.

63 Although there are differences in the wording of Mrs Lopes' guarantee, the same considerations apply. Indeed, as Mrs Lopes has conceded, her guarantee is drafted even more widely than her husband's. In my view, the argument that the liability of Picarock to Joseph Taranto under the Deed of Loan is not captured by the words "in consideration of Taranto ...agreeing to provide loans, advances and other accommodation", is not sustainable. In particular, "accommodation" (in the sense of financial accommodation) is a word of wide import.[44] I also note that Mrs Lopes' guarantee does not have the dating issue affecting the description of the Deed of Loan in her husband's guarantee. In fact, the Deed of Loan does not feature at all in the description of the primary liability in her guarantee.

64 The final argument raised by Mrs Lopes in relation to the construction of her guarantee relies on clause 3, which appears to contemplate that the Debtor (namely, Picarock) joins with Mrs Lopes as guarantor in agreeing to certain provisions of the agreement. Mrs Lopes submits that this clause required a tripartite agreement. That is, the guarantee required an agreement by Mrs Lopes, Joseph Taranto and Picarock as to the manner in which the guarantee could be called upon in the event of default by Picarock. Mrs Lopes' guarantee is signed only by Mrs Lopes. There is no evidence of any acceptance of the agreement by Picarock, whether by conduct or otherwise.

65 Mrs Lopes further submits that, absent evidence that Picarock agreed to be a party to and be bound by the terms of the guarantee, the guarantee was never properly constituted and is therefore ineffective as against Mrs Lopes. The Estate has submitted in response that Mrs Lopes and Joseph Taranto are clearly able to agree (and have agreed) to the relevant terms of Mrs Lopes' guarantee on their own account, irrespective of Picarock's involvement. Neither party has sought to rely on authority[45] or an analysis of the terms of Mrs Lopes' guarantee to support their submission.

66 This issue more commonly arises where a deed of guarantee makes provision for execution by two or more co-sureties, and a question arises as to whether failure by one co-surety to execute the guarantee relieves the intended co-surety of liability. Whether a party is to be relieved from liability in these circumstances is a matter of construction of the deed concerned: was it intended that the party signing would not be liable until the other party signed?[46] In cases where it is not possible to say as a matter of construction that the instrument is on its terms conditional on all parties signing, relief in equity may be available if the evidence shows that the signatory executed "on the faith of" the other party executing. [47]

67 According to the learned author of Seddon on Deeds, the onus is on the executing party to show that the deed was intended to be executed by all obligors.[48] However, I am not sure that the authorities he relies on stand so clearly for that proposition.[49] Regardless, the position in this case is clear. First, this case does not fall into the category of cases where the failure of the third party (Picarock) to execute, will throw an additional burden on Mrs Lopes:

"These cases make it quite clear that once a person has signed, sealed and unconditionally delivered a deed that deed is binding on that person even if there is a party to the deed who has not executed it or delivered it unless the failure of that third party will throw an additional burden on the other parties. There is no additional burden in the instant case. Accordingly the Deed is effective." [50]

68 Second, and conclusively, Mrs Lopes' guarantee expressly provides (clause 3.20) that:

"This Guarantee and Indemnity shall bind each of the signatories hereto to the extent aforesaid notwithstanding that this Guarantee and Indemnity may not have been executed or purportedly executed by one or more of the persons named herein as Guarantor or the Debtor or that this Guarantee and Indemnity is or may become void or voidable as against one or more of such persons."

No evidence was led from Mrs Lopes or otherwise that would support the proposition that, notwithstanding this provision, Mrs Lopes executed "on the faith of" Picarock executing the deed.

Has Mrs Lopes established all the elements of a Garcia defence?

69 To succeed on her Garcia defence,[51] I must be satisfied on the balance of probabilities that:

(1) Mrs Lopes did not understand the purport and effect of the transaction;

(2) the transaction was voluntary, in the sense that Mrs Lopes obtained no benefit from the Deed of Loan, the performance of which she guaranteed;

(3) Joseph Taranto knew that Mrs Lopes was Mr Lopes' wife and could be expected to repose trust and confidence in Mr Lopes in matters of business and therefore to have understood that Mr Lopes may not fully and accurately explain the transaction to Mrs Lopes; and

(4) Joseph Taranto nonetheless did not take steps to explain the transaction to Mrs Lopes or find out that a stranger had explained it to her.

70 The Estate has conceded that (3) is made out.[52] In relation to (1), the burden of proof is squarely on Mrs Lopes.[53] The question of burden in respect of (2) and (4) is less certain. I deal with the question of burden in respect of (2) below. In relation to (4), the better view seems to be that this falls to Mrs Lopes to prove.[54] But to my mind, the issue is put beyond doubt where (as here) it is not in dispute that the steps of the kind required by (4) were taken. In my view, on the facts of this case, Mrs Lopes must satisfy me that despite those steps, the process of explanation miscarried to such an extent that Joseph Taranto's conscience is relevantly impeached.[55] I will summarise the evidence of Mrs Lopes and her solicitor Mr Carlei before returning to consider whether each of (1), (2) and (4) is satisfied.

71 Mrs Lopes is 62 years old. She was born in Ipswich, Queensland, but grew up in Melbourne before returning to live in Queensland. She now lives in the family home, on Chevron Island, Surfers Paradise. Mrs Lopes attended Oakleigh High School in Melbourne and subsequently completed tertiary studies in social sciences at La Trobe University. After leaving university, she worked in various roles including as a functions coordinator, a pharmacy assistant and a medical receptionist.

72 As a pharmacy assistant, Mrs Lopes worked in one of her husband's pharmacies and undertook "serving in the shop...[and] a little bookwork to do with the ordering and wages". Mrs Lopes' evidence was that this was her only active involvement with her husband's businesses. Mrs Lopes' last job was as a permanent part-time medical receptionist, working up to three part-days a week. This involved clerical tasks, taking phone calls and booking and preparing rooms for patients. Mrs Lopes retired from paid employment in 2000. She could not recall what her salary was at the time of her retirement, but agreed that it was a typical salary for someone working three part-days a week as a medical receptionist.

73 Mr and Mrs Lopes have been married for 32 or 33 years. Mrs Lopes has bank accounts in her sole name, which had been held by her since before she met Mr Lopes and were used for running the household. In relation to the family home on Chevron Island, Mrs Lopes agreed that this was a waterfront property which could be worth around $1 million. The home is solely in her name, but is mortgaged. There was no evidence as to what was owing under the mortgage.

74 The balance sheet for Code Up for the year ended 30 June 2004 shows a loan by Code Up for $488,243, with a description comprising the street name for Mrs Lopes' home followed by "(Chevron)". Mrs Lopes agreed that she could not point to any asset that she or Mr Lopes owned that met the loan description, apart from her home. She said that Mr Lopes arranged to buy and build the home, but agreed that the amount of $488,000 "sounds about right" as the cost involved. She also agreed that her personal income would not have been sufficient to pay for the home.

75 In relation to her knowledge and involvement in Mr Lopes' businesses, the effect of her evidence is probably best summed up by the following passage:

"I don't know anything about my husband's companies, businesses and dates and amounts. I would have no idea. I never stepped in the offices of wherever he worked, I was just his wife who signed documents. These figures are just pieces - they're just numbers. I don't know anything about these".

She said that she would sign "hundreds" of business related documents without reading them or making any enquiries, if they were put before her by her husband.

76 Several ASIC database searches showed Mrs Lopes as having directorships and shareholdings in various companies. Although she recognised some of the company names, she generally denied knowledge of the roles she held in those companies, their business or the circumstances in which she came to be involved in the companies. She said that: "I would have signed papers at the request of my husband I would imagine to be a director". Three companies that were given particular attention during her evidence were Kaytiff Pty Ltd, Kaylo Pty Ltd and Kayan Medical Services Pty Ltd.

77 Mrs Lopes has been the sole director, secretary and shareholder of Kaytiff Pty Ltd since its registration on 10 June 2011. Its principal place of business since registration has been Mrs Lopes' home address. Mrs Lopes agreed that she knew Kaytiff Pty Ltd existed and that all of its assets were owned by her through her 100% shareholding. Mrs Lopes also accepted that she became a shareholder of Waymake in September 2010. She was then taken to a presentation of accounts and statement by the liquidator of Waymake that showed a receipt by the liquidator of $10,000 on 30 October 2011 from "Kaytiff Pty Ltd ATF Kay Lopes Family Trust" described as "indemnity funds". Mrs Lopes said that the only source of the funds could have been from Mr Vanarey, an old family friend that she knew through her husband, who had been giving her $30,000 or $40,000 each year "to get by".

78 In relation to the company Kaylo Pty Ltd, Mrs Lopes' evidence was that that she had "heard the name" but otherwise knew nothing about the company. Mrs Lopes agreed that the company search showed her as the sole director of Kaylo Pty Ltd. She said: "I know companies can have directors and I've seen pieces of paper where the directors are listed on pieces of paper, but no, I don't really know what the role of directors is in a company". Mrs Lopes was then taken to a change of company details form, apparently signed by her in April 2016 which showed that the 10 issued shares in the company had been transferred from Mr Lopes to Mrs Lopes on 11 April 2016. The form had been lodged by Morgan Conley solicitors, the solicitors acting for Mrs Lopes in the proceeding.

79 Mrs Lopes' initial evidence was that she knew nothing about this. She said that if a document to this effect was lodged, it was done without her instructions. She said that nobody had shown her that document in relation to this proceeding. She also asserted that she had not told her lawyers what to do in relation to this proceeding. Later her evidence was to the effect that she did not recall the circumstances in which her solicitors asked her to sign something in April 2016, and if she signed documents she would have done so at the request of her husband. She said that documents that solicitors need to witness were not always documents that have legal consequence:

"I haven't always been to a solicitors thinking, thinking that every time I've gone in there I'm under some legal consequence, no... Actually, most of the times I've been to solicitors, it might have been to sign things that were just to do with setting up of businesses and things. They were never situations where consequences-where I was fearful or worried about outcomes of anything."

80 Mrs Lopes could recall signing a document with the name Kayan Medical Services Pty Ltd on it but said that she didn't do anything connected with the company. She did not know that she was currently a director of Kayan Medical Services Pty Ltd. The other director is Mr Ian Tauman. According to Mrs Lopes, Mr Tauman was "someone that was in pharmacy back when [Mr Lopes] was in pharmacy". Mrs Lopes did not know what assets the company had.

81 Mrs Lopes met with Mr Carlei for the purpose of executing her deed of guarantee on 20 May 2011. It was suggested to her in cross-examination that if she could not remember the circumstances of signing a document in April 2016, her memory of the same process of signing a document with solicitors in May 2011 would be likely to be inaccurate. She responded: "Incorrect. If you're referring to the day with Peter Carlei that was a very specifically memorable day in the fact that I was desperate to get to the hospital." Her earlier evidence had been that she was going to the hospital that day because her stepson had just been put into an induced coma. She said that because she wanted to get to the hospital, she had a vivid memory of the signing process. She denied that, in circumstances where she was anxious to get to the hospital, it was possible Mr Carlei was saying things and she wasn't paying attention.

82 Her initial evidence was that she spent "no more than 10 minutes" with Mr Carlei, but later extended this to "10 or 15 minutes". The meeting occurred in Mr Carlei's office. Mrs Lopes was sitting opposite Mr Carlei across a table. There was no one else in the room other than she and Mr Carlei. Mrs Lopes described what occurred at the meeting in the following terms:

"There was some banter at the beginning, general back-and-forth conversation about the need to get this done, to get the signature witnessed... For us to be able to get to the hospital. That was most of the conversation... Peter spent time skimming through, verbalising to himself actually, "dadada, dadada, dadada, we don't... need to worry about that...". And I think he was crossing things out. And basically going through the document hastily, to make sure he was looking through it, but it was all very rapid... He did go through it. To himself, virtually, yeah. He was reading out loud... But he wasn't speaking to me. He was reading in a sort of speed read fashion. If he did [say some things to me in that time] I don't recall anything that was memorable or outstanding, or pertaining to anything to do with the document... He would have been talking to me. [I don't specifically recall what it was that he said to me on the day]"

83 Mrs Lopes agreed that there was not a lot of writing on page 3 of the solicitor's certificate comprising schedule 3 to her guarantee. She accepted that she could read those words pretty quickly and she had no problems reading English. The words on page 3 of the solicitor's certificate are as follows:

"CLEINT'S CERTIFICATE

I CERTIFY that I have been handed a copy of the certificate.

I have read the certificate.

I am the client named.

The above information is true.

SIGNED:

Print name:

DATED:"

84 Mrs Lopes agreed that it was her signature on the page and that she did not falsely certify the document. She then gave the following evidence:

"Q: And so what you've certified there is true and correct?

A: I just signed it.

Q: Well, is it true and correct, as you certified, that you read the certificate?

A: No, I didn't read the certificate.

Q: So you're saying now that's a false certification?

A: I've signed it, that's all I can say.

Q: Well, let me put it to you. You're saying now that it is not true that you read the certificate?

A: It's not true that I read the certificate, yeah, that is - I didn't read the certificate.

Q: So where it says "I have read the certificate," on that document ... And you signed your name... That is a lie, is that what you're saying?

A: I just signed it. If that means it's a lie, I signed it.

Q: Well, do you accept now that it is a lie? Or, sorry, do you assert now that it is a lie?

A: Well, it must be.

Q: And I suggest that you are willing to make untrue statements if it assists you and your husband financially?

A: Absolutely not.

Q: Well, isn't that what you've done here?

A: Not knowingly. I signed this piece of paper in a hurry, and yes, I didn't dot every[thing] and read everything - I just signed it."

85 Later in her evidence, Mrs Lopes confirmed that she did not recall any conversation with Mr Carlei about the solicitor's certificate, other than Mr Carlei saying: "I'm sure you've seen or signed things like this before". She said: "It wasn't 10 minutes of him mumbling, it was just blah blah blah, blah blah blah, and I saw him with a pen crossing out, blah blah blah, yes, 'I'm sure you signed things before', and it was a wide table and he pushed the document across the table and I signed it".

86 Mrs Lopes was again asked whether Mr Carlei could have said things about the documents that she didn't pay attention to. She responded: "Well, he certainly didn't advise me of anything that would have upset or put fear in me because I didn't walk out of there thinking I'd done anything [other] than having him witness my signature on a document". She denied that Mr Carlei explained to her the general nature of the guarantee. The following exchange then occurred:

"A: Back then you knew what a guarantee was?

Q: Back then... [in 2011]... not really. It was of piece of paper that I signed... It didn't hold any gravity to me, yes.

A: The word guarantee may as well be Chinese from your perspective?

Q: Yes, yes.

A: You said it's a jumble of letters, it doesn't mean anything to you?

A: It said guarantee, but I didn't even look at it.

Q: I'd suggest to you that you're exaggerating your lack of knowledge of what a guarantee is?

A: No, I'm not.

...

Q: And you know what a guarantee is at least in concept?

A: I do now.

Q: And you knew back then that when you guarantee a document when you sign a guarantee you're guaranteeing the payment of money?

A: No.

Q: And the borrower defaults...?

A: I didn't know I was guaranteeing a payment of money. I was having my signature witnessed in a hurry on a document and getting out of the door to get to the hospital. I didn't take any of the gravity into it and I certainly do not recall being in a lengthy conversation with Peter Carlei or been given advice. I certainly didn't leave there frightened, upset or in any state of thinking oh my God, you know, it's - it was a signature."

87 Mrs Lopes agreed that the last page of her guarantee comprising the Schedule also had very little text on it and had "THE GUARANTOR" in bold letters just above her name. She said: "But it didn't, didn't have any gravity. I didn't, it - I was guaranteeing something. I wouldn't have remembered, or I don't even recall knowing how much or what was involved. I certainly didn't know the entities that I was guaranteeing". Mrs Lopes went on to say that she did not even know who Picarock is, but agreed that she could have asked. She said she didn't see any relevance to asking. She continued:

"I don't even remember it being a guarantee. I remember it being a piece of paper that needed to be signed"

...

I would have imagined at the time like all other times it was something I was doing for John, that I was signing something that John had asked me to sign and that the word guarantor was probably connected to him in some way and it was just me also as usual adding my signature to a piece of paper."

88 On the question of whether Mr Carlei discussed interest, Mrs Lopes was more forthright. She said: "[Mr Carlei] didn't discuss interest or any of that... If he had been discussing matters of finance like interest and that I would have been more aware that it was something to do with money or something like that, but no, no, I wasn't".

89 Peter Carlei is an Australian Lawyer and a principal of Russo Pellicano Carlei Lawyers in Oakleigh, Victoria. Mr Carlei vaguely recalled meeting with Mrs Lopes but agreed that he did not have any independent recollection of any aspect of the meeting. His evidence was essentially of his usual practice where he is instructed to provide a solicitor's certificate in respect of a guarantee and what he was able to discern from the documents and notes on his file.

90 Mr Carlei's usual practice was to review the relevant loan agreement and guarantee in advance of his meeting with the client, to satisfy himself that the certification was one he could provide. The client would then come in and he would go through the loan obligations on the borrower, highlighting the main points of the loan, and then explaining the nature and effect of the guarantee. He would then effectively do a page turn of the guarantee with the client, going through the major points, "not in absolute detail but in sufficient clarity to ensure that the client understood...that ultimately if the...borrower defaulted, then the lender would have the right to seek to enforce the obligations that the borrower had against the guarantor to the full extent provided for in the guarantee". This would have included identifying the amount of the loan.

91 Mr Carlei confirmed that the handwritten notes in the margin of the Deed of Loan on his file were made by him. He has noted the repayment instalments of $500,000 and $1.7 million, respectively. He has also undertaken some calculations of interest. He said:

"without going to the calculator, I would suspect that what I was doing here was calculating interest on 2.2 million for 18 months and - because 500,000 would then have been paid. That would have reduced the balance at that point to 1.7 million and the interest on the remaining balance - I suspect that 7% for the six months might add up to 59,500 and so the total interest payable under this loan agreement would have been 290,500."

92 Mr Carlei later hand-wrote an instruction to his staff to write to Mrs Lopes as a follow-up to the meeting. That letter is dated 27 May 2011 and relevantly states:

"We refer to the above matter and to your attendance at your [sic] office on 20 May 2011.

We confirm that we advised you in respect of the value and effect of the Guarantee $2.2Million and that the documentation was executed in my presence."

In the course of her evidence, Mrs Lopes accepted that she would have received and opened this letter, but: "it goes on John's desk, it's business mail, it's not my mail". The letter enclosed an invoice addressed to Mrs Lopes for $302.50, including GST.

93 Mr Carlei agreed that it was his usual practice to read out aloud to the client the section of the solicitor's certificate under the heading "Part B Explanations Given by the Certifying Solicitor". Mr Carlei accepted that one of the statements in the explanations, if read aloud to Mrs Lopes, could have been misunderstood by her. He said: "Kay is not a lawyer. She has some business acumen, but it is possible". He agreed that an "all monies" clause was an unusual clause in a guarantee but added that:

"In a situation like this, one of the items I look for is whether or not the guarantee is limited. This guarantee is not purported to be limited to any specific amount so the obligation covered the loan and any potential other amounts that the borrower may have - the lender may have advanced to the borrower at the time and it would have been said to Kay, it is an unlimited guarantee."

Mr Carlei agreed that he had no specific recollection of saying that to Mrs Lopes.

94 On the question of whether Mr Carlei asked Mrs Lopes about what her assets were and whether she would be able to meet the liability if the borrower defaulted, Mr Carlei responded:

"Again, I would have in general. I would tell a client that if you were sued, any assets that you own are liable to meet the debts that the borrower was obliged to pay and you run the risk of, if you own your own property, losing your property".

He again accepted that he had no independent recollection of telling Mrs Lopes this, except that it was something he did as a matter of course. He later added that as part of his general advice, he would tell the client that loss of their home might be a possibility if there is a default.

95 On the time taken for the meeting, Mr Carlei denied that the meeting took about 10 minutes. He said: "I can say it would have taken more than 10 minutes to go through and explain the documents. I would have thought at best, minimum of half an hour, 40 minutes". He accepted that Mrs Lopes may have been in a hurry to be somewhere else but: "It wouldn't have reduced my time required to advise". Mr Carlei disagreed that at the meeting with Mrs Lopes he just went through the documents quickly and read them to himself. He denied that he failed to provide her with any advice.

96 In particular, when it was put to him that he said to her something to the effect of, "you've signed these before, you know what this is all about", he responded: "Definitely not". He said: "I ensure that clients understand the nature and effect of a guarantee. It is an important document and I seek to avoid this specific situation". By "this specific situation", I understood Mr Carlei to be referring to the situation of being subpoenaed to give evidence, and cross-examined on his processes.

97 Finally, when asked if he had known that $2.2 million referred to in the Deed of Loan had been advanced in 2002 or 2003, whether that would have affected the advice he gave, the following exchange occurred

"A: Absolutely.

Q: And what would you have told her about that?

A: Don't sign the guarantee."

98 The version of the Deed of Loan on Mr Carlei's file and provided to him at or before the meeting with Mrs Lopes on 20 May 2011, was undated. It had been executed by Picarock but not by Joseph Taranto.

Did Mrs Lopes understand the purport and effect of the guarantee?

99 As mentioned above, the burden of establishing this first element of a Garcia defence is squarely on Mrs Lopes. In my view, she has failed to discharge that burden. Mrs Lopes is an intelligent woman. She is educated to tertiary level and clearly has complete command of the English language, both written and oral. She has had her own bank accounts for most of her life. She has been employed in roles that involved clerical duties, including exposure to book work. Despite this, I accept that she reposed trust in her husband Mr Lopes and over the 32 odd years of her marriage has signed literally hundreds of business and company documents, including at solicitors' offices, without enquiring as to their purport and effect. But I do not accept that she was incapable of understanding the purport and effect of the documents, had she so enquired or otherwise had them explained to her.

100 Mrs Lopes' assertion to the effect that she signed any document that Mr Lopes put in front of her without understanding the content, became something of a refrain in the course of her evidence. She continued to repeat versions of it to a point where, in my view, it became both disingenuous and implausible. In particular, I do not accept her evidence that she had so little understanding of the meaning of "guarantee", that it might as well be in Chinese. Similarly, I do not accept that she left the meeting with Mr Carlei in complete ignorance of the effect of the document she had just signed. I might have accepted that she was so distracted by her impending visit to her gravely ill stepson, that she recalled little or nothing of the meeting. But she expressly and repeatedly disavowed any lack of attention to what Mr Carlei said to her during the meeting.

101 In my view, Mr Carlei was a conscientious and truthful witness. He struck me as a practitioner of considerable experience who fully appreciated the gravity of his responsibility to adequately advise his clients for the purpose of signing a solicitor's certificate in the form of that appearing as schedule 3 to Mrs Lopes' guarantee. I hasten to add that I do not disregard Mr Carlei's frank admission that he had only a vague recollection of meeting Mrs Lopes and no direct recollection of what advice he gave her or what in fact transpired at the meeting. This is hardly surprising given the frequency with which he is likely to have undertaken this role and the passage of years since the meeting. However, I have no reason to doubt the veracity of his evidence as to his usual practice. Nor do I have any reason to conclude that he departed materially from this practice in his meeting with Mrs Lopes.

• I agree with the Estate's submission that the picture painted by Mrs Lopes of her sitting in a room quietly observing Mr Carlei muttering to himself for 10 to 15 minutes, is not plausible;

• it is equally implausible that in a meeting lasting even as brief a period as 10 to 15 minutes, Mr Carlei failed to mention as a minimum that the loan Mrs Lopes was to guarantee was for $2.2 million and that it would accrue interest totalling $290,500 by the time it was repayable, particularly as he had taken the trouble to make these calculations and note them on the copy of the Deed of Loan provided to him for the purpose of his meeting with Mrs Lopes;

• I am satisfied that Mr Carlei did a "page turn" of the guarantee with Mrs Lopes, summarised the effect of the key provisions and spoke of the risk to Mrs Lopes of her losing her personal assets (including her home) if the loan went into default; and

• I also accept it is more likely than not that, in accordance with his usual practice, Mr Carlei explained to Mrs Lopes that her liability under the guarantee was potentially unlimited, and thus identified for her, at least in general terms, the "all moneys" nature of the guarantee.

103 I am therefore satisfied that the critical aspects of the transaction were explained by Mr Carlei to Mrs Lopes, including that it was an "all moneys" guarantee. And Mrs Lopes has failed to persuade me that she did not sufficiently understand that explanation, at least at the time of the meeting. The explanation that I have found was given by Mr Carlei was enough to impart to a woman of Mrs Lopes' intelligence, level of education and grasp of the English language, the purport and effect of her guarantee, as that expression has been defined in the authorities relied on by Mrs Lopes.[56]

104 In my view, the incongruities in the form of the certificate referred to in Mrs Lopes' submissions,[57] are inconsequential and do not detract from my findings as to what, in fact, was communicated to Mrs Lopes in the course of the meeting.

105 This question is finely balanced and, in my view, ultimately turns on the subsidiary question of where the burden of proof lies. Mrs Lopes has boldly submitted that "the onus is on the plaintiff to show that Mrs Lopes was not a volunteer", citing Croft J in the Supreme Court in Abdul.[58] In my view, the question is not nearly as straightforward as this submission would suggest. The authority cited by Croft J in Abdul for this proposition is Chia,[59] where Einstein J states:

"Where the transaction is not ex facie for the benefit of the wife, then the onus will lie on the party seeking to enforce the security to show that the wife was not, relevantly, a volunteer: Warburton v Whiteley [1989] NSW ConvR 55-453 at 58,288...per McHugh JA"

106 The Estate has noted in its submissions that Warburton was decided before Garcia and has set out at length the many competing authorities, including Chia itself, that treat the burden as resting on the guarantor seeking to rely on a Garcia defence.[60] The Estate argues that the principal relied on by Croft J in Abdul: "is at most merely a statement of the necessity for the creditor to displace a conclusion, if that conclusion otherwise arises on the evidence put forward by the guarantor".[61] There is considerable force in this submission. It also seems to me that the burden resting on the party relying on the Garcia defence sits more comfortably with considerations of the kind discussed by Kirby J in Garcia.[62]

107 However, in the absence of any authority of at least an intermediate appellate court expressly disapproving these findings (and I have found none), I consider that I am constrained by the findings on burden by McHugh JA (as he then was) in Warburton, as approved in Abdul. My starting point therefore is to consider whether the transaction was on its face for the benefit of Mrs Lopes. This is a different question to that concerning the sufficiency of the evidence of the advances to Picarock, discussed above.[63] In particular, it lacks the express support of the two emails, the letter from Griffiths Parry and the notice to admit,[64] coupled with the application of the rule in Jones v Dunkel arising from the failure to call Mr Lopes to give evidence those matters.[65] None of those documents say anything expressly about any benefit to Mrs Lopes.

108 In my view, the evidence as a whole falls short of establishing that the transaction on its face is for the benefit of Mrs Lopes. An inference can be drawn that funds generated out of Mr Lopes' business activities are likely to have flowed to Mrs Lopes given her lack of independent financial resources (putting aside the evidence of occasional assistance from Mr Vanarey). But the evidence of this is incomplete and speculative. I accept Mrs Lopes' submission that an incidental benefit accruing to family through shareholdings, company directorships and the like, is not sufficient.[66]

109 That said, there is evidence in this case that seems to me to rise higher than evidence of the kind discussed in the passages from Agripay and Abdul referred to in Mrs Lopes' submissions.[67] I refer, in particular, to the evidence discussed above concerning:

• the possible contribution of funds from the original advances to Code Up to the purchase of Mrs Lopes' home;[68] and

• the substantial funds deposited into Kaytiff's bank account in the period following the execution of the guarantee, seen against the background of Mr Lopes email dated 11 May 2011 discussing the release of funds as part of what appears to be a broader restructure of his financial affairs.[69]

110 As to the latter, I reject Mrs Lopes' submission that the Kaytiff bank statements should not be admitted. They were called for during the cross-examination of Mrs Lopes, in response to Mrs Lopes' surprising evidence that she knew nothing of the financial affairs of a company that had been under her exclusive control as sole director, secretary and shareholder since June 2011. In my view, the call was justified. The bank statements also confirm other evidence,[70] that Kaytiff is the trustee of "Kay Lopes Family Trust". The timing of the production of the bank statements was agreed to suit the convenience of both the parties and the court. There can be no suggestion that the bank statements do not meet the business records exception to the hearsay rule.[71] Finally, I am satisfied that the bank statements are relevant and that the submissions made about them are not "baseless", for the reasons set out in the Estate's submissions concerning the bank statements.[72]

111 On balance, however, I am not satisfied that even this evidence is sufficiently compelling and complete to discharge the burden that the Estate bears. For completeness, I note that had the burden instead been on Mrs Lopes on this aspect of her Garcia defence, I would have been satisfied of Mrs Lopes' failure to establish that she was not a volunteer. In my view, the evidence referred to above is sufficient to create enough doubt about whether or not she received a benefit and thus to justify a finding against her on the second element of the Garcia defence, absent contrary evidence.

Did Joseph Taranto take steps to have the transaction explained?

112 The court in Garcia emphasised the relatively simple means by which a creditor can avoid the application of the equity:

"As is apparent from what was said in Yerkey v Jones the creditor may readily avoid the possibility that the surety will later claim not to have understood the purport and effect of the transaction that is proposed. If the creditor itself explains the transaction sufficiently, or knows that the surety has received "competent, independent and disinterested" advice from a third party, it would not be unconscionable for the creditor to enforce it against the surety even though the surety is a volunteer and it later emerges at the surety claims to have been mistaken."[73]

113 It is important to emphasise that the focus is not on the subjective belief or understanding of the wife. It is the conscience of the creditor which is in issue:

"The explanation provided by the creditor or a third party need not, in fact, successfully disabuse the wife of her misapprehension is. It need only give the creditor reasonable grounds for believing that the wife does not have an adequate understanding of the nature and purport of the transaction".[74]

Viewed objectively, it is difficult to imagine how Joseph Taranto could have done more to absolve his conscience of any belief or concern he might have otherwise had that Mrs Lopes may repose trust and confidence in Mr Lopes in matters of business and Mr Lopes may not fully and accurately explain purport and effect of the transaction.

114 Mrs Lopes has pointed to a number of matters which she nevertheless argues operate to impeach Joseph Taranto's conscience. I will deal with these in turn. First, Mrs Lopes has submitted that her "stepson was in hospital in a coma suffering from a cancer relapse, fact which was known to the deceased".[75] This submission is finds no support in the passage of transcript relied on. And I have been unable to identify any other evidence that might suggest that Joseph Taranto had any knowledge of the medical condition of Mrs Lopes' stepson at the time of her meeting with Mr Carlei, or at all.

115 Second, Mrs Lopes submits that it was: "clearly unconscionable for the deceased to secretly have Mrs Lopes bound to a different obligation to that of her husband".[76] This is a reference to the fact that there are substantial differences in the format and content between the guarantee given by Mr Lopes and that given by Mrs Lopes. This may in part be explained by the fact that it appears that they have been prepared by different law firms. The latter was prepared by Lawcorp Lawyers, who were acting for Joseph Taranto in the transaction. The former is in a font and style similar to the Deed of Loan which suggests it may have been prepared by Griffiths Parry. In any case, the suggestion of some subterfuge on the part of Joseph Taranto is unfounded. And even if there was some basis for the suggestion, it would have been wholly superseded by the fact of the independent advice from Mrs Lopes' own lawyer, Mr Carlei.

116 Third, Mrs Lopes asserts that "the certification by Mr Carlei specifically excluded any advice about the transaction". I presume this is a reference to the evidence that Mr Carlei did not give Mrs Lopes financial advice about the transaction. This evidence included the statement in the Solicitor's Certificate given by Mr Carlei that: "I further informed the guarantor that if in any doubt on these aspects the guarantor should obtain independent financial advice before signing the documents." Mrs Lopes does not cite any authority for the proposition that a creditors' conscience is impeached by the failure to ensure that the guarantor receives independent financial advice, or that financial advice is somehow encompassed in the obligation to provide advice about the purport and effect of the guarantee. In my view, to so hold would constitute an unwarranted extension of a principle that is already under some strain.[77]

117 Fourth, Mrs Lopes alleges that there were certain aspects of the underlying loan transaction that Joseph Taranto failed to ensure were disclosed to Mrs Lopes. In my view, arguing that matters at this level of detail are required to be included in the explanation finds no support in the authorities. Indeed, any explanation that began to deconstruct the underlying transaction by pointing to matters that might be said to go to the validity of that transaction, are more likely to create confusion and uncertainty and thus impugn the efficacy of the advice. The facts of this case are fundamentally different from decisions like Abdul and Amtel Pty Ltd v Ah Chee.[78] In this case, the various certificates and acknowledgements was signed in the presence of, and following advice from, an experienced and independent legal practitioner.

118 Mrs Lopes needed to be told that she was entering into a transaction that could see her personally liable to pay at least $2.2 million plus interest in the order of $290,000. She arguably also needed to know that her liability was potentially unlimited and that, if the borrower defaulted on the loan, her personal assets (including her home) were at risk. As discussed above, I am satisfied that all these matters (at least) were drawn to Mrs Lopes' attention. In my view, it is nonsensical to suggest that it was unconscientious of Joseph Taranto not to ensure that Mrs Lopes was also told about aspects of the transaction that might potentially entitle her to avoid liability under the guarantee.

119 In my view, the Estate correctly submits that the fourth element of the Garcia defence is insurmountable for Mrs Lopes.

120 For the reasons above, I will order that there be judgment for the Estate against Mr and Mrs Lopes in the sum of $2,200,000. On the question of interest, my tentative view is that the plaintiff is entitled to interest on that sum at the rate of 7% per annum from 24 May 2011 until the time when demand was made against the defendants, being 14 February 2014.[79] Interest thereafter is payable pursuant to s58 of the Supreme Court Act 1986 (Vic)[80] at the rate for the time being fixed under s2 of the Penalty Interest Rates Act (Vic) 1983.

121 I would or also propose to order that Mr and Mrs Lopes pay the Estate's costs of and incidental to the proceeding (including reserved costs) on the standard basis in default of agreement, unless the parties are able to bring to my attention any matters that might justify a departure from the usual order on costs.

122 I will hear further from the parties on the final form of the orders on interest and costs.

I certify that these 44 pages are a true copy of the reasons for decision of His Honour Judge Woodward delivered on 22 November 2017.

[1] Garcia v National Australia Bank [1998] HCA 48; (1998) 194 CLR 395 ("Garcia")

[2] A loan to Code Up is shown as an asset in the PUP balance sheets with a value as follows: at 30 June 2004, $102,832.48; at 30 June 2005, $941,943.08; at 30 June 2006, $1,186,317.92; at 30 June 2007, $1,231,913.81; at 30 June 2008, $1,223,590; at 30 June 2009, $1,244,563.96; at 30 June 2010, $1,601,505.75; at 30 June 2011, $1,601,505.75; at 30 June 2012, $1,601,505.75

[3] A loan to Wemear is shown as an asset in the PUP balance sheet with a value as follows: at 30 June 2004, $1,000,000; at 30 June 2007, $58,000; at 30 June 2008, $82,000; at 30 June 2009, $176,000; at 30 June 2010, $240,000

[4] Plaintiff's supplementary outline of submissions at [5(d)]

[5] Defendants' supplementary submissions at [10]

[6] I presume this should read "as a fact or matter of law"

[7] In the sense that there is insufficient evidence of the advances having been made by Joseph Taranto to Picarock, as discussed below commencing at [48]

[9] Dare v Pulham (1982) 148 CLR 658 at p664-5

[10] Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15

[11] Arthur Young v Tieco International (1995) 182 LSLJ 367, per Lander J at [370]

[12] For example, The New Shorter Oxford English Dictionary (1993 Edition: Clarendon Press): "2. With to: consequent and conforming to; in accordance with"

[13] [1938] AC 156; [1937] 4 All ER 396

[14] Greer v Kettle (supra) [1937] 4 All ER 396 at 404; Sibonna Nominees Pty Ltd v Vouzas [2013] VSCA 369, per Warren CJ (Tate and Kyrou JJA agreeing), citing Ferguson J (as she then was) at first instance in Vouzas v Sibonna Nominees Pty Ltd [2011] VSC 261 at [119]; see also Maclean v RC & MF Holdings Pty Ltd [2011] VSC 447 at per Ferguson J at [128]

[15] [2000] VSCA 96 at [57]- [61], recently affirmed in (among others) Rinehart v Rinehart (No 3) [2016] FCA 539 at 628 and Labracon Pty Ltd v Cuturich [2013] NSWSC 97 at [162], which was in turn recently cited by Gordon J (in dissent) in Fischer v Nemeske Pty Ltd (2016) 257 CLR 615 at [195]

[16] Although compare the detailed exposition on whether estoppel by deed is a subset of estoppel by convention in Labracon Pty Ltd v Cuturich, per Lindsay J at [114]-[153]

[17] Cousens v Grayridge Pty Ltd (supra) at [58]

[18] See, for example, the defendants' supplementary submissions at [13]

[20] Cf Defendants' submissions at [31]

[21] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, per French CJ, Nettle and Gordon JJ at [46]-[52]; see also Apple and Pear Australia Ltd v Pink Lady America LLC (2016) 343 ALR 112; [2016] VSCA 280, per Tate JA at [91] to [140] and Ferguson and McLeish JJA at [229]-[232]

[22] Plaintiff's supplementary outline at [1] to [6] (where appearing for the second time)

[23] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (supra) at [46]-[47]

[27] See the discussion in Cousens (supra) at [58] of Helmich & Taylor v Thorp & Strathdee [1997] 3 NZLR 86

[28] Labracon Pty Ltd v Cuturich (supra) at [163]

[29] [1959] HCA 8; (1959) 101 CLR 298 at 320-322

[30] Plaintiff supplementary outline and [15], cf defendants' supplementary submissions at [26]-[29]

[31] Defendants' supplementary submissions at [13]

[32] (1972) 5 SASR 386 at 394 - 396, see also N Seddon, Seddon on Deeds (2015 edition, The Federation Press 2015) at [6.33] p229

[34] Plaintiff's supplementary outline at [10] to [21], where they second appear

[35] [2015] VSCA 298, per Kyrou and Kaye JJA and Ginnane AJA at [96]

[36] O'Donnell v Reichard [1975] VicRp 89; [1975] VR 916 at 921

[37] Trkulja v Markovic (supra) at [94]

[38] [2015] VSCA 137 at [212]

[39] Defendants' supplementary submissions at [28]

[42] Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 427-8 per Dixon CJ and Fullagar J

[43] Defendants' submissions at [53], [58] and [59]

[44] International Litigation Partners Pte Ltd v Chameleon Mining NL (Receivers and Managers Appointed) [2012] HCA 45; (2012) 246 CLR 455 at [28] and [43]

[45] For a discussion of issue generally, including reference to authority, see N Seddon, Seddon on Deeds (2015 edition, The Federation Press 2015) at [6.15] 213-214

[46] Keith Murphy Pty Ltd v Custom Credit Corp Ltd (1992) 6 WAR 332 at 342; Lady Naas v Westminster Bank Ltd [1940] AC 366, per Lord Wright at 403

[47] Keith Murphy Pty Ltd v Custom Credit Corp Ltd (supra) at 342; Federal Commissioner of Taxation v Taylor [1929] HCA 13; (1929) 42 CLR 80, per Rich, Starke and Dixon JJ at 87

[48] (supra) citing (among others) Gattellaro v Westpac Banking Corporation [2004] HCA 6; (2004) 204 ALR 258 per Gleeson CJ, McHugh, Hayne and Heydon JJ at [30], [36]

[49] Gattellaro v Westpac Banking Corporation (supra) [36] at fn 5

[50] Pratap v Permanent Custodians Ltd [2013] NSWSC 1918, per Young AJ at [8]

[53] State Bank of New South Wales v Chia [2000] NSWSC 552; (2000) 50 NSWLR 587 ("Chia") per Einstein J at [170] National Australia Bank v Savage [2013] NSWSC 1718 at [75] cf Chia at [169] citing Warburton v Whiteley (1989) NSW ConvR 55-453 ("Warburton") per McHugh J at 58,288 and Bank of Western Australia Ltd v Abdul [2012] VSC 222 ("Abdul") per Croft J at [58]

[54] Chia at [171] to [176]; National Australia Bank v Savage [2013] NSWSC 1718 at [75]

[56] Defendants' submissions at [87], [88] and [92], citing Agripay Pty Ltd v Byrne [2011] QCA 85; (2011) 2 Qd R 501 at [20], Chia (supra) at [169] and Amtel Pty Ltd v Ah Chee [2015] WASC 341

[57] Defendants' submissions at [91], [93] and [94]

[64] Discussed at [11] to [14] above

[67] Defendants' submissions at [79] and [80]

[71] Evidence Act 2008 (Vic) s69

[72] Defendants' outline on Katiff's bank statements dated 23 August 2017

[75] Defendants' submissions at [75a]

[77] Agripay Pty Ltd v Byrne (supra) at [146]

[78] [2015] WASC 341

[79] Notwithstanding paragraph 8 of the defence on behalf of Mr and Mrs Lopes dated 6 November 2015, I understand they do not dispute that a demand under the guarantee is was made by letter on or about that date

[80] Made applicable to this Court pursuant to s50 of the County Court Act 1958 (Vic)