This letter was clearly written in compliance with the undertaking referred to above.
12 The various loan documents to which I have referred all bear date 21 September 2004 (I exclude from this, of course, the letter written by the defendants to the Commonwealth Bank on 19 October 2004). The mortgage document itself is undated but it is to be noted that this document attracted stamp duty and bears an endorsement dated 23 September 2004 as to the stamp duty payable. This endorsement appears on the form in the section provided. It discloses duty was calculated on $260,000 which, of course, accords with the sum advanced under the first loan agreement. It is a compelling inference that execution of the mortgage preceded the assessment of the duty paid.
13 I referred earlier to there being similar documents for the third mortgage. It is to be noted that that mortgage is also undated but that it records for the purposes of duty that the principal sum advanced was $50,000.
14 Mr Velik very properly acknowledged that the usual procedure was for there to be a statement in the documents expressly incorporated in the mortgage as to the principal sum and the terms for repayment. It seems to me that prudence requires no less. However, the question here is whether, when that prudent course was not taken, it is proper to have regard to the evidence as to the intention of the parties in determining the issue here presented.
15 Mr Knaggs has presented brief written submissions confirming his submissions on 15 March. Mr Knaggs referred to s 56(1) of the Real Property Act which provides:
"Whenever any land or estate or interest in land under the provisions of this Act is intended to be charged with, or made security for, the payment of a debt, the proprietor shall execute a mortgage in the approved form ."
(Emphasis added)
16 Mr Knaggs submitted that the sub-section made it plain that where a mortgage was entered into in relation to land under the Real Property Act validity as a security required that the mortgage be in an approved form. He referred to the approved form. It does not, on the face of it, expressly require that the principal sum and the repayment provisions be expressed. It does, however, make provision for the incorporation in the mortgage document of covenants to be stated. Mr Knaggs submitted that the legislature contemplated and required that the mortgage, after incorporation of annexed documents, should spell out the loan and repayment provisions. He submitted that leaving the mortgage documents in the way in which the plaintiff's mortgage documents were left defeated the purpose of s 56(1). Hence, Mr Knaggs contended that the second mortgage was not effective to provide security for the sum advanced. A submission to the like effect was made concerning the third mortgage.
17 Mr Velik submitted that the subject mortgages are in the approved form, which does not spell out a requirement that the principal sum and the repayment provisions be stated either in the form or in documents which are expressly incorporated.
18 The issue now raised on behalf of the defendants has been raised belatedly. The defendants did not seek to raise this issue when faced with the plaintiff's claim for recovery of possession of the premises. The judgment for recovery of possession was a default judgment but Mr Knaggs properly acknowledged that when the defendants unsuccessfully sought to set that judgment aside, the point now raised was not brought forward as a possible ground of defence. Mr Velik submitted that the defendants are estopped from pursuing the issue now sought to be raised, and he referred to Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 as authority for the estoppel point. Plainly, if the issue now to be addressed is to be determined in the defendants' favour, it could have been relied upon as an arguable defence when the defendants sought to set the judgment for possession aside.
19 The estoppel issue was not raised in the hearing before me, but in later submissions, and Mr Knaggs has not addressed it. However, having regard to the conclusion I have reached on the principal issue which was addressed on behalf of both parties on the hearing before me, I do not find it necessary to deal with the estoppel issue.
20 I consider Mr Velik is correct in his submission that the approved form does not spell out a requirement that the principal sum and the repayment provisions must be stated either in the form itself or in documents which are expressly incorporated in the mortgage.
21 It is well settled that where a number of documents are executed at the same time relating to the same transaction, it is proper to construe the documents together to determine their effect. In Smith v Chadwick (1881-82) 20 ChD 27 Jessel MR referred to the doctrine as to contemporaneous documents, saying at 62-63:
"…the doctrine as to contemporaneous documents rests on this, that when documents are actually contemporaneous, that is, two deeds executed at the same moment, a very common case, or within so short an interval that having regard to the nature of the transaction, the court comes to the conclusion that the series of deeds represents a single transaction between the same parties, it is then that they are all treated as one deed…"
22 To the like effect in Manks v Whiteley (1912) 1 Ch 735, Fletcher Moulton LJ expressed the principle:
"…that where several deeds are part of one transaction and are contemporaneously executed, they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction…"
23 I see no reason why in the present case regard cannot be had to the loan agreement, bearing in mind that it was one of the many documents executed by the defendants as earlier referred to and bearing in mind also the timing of its execution.
24 The decision in Nunn v Wily [2001] NSWSC 317 is in point. The mortgage, a schedule and a loan agreement were prepared at the same time and were executed together. The mortgage referred to "Annexures A and B hereto" but the schedule and the loan agreement were not identified as annexures. Austin J held that he could nevertheless treat those two documents as the documents sought to be identified in the mortgage. He said as to this (at [111]):
"They were not labelled 'A' and 'B', but there can be no doubt, in my view, that they are the two annexures identified in the Mortgage. It is not necessary to rely on other extrinsic evidence in order reach this conclusion. But it is permissible to do so, because the absence of the letters 'A' and 'B' on the documents that accompanied the Mortgage gives rise to an ambiguity, and parol evidence is admissible to remove that ambiguity: Codelfa Construction , 352 per Mason J. In this case the evidence of Ms Bova that her normal practice was to identify the schedule and loan agreement as annexures A and B, but omitted to do so in this case, reinforces the conclusion which is otherwise available."
25 His Honour went on to say (at [112]):
"While the Mortgage makes no reference to the loan agreement, it contains a covenant by the mortgagor to incorporate the annexures, one of which is the loan agreement. In my view, when those two documents are read together with the schedule, they purport to provide security with respect to the Principal Sum and interest identified by the loan agreement."
26 Earlier, his Honour said (at [108]-[109]):
"108 Counsel for Mr Wily submits that the Mortgage and the loan agreement have been defectively drafted in various ways. In making his argument, he insists that the Mortgage and the loan agreement are very different documents both in nature and effect, and therefore it is not possible to overcome the deficiencies of one document by having recourse to the other. I disagree.
109 The approved form of mortgage under the Real Property Act does not necessarily contain all of the ingredients necessary for a valid mortgage. The form identifies the property and the parties and contains a charging clause, but does not deal with such matters as the amount secured over the property, repayment or interest. Some standard provisions of mortgage instruments have been extracted and registered as Memorandum Q860000, which is incorporated by reference into the Mortgage in this case: see Real Property Act, s 80A; Fisher & Lightwood's Law of Mortgage , at para [3.11]. It is common practice to set out the arrangements as to borrowing, repayment and interest in a loan agreement, or a schedule to the form of mortgage, or both. Where the mortgage on its face purports to incorporate another document by reference, or where it is clear that one or more collateral documents relate to the same transaction, it is necessary to construe the documents together in order to determine their legal effect: Smith v Chadwick (1880) 20 ChD 27, 62; Manks v Whiteley [1912] 1 Ch 735, 754 (on appeal, Whiteley v Delaney [1914] AC 132)."
27 The conclusion reached by Austin J (at [115]) was that upon the proper construction of the mortgage, the schedule and the loan agreement, the mortgage secured the payments in respect of certain specified debts even though there was a need to go to the loan agreement.
28 Returning to the present case, the mortgage incorporated Annexure A, and Annexure A acknowledged that the mortgage was given and obligations were incurred under it "for valuable consideration" received from the mortgagee. Whilst this annexure does not spell out the valuable consideration, the loan agreement does, and it seems to me that the loan agreement is to be looked at with the mortgage and Annexure A to determine the legal effect of these documents.
29 I observed earlier that there was similar documentation in the case of both advances. Hence, I conclude that the sums advanced by the plaintiff to the defendants were secured by the registered second and third mortgages.