Barrington Winstanley Group Pty Ltd v Edmonds

By a Statement of Claim filed on 22 April 2021, the plaintiff (“BWG”) seeks a monetary judgment against the first and second defendants (Mrs and Mr Edmonds) pursuant to a Deed of Acknowledgement of Debt entered into on 27 April 2018. BWG further contends that the amount owed to it is secured by a charge over a property owned by Mrs and Mr Edmonds (“the Property”).

Mention should be made of the other three defendants to the proceedings. The third defendant, DSJSE Pty Ltd (“the company”) is a company associated with Mrs and Mr Edmonds. Mrs Edmonds was the sole director and secretary of the company when the events relevant to these proceedings occurred. The Court was informed that the company is in liquidation. BWG no longer seeks to proceed against the company. The fourth defendant, NWC Finance Letter of Offer Pty Ltd, is a caveator in respect of the property. The fourth defendant did not actively participate in the hearing. The Court was informed that, subject to the protection of its claimed interest, the fourth defendant did not oppose the making of an order for the sale of the property. The fifth defendant, Jason Hulbert, ceased to be a party to the proceedings prior to the hearing.

The matters remaining for determination were thus confined to BWG’s claims for relief against Mrs and Mr Edmonds. At the hearing, Mr Pesman SC appeared for BWG. Mrs Edmonds appeared for herself and, with the consent of BWG, also for Mr Edmonds. Mrs Edmonds, who is currently an inmate of the North Coast Correctional Centre, participated in the hearing using audio-visual link technology.

BWG is a finance broker. The claims it makes are essentially based upon an Exclusive Mandate and Fee Agreement dated 3 November 2017, and a Deed of Acknowledgement of Debt executed on 27 April 2018. For convenience, these documents will be referred to as “the Agreement” and “the Deed” respectively.

In brief summary, BWG alleges that, pursuant to the Agreement, a Service Fee of $211,200 became payable to it by the company, and that Mrs and Mr Edmonds were similarly liable as guarantors of the company’s obligations. BWG further alleges that Mrs and Mr Edmonds provided a charge in its favour over various properties, including the Property, to secure payment of any monies that become due and payable to BWG under the Agreement. In relation to the Deed, BWG alleges that the company and Mrs and Mr Edmonds made various acknowledgments including that a Service Fee of $211,200 was payable under the Agreement, and undertook that the amount of the fee plus interest (referred to in the Deed as the “Debt”) would be paid to BWG upon the happening of certain events.

The claim for monetary relief rests primarily upon the Deed. The Agreement is relied upon only in the alternative in that regard. The claim to enforce the charge rests upon the provisions of the Agreement, although, as will be seen, BWG asserts that estoppels arise from the Deed that preclude Mrs and Mr Edmonds from contending that the charge they granted pursuant to the Agreement does not secure payment of the money claimed.

Mrs and Mr Edmonds filed a Defence dated 18 June 2021. The Defence contains denials of most of the allegations made by BWG. Mrs and Mr Edmonds deny that they were parties to the Deed, and it is alleged that Mrs Edmonds signed the Deed in circumstances of coercion and intimidation on the part of BWG. It is further alleged that the coercion and intimidation resulted in her mental condition becoming unstable to the extent that she was unable to make decisions, and that this was known by BWG. No Cross-Claim was filed by either Mrs or Mr Edmonds.

In BWG’s case, three affidavits of a director, Kelwyn Hough, were read (25 June 2021, 22 July 2021 and 29 March 2022), as well as an affidavit of Ms Suyu Dai, solicitor (17 March 2022). Mr Hough was cross-examined. In the case of Mrs and Mr Edmonds, two affidavits of Mrs Edmonds were read (8 July 2021 and 14 March 2022). Mrs Edmonds was cross-examined.

Mrs Edmonds was the sole director and secretary of the company between 12 June 2014 and 18 October 2019.

On 2 November 2017, Mrs Edmonds signed an Exclusive Mandate and Fee Agreement with BWG. Mrs Edmonds signed the Agreement as borrower. This agreement related to a proposed refinancing loan of $925,000 in respect of a property described as “1549 Boorolong Road, Dumaresq NSW 2350”. This proposed refinancing did not proceed, and BWG makes no claim pursuant to that agreement. As already mentioned, the claims made by BWG arise from a further Exclusive Mandate and Fee Agreement dated 3 November 2017 (“the Agreement”). The Agreement was signed by Mrs and Mr Edmonds for the company as borrower, and again by Mrs and Mr Edmonds as guarantors.

Prior to the execution of the Agreement, Mrs Edmonds sent an email to Mr Hough on 1 November 2017 which included the following:

Shortly thereafter, Mrs Edmonds sent another email to Mr Hough which provided various details of amounts owing. These included almost $1.7 million owed to Coastline Credit Union (secured over 74 Dumaresq Road, Armidale and 136 Bellbrook Road, Armidale); $586,000 owed to PMA Holdings; and $1,132,000 owed to Hubertus Bobbert (secured over 134 Bellbrook Road, Armidale). The email continued:

On 3 November 2017 (at 6:06pm) Mr Hough sent an email to Mrs Edmonds in the following terms:

Shortly thereafter (at 6:23pm), Mrs Edmonds sent an email to Mr Hough which attached the Agreement, described as “duly executed dated and witnessed Mandate document”.

The cover page of the Agreement referred only to BWG and Mrs Edmonds. However, it is clear from page 1 that the Agreement is between BWG and the parties described in Items 1 and 2 of Schedule A, namely, the company as borrower and Mrs and Mr Edmonds as guarantors. The Agreement relevantly provides:

Schedule A to the Agreement is in the following terms:

Mrs and Mr Edmonds also signed Appendices 1 and 2 to the Agreement. A request was thereby made for BWG to delay payment of the Service Fee (see cll 2.2.1 and 3). There is no evidence that BWG ever agreed to delay payment in accordance with those provisions.

The Letter of Offer, referred to in Mr Hough’s email of 3 November 2017, was an offer by In Base Investments Pty Ltd to lend $3,840,000 to the company. The letter relevantly included the following:

It appears that Mrs Edmonds signed the Letter of Offer on 3 November 2017. I infer from the terms of Mr Hough’s email that the signing occurred after the letter had been issued to her by Mr Hough, after the Agreement had been signed. Mrs Edmonds sent the signed Letter of Offer to BWG on 4 November 2017 (and again on 6 November 2017) together with up-to-date title searches and rate notices in respect of the properties involved. These included a title search and rate notice in respect of the land contained in folio identifier 45/755811 which was (and remains) jointly owned by Mrs and Mr Edmonds. The rate notice describes the property address as 74 Dumaresq Road, Saumarez Ponds NSW 2350. There is no real doubt that this property (which I refer to as “the Property”) is the property that is described in the Agreement and the Letter of Offer as “74 Dumaresq East Road, Dumaresq NSW 2350”. Mrs Edmonds seemed to concede that there was but one property, variously described, being “the property in DP45/755811”.

The title search showed that the Property was encumbered by a registered mortgage to Coastline Credit Union Ltd, and that caveats had been lodged by PMA Holdings Pty Ltd and Directline Finance Pty Ltd.

The signed Letter of Offer was sent to the lender’s solicitors on 6 November 2017.

The Letter of Offer required the sum of $13,000 to be paid by the borrower into the trust account of the lender’s solicitors. Those solicitors were DSA Lawyers. On 8 November 2017, DSA Lawyers requested BWG to have the borrower make that payment, and BWG passed the request on to Mrs Edmonds. Mrs Edmonds sent an email to BWG on 8 November 2017 stating that she was “now proceeding to the payment of funds into the provided account and will e-mail receipt”. It appears, however, that the $13,000 payment was never made. That is so even though Mrs Edmonds stated in her email:

It further appears that on 8 November 2017 Mrs Edmonds signed and returned a revised version of the Letter of Offer. The revisions (including those to the description of the properties to be provided as security) are not material to the issues that arise in the case.

It is evident that, at about this time, there were communications between BWG and DSA Lawyers concerning the obtaining of valuations of the proposed security properties.

On 14 November 2017 BWG advised Mrs Edmonds that a valuer had been found, and requested that $16,850 be paid into the account of the lender’s solicitors to “start the process”. That amount consisted of a valuation fee of $14,850 and $2,000 for “legal documentation”. Again, it seems that no such payment was made.

On 21 November 2017, DSA Lawyers sent an email to BWG in which it was stated that if no money is received in the next 48 hours the matter should be considered “at an end”. Also on 21 November 2017, Mr Hough sent an email to DSA Lawyers which attached some “desktop” valuations obtained by Mrs Edmonds. In the email it was stated, inter alia, that arrangements were being made “to pay the upfront fee tomorrow”. Later that day, Mr Hough also forwarded to DSA Lawyers some appraisals of the properties that had been prepared by real estate agents, and supplied by Mrs Edmonds. However, in their response, DSA Lawyers stated that they wanted to appoint their own valuers, and noted that they had still not received payment of the “application fees”.

On 24 November 2017 Mrs Edmonds made a payment of $5,000. This payment seems to have been made directly to BWG rather than into the DSA Lawyers’ trust account, but the evidence (including the indecipherable Credit Transfer Form) is unclear on that matter. The evidence is also not entirely clear as to the circumstances in which this payment was made, but it seems likely that the payment was intended to be put towards the obtaining of valuations. In any event, the evidence suggests that the proposed loan from In Base Investments Pty Ltd was not actively pursued after about 29 November 2017. Mr Hough deposed that at about that time the offer was withdrawn.

Mrs Edmonds thereafter continued to engage with BWG concerning the obtaining of finance. On 12 December 2017 Mr Hough forwarded to Mrs Edmonds a Provisional Offer of Loan Funding from Portcullis Capital Pty Ltd, for a loan to the company of $2.8 million for which Mrs and Mr Edmonds would be guarantors. This document appears to have been executed on 13 December 2017 by Mrs Edmonds for the company, and by Mrs Edmonds and Mr Edmonds as guarantors. It was sent by Mrs Edmonds to Mr Hough by email sent on that day at 1:13pm. I note, however, that in the course of cross-examination Mrs Edmonds stated that Mr Edmonds did not sign the document, and she gave answers that suggested that she had forged his signature. When pressed on the matter, Mrs Edmonds was not prepared to admit distinctly that she forged the signature, but went as far as to say that she assumed that she did. I also note that it appears from Mr Hough’s email to Mrs Edmonds on 13 December 2017 (at 1:03pm) that it was proposed to accept the offer on the basis that only a part payment (of $5,000) of a required valuation fee would be paid, with the balance of that fee to follow later. The terms of the email seem consistent with the proposition that the $5,000 paid by Mrs Edmonds on 24 November 2017 was indeed paid to BWG. This is reinforced by the evidence that on 3 January 2018 Mr Hough transferred $3,000 from the BWG trust account to Mr O’Sullivan of Portcullis Capital towards valuation fees.

There is evidence that Mrs Edmonds sought to pay a further sum of $6,000 to Portcullis Capital on 11 January 2018, but the latter claimed on 18 January 2018 that the funds had still not been received into its account. In any event, it appears that the proposed Portcullis Capital loan did not proceed. Neither did a proposed loan from Universal Finance, which was to be made to a different company and secured over properties including the Property.

On about 24 February 2018, Mr Hough travelled from Melbourne to Coffs Harbour to meet Mrs Edmonds face-to-face. It seems that Mr Hough agreed to do so only on the basis that the cost of his airfares be reimbursed.

In the meantime, on about 18 December 2017, BWG, through its solicitors JHK Legal, lodged a caveat (AM983914) against the titles to various properties, including the Property (i.e. Folio Identifier 45/755811). The form of caveat initially referred to 45/755818, but the number appears to have been amended by hand. There is no doubt that the caveat was recorded against the title to 45/755811. By the caveat, BWG claimed an interest as an equitable mortgagee by virtue of the Agreement.

On 29 March 2018, Wordsworth Lawyers, acting for Mrs and Mr Edmonds, sent a letter to JHK Legal. The letter, which was received on 5 April 2018, was in the following terms:

Mr Hough became aware of the lapsing notice on about 5 April 2018. He deposed that he then had a telephone conversation with Mrs Edmonds. Mrs Edmonds deposed:

In answer to the above, Mr Hough denied that there was any verbal abuse or attack, intimidation or bullying towards Mrs Edmonds. Mr Hough deposed that in the telephone conversation:

Mr Hough further denied that Mrs Edmonds told him that she could not cope with threats because of her experiences of domestic violence. Mr Hough said that he had no knowledge of the alleged domestic violence until he received Mrs Edmonds’ affidavit.

On 6 April 2018 Mrs Edmonds sent an email to Mr Hough in the following terms:

On 11 April 2018 JHK Legal sent an email to Wordsworth Lawyers which included the following:

Wordsworth Lawyers responded later on 11 April 2018 in the following terms:

On 16 April 2018 Ms Faulkner of JHK Legal sent an email to Wordsworth Lawyers which contained a request that the attached Deed of Acknowledgement of Debt and Irrevocable Authority be executed and returned by no later than 4:00pm on 19 April 2018. Mr Chaffey of Wordsworth Lawyers replied shortly thereafter stating that he would send the deed to his client.

Mr Hough and Mrs Edmonds were at that time still in communication with each other in relation to the obtaining of finance. I note that in an email sent to Mr Hough on 16 April 2018, Mrs Edmonds thanked Mr Hough for his support and loyalty.

However, on 20 April 2018 Mr Hough sent an email to Mrs Edmonds in the following terms:

Mrs Edmonds promptly responded by email that included the following:

Mr Hough sent an email in response later in the morning of 20 April 2018. This email included the following:

Later on 20 April 2018 Mrs Edmonds sent an email to Mr Hough that included the following:

On 21 April 2018 Mr Hough attached a copy of the proposed deed to an email he sent to Mrs Edmonds. However, he advised that as there had been discussions since the deed had been provided to Wordsworth Lawyers, “in all likelihood this is not the final document”. The email continued:

Despite the terms of the above email, on 22 April 2018 Mrs Edmonds sent to Mr Hough a copy of the proposed deed, said to have been signed by both Mrs and Mr Edmonds.

Later on 22 April 2018, Mr Hough sent an email to Mrs Edmonds which included the following:

On 24 April 2018 JHK Legal sent an email to Wordsworth Lawyers which attached an updated version of the proposed deed. The email contained a request that it be executed and returned by no later than 4:00pm on 27 April 2018.

At 9:37am on 27 April 2018, Mrs Edmonds sent an email to Mr Hough which attached “the final Deed of Acknowledgement of Debt”. The Deed was apparently executed by Mrs Edmonds for the company, and separately by Mrs and Mr Edmonds. The email included the following:

The parties to the Deed are expressed to be BWG, the company and Mrs and Mrs Edmonds. The recitals to the Deed included:

The operative part of the Deed included the following:

The execution page is headed “EXECUTED AS A DEED”. It provides for execution by BWG and the company in accordance with s 127 of the Corporations Act 2001 (Cth); and for each of Mrs Edmonds and Mr Edmonds to sign, seal and deliver in the presence of a witness.

The signatures of Mrs Edmonds and Mr Edmonds were apparently witnessed by Jennifer Marshall, a sister of Mrs Edmonds.

On 1 May 2018, Mr Chaffey of Wordsworth Lawyers sent an email to Ms Faulkner of JHK Legal in the following terms:

Mrs Edmonds deposed, in relation to the Deed:

The first issue to consider is whether BWG is entitled to a monetary judgment against Mrs and Mr Edmonds pursuant to the Deed. In this regard, BWG seeks to recover $240,520 plus interest. The claim rests upon cl 2.1 of the Deed. By their Defence, Mrs and Mr Edmonds deny that they are parties to the Deed and Mrs Edmonds further says that she signed the Deed due to coercion and intimidation by BWG which resulted in her mental condition becoming unstable to the extent that, to the knowledge of BWG, she was unable to make decisions.

There is no substance to the argument that Mrs and Mr Edmonds are not parties to the Deed. The evidence is in my view clear that, on the morning of 27 April 2018, Mrs Edmonds signed the Deed for the company as its sole director (and secretary) pursuant to s 127 of the Corporations Act. Further, Mrs and Mr Edmonds executed the Deed in the presence of Mrs Edmonds’ sister, Jennifer Marshall. Ms Marshall witnessed the signatures. By so signing the Deed, Mrs and Mr Edmonds can be taken to have signed, sealed and delivered the Deed and evinced an intention to be bound by it immediately (see Pittmore Pty Ltd v Chan (2020) 104 NSWLR 62; [2020] NSWCA 344 at [68]-[71]; Segboer v AJ Richardson Properties Pty Ltd (2012) 16 BPR 31,235; [2012] NSWCA 253 at [51]-[60] and [73]). Moreover, the Deed, so executed, was physically delivered to BWG when it was sent as an attachment to Mrs Edmonds’ email to Mr Hough at 9:37am on 27 April 2018. Subject to any argument concerning the validity of the Deed, Mrs and Mr Edmonds thereby became immediately bound by the Deed, and the Deed could be enforced against them by BWG.

That is so even if BWG did not sign the Deed. Neither the terms of the Deed, nor the objective circumstances surrounding its execution by Mrs and Mr Edmonds, show that the Deed would only become enforceable if and when BWG executed the Deed. I would add that it is not necessary for an exchange of deeds to occur before the Deed would become enforceable.

There is also no substance to the argument advanced by Mrs Edmonds that the Deed was merely a draft, not intended to be binding. Whilst that might have been said in respect of the document sent to Mr Hough on 22 April 2018, it cannot be said in respect of the document sent to Mr Hough on 27 April 2018. It can be inferred from the terms of Mrs Edmonds’ email of 27 April 2018 and Mr Chaffey’s email of 1 May 2018 that the document executed on 27 April 2018 was the updated form of deed that had been sent to Wordsworth Lawyers on 24 April 2018. That document had been provided by Mr Chaffey to Mrs and Mr Edmonds (with advice to not sign it), and Mrs Edmonds described it as “the final Deed of Acknowledgement of Debt”.

I turn now to the argument advanced by Mrs Edmonds to the effect that she signed the Deed due to duress, at a time when she was unable to make any decisions. Presumably, the argument is advanced as a reason why the Deed should not be enforced.

I should say at once that I find myself unable to accept the evidence of Mrs Edmonds in relation to this issue. In particular, I do not accept her evidence that, at some time between 5 April 2018 and 10 April 2018, BWG (through Mr Hough) verbally abused, intimidated and bullied her for engaging a solicitor and serving a lapsing notice. I prefer, and accept, Mr Hough’s denials that he engaged in such conduct. I also accept his denial that Mrs Edmonds told him that she could not cope with threats due to her experiences with domestic violence.

Where their evidence is in conflict, I generally prefer Mr Hough’s evidence to that of Mrs Edmonds. I think that Mr Hough gave his evidence in a satisfactory manner. He appeared to be trying to give accurate answers to the best of his recollection. Moreover, his evidence was generally consistent with the contemporaneous documents that were adduced in evidence.

On the other hand, Mrs Edmonds’ evidence is not supported by the documentary evidence of the communications between Mr Hough and herself at around that time. Mrs Edmonds’ email of 6 April 2018, advising that she had been given instructions to withdraw the lapsing notice, concludes with her sending her “warmest regards” to Mr Hough. There is no mention in the letters sent by Wordsworth Lawyers of any abuse, intimidation or bullying. Neither does Mrs Edmonds mention such matters in her emails to Mr Hough in the period from 16 April 2018 to 27 April 2018, even where the communications stray into the more personal rather than strictly business side of the relationship. Indeed, Mrs Edmonds’ emails in that period contain statements of sincere appreciation of Mr Hough’s efforts, warmest regards, and even “our love and friendship”, and an acknowledgement that Mr Hough had “been with us all the way through this journey”.

It was put to Mrs Edmonds in cross-examination that her evidence about being abused, intimidated and bullied was not true. She denied that was so. She also denied that her evidence about being too scared to get legal advice was false. I do not accept those denials. Mrs Edmonds maintained that she did not receive any legal advice at the time of signing the Deed. I do not accept that evidence, which is inconsistent with Mr Chaffey’s email of 1 May 2018 the content of which is very likely to be accurate.

Mrs Edmonds was confronted in cross-examination with the absence of any references in her emails to abuse and intimidation. She said in response that she told Mr Hough that she could not stand to be bullied or intimidated because of abuse she suffered as a child. Mrs Edmonds was then confronted with the statement in her email thanking Mr Hough for his support and loyalty. She was asked how she reconciled that with her evidence about Mr Hough’s intimidating behaviour. To this, Mrs Edmonds said that it had been one of her “core beliefs” that if a man was bullying or intimidating you, “you always did everything that you could to please that person”.

I do not accept that Mrs Edmonds spoke to Mr Hough about being bullied or intimidated, and I cannot accept her evidence that the terms in which she wrote to Mr Hough were designed to please him as a person who was bullying and intimidating her.

I formed an unfavourable impression of Mrs Edmonds as a witness. That impression was formed as a result of various aspects of her testimony, including the following:

The above matters in particular caused me to conclude that Mrs Edmonds’ evidence should be treated with great caution. I would not be prepared to accept her evidence on any contentious matter unless it were corroborated by other evidence that was itself reliable and likely to be accurate. My conclusion is not based upon, but it is reinforced by, the fact that Mrs Edmonds is currently serving a prison sentence for offences involving fraud.

It should also be noted that, although Mrs Edmonds referred in her affidavit to various mental health issues or conditions, no expert medical or psychiatric evidence was adduced to the effect that at the time the Deed was signed Mrs Edmonds was suffering from any particular medical or psychiatric condition, or that such a condition meant that she was unable to make decisions, including as to whether to sign the Deed. I would accept, based on the documents in evidence, that at the time of the dealings between November 2017 and April 2018 Mrs and Mr Edmonds were under a significant degree of financial pressure, but I do not accept that Mrs Edmonds was at any relevant time suffering from a condition that prevented her from making rational decisions on commercial and financial matters in her own interests. That conclusion is supported by the terms of many of the emails sent by Mrs Edmonds.

It is certainly not the case that BWG was aware of any condition suffered by Mrs Edmonds that would impair her ability to make decisions. I do not accept Mrs Edmonds’ evidence on this matter, including her denial in cross-examination that she made no disclosure of any mental health issues to Mr Hough; and I reject her evidence that she told Mr Hough that “all documents would have to be explained to me because of the issues I was suffering”.

In my opinion, consistent with the warranty contained in cl 3.1.5 of the Deed, Mrs Edmonds entered into the Deed voluntarily, and not as a result of any duress on the part of BWG. Mr Hough evidently appreciated that Mrs Edmonds was emotionally and financially in a distressed state in April 2018. However, I do not think that any unfair or illegitimate pressure was placed upon her by BWG in the circumstances. Whilst it was made clear at that time that unless the Deed was signed, BWG would not continue to provide its services, the tenor of a number of Mr Hough’s emails was clearly to the effect that there was a choice as to whether the Deed was signed or not, and that the Deed should only be signed if there were no dispute about BWG’s fee, and after legal advice was obtained. Mrs Edmonds in fact received legal advice from Mr Chaffey about the Deed. Despite that advice, she chose to sign the Deed. Quite apart from the terms of the Deed itself, Mrs Edmonds acknowledged in her email of 27 April 2018 that she and Mr Edmonds had discussed and were aware of the contents of the Deed.

It follows from the above that Mrs Edmonds has failed to establish any reason why the Deed should not be enforced.

By cl 2.1 of the Deed, the company and Mrs and Mr Edmonds jointly and severally undertook to repay the Debt to BWG on the earlier of various events. Debt is defined in cl 1.1 of the Deed to include the Service Fee plus all accruing interest. By Recital M, the Service Fee plus accrued interest calculated in accordance with the Agreement was stated to be $240,520 as at 12 April 2018. It is further stated in Recital M that interest continues to accrue on the Service Fee at the interest rate. The reference to the interest rate is plainly a reference to the interest rate that is specified in cl 7 of the Agreement (see Recital D).

There is no doubt that the obligation under cl 2.1 of the Deed to repay the Debt has arisen. There is evidence that sales of some of the Properties (as defined in the Deed) have completed (see cl 2.1.2) and in any event the service of the Statement of Claim would constitute a written demand by BWG (see cl 2.1.4).

In these circumstances, it is my view that Mrs and Mr Edmonds are obliged to pay BWG $240,520 plus interest accrued on that amount after 12 April 2018 at the rate specified in cl 7 of the Agreement. That is a high rate of interest (2.5% per month compounding each month) but it has not been shown in the circumstances to be penal or unconscionable.

A judgment should be entered for BWG against both Mrs and Mr Edmonds for $240,520 plus interest accrued since 12 April 2018 at that rate. The Court will order that an interest calculation be brought in to enable the appropriate judgment sum to be determined.

The next issue to consider is whether the money payable by Mrs and Mr Edmonds pursuant to cl 2.1 of the Deed is money that is the subject of the charge granted by Mrs and Mr Edmonds pursuant to cl 13.9 of the Agreement.

By cl 13.9, various property, including the Property, was charged with the payment of “those monies”, being “monies that become due and payable to BWG under this agreement for any reason”. BWG contends that the Service Fee (and interest thereon) became due and payable to it under the Agreement. It relies upon cll 2.2 and 7 of the Agreement in that regard.

Under cl 2.2, a Service Fee may become due and payable upon BWG obtaining “a loan offer within the ambit of the instructions set out at Item 3 of Schedule A.” Item 3 of Schedule A specifies a number of features of a loan offer including the amount of the loan, the term of the loan and the interest rate. Those features delineate the ambit of the instructions within Item 3 of Schedule A.

BWG claims that a Service Fee arose from the Letter of Offer from In Base Investments Pty Ltd that was obtained by BWG and provided on 3 November 2017. However, it seems to me that as the offer concerned a loan for a period of only 3 months rather than the 12 month period specified in Item 3 of Schedule A, it cannot be said to be a loan offer within the ambit of the instructions set out at Item 3 of Schedule A. The period of a loan for refinance purposes is obviously a matter of importance, and there is a significant difference between a 3 month term and a 12 month term. The same point can be made in relation to the updated Letter of Offer obtained by BWG and provided on 8 November 2017.

In these circumstances, I do not think that any Service Fee became due and payable to BWG under the Agreement. The amount that is payable by Mrs and Mr Edmonds pursuant to cl 2.1 of the Deed does not bear that description. It follows that it is not an amount of money that is the subject of the charge granted under cl 13.9 of the Agreement.

BWG seeks to avoid that conclusion by claiming an estoppel by deed. The estoppel is said to arise from the recitals and operative provisions of the Deed. BWG emphasised that the Deed was entered into in the context of a dispute between the parties as to whether BWG was entitled to the Service Fee, and was intended to resolve that dispute. BWG submitted that Mrs and Mr Edmonds are estopped by the Deed from asserting that the Service Fee was not earned under the Agreement, and therefore from asserting that there is no debt to which the charge attaches.

It is true that by the terms of the Deed (in particular, Recitals I, M and N, and cl 2.1) Mrs and Mr Edmonds acknowledged the existence of a Service Fee payable under the Agreement, and agreed to pay it, together with interest, to BWG. An estoppel by deed could thereby arise to preclude Mrs and Mr Edmonds from denying the truth of that which they have acknowledged.

However, an estoppel by deed operates only in an action on the deed to enforce rights arising under it. That was the principle applied by Clarke J (as his Honour then was) in Offshore Oil NL v Southern Cross Exploration NL (1985) 3 NSWLR 337 at 340-5. That decision has been approved a number of times in this, and other, courts (see, for example, Minassian v Minassian [2010] NSWSC 708 at [55]; Re Quality Blended Liquor Pty Ltd [2015] 2 Qd R 381; [2014] QSC 234 at [48]; Australia and New Zealand Banking Group Ltd v Bragg (No 3) [2017] NSWSC 208 at [82]; and Burkett v Bendigo and Adelaide Bank Ltd (No 2) (2018) 133 ACSR 411; [2018] VSC 723 at [113]). I think that I should take the same approach here and apply the principle as recognised by Clarke J.

It seems to me that in seeking to enforce the charge granted under cl 13.9 of the Agreement to secure payment of the amount payable under cl 2.1 of the Deed, BWG is not taking action on the Deed to enforce rights arising under it. Rather, it is seeking to enforce a right that arises under the Agreement. The charge was created by the terms of the Agreement independently of, and antecedent to, the Deed. There are provisions in the Deed which refer to the clause of the Agreement that gives rise to the charge (e.g. Recital E and cl 2.2). However, it is clear that the Deed merely recognises the effect of the clause (which, by cl 2.2, is acknowledged to be valid), and does not purport to itself create any charge. That is the case even though the operative provisions of the Deed contain acknowledgements to the effect that BWG was and remains entitled to maintain caveats. Clause 2.2 makes it plain that this entitlement was based on the charging clause contained in the Agreement.

For these reasons, I have come to the conclusion that Mrs and Mr Edmonds are not precluded by an estoppel by deed from asserting that the amount payable by them pursuant to cl 2.1 of the Deed is not the subject of the charge granted under cl 13.9 of the Agreement. Put another way, I do not think that Mrs and Mr Edmonds are precluded from asserting that there are no monies due and payable to BWG “under this agreement” within the meaning of cl 13.9 of the Agreement.

BWG submitted that the provisions of the Deed could still operate as admissions against Mrs and Mr Edmonds. That is so, but the essential question here is whether, on the true construction of cl 13.9 of the Agreement and in the events that actually happened, any monies became due and payable to BWG under the Agreement. In my view it is clear, for the reasons I have already stated, that the Service Fee did not become due and payable to BWG under the Agreement. The provisions of the Deed, including the acknowledgements contained within it, do not alter that reality. In the absence of an estoppel, Mrs and Mr Edmonds were entitled, as they did in their Defence, to deny that the Service Fee became due and payable (see Statement of Claim paragraph 13 and Defence paragraph 7). It is not necessary to consider various other arguments raised by Mrs and Mr Edmonds to the effect that no Service Fee became due and payable, or that the Agreement was somehow not binding or enforceable. I should record, however, that I regard as fanciful Mrs Edmonds’ evidence that she was pressured by BWG to return the executed Agreement and Letter of Offer.

It follows that BWG is not entitled to enforce a charge over the Property for payment of the amount that is payable to it under cl 2.1 of the Deed.

BWG is entitled to a monetary judgment against both Mrs and Mr Edmonds for $240,520 plus interest. The Court will direct BWG to bring in an interest calculation to enable the appropriate judgment sum to be determined. The interest calculation will be directed to be served upon Mrs and Mr Edmonds, who will be given an opportunity to either agree to, or dispute, the calculation.

Otherwise, BWG’s claim will be dismissed. However, as BWG is the successful party, the Court will also order that Mrs and Mr Edmonds pay BWG’s costs of the proceedings.