"Interest: At 5 per cent per annum subject to review. Principal repayments: 20 years maximum commencing 1/7/80. Security: Initially a stock mortgage and then when the title is converted to a pastoral lease, a land mortgage is required. A trust fund is to be established at a suitable bank." 4. On 1 July 1978, the Territory Development Ordinance 1978 came into force. This Ordinance repealed the Encouragement of Primary Production Ordinance. By s5 of the Ordinance there was established a corporation with perpetual succession called the Northern Territory Development Corporation ("the NTDC"). Pursuant to s3 of the Ordinance, the NTDC took over the rights, privileges, obligations and liabilities, contingent or otherwise, of the Board. The NTDC's function was to assist in the development of industry in the Northern Territory by the provision of money, resources and advice (s15). "Industry" was defined by s4 to include, inter alia, a business or other activity carried on in the Territory that has as its object the production of food, marketable products or things. By s16(1), the NTDC had power to do all things that were necessary or convenient to be done for or in connection with or incidental to the performance of its function and the exercise of its powers. Section 16(2) provided that, without limiting the generality of s16(1), the NTDC may, for the purpose of carrying out its function or exercising its powers, do a number of specific things, including "enter in contracts" and "acquire, hold and dispose of real or personal property." Section 18(1) provided that, subject to s18(2), the NTDC may lend money, inter alia, "for the discharge or consideration of debts." Section 18(2) provided: "Money shall not be lent by the Corporation except with the approval of the Minister." Section 18(3) provided that the Minister's approval may be given from time to time either in relation to a specific loan or by a standing approval in general terms. 5. By letter dated 10 July 1978 to the defendant from Mr Mulder, an executive officer employed by the NTDC, the defendant was advised "that the Board had recommended for approval by the Minister of Industrial Development a loan of $150,000 for Debt Reconstruction." The letter set out the terms and conditions of the loan in somewhat different language to that approved by the Board, and referred to "special conditions" none of which appear to have been the subject of consideration by the Board. 6. On 11 July 1978, Mr Mulder submitted to the Minister a memorandum setting out the details of the defendant's application for financial assistance for the Minister's approval. The recommendations to the Minister were as follows: "It is recommended that:- (1) Under the provisions of section 18(1)(d) of the Territory Development Ordinance you approve a loan of $150,000 in favour of Mr John Alfred Turner for the purpose of Debt Reconstruction and - (2) Under the provisions of section 18(2) of the Territory Development Ordinance you approve the terms and conditions of the loan to be:- Interest: Initially at the rate of 5 per cent per annum, and subject to annual review. Principal repayments: To be made over a maximum period of 20 years commencing 1/7/1980 and subject to annual review." 7. The letter elsewhere advised the Minister that the Board "... initially requires a mortgage over stock depastured on the lease. This will be consolidated (sic) by a mortgage over the lease when the Pastoral Homestead Lease is converted to a Pastoral Lease." The Minister's approval was given by notation on the memorandum and dated 12 July 1978. It is to be noted that the approval did not in specific terms seek the Minister's approval to the form of security, or to the terms of any security documents, and the Minister's approval was sought and given only in the broadest of terms to whatever the precise arrangements might be. 8. By telegram dated 12 July 1978, Mr Mulder informed the defendant that the Minister had approved the loan and an explanatory letter had been mailed. Presumably the explanatory letter referred to was the letter of 10 July 1978 as no other letter was apparently sent. There is no evidence that the defendant communicated any acceptance of the terms offered by Mr Mulder's letter of 10 July, either by writing, or orally. 9. Prior to this time, the defendant owed an amount of $10,391.23 to the Board for a drought relief loan. Pursuant to s3(1) of the Territory Development Ordinance 1978, this debt became payable to the NTDC. On 12 July 1978, the NTDC "drew down" from the loan which had been approved $10,391.23 to pay out this loan from the $150,000 to be advanced. This was done by journal entries in the NTDC's records. There is no evidence that this was done with the defendant's knowledge or approval at that time. The defendant merely says that he rang the NTDC regularly to tell them he was waiting on the money, and to ask where it was. 10. On 20 November 1978, the defendant executed a stock mortgage under seal to secure the loan. The mortgage contains detailed provisions for the payment of interest and principal. In particular, the mortgage provides that the NTDC may: "... from time to time demand payment of such amount of the said indebtedness as the Corporation may in its discretion determine. PROVIDED HOWEVER that if the Mortgagor has observed and performed the terms and conditions expressed or implied herein or in the said mortgage the Corporation shall not demand that the Mortgagor make any such payment before the first day of July 1980. AND FURTHER that the Mortgagor will pay to the Corporation the said indebtedness or so much thereof as shall remain unpaid no later than the first day of July 2008." 11. Thereafter, the NTDC made payments (in January 1979) of $114,400.77 to Bennetts Farmers Ltd (which presumably is the same company as Bennett and Fisher Limited); and $15,000 to the Bank of New South Wales; and $10,205 to the Commonwealth Development Bank. The defendant apparently was aware of this and in any event made no complaint as to the manner of the disbursement of loan funds. 12. The stock mortgage provided for the payment of interest on the principal sum or the balance thereof at the rate of 5 per cent per annum (clause 2), such interest to be payable on demand in writing signed by the NTDC's Chairman or Acting Chairman (clause 1). At some date unspecified, but presumably after 30 June 1979, the NTDC sent a statement of account to the defendant and advised "that the following amounts are now due and payable by you." The amount referred to was $4,175.79 for interest. The defendant paid this amount on 12 October 1979. Similarly on 20 October 1980 the defendant paid $15,305.61 made up of the principal ($7,500) and the balance in interest. Requests for payment of principal and interest were made in 1981, but not paid. On 23 December 1981, the defendant was notified that in future, loan repayments were to be calculated on an "annuity method" and that his payments would thereafter be $11,500 payable on 1 July 1982 and annually thereafter. The "annuity method" was explained in these terms: "Under the annuity method, all future principal repayments and reducing interest charges are combined and averaged, and repayments will be in equal instalments for the remaining period of the loan." No reply was received to this letter. On 2 June 1982, the NTDC requested payment of the amount of $26,289.04, made up of an instalment of $11,500 plus arrears of $14,739.04. Payment of these amounts was made on 27 September 1982. The defendant thereafter made payments of $11,500 on 20 October 1983 and 22 June 1984, as well as a payment of sixty cents on 25 March 1983. No further payments were made. A number of demands for payment were thereafter made, although none seem to have been signed by the Chairman in accordance with clause 1 of the mortgage. 13. On 24 December 1986 the Territory Loans Management Corporation Act 1986 came into force. This Act repealed the Territory Development Ordinance (as amended). Section 6 of the Act provides as follows: "6. CORPORATION (1) Notwithstanding the repeals effected by section 4, the Northern Territory Development Corporation that was, immediately before the commencement date, in existence by virtue of the Territory Development Act as then in force is continued in existence and shall be known as the Territory Loans Management Corporation. (2) The Corporation - (a) is a body corporate with perpetual succession; (b) shall have a common seal; and (c) is capable, in its corporate name, of acquiring, holding and disposing of real (including leasehold) and personal property and of suing and being sued. (3) All courts, judges and persons acting judicially shall take judicial notice of the common seal of the Corporation affixed to a document and shall assume that it was duly affixed." 14. Section 14 of the Act provides: "14. FUNCTION AND POWERS OF CORPORATION (1) The function of the Corporation is to administer the loans and guarantees of or to which the Corporation was a party immediately before the commencement date, to enforce agreements relating to those loans and guarantees and to

continue the agency or other arrangements relating to other loans and guarantees being carried out by the Corporation immediately before the commencement date. (2) Subject to this Act, the Corporation has such of the powers it had immediately before the commencement date as are necessary or convenient to enable it to perform its functions or exercise its powers." 15. By notice under the common seal of the plaintiff corporation dated 25 February 1987 the plaintiff demanded the repayment of the principal, interest and other monies secured by the stock mortgage. No point is taken about the validity of the notice by the defendant's counsel and service of the notice in accordance with the terms of the mortgage is not denied by the defendant. 16. In March 1987, the defendant sold Jinka Station for $1,241,000. The defendant has not repaid any monies to the plaintiff, other than the amounts previously paid to NTDC on and prior to 22 June 1984, and to which I have already referred. 17. The defendant claims that following destocking orders served upon him by the Chief Inspector of Stock, he entered into a destocking agreement with the Northern Territory of Australia in September 1982. As a result, he claims that, although he received compensation for some of his stock under that agreement, the amount of compensation he received was less than the value of the animals, and he did not have sufficient funds to re-stock the property. The remainder of the stock was sold to abattoirs for slaughter following the orders to destock. Although he received "in the region" of $300,000 for destocking compensation, he claims that this was less than the replacement cost of the animals, and was paid to Bennett and Fisher, his stock agents, who applied the monies in reduction of "existing debts and operating costs." The other funds he received in respect of sales not the subject of the destocking agreement "were used to pay the expenses of destocking and previous operating expenses owed to my stock agents." No details are given as to the amounts received for all the stock. At the time of the application for the loan, the defendant says he had 5,500 head and at $300 each, they were worth $165,000. However, this must be a mistake, as on my arithmetic the stock, on those values and numbers, would be worth $1,650,000. The defendant's loan application in fact valued the stock at $166,200. It is not clear how this value was arrived at. The sales recorded in the loan application indicate that stock were being sold at considerably less than $300 a head at that time. The defendant's tax returns for the years ended 30 June 1981 to the year ended 30 June 1986 reveal: Year Closing Stock Value Gross Profit/Loss ended on Hand
$ Profit $ from trading 30/6/81 6,395 146,299 161,791 (139,114) 30/6/82 6,705 121,132 107,557 (130,881) 30/6/83 3,500 59,040 526,067 168,697 30/6/84 1,850 26,876 563,483
212,868 30/6/85 1,270 16,147 199,851 (56,295) 30/6/86 100 1,271 232,013 97,420 18. During this period, the defendant's stock and station agents were his largest creditor. Interest charges to his agents averaged in the vicinity of $60,000 per year, and the debt to his agents appears to have averaged about $240,000. The tax returns support the conclusion that the defendant substantially reduced his stock from about 1983 onwards and realised significant profits in the years after 1983. However the debt to his stock and station agents does not seem to have diminished. I accept for the purposes of this application the defendant's assertion that the funds received from cattle sales were used to pay the expenses of destocking and previous operating expenses (including high interest payments) to his stock and station agents, but there is no evidence to support the defendant's bald assertion that there were no surplus funds available to purchase stock. I accept, also, for the purpose of this application that the operating expenses of the defendant's station rose dramatically after 1981 onwards from an average of approximately $50,000 ,per annum prior to 1978 to between $250,000 and $350,000 per annum in the years after 1981. Finally there is evidence that the defendant's net asset position deteriorated from a surplus of about $100,000 in 1978 to a net shortfall of $237,814 (excluding the value of the lease itself) as at 1986. 19. In 1988 the defendant commenced proceedings against the Northern Territory of Australia, certain veterinary officers of the Department of Primary Industry employed in the Brucellosis and Tuberculosis Eradication Campaign, as well as the former Chief Inspector of Stock, all of whom were servants or agents of the Northern Territory (the "1988 action"). The defendant claims in the 1988 action that the orders to destock were not lawful and that he entered into the destocking agreement with the Northern Territory acting upon a number of representations made by the Northern Territory's said servants or agents which were to their knowledge false. Alternatively the defendant pleads that he entered into the destocking agreement because of duress or undue influence. Further, the defendant pleads that the conduct of the Northern Territory's agents constituted the tort of abuse of office, that analysis of samples of blood from the cattle taken to test for brucellosis was done negligently, that the requirements of the destocking orders and the destocking compensation agreement should have been "removed", and that as a consequence of the matters alleged the defendant suffered loss and damage. Not all of the matters pleaded above are the subject of any affidavit by the defendant deposing to facts relevant to show that these assertions may have substance. In particular, no facts in support of the allegations relating to fraud, duress and undue influence are sworn to. THE APPLICABLE LAW 20. Rule 22.04(1) of the Supreme Court Rules provides that, where the plaintiff applies for summary judgment, "the defendant may, by affidavit or otherwise, show cause against the application." The defendant's solicitor did file an affidavit exhibiting the pleadings in the 1988 action brought by the defendant. The defendants in the 1988 action admit that orders to destock were given, and that the Northern Territory entered into a destocking compensation agreement on 27 September 1982 with Mr Turner. Most of the other allegations are denied, including the allegations of fraud, duress and undue influence. Counsel for the plaintiff submitted that as there were no facts sworn to, to support the allegations of fraud, duress and undue influence contained in the pleadings in the 1988 action, those matters could not be considered as having been raised by the defendant in order to show cause. The defendant's submission was to the effect that, as the factual matters raised in the 1988 action were still to be disposed of by the court in that action, there was, for the purposes of this application, an issue to be tried as to those factual matters. I do not accept this submission. I consider that the plaintiff's contention is correct. Once the plaintiff had established by facts verified on affidavit that the plaintiff has a good cause of action, the evidentiary burden has shifted to the defendant to show cause why judgment should not be given against him: see Australia and New Zealand Banking Group v David (unreported, Supreme Court of the Northern Territory, Kearney J, 6/12/91 esp at 10-11). As Kearney J observed in that case at 5-6: "In terms of the Rules, a defendant shows cause by satisfying the Court that the part of the claim relied on

involves 'a question (which) ought to be tried or that there ought for some other reason (to) be a trial of that -- part;' see Rule 22.06(1)(b). To do so, a defendant is usually required to swear an affidavit in which, using such diligence as may reasonably be expected of him in the circumstances, all of the evidence he relies on in his defence is set out, in summary form. That is, the defendant showing cause must reveal in his affidavit the real nature of his defence and in that regard he must 'condescend upon particulars,' as Lord Blackburn put it in Wallingford v Mutual Society (1880) 5 App Cas 685 at 704. The affidavit therefore should deal specifically with the plaintiff's claim and the facts set out in its supporting affidavit; it should state clearly the defence to that claim and the facts relied on to support that defence." 21. As there are no facts sworn to which establish that there is an issue to be tried as to whether the destocking compensation agreement was induced by fraud, duress or undue influence, I do not consider that there is any issue to be tried based upon a defence which relies upon those allegations. 22. The relevant principles of law to be applied may be briefly stated. Firstly, on an application for summary judgment under O.22, the plaintiff must prove that there is no question to be tried. There must be no reasonable doubt that the plaintiff is entitled to judgment. The plaintiff is not entitled to succeed if there are relevant facts in dispute, or where some difficult point of law is to be decided: Heller Financial Services Ltd v Solczaniuk [1989] NTCA 3; (1989) 99 FLR 304 at 309 per Kearney J (Martin J concurring). To establish that there is a triable issue, it is sufficient for the defendant to show facts which show a plausible defence, an arguably good defence (ibid at 312). However, leave to defend is not granted if all that is shown is "all surmise and Micawberism," per Megarry VC in The Lady Anne Tennant v Associated Newspapers Group Ltd (1979) FSR 298; and the court may nonetheless grant summary judgment, notwithstanding that there is extensive legal argument, if at the end of the day the plaintiff clearly shows that there is no defence. As Asche CJ put it in Civil and Civic Pty Ltd v Pioneer Concrete (NT) Pty Ltd [1991] NTSC 3; (1991) 1 NTLR 43 at 53, the court should not - "... encourage ingenious counsel to adopt what one would have to call a 'cuttlefish' defence. That sagacious mollusc endeavours to confuse and defeat its enemies by pouring forth clouds of inky blackness when attacked. So, resort to a welter of authorities and referral to esoteric points of law might be employed to persuade an overworked judge that the answer is too hard to find on summary proceedings; and the defence thereby gain a much desired breathing space; at the expense of the plaintiff." THE SUBMISSIONS OF THE PARTIES 23. The plaintiff sues upon the personal covenants in the stock mortgage. The defendant maintains that, on the evidence, there is a question to be tried as to whether the agreement between the parties is that contained in the stock mortgage, or whether there was a pre-existing loan agreement reached between the parties prior to the execution of the stock mortgage. Whether this is so or not, as the plaintiff sues on the personal covenants in the stock mortgage, it is irrelevant whether there was a pre-existing contract entered into between the parties. If such a contract ever existed, it merged into the stock mortgage made in contemplation thereof. The stock mortgage is a deed which is in the form of a common law mortgage of property, i.e. it is a conveyance or transfer of the ownership of the cattle to the NTDC coupled with a contractual right of redemption. In Knight Sugar Co Ltd v Alberta Railway and Irrigation Co (1938) 1 All ER 266 at 269, Lord Russell of Killoween, speaking for the Privy Council said: "... it is well settled that, where parties enter into an executory agreement which is to be carried out by a deed afterwards to be executed, the real completed contract is to

be found in the deed ... The most common instance, perhaps, of this merger is a contract for sale of land followed by conveyance on completion. All the provisions of the contract which the parties intend should be performed by the conveyance are merged in the conveyance, and all the rights of the purchaser in relation thereto are thereby satisfied." 24. I note that the stock mortgage is registered pursuant to s28 of the Instruments Act. It is therefore: "... valid in law to all intents and purposes whether the money secured by the mortgage is payable presently or not, and notwithstanding that the mortgaged live-stock are not delivered over to the mortgagee but remain and continue in every respect, as theretofore, in the possession, order and disposition of the mortgagor." (s28) 25. The Instruments Act does not prescribe any form of stock mortgage, and because of s15, a registered stock mortgage is not a bill of sale to which Part II of the Instruments Act applies. (The effect of s15, and of the definitions "bill of sale" and "personal chattels," is that, until registered as a stock mortgage, a stock mortgage which is not registered is void as an unregistered bill of sale: see 29(1)). 26. No claim is made by the defendant in his Further Amended Statement of Defence for the rectification of the stock mortgage, and no facts were alleged upon which I might permit a plea of rectification. The defendant sought to maintain an argument that the loan was not repayable upon demand, relying upon a supposed completed contract made before the stock mortgage. In my opinion there is no substance to this argument. The plaintiff's case stands or falls on the terms of the stock mortgage. Under the terms of the stock mortgage, the plaintiff was entitled to demand payment at any time after July 1980 without the defendant being in default. The evidence is uncontested that a valid demand was made on 25 February 1987. I am satisfied that the plaintiff's evidence is sufficient to show that unless the defendant satisfies me (the persuasive burden being upon him) that there ought nevertheless be a trial of the action, the plaintiff is entitled to summary judgment. 27. The defendant next contends that the stock mortgage is ultra vires, as the approval of the Minister was not obtained, as required by s18(2) of the Territory Development Corporation Ordinance. In particular, the defendant says that the Minister did not give his approval to those terms of the stock mortgage which empower the plaintiff to recover the monies secured thereunder upon demand. The defendant points to the terms of the loan which the Minister in fact approved; nowhere was there reference to a power to recover the monies upon demand. However, s18(2) of the Ordinance merely provided that "money shall not be lent by the Corporation except with the approval of the Minister." There is no specific reference in the Ordinance requiring the Minister to approve each and every term of the loan. It was, in my opinion, clearly open to the Minister to approve of the loan in general terms, and to leave the details of the terms of the loan to the NTDC if he so chose. In this case, the Minister was informed that there was to be a stock mortgage by way of security. None of the terms of that mortgage were put to him, other than the loan was to be in the sum of $150,000 over a maximum of twenty years and to bear interest at 5 per cent with "annual reviews." I do not consider that there is a triable issue that the stock mortgage was ultra vires. The facts suggest only one conclusion, i.e. that the Minister was content to leave the precise terms of the stock mortgage to the NTDC and this he was clearly entitled to do. I might add that in the case of a mortgage: "Even though the obligation to repay is not expressed in the mortgage deed, it is implied from the fact of the loan. If no time for repayment be expressed in the document, then it is implied that the sum is payable on demand." (Sykes The Law of Securities 4th ed at 128). Even if the Minister had approved of a contract only in the form (so far as repayment was concerned) contained in the memorandum put to him, the law would imply an obligation to repay on demand. 28. Next, the defendant submitted that there was an issue to be tried as to whether the plaintiff was the same legal entity as the Northern Territory Development Corporation. Having regard to ss6 and 14 of the Territory Loans Management Corporation Act, this argument has no merit: see Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672. 29. The next argument was that the stock mortgage was either frustrated by the acts of the Northern Territory or breached by reason of the Northern Territory preventing the defendant from performing his obligations under the loan agreement. The defendant put his case in the alternative, depending upon which principles were held to be applicable. The principle argument was that the plaintiff is and was the agent of the Crown in the right of the Northern Territory; that the Northern Territory therefore was the principal lender and bound by the stock mortgage to the same extent as if it were a contracting party; that the Northern Territory had, by its conduct, precluded the defendant from repaying the loan in the manner contemplated between the parties; and was therefore in breach of certain implied terms of the loan agreement and the stock mortgage entitling the defendant to terminate the stock mortgage; which the defendant did by not paying the plaintiff upon demand being made. 30. There are a number of steps in this argument. The first is that the plaintiff is and was at all times the agent of the Northern Territory. I am prepared to accept this, as it is supported by authority: Burgundy Royale Investments Pty Ltd and Ors v Westpac Banking Corporation (1987-8) 76 ALR 173 at 178. The next step is whether the plaintiff contracted as agent so as to bind the Northern Territory as principal. As a general rule, a disclosed agent may sue or be sued on any contract made on the principal's behalf: see Bowstead On Agency 14th ed at 231. That issue is to be resolved by reference to the question of whether or not the plaintiff contracted on its own behalf, or as an agent. The plaintiff submits that on the facts of this case it is plain that the plaintiff contracted with the defendant solely on its own behalf. Firstly, the plaintiff points to the mortgage itself, which refers only to the NTDC and the defendant. Secondly, the plaintiff relies upon the provisions of the Territory Development Ordinance, particularly ss5(1),15,16 and 18. Thirdly, the plaintiff relies upon a passage in Bowstead On Agency 15th ed at 427, footnote 25, which suggests that "where a person signs a document in his own name ... he is the person liable on the contract." On the other hand, the defendant says that the terms of the Ordinance clearly indicate that the plaintiff, in taking the security, did so as agent for the Crown. Mr McDonald for the defendant relied upon s18(2), which requires Ministerial approval to the loan; s21, which requires Ministerial approval to waiver, forgiveness or deferral of debts due to the NTDC, and s26, which provides that the monies of the NTDC consist of such monies as are appropriated by a law of the Territory for the purposes of the Corporation. In my opinion, the defendant's contention is plainly arguable. The next step is that the Northern Territory had by its conduct, precluded the defendant from repaying the loan in the manner contemplated by the parties. The defendant submitted that the purpose of the loan was to reconstruct the defendant's debts, that there was evidence that the parties intended that loans were to be repaid by the defendant out of the income from the property, that the income of the property depended upon cattle sales, and that the effect of the Northern Territory's actions was to prevent the defendant from earning income sufficient to meet the increased costs in running the property caused by the forced realization of the whole herd so as to make the property viable. I think the defendant has a good argument that the purpose of the loan was to reconstruct the defendant's debts, and that this purpose was subsidiary to the main purpose of assisting the defendant in the development of his pastoral business: see Territory Development Ordinance, ss15,18(1) and the definition of "industry" in s4. I consider also that the defendant has a good argument that the parties contemplated that he would service the debt out of cattle sales; but only for so long as the plaintiff did not validly demand repayment. There is evidence also that the effect of the destocking of the property over such a short period was to increase the defendant's costs. However there is no evidence apart from the defendant's bald assertions that the failure of the defendant to re-stock the property was the fault of the Northern Territory. The evidence shows that the defendant made considerable profits in the years ended 30 June 1983, 1984 and 1986. The defendant further swears that monies payable to him as compensation under the destocking agreement were paid to his stock and station agents who "used it against my account." That was an act the responsibility for which cannot be said to fall upon the shoulders of the Northern Territory, except, perhaps, to the extent that the defendant's agents may have financed the defendant's destocking costs. As those costs were allowed for in calculating the defendant's profits in the years abovementioned, it is difficult to see why the Northern Territory precluded the profit so generated (a total, allowing for losses in 1985, of $422,690) from being reinvested in re-stocking the property. The defendant says in his affidavit that destocking occurred shortly after the order to destock in August 1982, that it took more than two years to complete the destocking, and that he had to wait a further six months before he was permitted to re-stock the property. No reason is given as to why it took "more than two years" to destock the property. The destocking agreement contemplated that the property would be destocked by 30 June 1983. If this program had been adhered to, it seems that re-stocking could have commenced to take place on 1 January 1984. The defendant says that the replacement cost of "breeding stock" (by which I presume he means entire females of breeding age) was "$250 to $300 per head at the time," but the size of the breeding herd is not sworn to. At an average cost of $275 per head, the defendant could have purchased a breeding herd of some 1500 animals. There is nothing to suggest that the property would not be viable in those circumstances. 31. On the assumption that the Northern Territory was the true principal of the NTDC and able to sue and be sued upon the contract embodied in the stock mortgage, on the presumed facts, can it be said that there is an issue to be tried as to whether the Northern Territory unlawfully caused the defendant's entire stock to be destroyed? It could not be said, having regard to the findings of Asche CJ in Mengel and Klein v Northern Territory of Australia and Ors (unreported, 28/8/92) that there was no issue to be tried as to the validity of the notices to destock. If the destocking agreement was entered into by the defendant as a result of the fraud, duress or undue influence on the part of the Northern Territory, its servants or agents, the destocking agreement would be liable to be rescinded or avoided at the election of the defendant. In the case of fraud, if the defendant elects to keep the contract on foot, he may sue for damages; but until the defendant rescinds or avoids the contract, it is still on foot. 32. The facts asserted by the defendant show (a) that he commenced to destock the property "following the order to destock in August 1982" but precisely when is not stated. The order to destock is dated 13 August 1982. The second order is dated 14 September 1982 and is headed "Order to Destock No.40." The cattle concerned in both orders are the same in numbers and location on the property. The destocking compensation agreement is undated, but signed by the defendant on 27 September 1982 and by the Minister on 3 October 1982. By its terms, the agreement is deemed to have commenced on 14 September 1982. Clause 2 of the contract required the defendant to complete a program for the destocking of the property in accordance with a program contained in the schedule, which in turn requires stock to be moved in accordance with "Order to Destock No.40." There is no evidence that any cattle were destocked off the property prior to the destocking compensation agreement, and the whole tenor of the evidence is to the contrary. Nor is it asserted in the 1988 action that any stock were sold as a result of the orders to destock and before the commencement of the destocking compensation agreement. It flows from this that the evidence goes no further than the fact that the property was destocked in accordance with the terms of the destocking compensation agreement. Nowhere does the defendant assert that he has elected to avoid or rescind that agreement. No relief of that kind is sought in the 1988 action, which is a claim solely for damages. Nor does the defendant swear to having taken any steps to avoid or rescind this agreement. An agreement induced by fraudulent misrepresentation is not void, but voidable, and remains binding until set aside: Newbigging v Adam (1887) 34 Ch D 582 at 592. The defendant may on discovery the fraud, elect either to affirm or disaffirm the contract, but must, if he chooses to disaffirm, do so promptly upon discovery of the false representation: Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216 at 223. Similarly contracts induced by duress are not void but voidable: Barton v Armstrong (1973) 2 NSWLR 598 at 617, 631; Chitty On Contracts, General Principles 25th ed at 282; as are contracts procured by undue influence: Allcard v Skinner (1887) 36 Ch D 145. In each case, a party seeking an order setting aside the transaction will be barred by affirmation or laches. 33. The defendant asserts that it was an implied term of the stock mortgage that the NTDC and the Northern Territory would not prevent performance by the defendant of his obligations under the agreement, relying upon such cases as Stirling v Maitland (1864) 5 BandS 840 at 852; and Mackay v Dick (1881) 6 AC 251. Be that as it may, it cannot be said, in my opinion, that it is reasonably open to argument that the NTDC or the Northern Territory breached any such implied condition. The sale of the stock was achieved, on the most favourable view of the defendant's assertions, pursuant to the destocking agreement, which he has never taken any steps to avoid or rescind, and in relation to which there is no evidence before me upon which I could find that there is a serious issue to be tried as to its liability to be avoided or rescinded. The defendant has a similar difficulty with the second implied term relied upon, viz., that the NTDC and the Northern Territory breached an implied term that the defendant would be allowed quiet use and enjoyment of his cattle. 34. I think the true rule is stated by Sykes The Law of Securities 4th ed at 128: "The covenant to pay, however, is construed in equity as conditional upon the ability of the mortgagee to reconvey the property. Accordingly, not only is the mortgagee, in general, disentitled to sue after he has sold the property following foreclosure, but this prohibition applies to all cases where he has dealt with the property in such a way as to render it impossible for him to restore the property on final payment. Equity will in such cases restrain the bringing of the action. Exceptions to this rule occur where the mortgagor is himself a party to the alienation or has concurred in it, secondly where the alienation is in pursuance of the express or statutory power of sale, and lastly where the inability to convey has been due to any default of the mortgagor." 35. In this case, the defendant was a party to the destocking compensation agreement, which on the evidence before me is still a valid contract. In those circumstances I am unable to see how there is any arguable defence whether on the pleaded ground of breach of contract giving rise to a right to terminate, or upon the basis that the NTDC and its principal, the Northern Territory, have dealt with stock in such a way as to render it impossible for the stock to be restored on final payment. 36. The next point, is whether there is a serious question to be tried that the acts of the Northern Territory frustrated the stock mortgage. This argument is based upon the alternative view that the Northern Territory is not bound by the terms of the stock mortgage as a principal. In my opinion this contention is hopeless. The basic contention is, that because the stock the subject of the mortgage were sold pursuant to a contract made between the mortgagor and a third party to the stock mortgage (which contract has never been set aside) the mortgagee is prevented from suing on the personal covenants because the means by which monies were contemplated to be generated by way of income to meet any payments falling due under the mortgage can no longer be achieved, and the contract is therefore frustrated. The argument has only to be stated for its absurdity to be manifest. Lord Radcliffe said, in Davis Contractors Ltd v Fareham UDC [1956] UKHL 3; (1956) AC 696 at 729: "... frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract." 37. In this case, the personal covenants upon which the plaintiff sued, require payment of the whole of the monies upon demand. How it can be said that the defendant's obligation to pay upon demand has become impossible in the circumstances, I am unable to comprehend. If the defendant's contention is right, a lender who takes a security could never sue for his debt whenever the subject matter of the security is lost without the fault of either party. I am satisfied also that there is no substance to the assertion that the only means of payment contemplated by the parties was from the realization of the proceeds of sale of the stock. There is simply nothing in the stock mortgage to support this contention, and if one is to have regard to the matrix of facts surrounding the transaction, it is to be noted that the NTDC advised the defendant that a mortgage over the lease would also be obtained when the lease was converted to a pastoral lease. 38. The next argument in the defendant's armoury of defences was to fall back on estoppel, a tactic, I note, which is being used more and more by the profession in an effort to bolster up hopeless cases with something that at least seems to be plausible. In this case, the defendant relies upon the Northern Territory's alleged unconscionability by forcing the defendant to enter into the destocking agreement. But, if unconscionability is the touchstone, where is the equity in permitting the defendant to seek to prevent the enforcement of the personal covenants in the stock mortgage, when the law already gave him adequate remedies for his complaints (if there was ever any substance to them), and yet he has not chosen to avail himself of them? Be that as it may, there is no evidence in my opinion upon which any estoppel is faintly arguable. The defendant contends that he had an assumption or expectation that he would be able to continue to breed his herds without interference for the next twenty years, but that this assumption was dashed by the Northern Territory forcing him to sell his stock. The problem is that there is no evidence of any representation made by the Northern Territory, or the Board or the NTDC to this effect. The stock mortgage entitled the plaintiff to sue on demand. There is no evidence of any representation that, for instance, notwithstanding this provision, the NTDC would not enforce it; nor is there estoppel by convention as there is no evidence that the parties negotiated upon the assumption of the continued existence of the herd as the only means by which the Board or the NTDC would expect payment from the defendant. 39. Finally, the defendant complains that the plaintiff's affidavit material was not sworn by persons who had personal knowledge of the facts. However, r22.03(3) permits statements of fact based on information and belief if the grounds are set out and the court considers that the statement ought to be permitted. The plaintiff's affidavit material, to the extent that it was based upon information and belief, set out the grounds in each case in substantial detail. In nearly every case, the material relied upon was documentary and came from the plaintiff's records and would probably have been admissible under the Evidence (Business Records) Interim Arrangements Act 1984. I note also that no objection was taken to the use of the affidavits at the hearing by the defendant's counsel on that ground until very late in the argument which was held over several days. In those circumstances I see no reason why I ought not to permit the plaintiff to rely on the affidavits. 40. Accordingly, I am satisfied that the plaintiff is entitled to summary judgment. The amount due, including interest is the sum of $178,245.99 as at 26 May 1992. In arriving at this sum I am satisfied that unpaid interest has been properly capitalised at annual rests in accordance with the terms of the stock mortgage (see the definition of "the said indebtedness" and clause 2 of the stock mortgage). After 26 May 1992, interest has accrued at the rate of 5 per cent on the balance of $170,613.20. On my calculations, this amounts to a further sum of $3,575.85. The total amount now owing is therefore $181,821.84. Accordingly there will be judgment for the plaintiff for the sum of $181,821.84 together with the costs of the action to be taxed.