White v Data Transfer Services Pty Ltd & Ors

Introductory observations

1. In assessing the evidence making the findings of fact set out below, I have focussed on the findings for which each party contended in their closing submissions and the evidence relied on in support of those submissions. Each party contended for more than fifty separate findings of fact. Some of those findings were common ground, as identified below. Other proposed findings related to matters that were of limited, if any, relevance to the issues to be determined in these proceedings. The defendants' submissions had an unfortunate tendency to focus on peripheral matters, such as Mr Mina's alleged subjective thoughts during the period from June 2013 to June 2014 about the price he would be prepared to pay for the White Business and whether he wanted to undertake further due diligence before committing to a price. As referred to in detail below, the evidence clearly establishes that the only price under discussion between Mr White and Mr Mina during that period was a price of $5,500,000 (or $5,460,000 plus $40,000 for trading stock) and DTS and Mr Mina communicated to Mr White their willingness to be bound by a contract at that price, subject only to finance, on 13 June 2014. I have considered all of the submissions and all of the findings contended for by both parties, but this section of these reasons is focussed on the evidence and findings that are relevant to the issues to be determined.
2. Much of the evidence given by Mr White and Mr Mina concerned conversations that are said to have occurred between seven and eight years prior to the hearing. The following well-known observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319 apply: "… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."
3. The factors referred to by his Honour require primary emphasis to be placed on the objective surrounding facts that are either undisputed or established by contemporaneous documents, and the inherent probabilities and improbabilities: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]-[31] (Gleeson CJ, Gummow and Kirby JJ); Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102 at [77] (Bell P (as the Chief Justice then was), Leeming JA and Emmett AJA agreeing). Indeed, in any commercial litigation, contemporaneous documents "generally furnish the most reliable source of evidence as to what occurred or, at the very least, provide a generally reliable reference point from which to assess the reliability of witness testimony". Although the accuracy and reliability of witness testimony must be treated with caution given the fallibility of human memory, witness testimony may still be of value and importance, including by providing evidence of the context in which relevant documents and events must be understood: ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [25]-[29] (Bell P, Bathurst CJ agreeing).
4. The plaintiff's closing submissions acknowledged that Mr White was not a reliable witness and that he frequently gave answers that were plainly wrong compared to the contemporaneous documents.
5. Mr White swore two affidavits that were read at the hearing. The first affidavit was sworn on 2 September 2020 and the second affidavit was sworn on 31 August 2021, just one week before the commencement of the hearing.
6. It became apparent early in Mr White's cross-examination that he had prepared his first affidavit without paying due attention to the contents of the affidavit and the documents exhibited to it. For example, the following exchange occurred between Mr White and the cross-examiner shortly after the commencement of his cross-examination in the context of Mr White being asked about an email sent by Mr Nadim Joukhadar to Mr Mina on 9 July 2013, and copied to Mr White, in relation to Mr Mina's proposed acquisition of the White Business: [2] "Q. This email, do you remember now the circumstances of it being written?

A. It was written because we wanted information regarding selling of the business to Mr Mina. Q. This email was your wish list for the sale of the business, wasn't it? A. Not really. Q. Did you disagree with anything in the email? A. Say that one again, please. Q. Did you disagree with anything written in this email? A. No, not really. I just looked at it and that's it. I left it as that. Q. You dictated the email to Nadim, didn't you? A. How can I dictate the email to Nadim when I can't make emails? Q. You told him what to write in it, didn't you? A. I didn't write anything of that. Q. You told him what to write in the email, didn't you? A. No. Incorrect. Q. Did you see the email before it was sent? A. No. Q. You saw it after it was sent, did you? A. Say that again, please. Q. Did you see the email after it was sent? A. I only saw the email, you won't believe it, yesterday when I got these two books delivered to my premises. Q. Is that a serious answer, sir? A. Say that again, please. Q. Is that a serious answer, that you only saw it for the first time yesterday? A. First time I've seen it. Q. Sorry sir, I'll just be a minute. Sir, can you go to page 48 of the Court book please? A. Yes. Q. Do you recognise this as a copy of your affidavit, your main affidavit? A. Yes. Q. Can you look at paragraph 19 please? A. That's right, yes, I can see that there. Yes. That's come up yes. Q. And it says that is, 'I was copied into an email between Nadim and Mr Mina'? A. Yes. Q. And you see that you put a copy of the email into your exhibit? A. That is correct, that was made up by my solicitor, yes. Q. Made up by your solicitor? A. Yes. Q. Is that what you said? A. Yes. Q. So, you didn't read the emails when you swore the affidavit, is that right? A. That's right, yes. Q. Is that the same with everything that's been put in in your exhibit? A. Say that again please? Q. You exhibited many documents to your affidavit, haven't you? A. Yes. Q. Is it the case that you did not look at them? A. I just glanced through them."

1. Mr White also gave evidence that he had not read all of the documents exhibited to his first affidavit: "I won't say I read everything. I went through the most important things which is important to me which I looked at." [3]
2. During cross-examination, Mr White disowned his second affidavit. He said that "I went through and looked at it and I thought it was not really right" but he had nevertheless sworn the affidavit. Asked if there was anything in the six page affidavit that was true, Mr White identified only one matter that was true. Asked if he wanted to withdraw the affidavit, Mr White replied nonchalantly: "To me, all that's what I said over there, I signed it, if it means something to you … it's up to you on what you want to do." [4]
3. During cross-examination, Mr White frequently appeared to answer questions hurriedly and without any serious attempt to recall the events and conversations he was asked about. For example, Mr White was asked questions about moving the White Business into Mr Mina's business premises in January 2014 and a delay of several months thereafter before any progress was made in relation to the sale of the White Business to DTS. Mr White insisted that he did not move the White Business into Mr Mina's premises until he had the signed contract for sale of business. However, immediately after giving that answer, Mr White changed his evidence to say that he only had a one page document signed by DTS and Mr Mina before that move occurred. [5] The first answer is plainly incorrect, as the contemporaneous documentary evidence referred to in more detail later in these reasons establishes that DTS and Mr Mina first signed a contract for sale of business on 13 June 2014, some six months after Mr White moved the White Business into Mr Mina's premises. The second answer is consistent with the documentary evidence referred to below and is also consistent with evidence that Mr White had given in cross-examination earlier on the same day. [6]
4. I reject the plaintiffs' submission that Mr White's unreliability as a witness is partly attributable to his difficulty in hearing the questions asked of him. To my observation, senior counsel for the defendants took care to ensure that Mr White could hear the questions [7] and Mr White had no hesitation in asking for a question to be repeated if he had not heard it and the cross-examiner obliged. [8]
5. For all of the reasons at [12]-[18] above, I do not accept Mr White's evidence in relation to disputed matters unless it is inherently probable, corroborated by contemporaneous documents and/or contrary to his own interests. In any event, almost all of the findings for which the plaintiff ultimately contended rely solely on the contemporaneous documents and evidence given by Mr Mina in cross-examination.
6. Mr Mina was a most unsatisfactory witness. He sought to derail the cross-examination process by giving non-responsive answers to clear questions asked of him [9] and taking it upon himself to make a speech mid-way through his cross-examination that raised serious allegations against Mr White that were not relevant to any issue raised by the pleadings with the possible exception of Mr Mina's abandoned cross-claim referred to at [7] above. [10] Many aspects of Mr Mina's evidence were fundamentally inconsistent with the contemporaneous documents. Whilst some of those inconsistencies may be attributable to the unreliability of Mr Mina's recollection seven or eight years after the relevant events, [11] other inconsistencies result from Mr Mina giving untruthful evidence in these proceedings. [12] Mr Mina gave false evidence in relation to a file note prepared by his solicitor on 22 August 2014, [13] either in his affidavit sworn on 6 August 2021 [14] where he described the context in which the file note had been made and said that the file note contained his instructions to Mr Gough concerning his proposed purchase of the White Business, or in cross-examination when he steadfastly maintained that he had seen the file note for the first time on 3 September 2021, being the Friday prior to the hearing. [15]
7. As the plaintiff submitted, the Court is not bound to accept or reject a witness's evidence in its entirety. I have not assumed on the basis that Mr Mina has lied about some specific matters that he has lied about other matters: Sangha v Baxter [2009] NSWCA 78 at [155]-[156] (Basten JA, Handley AJA agreeing). Having regard to the passage of time since the events that are the subject of his evidence and his willingness to lie about some matters where he perceived that it suited his interests to do so, I have adopted the same cautious approach to Mr Mina's evidence as I have to Mr White's evidence. That is to say, I do not accept Mr Mina's evidence in relation to disputed matters unless it is inherently probable, corroborated by contemporaneous documents and/or contrary to his own interests.

Negotiations during 2013

1. From early 2013, there were many conversations between Mr White and Mr Mina about the potential sale of the White Business to Mr Mina or one of his companies. Mr White had not advertised the business for sale and was not speaking with other potential purchasers. According to him, Mr Mina approached him seeking to buy the business. According to Mr Mina, Mr White was pressing him to purchase the business. It is not necessary to resolve the question of who initiated the discussions that resulted in the negotiations that commenced in earnest in mid-2013.
2. On 19 June 2013, Mr White and Mr Mina signed a confidentiality agreement setting out the terms on which Mr White and his associated companies would provide financial information, customer information and other confidential information to Mr Mina for the purpose of Mr Mina undertaking due diligence in relation to his potential purchase of the White Business.
3. During the negotiations that followed the signing of the confidentiality agreement, Mr Pierre Safi of Fortis Law Group acted as the solicitor for Mr White and the Vendors. Mr Stewart Gough of Matthews Folbigg Solicitors acted as the solicitor for Mr Mina. Mr Nadim Joukhadar, who was Mr White's accountant, advised Mr White and sent some communications to Mr Mina in relation to the proposed purchase of the White Business.
4. In cross-examination, Mr Mina agreed that Mr White told him throughout 2013 that he wanted a purchase price of at least $5,500,000 for the White Business.
5. At some stage between July and September 2013, Mr Mina told Mr White that he could not use his assets to raise finance for the purchase because the assets of his marriage were "bound up" in divorce proceedings.
6. By 8 September 2013, Mr Mina was in discussions with Mr White about the current trading and cash flow projections for the White Business and possible vendor finance. Mr Mina was also in discussions with Mr Rohit Lakhotia of Westpac about finance for the potential acquisition. These matters are recorded in an email that Mr Mina sent to Mr Lakhotia on 9 September 2013. Mr Mina's evidence in his affidavit sworn on 3 November 2020 in which he denied having considered vendor finance or discussing with Mr Lakhotia the prospect of Mr White offering vendor finance as at 9 September 2013 is inconsistent with his own contemporaneous document. I reject that aspect of his evidence.
7. By 3 October 2013, Mr Mina was providing financial information concerning the White Business to his accountant (Mr Jonathon Delacour of R&G Consulting Chartered Accountants) and asking him to prepare projections "cutting out some of the expenses and moving them into my premises". In cross‑examination, Mr Mina complained that the information provided by Mr White was "very limited" and claimed that his discussions with Mr White about the White Business were subject to due diligence even as late as December 2013. Mr Mina's complaint about having limited information does not ring true given that the contemporaneous email correspondence between Mr Mina and Mr Delacour and the other contemporaneous correspondence referred to below record no complaint by Mr Mina, his accountant or his finance broker about the adequacy of the financial information.
8. On 4 October 2013, Mr Lakhotia sent an email to Mr White and Mr Mina outlining the following acquisition strategy: "1. Borrow - $2million against the Total Business Assets. 2. Allow John to own 50% stake of the business and allow him to reduce the stake down to 25% by repaying the $1 million over the following Financial Year. We will aim at obtaining $2million against the business assets ASAP. Once you have exchanged and initiated work you can then borrow another $1million to repay John against your Commercial Property post settlement. Benefits: 1. Senses Direct will get control of the business without relying on divorce settlement. 2. Once the property settlement takes place 3-6months Mark will have a controlling share in the business by paying John $1million. 3. You will have access to the Cash Flow and the profits of the business sooner as we will not have to wait for settlement. Please note: We can also look at the possible option of Cash Flow Lending against the debtors listing going forward if that appears a reasonable option going forward."
9. Mr Mina replied by email to Mr Lakhotia, copied to Mr White, on 5 October 2013: "I love your creativity, its one of the skills that really makes a difference, happy to proceed with the idea, I will catch up with John on my return and finalize the finer details, My accountants and solicitors will also finalize the documentation once we have a letter from you indicating the lending approval,"
10. I note that Mr Lakhotia's proposal reflects a price of $4,000,000 for the White Business or $2,000,000 for fifty per cent of the business. In cross-examination, Mr Mina agreed that, by this time, his discussions with Mr White had landed on an expected price for the White Business of $5,500,000, of which $4,000,000 was attributable to the business itself including the goodwill of the business and $1,500,000 was attributable to equipment. Mr Mina claimed in cross‑examination that this expected price was subject to due diligence, but I do not accept that aspect of his evidence for three reasons. First, it is inherently improbable that Mr Mina would have been willing to reach even a qualified landing as to price without first conducting the due diligence that he had been entitled to conduct since signing the confidentiality agreement in June 2013. Second, Mr Mina's due diligence was at least well advanced by early October 2013. He had been in discussions with Mr White about trading and cash flow projections since early September 2013. As referred to at [28] above, Mr Mina had instructed his own accountant to prepare projections for the White Business assuming adjustments that Mr Mina would make to the costs of the business and on the assumption that the business was operating out of Mr Mina's premises. Third, according to Mr Mina's 5 October 2013 email, it was only the "finer details" and documentation that needed to be finalised. The terms and tone of that email are inconsistent with further material due diligence being required. I also reject Mr Mina's evidence in cross-examination that he "wasn't comfortable with that price" of $5,500,000 as wholly inconsistent with his 5 October 2013 email to Mr Lakhotia and Mr White.
11. On 12 November 2013, Mr White prepared and signed a document in the following terms: "Attention: Mark Mina Proposal for sale of Business of JW Mailing Services to Mark Mina 1. Purchasing 75% of JW Mailing Services (including JS Mailing) 2. Price for 75% = $3,000,000.00 3. The remaining 25% that John White holds you are able to purchase as per agreement between both parties 4. Sale of Equipment = $1,500,000 (as per sheet attached) 5 Sales of Stock - All Stock to be audited and price to be provided on completion and added to the total sale cost. 6. Item 2 has to be finalised on day of sale to be able to pay out existing debts. 7. The remaining funds to be paid to John White on a monthly basis upon agreement between both parties 8. The existing debtors will be looked after by JW Mailing Services I would like to have this finalised before you start you [sic] holiday on the 12th December 2013. Later on we can come to a further agreement for a package for John White for assisting in the Parramatta office. We will sit down to work out a deal regarding the accountancy of the company. Waiting to hear your response."
12. Mr White gave inconsistent evidence about whether he caused this document to be sent to Mr Mina or whether he handed it to him personally. Mr Mina gave evidence that he did not receive the document and that he had seen it for the first time during these proceedings. It is plain from the terms of the document that Mr White prepared it with the intention of providing it to Mr Mina. Having regard to subsequent developments referred to below, I do not find it necessary to resolve the dispute about whether Mr Mina in fact received it.
13. On 10 December 2013, Mr Safi sent an email to Mr White and Mr Mina attaching a draft contract and asking that it be forwarded on to Mr Gough for review. The draft contract attached to that email named JW Mailing Services Pty Ltd as the vendor, DTS (under its former name) as the purchaser and Mr Mina as the guarantor. The draft contract specified a price of $5,500,000, of which $4,000,000 was attributed to goodwill and $1,500,000 was attributed to equipment. The draft contract contained a list of equipment with values totalling $2,528,200. Special condition 5 of the draft contract provided: "The vendor will provide financing to the purchaser the sum of two million five hundred thousand dollars $2,500,000.00 of the purchase price on terms that shall include the following: (a) The sum financed shall be repaid to the Vendor in equal monthly instalments over 12 months commencing 1 March 2014; and (b) The Purchaser will grant the Vendor continuing security over all the fixed and floating assets of the business and the purchaser corporate entity including all present and after acquired property; and (c) The Purchaser will at the purchaser's cost prior to completion enter into such loan and security arrangements and permit such registrations on the Personal Properties Securities Register as are reasonably required by the vendor to secure and record the agreement to finance the vendor herein."
14. At this stage, Mr Mina had not obtained finance approval from an external lender for his proposed acquisition of the White Business. Mr Mina's finance broker (Mr Michael Lancaster of Moody Kiddell & Partners) was pursuing an approval from Westpac but Mr Mina was aware from an email that Mr Lancaster sent to him at 2.11pm on 11 December 2013 that there were doubts about whether Westpac would provide any finance for the proposed acquisition.
15. Mr Mina forwarded Mr Lancaster's email on to Mr White at 3.08pm on 11 December 2013, indicating that he would call Mr White. In cross-examination, Mr Mina gave evidence that he was keeping Mr White updated in relation to his progress in seeking external funding and that, at this stage, he (Mr Mina) was ready to commit to purchasing the White Business.
16. At 5.24pm on 11 December 2013, Mr Mina sent an email to Mr Safi stating: "Please see the commitment below which John has asked me to email to you. Please call John to discuss. Regards Mark"
17. The following text and signatures then appeared immediately below within the same email: "Dear John, I Maher Mina will commit to purchasing the Business from you (JW Mailing Pty Ltd), I'm unable to proceed with this purchase till the 20 February due to current situation with Family court matter which is due to settele [sic] on the 20th February 2014, I will approach the CBA and Westpac to fund the purchase price discussed withand [sic] formalized in the contract late February 2014, During the Months of December and January we will work together to relocate the machinery and the operation from Blacktown to Parramatta and, commit to working together till the funding takes place early in the new year, It is understood that all assets of JW Mailing will remain the property of JW Mailing till the purchase price is paid in full , [signature] [signature] Mark Mina NADER MINA 11 December 2013"
18. Although Mr Mina raised various issues in cross-examination about the authenticity of this document, there was ultimately no dispute that he and his brother, Nader Mina, did sign this document and send it to Mr Safi. It is convenient to refer to it as the commitment document.
19. I note that, although Mr Mina asserted in cross-examination that he had signed the commitment document "under duress", [16] senior and junior counsel for the defendants did not submit that the Court should make any finding to that effect. The finding sought was that Mr Mina and his brother, Nader Mina, had signed the document. [17]
20. Mr Mina was at pains to say in cross-examination that the commitment document was subject to due diligence. I reject that evidence for the reasons explained at [28] and [31] above and for the following two further reasons.
21. First, the commitment document contains no such qualification and does not refer to Mr Mina requiring any further information about the White Business before proceeding with the purchase he was committing to. Funding is the only matter identified as standing in the way of Mr Mina proceeding with the purchase.
22. Second, Mr Mina agreed in cross-examination that he had the opportunity to obtain any additional information about the White Business that he may have believed he needed between 3 October 2013 (being the date of his communications with his accountant referred to at [28] above) and early December 2013. He also agreed that he did not ask for any further information during that period. Mr Mina's explanation for this was that: "There was no urgency. I was going through a divorce and I didn't ask for anything, no." Given that Mr Mina was progressing his analysis of the White Business information through his accountant and was pursuing finance approval from external lenders during this period, his evidence that there was "no urgency" to request any further information he might have required for due diligence purposes is implausible and I reject it. If Mr Mina is to be believed, he was hoping to obtain finance approval which he would then delay taking up while he resumed due diligence, running the risk that the finance approval would expire by the time he was ready to proceed. That is contrary to commercial common sense and it is inherently improbable that Mr Mina instructed his accountant to prepare projections and applied for finance without first having all of the information that he believed he required.
23. By 11 December 2013, Mr Mina was working towards proceeding with his acquisition of the White Business in late February 2014 "at the purchase price discussed" after the expected settlement of his family law proceedings on 20 February 2014, as stated in the commitment document. I find that the "purchase price discussed" in the commitment document means the price of $5,500,000 referred to at [31] and [34] above. There is no evidence of any other price having been discussed prior to 11 December 2013.
24. It is common ground that, by the end of January 2014, the plant and equipment of the White Business had been moved from Mr White's business premises in Blacktown to Mr Mina's business premises in North Parramatta and the staff of the White Business were working out of the North Parramatta premises. I do not find it necessary to make any finding about whether Mr White or Mr Mina (through his brother) made the arrangements for the equipment to be moved. The point is that the move was consistent with Mr Mina's statement in the commitment document that, during December 2013 and January 2014 "we will work together to relocate the machinery and the operation from Blacktown to Parramatta and, commit to working together till the funding takes place early in the new year".
25. In his affidavit sworn on 3 November 2020, Mr Mina gave evidence to the effect that he was surprised and shocked to be informed by Nader Mina during January 2014, when Mr Mina was overseas, that the plant and equipment and employees of the White Business had moved into his North Parramatta premises. In cross-examination, Mr Mina gave evidence that he did not commit to Mr White moving the equipment to North Paramatta "until I do the due diligence". Mr Mina claimed that he did not know that the equipment would be moved during December 2013 and January 2014 while he was overseas. When it was put to him that he had agreed in December that he would work together with Mr White to relocate the machinery, Mr Mina answered: "I did not agree to move the equipment, no. I hadn't signed a contract, I had not agreed on a price."
26. Mr Mina's evidence referred to immediately above is irreconcilable with the commitment document that Mr Mina admits he signed. I reject the evidence as a lie made up in support of Mr Mina's "duress" case theory that he sought to advance in cross-examination but which in fact formed no part of his defence or cross-claim pressed at the hearing.

Evidence during the period January to June 2014

1. It is common ground that, after the move to North Parramatta referred to immediately above: 1. the plant and equipment of the White Business remained the property of the Vendors pending payment of the purchase price in full, as referred to in the commitment document and as confirmed by Mr Mina in cross‑examination; 2. consistently with the Vendor's continued ownership of the White Business plant and equipment, Mr White continued to make the lease payments for that plant and equipment; 3. the staff of the White Business remained employees of the Vendors, but Mr White or the Vendors invoiced DTS or Mr Mina for the cost of their wages; 4. Mr Mina wanted to run the White Business his way and Mr White agreed to allow it to be moved to or integrated with Mr Mina's accounting system; 5. Mr Mina had access to the customer list for the White Business, took orders from those customers and invoiced them for those orders and retained the revenue generated by the White Business for himself and/or DTS.
2. In cross-examination, Mr Mina accepted that these arrangements, whereby he had the use of the plant and equipment and received the revenue of the White Business before he had fulfilled his commitment to purchase the business, were to his benefit.
3. Mr Mina claims to have discovered in about March 2014 that Mr White had been undercharging customers of the White Business for postage and that customers would cease to patronise the White Business if they were charged prices that reflected the actual postage costs. Mr White disputes this and claims that Mr Mina increased prices charged to customers because he was greedy. I do not consider that it is necessary to make any findings about this disputed issue in circumstances where it is common ground that, during the parties' ongoing negotiations for the sale of the business in the period up to the end of May 2014, there was no change to the purchase price under discussion. That purchase price remained $5,500,000, subject only to $40,000 of that price being allocated to trading stock as referred to immediately below.
4. On 28 May 2014, Mr Gough wrote to Mr Safi identifying outstanding issues in relation to Mr Mina's proposed acquisition of the White Business. The letter relevantly stated: "We understand there is a new version of the draft sale agreement which contains various changes to previous editions. There are still a number of items that need to be resolved including the finalisation of the terms of the sale agreement. To this extent we raise the following: (1) Completion Date: completion needs to be made subject to our client obtaining finance on terms satisfactory to it within 3 months from the date of exchange, failing which either party may rescind the agreement. … (9) Trading stock: the agreed amount for the trading stock is to be $40,000. … (10) Price, Deposit and Asset Apportionment: these amounts are to be: Price = $5,460,000 (being the original price less the value for stock mentioned in point 9 above) Deposit = $546,000 Balance = $4,914,000 Goodwill = $3,431,000 Plant & Equipment = $2,029,000 (being the total shown on the list of equipment page in the Contract less the items to be deleted per point 20 below) … (13) Special condition 5: In respect of this clause: (a) 5.1: replace 'terms that shall include the following' with 'the following terms' (b) 5.1(a): the repayments are to commence 6 months after the date of completion (c) 5.1(b): the only assets to be the subject of a charge are those being purchased. …"
5. It will be recalled that special condition 5 was the condition providing for vendor finance in the amount of $2,500,000. [18]
6. Mr Mina confirmed in cross-examination that Mr Gough's letter would have been sent to Mr Safi on his instructions and that a purchase price of $5,460,000 plus $40,000 for trading stock reflected his position (that is, Mr Mina's position) at the time.
7. Mr Safi responded to Mr Gough's letter by email on the evening of 28 May 2014. Mr Safi advised that the changes requested to the price on account of the trading stock as referred to in items (9) and (10) of Mr Gough's letter were agreed. However, the changes requested to the completion date (item (1) of Mr Gough's letter) and the deferral of any repayment of the vendor finance for six months after completion (item (13) of Mr Gough's letter) were not agreed. Mr Safi's email stated that the Vendors required an exchange of contracts by Friday 2 June 2014 with completion by Friday 14 June 2014. Mr Safi continued: "I am instructed that unless contracts are exchanged by [Friday, 2 June 2014], the offer to sell the business to your client will expire and my client will take all steps required to: a. Retake possession of the business; b. Consider proceedings against your client for damages and an account for profits"
8. Mr Mina accepted in cross-examination that he saw Mr Safi's email referred to above soon after 28 May 2014 and thus became aware that Mr White had agreed to the purchase price proposed by Mr Gough on behalf of Mr Mina of $5,460,000 plus $40,000 for trading stock. Mr Mina was also aware that Mr White would be entitled to take the White Business back if he (Mr Mina) did not proceed with the purchase that he had committed to in December 2013.
9. Special condition 5 of the draft contract required the purchaser to enter into such loan and security agreements as the Vendors reasonably required to secure and record the agreement for vendor finance.
10. On 29 May 2014, Mr Safi sent an email to Mr Gough attaching a loan agreement "as discussed". The attached document is a deed of loan and guarantee between DTS (under its former name) as borrower, Mr White as lender and Mr Mina as guarantor. Clause 2.1 is in the same terms as clause 2.1 of the Deed that was subsequently executed on 22 August 2014, save that the "Commencing Date" was defined as 14 June 2014 and the "Facility Limit" was $2,500,000. Mr Mina gave evidence in cross-examination to the effect that he was aware that this document was to give effect to the vendor finance offered by Mr White and that the loan amount of $2,500,000 would not be paid or transferred by Mr White to Mr Mina or any entity associated with Mr Mina but would be applied to the purchase price of the White Business. Mr Mina expected to have to borrow additional funds from Westpac (or some other external source brokered by his finance broker) in addition to taking up the vendor finance.
11. Mr Safi sent Mr Gough a Word version of the draft deed referred to above on 2 June 2014, apparently at Mr Gough's request or following some further discussions between them. Mr Gough marked up some comments and proposed changes on that Word version, and Mr Safi then marked up his responses. Mr Safi emailed a copy of the draft deed incorporating Mr Gough's comments and proposed changes and his own responses on 5 June 2014.
12. Mr Gough's comments included a request that the identity of the lender in the draft deed be changed to "both vendor entities" under the contract for the sale of the White Business. Mr Safi agreed to that request, which aligned the draft deed of loan and guarantee with the vendor finance special condition in the draft contract. No changes were proposed to clause 2.1. The "Commencing Date" remained 14 June 2014 and the Facility Limit remained $2,500,000.

DTS and Mr Mina sign a contract for sale of business: 13 June 2014

1. On 13 June 2014, Mr Mina signed a contract for the sale of the White Business to DTS (under its former name) for a price of $5,460,000. Mr Mina signed in his capacity as sole director of DTS and also in his personal capacity as guarantor. Mr Gough emailed a copy of that signed contract to Mr Safi on 13 June 2014 together with an unsigned further version of the deed of loan and guarantee. Mr Gough's email stated: "The attached is sent to indicate that it has been signed BUT an exchange cannot occur until my client's bank is ready to go and that is expected to occur later next week (and of course the cheque for the deposit is available)".
2. In the signed contract for sale of business attached to Mr Gough's email, the price had been amended by hand to $5,460,000, of which $2,931,800 was attributed to goodwill and $2,528,200 was attributed to equipment. The completion date on the front page of the contract had been amended by hand to read: "21 days after contract date". The contract date was left blank. Special condition 10 required completion to occur by 4pm on the completion date, failing which a party not in default was entitled to serve a notice to complete. Special condition 5 provided for vendor finance in the amount of $2,500,000 secured against the goodwill, plant and equipment and certain other assets and repayable in equal monthly instalments over three years commencing three months after completion of the contract. Special condition 5.1(c) required DTS to enter into loan and security agreements as reasonably required by the Vendors prior to completion. Special condition 5.1(d) contained an acknowledgement by the Vendors that DTS is obtaining finance from Westpac Banking Corporation and that, if required, the Vendors will enter into a deed of priority in favour of Westpac.
3. Special condition 17 of the signed contract provided that the parties had agreed to enter into the attached labour on hire services agreement on completion. The attached agreement - entitled "Labour on hire services agreement" - essentially provided that employees of the White Business would be employed by a labour hire business established by JW Mailing Services and hired out for a fee to DTS and Senses Direct Mail (another company associated with Mr Mina). Clause 2.1 of the agreement nevertheless contemplated that some employees of the White Business may become employed by DTS or Senses Direct Mail after completion of DTS's purchase of the White Business. In that event, clause 2.1(b) required the Vendors to pay DTS the accrued benefits and entitlements of those employees up to the date of the transfer of their employment, such payment to be made as an adjustment under the contract for sale of the White Business. Clause 2.2(a) provided that DTS was entitled to offset any unpaid entitlements in respect of such employees against any monies owed or owing to the Vendors under the contract for sale of business, or the loan agreement or security agreement in the forms attached to that contract (or as amended or replaced by the parties thereto).
4. In the unsigned deed of loan and guarantee attached to Mr Gough's email, the lender had been changed to the Vendors and the "Commencing Date" and "Final Repayment Date" in items 5 and 9 of the Schedule had been crossed out by hand and replaced with the words "insert date". Again, there was no change to clause 2.1 or to the $2,500,000 "Facility Limit" in item 7 of the schedule.
5. Later on 13 June 2014, Mr Mina forwarded Mr Gough's email, including the attachments, to his finance broker Mr Lancaster and to Mr Lakhotia of Westpac, stating: "Please see attached at long last a copy of the final contract signed but not exchanged till approval is received"
6. In cross-examination, Mr Mina agreed that, by signing the contract that Mr Gough forwarded to Mr Safi in 13 June 2014, he had communicated to Mr White that he and DTS were ready to be bound to a contract in those terms subject only to finance.
7. The external finance that Mr Mina had been seeking to arrange through his finance broker for some time was still not approved by the end of July 2014. That is clear from an email that Mr Mina sent to Mr Lancaster and others, copied to Mr White, on 25 July 2014. In that email, Mr Mina expressed his frustration and disappointment about the delay and the number of approval steps that his finance application was subjected to. Mr Mina also complained that he felt embarrassed having to face Mr White on a daily basis. I infer that the embarrassment arose from the fact that Mr Mina had been reaping benefits from operating the White Business and receiving its revenue since January 2014 but had not yet paid anything to Mr White for the business.
8. By 6 August 2014, Mr Mina had applied to Bank of Queensland for finance and was emailing them directly (not through his finance broker) asking about the progress of his application. Mr Mina was keeping Mr White informed by forwarding his email communications with Bank of Queensland on to Mr White.
9. In the meantime, orders had been made in Mr Mina's family law proceedings and one of his properties had been sold for a little over $2,000,000 in about July 2014.

Revised sale contract and signed Deed of Loan and Guarantee: August 2014

1. On 18 August 2014, Mr Gough emailed a revised (unsigned) version of the contract for sale of business to Mr Safi with the purchase price reduced to $2,650,000, of which $998,565 was attributed to goodwill and $1,651,435 was attributed to plant and equipment. The vendor finance clause was deleted, but special condition 17 remained and the attached labour on hire services agreement contained the provisions referred to at [62] above, including the right for DTS to offset any employee entitlements payable by the Vendors to DTS against any monies owed or owing to the Vendors under the contract for sale of business or the loan agreement or security agreement. That is to say, notwithstanding that the vendor finance special condition had been deleted from the contract for sale of business, the terms of the labour on hire services agreement contemplated that there would be a loan agreement between the Vendors (as lenders) and DTS (as borrower).
2. In his affidavit sworn on 2 September 2020, Mr White said that he agreed to an amended purchase price of $2,650,000 relying on the agreement of DTS and Mr Mina to pay the $2,000,000 under the Deed of Loan and Guarantee. That evidence was admitted on a limited basis, but it is entirely consistent with Mr Gough's contemporaneous record of Mr Mina's instructions concerning the reduction in the purchase price to $2,650,000 in the unsigned contract that Mr Gough sent to Mr Safi on 18 August 2014. Mr Gough made the following file note on 22 August 2014 (my emphasis): "I had a conference with Mark Mina on Friday 22 August 2014 as follows: • Mark said that he is getting a lot of pressure from John White to start to sign some documentation because all of the assets in effect have been transferred to Mark long ago and we are still yet to exchange the Sale of Business Agreement. • Mark said that John is setting the deadline of 12.00pm today to have a Deed of Loan signed otherwise John is threatening to get Court orders to shut Mark down and reclaim his assets. • Mark therefore is under commercial pressure to get the Deed of Loan signed. • The way Mark explained it to me is as follows: 1. The purchase price and the allocation of that between goodwill and plant and equipment is to remain as per the Sale of Business Agreement. 2. In addition, Mark is going to pay John $2 million. 3. This is to be reflected in a Deed of Loan - in essence it's a paper document because Mark is not actually receiving $2 million from John, however, he is agreeing to repay that so when you add that to the Sale of Business Agreement amount, that gives you a total figure of $5.1 million including stock. 4. I advised Mark that I am not giving any taxation advice as far as that is concerned and Mark understands that there is an issue here about reducing the amount of stamp duty that is payable which is a fraud on the OSR and I also have concerns about what the true value of the assets are if its being structured this way - nonetheless, Mark wants to proceed down this path. 5. I explained to Mark that they haven't provided me with the Deed of Charge to sign albeit the Deed of Loan requires that document to be signed. 6. I said to Mark that ideally you would have an unsecured loan because you are not paying stamp duty on the loan amount, however, John would never go for that in my view therefore as and when the time comes for signing the Charge, Mark is going to be up for stamp duty on that document of $10,011. 7. I explained to Mark that he has got three months from the time of signing the Deed of Charge and the Sale Agreement to pay the relevant stamp duty on both of those documents. 8. We went through the schedule to the Deed of Loan that John had provided and there are a couple of items where we debated back and forth but the final version is that that I emailed to Mark on the morning of 22 August 2014 and which I will hand deliver to him so he can get it signed by 12.00pm that day. • When I was in conference with Mark, Mark had a telephone discussion with John where Mark said on the phone that he wouldn't do the wrong thing by John and that he was committed to signing the Deed of Loan by 12.00pm today and he was making arrangements with John for him to come and collect those documents or for his wife Sharon to do so. • I did explain to Mark that Westpac want a charge over the assets and there is already a clause in the Deed of Loan that deals with that aspect. • I said to Mark the fly in the ointment at the moment is Neil because we still need him to sign off on the release so you can get the funds from Westpac - I haven't had a response from Neil's lawyer yet to my email of 20 August 2014. • I reminded Mark that if I was Neil I would only agree to give the release on condition that not only the last $100,000 instalment was paid but also the rent contribution of $42,000 which is way overdue. • Mark was fine for me to use the last base document that I had emailed to Pierre and then just update the schedule as needed to reflect our conversation of this morning. • Mark also advised that labour hire arrangement is out so therefore we are reverting back to a situation where Mark is taking over staff. • I reminded Mark though I am still yet to receive accrual details from Pierre even though I have asked for that relentlessly over the last six months - what Mark has advised me to do is to make sure I get documents to Pierre today regarding and [sic] exchange and settlement so that John can see things are moving along as quickly as possible."
3. As the plaintiff's submissions acknowledged, the evidence does not explain the $400,000 reduction from the previously agreed purchase price of $5,500,000 (or $5,460,000 plus trading stock) to $5,100,000. However, an email sent by Mr White to Mr Mina on 2 February 2015 stating that "[t]he money you bought the company for included a $500,000 discount" is broadly consistent with such a reduction having been agreed at some time between 13 June 2014 and 18 August 2014.
4. At 11.22am on 22 August 2014, Mr Gough sent Mr Mina an email referring to an attached Deed of Loan and Guarantee which Mr Gough had prepared using the "clean document I emailed to [Mr Safi] on 13.6.14" but amending the Schedule and changing the lender to Mr White. The email concludes with Mr Gough noting that Mr Mina would collect "the clean edition from me in the next few minutes so that it can be signed by 12pm today". I infer from that email and from Mr Gough's file note referred to immediately above that Mr Gough acted on Mr Mina's instructions in changing the identity of the lender in the Deed from the Vendors to Mr White immediately before Mr Mina signed the Deed. Although Mr Mina could not recall the reason for this change, he accepted in cross-examination that Mr Gough must have made the change on his instructions.
5. The Deed of Loan and Guarantee was executed by DTS and Mr Mina (as borrower and guarantor, respectively) and by Mr White (as lender) and it is common ground on the pleadings that the parties entered into it on 22 August 2014.
6. As referred to at [3] above, clause 2.1 of the Deed (under the heading "Advances") provided: "The Borrower agrees with the Lender that subject to the terms of this Deed the Borrower has at the Commencing Date received from the Lender an amount equal to the Facility Limit and that the Borrower is indebted to the Lender for an amount equal to the Facility Limit."
7. As referred to at [4] above, the "Commencing Date" was defined in item 5 of the schedule to the Deed as 1 September 2014. The "Facility Limit" was defined in item 7 of the schedule as $2,000,000.
8. Clause 1 of the Deed defined "Advance" as meaning "any draw down of the Facility and any payment or liability which is deemed to be an Advance". The term "Principal Sum" was defined as "the aggregate amount of all Advances for the time being outstanding". Pursuant to clause 3 of the Deed, interest was payable on the Principal Sum from 1 February 2015 at the rate of 4 per cent per annum, calculated monthly.
9. Clause 5 of the Deed required the borrower to repay the Principal Sum plus interest in instalments. The first instalment in the amount of $200,000 was required to be paid by 10 September 2014 and the balance of the Principal Sum was to be repaid in monthly instalments of $25,000 commencing on 1 February 2015. Each instalment was to be applied firstly in satisfaction of interest accrued and payable under the Deed, secondly in payment of any fees or other moneys (other than principal and interest) payable under the Deed and thirdly in reduction of the Principal Sum. Pursuant to clause 3 of the Deed and items 13 and 18 of the Schedule to the Deed, the rate of interest was 4 per cent per annum, calculated monthly, from 1 February 2015. Clause 5.8 of the Deed provided that the maximum term of the Loan is three years.
10. Clause 6 of the Deed provided that Mr White's obligations as lender were subject to DTS as borrower providing security. Clause 6 also provided that the borrower and lender may agree from time to time to vary the security, including by releasing it or by taking further security.
11. Clause 7 of the Deed provided that, upon the occurrence of an event of default set out in clause 7.2, the lender may exercise all or any of the discretions, powers, rights and remedies in clause 7.3. The events of default set out in clause 7.2 included a default by the borrower in the payment of any part of the Principal Sum or any interest on the due date or a breach by the borrower of any obligation under the Deed, which payment default or breach is not remedied within 14 days of a written request to do so by the lender. The lender's rights in clause 7.3 included declaring that the Principal Sum together with all accrued interest are immediately due and payable by the borrower.
12. Pursuant to clause 10 of the Deed, Mr Mina guaranteed the repayment of the loan by DTS. Clause 10 relevantly provided: "10.1 The Guarantors (or if more than one then jointly and severally) unconditionally and irrevocably guarantees payment to the Lender of the Guaranteed Money. 10.2 If the Borrower does not pay the Guaranteed Money to the Lender on time and in accordance with this Deed, then the Guarantors must pay the Guaranteed Money to the Lender on demand by the Lender (whether or not demand has been made on the Borrower). A demand may be made at any time and from time to time. 10.3 As a separate undertaking, the Guarantors indemnifies the Lender against all reasonable costs, charges or expenses incurred in connection with the Guaranteed Money not being recoverable from the Guarantors under clauses 10.1 or 10.2 or from the Borrower because of any circumstance whatsoever. 10.4 The Guarantors acknowledges incurring obligations and giving rights under this Deed for valuable consideration received from the Lender."
13. In his affidavit sworn on 3 November 2020, Mr Mina deposed that he instructed Mr Gough to prepare the draft contract with a sale price of $2,650,000 on or about August 2014 because he was very concerned about the true value of the White Business and was no longer prepared to pay the price previously discussed. Mr Mina deposed that $2,650,000 represented the total price that he was then willing to pay and that he did not negotiate with Mr White before or after making that offer on 18 August 2014 that he would pay any additional amount by way of vendor finance or otherwise. Mr Mina also deposed that, when he signed the Deed of Loan and Guarantee at Mr Gough's office on 22 August 2014, he was confident of obtaining all of the funds that he would need to purchase the White Business "from my own sources" without vendor finance and that: "I signed the Deed of Loan and Guarantee in order to placate Mr White and to stop him from carrying out his threat to end negotiations with me. I had formed the view that if vendor finance was not required and I was in a position to pay the purchase price in full by other means, the Deed of Loan and Guarantee would thereby be of no effect."
14. Mr Mina gave evidence in cross-examination that he was "intimidated into signing" the Deed of Loan and Guarantee.
15. I reject Mr Mina's evidence referred to at [81]-[82] above because it is entirely inconsistent with the explanation that he provided to Mr Gough at the time, as recorded in Mr Gough's contemporaneous file note. In cross-examination, Mr Mina said that he had no memory of giving Mr Gough the instructions recorded in the file note but did not deny doing so. Mr Mina's allegation of "intimidation" is inconsistent with the objective facts that, by 22 August 2014, Mr Mina and DTS had had the benefit of the White Business plant and equipment and revenue since January 2014 without having paid a cent for the business. It is unsurprising that Mr Mina was beginning to feel some commercial pressure from Mr White to take steps towards implementing the transaction that Mr Mina had committed to in December 2013. That does not constitute intimidation. As referred to at [54] above, Mr White and the Vendors were contemplating exercising their legal rights if the transaction did not proceed. Mr Mina had received independent legal advice from Mr Gough throughout the negotiations and signed the Deed on 22 August 2014 after consulting Mr Gough.
16. In addition, the effect of Mr Mina's evidence, if it were to be accepted, is that Mr White simply accepted without objection or protest a reduction of the previously discussed purchase price by more than 50 per cent unilaterally determined by Mr Mina and communicated to Mr White on 18 August 2014. As senior and junior counsel for the plaintiff submitted, it is inherently improbable that Mr White would have behaved in that way, rather than re-taking possession of the White Business as he had foreshadowed on 28 May 2014.
17. The defendants submitted that the Court should find that Mr White was concerned in August 2014 that Mr Mina had him "over a barrel" and he required Mr Mina to sign the Deed because "Mr White wanted something signed to ensure he would get something for his business". As I understand the submission, the defendants' contention is that the Deed was intended by Mr White to ensure that Mr Mina paid to him or to the Vendor companies the sum of $2,000,000 that Mr Mina expected to receive from the property that he had sold in July 2014 in partial satisfaction of the purchase price for the White Business that had been reduced to $2,650,000. I reject that submission for two reasons. First, the submission is contrary to Mr Mina's instructions to his solicitor at the time as recorded in Mr Gough's 22 August 2014 file note. Second, the evidence does not support a finding that Mr Mina had Mr White "over a barrel" in any sense that overcomes the inherent improbability of Mr White accepting such a significant reduction to the purchase price from Mr Mina eight months after Mr Mina had commenced receiving all of the revenue from the White Business without yet having paid anything for it. Mr White's protestations in cross-examination that Mr White would have been welcome to take back the White Business in August 2014 and that Mr Mina wished he had done so are entirely inconsistent with the contemporaneous emails recording Mr Mina's efforts to secure finance so that he could proceed with the purchase. [19]
18. On 27 and 28 August 2014, Mr Safi was taking steps towards settlement of the contract for sale of business on Friday, 29 August 2014. It will be recalled that the settlement was dependent on DTS and Mr Mina obtaining finance from Westpac, in addition to the vendor finance that was now provided by Mr White (rather than the Vendors) on the terms of the Deed.
19. On 28 August 2014, Mr Safi sent an email to Mr Gough attaching the contract for sale of business executed by Mr White on behalf of both Vendors in the same terms as the contract that had been executed by DTS and Mr Mina on 18 August 2014, including the price of $2,650,000, except in one respect. The one difference between the contract signed by the Vendors on 28 August 2014 and the contract that DTS and Mr Mina had signed on 18 August 2014 is that the contract signed by the Vendors did not provide for the parties to enter into a labour on hire services agreement and special condition 17 provided instead for DTS or its nominee to make offers of employment to those employees of the Vendors that it wished to employ. That is consistent with Mr Mina's instructions recorded in Mr Gough's 22 August 2014 file note that Mr Mina would be taking over the staff. Mr Safi's email of 28 August 2014 also attached various other documents required by DTS and Mr Mina on settlement. Those documents included a letter from ASIC dated 26 August 2014 acknowledging the request made by J.W. Mailing Services Pty Ltd to transfer the registration of the business name J.W. Mailing Services to a new holder and providing a transfer number to be given to that proposed new holder to facilitate their registration of that business name within four months.
20. It is common ground that Mr White did not in fact make a payment of $2,000,000 to DTS on the date of the Deed of Loan and Guarantee or on the "Commencing Date" of 1 September 2014.
21. Settlement did not proceed on 29 August 2014 and there was further correspondence between Mr Safi and Mr Gough during the following days about matters of detail relating to the settlement such as the documentation required to change ownership of domain names and calculation of the allowance to be made for employee entitlements on settlement now that the purchaser was to take over the employment of the Vendors' staff. Mr Gough sent an email to Mr Safi on 2 September 2014 stating: "As discussed yesterday afternoon: • although an exchange has not yet occurred, I confirm that my client will be making an advance payment of $2m by EFT today (appreciating it may take a day or two to show up in your client's account) • the settlement adjustment sheet will be amended to reflect this payment- I will provide a revised one as soon as the employee entitlement adjustment has been agreed • you have made all of the amendments to the contract by hand I set out in my email of 29.8.14 • I note you will have all PPSR releases ready for settlement and have completed all details of section 1 of the change of domain name forms • in respect of employee entitlements, please have your client complete the attached table and provide that to me for the reasons discussed yesterday- that is, my client must have accurate details and is required to recognise service for all purposes save for annual leave, redundancy and the probationary period (per the sale agreement) • my client expects that its finance for the balance of the purchase price will be available within the next 2 weeks"
22. It is common ground that DTS or Mr Mina paid the sum of $2,000,000 to the Vendors on 2 September 2014 and paid the further sum of $1,000,000 to the Vendors on 12 September 2014. These payments were made to the Vendors and not to Mr White personally.
23. It is also common ground that, although Mr Safi and Mr Gough continued to correspond with one another about "settlement" until about mid-October 2014, the contracts for the sale of the White Business to DTS were never formally exchanged or settled. Although Mr White, DTS and Mr Mina had entered into the Deed on 22 August 2014, [20] the security contemplated by clause 6 was neither insisted upon by Mr White nor provided by DTS. It was in DTS's interests for the loan to be unsecured, as recorded in Mr Gough's file note dated 22 August 2014. Mr Mina and/or DTS continued to operate the White Business and to receive the revenue generated by that business, as had been the case since January 2014. The employment of the Vendors' staff was taken over by DTS and/or Mr Mina. Mr White then ceased paying the employees in September 2014 as senior counsel for the defendants put to Mr White in cross-examination. The business name J.W. Mailing Services was not transferred to DTS. In cross-examination, Mr Mina claimed that he could not take the steps set out in ASIC's letter of 26 August 2014 to cause the business name to be registered to DTS because "till we get the exchanged contract we can't do anything because I've got nothing". [21] I reject that explanation. The absence of an exchanged contract did not impede DTS and Mr Mina from continuing to operate the White Business and receive its revenue or from taking over the employment of the staff of the White Business from September 2014. Mr Mina effectively had the business. The evidence does not support any positive finding about the reason why he failed to take the steps that were open to him to transfer the business name to DTS.
24. I reject the defendants' submission that Mr White "abandoned" the customers of the White Business in September 2014 and that "there was a ceding of certain assets … by Mr White to [Mr Mina or DTS] and those assets were some equipment that was still subject to lease, some phone numbers or a phone number, and a website, a customer lease [sic - list] and Mr White chose not to keep employing his staff, so they were just left". As the plaintiff submitted, DTS had been servicing the customers of the White Business since January 2014 and the business had been sold to DTS over what transpired to be a period of almost nine months. The usual formalities of exchange and settlement of the contract for sale of business were not observed, but that does not alter the fact that the White Business was in fact transferred to DTS in a process that commenced with DTS taking possession of the White Business in January 2014 on the basis that title did not pass until payment in full and that concluded with payment in full being made by 12 September 2014 through the payments totalling $3,000,000 made on 2 and 12 September 2014 together with DTS acknowledging receipt of and promising to repay the sum of $2,000,000 guaranteed by Mr Mina on the terms of the Deed of Loan and Guarantee.
25. I note that it is clear from Mr Mina's evidence in cross-examination that he relied on the fact that contracts had not been exchanged in not paying stamp duty in respect of the acquisition of the White Business. That evidence, together with his explanation of the transaction and instructions to Mr Gough recorded in the 22 August 2014 file note, tend to suggest that it was Mr Mina who put forward the structure of the transaction and did not wish to formally exchange contracts because he perceived that this was beneficial to him in relation to stamp duty. However, it is not necessary to make any finding about that and I do not make any finding.
26. The defendants submitted that, after 12 September 2014 (being the date of the second of the payments totalling $3,000,000 referred to above), "Mr Mina and Mr White considered that the Deed of Loan and Guarantee was redundant". There is no direct evidence of Mr Mina's or Mr White's state of mind. Having regard to the evidence referred to at [70] above (noting that I have rejected Mr Mina's contrary evidence at [81]-[85] above), it is inherently improbable that either of them considered that the Deed was redundant. Contrary to the defendants' submissions, the conduct of Mr White and Mr Mina after 12 September 2014 does not support an inference that they considered it to be redundant.
27. On 2 October 2014, Mr Khalid Rafiq sent an email to Mrs Sharon White stating: "As per our discussions on the phone, can you please acknowledge the fact that you have gone through the 3 pages on the attached excel worksheet in its entirety and fully agrees with all the figures in it. You also recognize that Senses Direct has actually overpaid you by an amount of $138,734.20 over the expenses incurred by you in regards to Senses Direct.

Consequently, when Senses Direct pays you an amount of $61,265.80 today, it will settle the amount payable to you for the month of September in full which is $200,000.00"

1. Mrs Sharon White was married to Mr White and worked in the White Business. Mrs White was named as a key person in the contract for sale of business signed by the Vendors on 28 August 2014.
2. Mr Khalid Rafiq worked in the accounts department of the White Business and, from about July 2014, had responsibility for the accounts receivable for the White Businesses and Mr Mina's Senses Direct business. In his affidavit sworn on 3 November 2020, Mr Rafiq gave evidence that he calculated the amount of $138,734.20 as the amount that Senses Direct had overpaid to J.W. Mailing Services Pty Ltd during the period from January to September 2014 in respect of wages, equipment storage and other costs. Mr Rafiq undertook that calculation at Mr Mina's request by reviewing the amounts that J.W. Mailing Services Pty Ltd had in fact paid for those expenses and reconciling them against the amounts that J.W. Mailing Services had invoiced to Senses Direct for those expenses on a monthly basis and the amounts paid by Senses Direct against those invoices. Clause 5 of the Deed of Loan and Guarantee required a sum of $200,000 to be paid to Mr White by 10 September 2014 as the first instalment of the Principal Sum of $2,000,000. [22] There is no contemporaneous evidence that DTS owed J.W. Mailing Services Pty Ltd (or "you" as referred to in Mr Rafiq's email) any other amount of $200,000 for the month of September 2014. In cross-examination, Mr Rafiq could not shed any light on this. In his affidavit sworn on 3 November 2020 and in cross-examination, Mr Mina gave evidence that $200,000 was a sum that he had decided to pay Mr White in order to "clear all debts" owing to Mr White or the Vendors to do with equipment that Mr Mina or his companies had stored at Mr White's premises during the period prior to September 2014. I reject Mr Mina's evidence as inherently improbable. It is clear from Mr Rafiq's evidence given under cross-examination by senior counsel for the defendants that any such storage debts owing by Mr Mina or his companies to Mr White or his companies would have been included in this reconciliation exercise and would have formed part of the net total rather than a separate amount from which the net total of all other reconciled amounts was deducted.
3. I find on the balance of probabilities that Mr Rafiq's reference in his 2 October 2014 email to "the amount payable to you for the month of September in full which is $200,000.00" was a reference to the first instalment payable under the Deed of Loan and Guarantee. It is common ground that, with Mrs White's prior agreement, Mr Mina set off the amount calculated by Mr Rafiq's reconciliation ($138,734.20) against the amount of $200,000 and made a net payment of $61,265.80 to J.W. Mailing Services Pty Ltd. Far from regarding the Deed of Loan and Guarantee as redundant after 12 September 2014, Mr White and Mr Mina were giving effect to it in October 2014.
4. I also note that emails sent by Mr Mina to Mr White on 2 February 2015 contain references to a loan owing to Mr White. [23] The defendants' submissions ignored these emails, which are inconsistent with the defendants' contention that the Deed of Loan and Guarantee was redundant after 12 September 2014.
5. On 25 February 2015, Mr Safi sent an email to Mr Gough in the following terms: "I refer to previous correspondence and in particular the Deed of Loan and Guarantee dated 22 August 2014. Pursuant to Clause 5 and Item 11 of that Deed, the sum of $25,000 was due and payable by your client to ours on 1 February 2015. Pursuant to clause 12.2, time is of the essence in regards to the borrowers/guarantors obligation to pay money. I am instructed that the payment due on 1 February 2015 has not been received. Pursuant to clause 7.2.1 of the Deed, it is an event of Default if the Borrower fails to make a payment due and the same failure has not been remedied within 14 days of a written request to do so. Attached is a written notice of the breach and the request to have it remedied which has been faxed to your client (clause 12.4). I look forward to hearing from you in due course."
6. The attached notice was addressed to DTS and Mr Mina and referred to the non-payment for more than 14 days of the $25,000 loan instalment due on 1 February 2015 and the non-payment of $1,750 fees payable by DTS as borrower. The notice stated that Mr White intended to exercise his "contractual and other rights" unless the breaches were remedied within 14 days of service of the notice.
7. Mr Gough's response sent by email to Mr Safi on 26 February 2015 stated: "Dear Pierre, In order to consider your email and attachment properly can you please provide me with: • a copy of the signed Deed of Loan and Guarantee that you refer to • evidence of payment of the 'principal' or 'loan amount' (however that is described in the said Deed of Loan and Guarantee) by your client to the borrower eg, EFT receipt, copy of a bank cheque Thereafter I will take further instructions from my client regards,

Stewart"

1. Mr Safi replied later that same day in the following terms: "Dear Stewart, Thank you for your email. A copy of the Deed of Loan and Guarantee executed by your client is attached and I note that it bears your signature as witness to the guarantor. As to evidence of the payment of the principal, by the Deed your client has acknowledged receipt of the principal and has agreed to be bound by the terms of the Deed. My client relies on the Notice of Breach served yesterday and reserves its rights in relation thereto."
2. A copy of the executed Deed was attached to Mr Safi's email.
3. Mr Gough replied to Mr Safi's email later on 26 February 2015: "thanks Pierre On the loan advance front: • whilst I appreciate clause 2.1, I expect your client will be able to demonstrate that the funds were in fact advanced to the borrower • if no funds were actually advanced then no amount is repayable - that must be the logical conclusion • as such, can you please provide the requested evidence"
4. Mr Gough's email was disingenuous having regard to the information recorded in his 22 August 2014 file note. There is no evidence of any response from Mr Safi.
5. There is no evidence of any further steps being taken by or on behalf of Mr White for more than four years after Mr Gough's email above to recover the amount that he claimed was owing under the Deed of Loan and Guarantee. Whilst that might be considered unusual, it is not determinative of any issue in these proceedings. Considered in the context of all of the other evidence and findings referred to above, the lengthy delay does not support the defendants' contention that the Deed of Loan and Guarantee was redundant or regarded by Mr White and Mr Mina as redundant after 12 September 2014.
6. On 4 November 2019, Mr Safi wrote to DTS enclosing a calculation of the amount of $2,231,466.59 owing by DTS under the Deed of Loan and Guarantee, offering by way of compromise to accept $2,000,000 in full and final settlement and demanding payment of that sum within 14 days. Mr Safi wrote to Mr Mina making the same demand for payment from him as guarantor.
7. Neither DTS nor Mr Mina made any payment in response to these demands and these proceedings were commenced on 14 February 2020.

Consideration and determination

1. As I have already mentioned, it is not in dispute that DTS had not received the sum of $2,000,000 from Mr White as at the date of the Deed. It is common ground that Mr White did not pay a monetary sum of $2,000,000 simultaneously with or subsequently to the execution of the Deed. It is not in dispute that DTS made no payments to Mr White under the Deed but for the payment of $61,265.80 in or about October 2014. As I have found to at [98] above, that payment after certain agreed offsets satisfied DTS' liability to pay the first instalment of $200,000 due under the Deed.
2. The central question in these proceedings is whether the doctrine of estoppel by deed operates to preclude DTS and Mr Mina from denying that they received the sum of $2,000,000 from Mr White as acknowledged in clause 2.1 of the Deed and therefore from denying that DTS is liable as borrower to pay Mr White the outstanding principal of $1,800,000 plus interest calculated at 4 per cent from 1 February 2015 in accordance with the Deed and that Mr Mina is liable for the same amount as guarantor.
3. Although views have been expressed in some authorities to the effect that estoppel by deed is a class of estoppel by convention rather than a distinct doctrine, [24] the contrary view was articulated persuasively in my opinion by Lindsay J in Labracon Pty Ltd v Cuturich (2013) 17 BPR 32,497; [2013] NSWSC 97 (Labracon) at [105]-[153]. In the present case, the plaintiff relied solely on the doctrine of estoppel by deed and neither party submitted that estoppel by deed was a sub‑class of estoppel by convention. I proceed on that basis.
4. The doctrine of estoppel by deed is founded on the solemnity of a deed: Greer v Kettle [1938] AC 156 (Greer v Kettle) at 171 (Lord Maugham, with the agreement of Lord Roche). As Lindsay J said in Labracon at [105] (citations of learned academic texts omitted): [25] "The essential idea of estoppel by deed is that a party who, by entry into a deed, expresses a solemn intention to be bound by a particular proposition will, in proceedings against a party entitled to the benefit of the deed, be precluded (ie, stopped), by reason of entry into the deed, from denying the truth, or at least the operation, of that proposition…"
5. Unlike estoppel by convention, estoppel by deed does not require a person claiming an entitlement to rely on the estoppel (Mr White, in this case) to prove that the parties adopted the proposition to which one or all parties are bound by the deed (or that the claimant relied on that proposition to their detriment) as the agreed or assumed conventional basis on which their affairs have been conducted: Labracon at [128]-[130].
6. Estoppel by deed is a common law doctrine which does not apply in equity to the extent that there are grounds for rescinding or rectifying the deed. As Lord Maugham said in Greer v Kettle with the agreement of Lord Roche (at 171-172, my emphasis): "… where there are proper grounds for rectifying a deed, e.g., 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. It is at least equally clear that in equity a party to a deed could not set up an estoppel in reliance on a deed in relation to which there is an equitable right to rescission or in reliance on an untrue statement or an untrue recital induced by his own representation, whether innocent or otherwise, to the other party. Authority is scarcely needed for so clear a consequence of a rectification order or an admitted or proved right to such an order. The well known rule of the Chancery Courts in regard to a receipt clause in a deed not effecting an estoppel if the money has not been paid is a good illustration of the equity view … The decision of Lord Romilly in Brooke v Haymes is even more closely in point and it may be added that the statement of the law in that case appears never to have been doubted. The headnote begins as follows: 'A party to a deed is not estopped in equity from averring against or offering evidence to controvert a recital therein contrary to the fact, which has been introduced into the deed by mistake of fact, and not through fraud or deception on his part.' In a simple case of this kind it would be unnecessary, as that case shows, to counterclaim for rectification, though in a case of any complexity it would certainly be desirable to do so. Since the Judicature Act, 1873, the rule in equity must prevail. … in all those cases where the party against whom an estoppel by deed is sought to be raised has a right to rectification which would, so to speak, destroy the alleged estoppel, or a right to rescission on equitable grounds, he has an answer to the estoppel which would not have been open to him at common law."
7. In Cousens v Grayridge Pty Ltd [2000] VSCA 96 (Cousens), Ms Cousens (as borrower), Grayridge Pty Ltd (as lender) and Hillside Way Pty Ltd (as guarantor) had executed a deed pursuant to which the borrower acknowledged in clause 3 that the principal sum of $190,000 had been received by her from the lender or had been paid in accordance with her authorisation on the date of the deed. Clause 3 was incorrect and was known by the lender's solicitor (a Mr Winter) to be incorrect in that no amount of the principal sum was paid until settlement which occurred some weeks after the date of the deed. The cheques drawn by the lender on settlement were collected by a fraudster who claimed to be authorised by the borrower. The majority of the Victorian Court of Appeal (Charles and Chernov JJA) held that the fraudster had implied authority to collect the cheques and it was irrelevant that he had subsequently applied the funds for his own purposes rather than for the benefit of the borrower. Batt JA reached a different conclusion on the question of authority. Relevantly for present purposes, all members of the Court of Appeal held that the borrower and guarantor were not estopped by clause 3 of the deed from denying liability to the borrower. Batt JA, with whom Charles and Chernov JJA agreed in relation to this issue, said (at [57]-[58], my emphasis): "57. It becomes necessary to consider his Honour's decision upholding the alternative basis of the respondent's claim against the appellant, namely, estoppel by virtue of cl3 of the deed of 14 July 1997. As at that date no money had been advanced and Mr Winter knew the acknowledgment in the clause to be untrue. But, subject to what follows, it is clear that at common law the appellant is by that clause precluded from denying receipt of the principal sum or its payment in accordance with her authorisation: Greer v Kettle. Estoppel by deed is not confined to statements in recitals but applies also, and indeed originally applied only, to statements in operative provisions: Coke on Litt (1832 edn, vol 2) 352(b); Greer v Kettle per Lord Maugham and, for instance, Helmich & Taylor v Thorp & Strathdee. If estoppel by deed is now properly to be considered as a form of estoppel by convention (as Sir Alexander Turner may be said to have demonstrated), then it may be that even at common law no estoppel arose here, for there is no estoppel by convention unless it can be shown that the alleged assumption has in fact been adopted by the parties as the conventional basis of their relationship (Con-Stan Industries of Australia) and here the alleged assumption that by 14 July 1997 the principal sum had been received by the appellant or otherwise paid in accordance with her authorisation was not adopted by the parties as a basis of their relationship since Mr Winter on behalf of the respondent and Bulfin (assuming that he can be said to have had authority from the appellant to this extent) proceeded to organise thereafter a settlement and Mr Winter disbursed the very money allegedly assumed already to have been earlier received or paid as authorised. 58. 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, which, whilst arguably strictly obiter on the point rather than providing a second actual basis for decision, was agreed in by Lords Atkin and Macmillan at least. It is stated in Spencer Bower & Turner that a recital or acknowledgment in the text of an instrument, in which one party acknowledges receipt of consideration moneys from another, while sometimes of value as an admission, will not support an estoppel. Similarly in Petersen v Moloney the High Court (Dixon, Fullagar and Kitto JJ) stated that the acknowledgment of payment in a transfer did not create an estoppel against the transferor, but was evidence against her, though in the circumstances not strong evidence. That statement does not depend upon the fact that a transfer of Torrens Title land is not by deed (though it has the effect of a deed when registered), for their Honours cited a passage from Burchell v Thomson dealing with receipt clauses in deeds in particular, as well as in other instruments. The decision in Helmich & Taylor v Thorp & Strathdee refusing to allow a mortgagor to go behind the recital of receipt of an advance in a mortgage document is, in my view, clearly distinguishable, for Fisher J held that the rule relating to receipt clauses had nothing to do with cases in which the parties had deliberately adopted the fiction of an antecedent payment as a convenient formula for defining an executory obligation to make a real payment in the future, in that case for shares, there never being any intention (as there was here) that funds would actually pass from the mortgagee to the mortgagor. That case would seem to exemplify the exception of 'circumstances special to a given transaction' allowed in Spencer Bower & Turner."
8. In Helmich and Taylor v Thorp and Strathdee [1997] 3 NZLR 86 (Helmich), the plaintiffs had granted a mortgage to the defendants "[i]n consideration of the principal sum lent to the mortgagor by the mortgagee (the receipt of which is hereby acknowledged)" securing the plaintiffs' obligation to repay that principal sum and other moneys payable under the terms of the mortgage: at [90]. One of the contentions raised by the plaintiffs in support of their application for an interim injunction restraining the defendants from exercising their power of sale under the mortgage was that they (the plaintiff mortgagors) had not in fact received the payment for which they had expressly acknowledged receipt in the mortgage. In dismissing the application for an interim injunction, Fisher J referred to the passage from Greer v Kettle that I have extracted above and said (at 94, my emphasis): "It is well established in equity, for example, that the parties to a deed which rests upon the assumption that a certain payment has been made can go behind any recital in the deed as to receipt of the payment in order to establish that the payment was not in fact made. … However, I do not think that this case falls into the receipt exception at all. The exception is confined to cases in which payment to the mortgagor does in truth underlie the transaction. It has nothing to do with cases in which the parties have deliberately adopted the fiction of an antecedent payment as a convenient formula for defining an executory obligation to make a real payment in the future. In a case of that sort, it is pointless to inquire into the question whether the antecedent payment was in fact made. Of course it was not. It was never intended to be. It is nothing more than a fiction deliberately adopted as a means of defining future obligations."
9. It is the emphasised portions of Fisher J's judgment above that the Victorian Court of Appeal referred to with apparent approval in Cousens at [58].
10. I would respectfully express in slightly different terms than Fisher J the reason why the "receipt exception" does not apply to statements in a deed that are a fiction deliberately adopted by the parties as a convenient formula for defining some executory obligation. Where the parties have deliberately adopted the incorrect statement in the deed, there is no mistake that has resulted in the failure of the deed to conform to the parties' true agreement. Thus, rectification in equity is not available: Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [103] (Gageler, Nettle and Gordon JJ). Nor does the fiction, without more, provide a basis for rescission of the deed. Thus, the fact that the payment acknowledged in the deed has not in fact been made does not destroy the estoppel, to adopt the language of Lord Maugham in Greer v Kettle.
11. In the present case, the plaintiff submits that clause 2.1 of the Deed, properly construed, is a fiction of the kind referred to by Fisher J in Helmich. The defendants submit that clause 2.1 is not a fiction of that kind and Helmich is distinguishable from the present case. The distinction is said to be that Fisher J found in Helmich that the relevant clause was a fiction for an executory obligation to make a payment in the future. In the present case, Mr White "was never going to make a payment, nor give any consideration". The defendants submit that the "receipt exception" to estoppel by deed (to adopt Fisher J's term) therefore applies.
12. I accept the plaintiff's submission and reject the defendants' submission for the following reasons.
13. The principles applicable to the construction of commercial contracts, which also apply to deeds, are well established.
14. As the High Court said in Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd: [26] "… the terms of a commercial contract are to be understood objectively, by what a reasonable businessperson would have understood them to mean, rather than by reference to the subjectively stated intentions of the parties to the contract. In a practical sense, this requires that the reasonable businessperson be placed in the position of the parties. It is from that perspective that the court considers the circumstances surrounding the contract and the commercial purpose and objects to be achieved by it."
15. A reasonable businessperson placed in the position of the parties would have known that: 1. DTS and Mr Mina had signed a contract to purchase the White Business for $5,460,000 on 13 June 2014 with the benefit of vendor finance of $2,500,000, thereby communicating to Mr White their willingness to be bound by that contract subject only to approval being received from an external lender of an additional loan that DTS required over and above the vendor finance in order to complete the purchase for $5,460,000; [27] 2. at the time that DTS and Mr Mina signed the contract referred to above, Mr White and Mr Mina had been negotiating for the sale of the White Business to DTS (or one of Mr Mina's companies) at a price of approximately $5,500,000 for approximately one year, the plant and equipment and staff of the White Business had been moved into Mr Mina's business premises in January 2014 on the basis of Mr Mina's commitment to purchase the White Business at that price and Mr Mina had effectively taken over the operation of the business and had been receiving the revenue from the business since January 2014; [28] 3. subsequently, DTS and Mr Mina sent to the solicitors for Mr White and the Vendors a revised unsigned contract on 18 August 2014 stipulating a purchase price of $2,650,000 and with no provision for vendor finance; [29] 4. Mr White is the principal behind the Vendors who were to provide the finance of $2,500,000 under the contract signed by DTS and Mr Mina on 13 June 2014; [30] 5. neither Mr White nor the Vendors questioned or objected to the reduction in the purchase price to $2,650,000 proposed in the revised contract sent to the solicitors for Mr White and Vendors on 18 August 2014; [31] 6. nor did Mr White or the Vendors question or object to the removal of the vendor finance clause from the revised contract received by their solicitors on 18 August 2014, notwithstanding that they were aware of the ongoing difficulties faced by Mr Mina at that time in securing external finance for DTS's proposed acquisition of the White Business; [32] 7. on 22 August 2014, Mr White (as lender), DTS (as borrower) and Mr Mina (as guarantor) entered into a Deed of Loan and Guarantee pursuant to which DTS and Mr Mina acknowledged in clause 2.1 that DTS had received $2,000,000 from Mr White; [33] 8. Mr White had not paid and the parties did not intend that he would pay $2,000,000 to DTS; [34] and 9. Mr White caused the Vendors to execute the revised contract with the purchase price of $2,650,000 on 28 August 2014, after the parties entered into the Deed of Loan and Guarantee containing the acknowledgment in clause 2.1. [35]
16. Standing in the position of the parties armed with knowledge of all those matters, it is my opinion that a reasonable businessperson would have understood clause 2.1 of the Deed of Loan and Guarantee as referring to a facility that was yet to be provided in the form of a reduced purchase price payable to the Vendors on the basis that a significant component of the previously agreed purchase price that was to be the subject of vendor finance would be paid by DTS to Mr White under the Deed of Loan and Guarantee rather than paid to the Vendors. In other words, the receipt acknowledged in clause 2.1 would have been understood by the reasonable businessperson as a fiction that was a convenient way of referring to a $2,000,000 reduction in purchase price that Mr White was to procure from the Vendors in favour of DTS as the purchaser. That was an executory obligation as at the date of the Deed of Loan and Guarantee on 22 August 2014. The Vendors were yet to sign a contract for sale of the White Business at the reduced purchase price of $2,650,000. As referred to above, that occurred on 28 August 2014.
17. The defendants' submission that Mr White "was never going to … give any consideration" is not correct. Mr White was going to procure the reduction in the purchase price by the Vendors. Moreover, contrary to the defendants' submissions, Mr White did in fact procure that reduction. As the evidence referred to at [69]-[90] demonstrates, the process of the transfer of the White Business to DTS was completed following the execution of the Deed of Loan and Guarantee by both parties and the payments totalling $3,000,000 made on 2 and 12 September 2014. In submitting that Mr White had not procured any reduction in the purchase price payable to the Vendors, the defendants emphasised that there was no evidence of any loan of $2,000,000 made by the Vendors to Mr White. I accept the plaintiff's submission that, if Mr White did not make himself liable to the Vendors for the reduction in purchase price, it simply does not follow that he did not procure the Vendors to make that reduction in favour of DTS. The defendants also relied on the absence of any settlement calculations prepared by the parties' solicitors recording a credit of $2,000,000 allowed by the Vendors against the purchase price. But that is entirely consistent with the evidence referred to at [69]-[70] above that the purchase price (i.e. the starting point for settlement calculations) was reduced and DTS entered into a separate obligation to repay $2,000,000 to Mr White under the Deed of Loan and Guarantee. I have already rejected the defendants' submissions that Mr White and Mr Mina treated the Deed of Loan and Guarantee as redundant after 12 September 2014. [36]
18. The defendants' submission that Mr White "was never going to make any payment" is correct but, in my opinion, irrelevant in light of the other features of the present case referred to above. Whether the executory obligation, being the obligation for which the parties to a deed have adopted a receipt clause as a convenient fiction, involves a future payment or some other form of future consideration, the party who has acknowledged receipt is estopped from departing from that statement in the deed in the absence of circumstances that would give rise to rectification or rescission of the deed: see [119] above.
19. I note that the defendants' closing submissions did not refer to their pleaded contention that there was an oral agreement between Mr White and Mr Mina which included an express or implied term that the Deed would become effective "only if the Loan was advanced". That contention is therefore taken to have been abandoned.
20. The only other pleaded basis on which equity might look behind clause 2.1 of the Deed of Loan and Guarantee was also abandoned by the defendants, as referred to at [7] above.
21. For those reasons, clause 2.1 of the Deed of Loan and Guarantee precludes the defendants from denying receipt by DTS of the $2,000,000, precludes DTS from denying its liability as borrower to repay that sum together with interest to Mr White and precludes Mr Mina from denying his liability as guarantor to whom a demand was issued on 4 November 2019 as referred to at [108] above.
22. The plaintiff's cause of action is for damages for breach of the Deed of Loan and Guarantee. In submitting that the plaintiff has failed to establish a cause of action in debt because he has not proved that he paid $2,000,000 to DTS by way of loan, the defendants miss the point. For the reasons already explained, estoppel by deed operates to preclude the defendants from denying the advance acknowledged in clause 2.1 of the Deed of Loan and Guarantee.
23. The plaintiff is entitled to judgment against DTS and Mr Mina in respect of their breaches of their obligations under the Deed of Loan and Guarantee in the sum of $1,800,000 (being the $2,000,000 sum of the "Facility Limit" referred to in clause 2.1, less the payment of $200,000 made in about October 2014 as referred to at [98] above) plus interest at the rate of 4 per cent per annum calculated monthly from 1 February 2015 as referred to at [77] above. The plaintiff is entitled to judgment against each defendant in respect of that amount, subject to an order precluding the plaintiff from recovering a total sum from the defendants that exceeds that amount. Unless the Court orders otherwise, post-judgment interest will be payable on the judgment sum in accordance with s 101 of the Civil Procedure Act. The defendants did not identify any reason why the Court should order otherwise and no such order will be made.
24. The cross-claim referred to at [7] above must be dismissed.
25. The parties' submissions did not indicate that there was any reason why the costs of the proceedings should not follow the event. Nor did the parties indicate that they would wish to be heard separately in relation to costs after the substantive outcome of the proceedings was known. Accordingly, there will be an order that the defendants/cross-claimants are to pay the costs of the plaintiff/cross-defendant on the ordinary basis in such amount as may be agreed or assessed.
26. As referred to earlier in these reasons, the plaintiff also sought an order for interest on costs. That is governed by s 101(5) of the Civil Procedure Act. The plaintiff did not submit that an order should be made for interest on costs to be payable on a date other than that prescribed in s 101(5).

Conclusion and orders

1. The parties are to bring in orders giving effect to these reasons for judgment within 14 days.

Endnotes

1. Under its former name, Law's Building Repairs & Maintenance Pty Ltd.
2. T23.3-25.8.
3. T27.26-27.30.
4. T33.5-36.40.
5. T52.20-54.25.
6. T31.6-32.5.
7. For example, T22.44-22.45, 32.21-32.26, 52.11-52.20, 76.20-76.45.
8. For example, T23.44-23.48, 25.10-25.21, 26.30-26.38, 27.45-27.50, 30.4-30.26, 37.4-37.11, 58.31-58.50, 68.31-68.41.
9. For example, T120.23-120.26, 120.48-121.8, 121.39-121.41, 140.3-141.35.
10. T123.44-124.39.
11. For example, Mr Mina's evidence referred at [31] below that he wasn't comfortable with a price of $5.5 million as at 5 October 2013.
12. For example, Mr Mina's evidence referred to at [46]-[47] below.
13. Referred to at [70] below.
14. In support of the plaintiff's unsuccessful claim of legal professional privilege in respect of the file note: White v Data Transfer Services Pty Ltd [2021] NSWSC 1112.
15. T162.35-164.24.
16. T126.5-126.10; see also Mr Mina's speech referred to at [20] above at T123.40-124.39.
17. Defendants' closing submissions dated 17 September 2021, paragraph 32.
18. See [34] above.
19. See [66]-[67] above.
20. See [73] above.
21. T171.45.
22. See [77] above.
23. Emails dated 2 February 2015 at Court Book pp 543 and 547.
24. See N Seddon, Seddon on Deeds (2015) at paragraph 5.5 and the authorities referred to, including the reference to this issue in Cousens v Grayridge [2000] VSCA 96 at [57] referred to in more detail below.
25. See also Labracon at [127].
26. (2017) 261 CLR 544; [2017] HCA 12 at [16] (Kiefel J, as her Honour then was, Bell and Gordon JJ) (citations omitted). See also Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] (French CJ, Hayne, Crennan and Kiefel JJ); Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [78] (Gageler, Nettle and Gordon JJ).
27. See [60]-[68] above.
28. See [44]-[45] above.
29. See [69]-[70] above.
30. See [2] above.
31. See [84] above.
32. See [54] and [60]-[68] above.
33. See [3] and [73] above.
34. See [88] above.
35. See [87] above.
36. See [94], [98]-[99] and [107] above. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 July 2022