Australia and New Zealand Banking Group Ltd v Bragg (No. 3)

1. [1]

   The Plaintiff, Australia and New Zealand Banking Group Ltd (the Bank), seeks possession of land at 485 Lake Conjola Entrance Road, Lake Conjola based on default under loan agreements and a mortgage entered into by the Bank with the Second Defendant. The Second Defendant is the registered proprietor of the land. The First Defendant is in occupation of the land. Both Defendants appeared unrepresented. The First Defendant, Mr Bragg, was given leave to appear on behalf of the Second Defendant in respect of which he was a shareholder and director, his wife being the other shareholder.

2. [2]

   On about 16 October 2010 the Second Defendant entered into a contract to purchase the property. The property had a development approval for the building of some 71 cabins on it. The development approval was in two stages with the first stage involving the completion of 19 cabins and the second stage involving the completion of the remaining 52 cabins. At the time the Second Defendant purchased the property 19 of the cabins had been all but completed – Mr Bragg said that although most of them did not have front doors they were fully lined with electrical wires in them.

3. [3]

   The Second Defendant required finance to complete the purchase of the property, to assist in the payment of GST and to provide funding for the remainder of the development. To that end the Second Defendant through Mr Bragg engaged a broker, Loans and Mortgages of Australia Pty Ltd trading as Xpress Mortgages, to obtain finance of $1,530,000 for a maximum loan term of 15 years with annual reviews, initial rate to be no more than 9% variable rate. The security to be offered was the property at Lake Conjola as well as another property at 120 Benarca Forest Road, Moana.

4. [4]

   It is not clear if the broker approached the Bank or if the Bank became involved by some other means. However, the Bank sent to Mr Bragg a Non-Binding Indicative Term Sheet for discussion purposes on 14 March 2011. That document referred to a facility of $1.5 million made up of a fully drawn advance of $1.365 million together with an overdraft facility referred to as a GST payment facility. Nothing was said in that document about the term of the loans. In relation to the first facility the loan was said to be an interest only loan for the “initial 12 months”. The second facility was to be cleared in full “via refund of GST” within four months from the commencement of the Facility. The document, like the covering letter, said that it was provided for discussion purposes only and did not represent an offer of facilities.

5. [5]

   The first letter of offer from the Bank was dated 13 May 2011. It offered two facilities being a business loan of $1,530,000 and an overdraft facility of $135,000. The term of the business loan facility was seven months expiring on 31 December 2011. That letter of offer was accepted on 10 June 2011 by Mr Bragg in his own capacity as well as in his capacity as sole director of the Second Defendant. It was also accepted by Mr Bragg and his wife in their capacity as trustees for the J and V Bragg Family Trust.

6. [6]

   For reasons not made clear, that letter of offer was replaced by an offer of the same facilities dated 6 July 2011 but subject to some different conditions including some conditions precedent. The term of the facilities was said to be seven months expiring on 31 December 2011. Security included a guarantee from Mr and Mrs Bragg in their own capacity and as trustees for the Family Trust in respect of the Second Defendant’s obligations limited to $1,665,000, registered mortgages over the property at Lake Conjola and the property owned by Benarca Pty Ltd at “Weaning Point”, Benarca Forest Road, Moana and registered company charges over the Second Defendant and Benarca.

7. [7]

   Amongst the conditions precedent were these:

8. [8]

   Amongst the Other Conditions was the following:

9. [9]

   The purchase of the Lake Conjola property settled on 18 July 2011 with the Bank providing $900,000 for that purpose. The overdraft of $135,000 was also made available at that time. The Second Defendant gave a mortgage over the property.

10. [10]

    An email from Geoff Michael, the Relationship Manager at the Bank, to Mr Bragg of 8 August 2011 said this in relation to the Facility:

11. [11]

    The loan facility was not repaid on 31 December 2011 when it was due for repayment, nor was the work finished by 30 September.

12. [12]

    On or about 9 March 2012, at the request of the Defendants through Mr Bragg, the Bank made an offer to extend the loan facility for a further period until 30 June 2012. The letter of offer dated 9 March 2012 said that both the overdraft facility of $135,000 and the business loan of $1,530,000 would expire on 30 June 2012. It was also a condition of the loan that physical development of the Lake Conjola property was to be finalised prior to 30 April 2012. The loan offer said that a failure to achieve that development finalisation would be considered a review event. Mr Bragg signed an acceptance of that letter both in his own capacity and on behalf of the Second Defendant on 16 March 2012.

13. [13]

    By 30 April 2012 the development of the Lake Conjola property had not been completed.

14. [14]

    On 7 May 2012 Mr Michael spoke to Mr Bragg. Mr Bragg said that he thought full completion was possible in three to four weeks. On 12 June 2012 another officer of the Bank, Alison Hughes, spoke to Mr Bragg. Mr Bragg said that if the Bank provided an ongoing commitment he would expect the remaining work and the development to be completed within six to eight weeks.

15. [15]

    On 21 June 2012 Mr Michael sent an email to Mr Bragg in these terms:

16. [16]

    That letter of offer from the Bank was dated 20 June 2012 and provided for the expiry of both the overdraft facility and the business loan on 30 September 2012.

17. [17]

    The loan was not repaid on 30 September. On 15 October 2012 Mr Michael prepared a diary note of discussions he had held with Mr Bragg. Mr Bragg had said that the cabins were complete but road construction had been delayed for a number of reasons. Mr Bragg said that he was in the process of arranging private funding for the project and that was likely to happen within the following two months. It was noted that the Defendants had been meeting interest costs from their own resources and there had been no loan drawdowns for some time. Mr Bragg requested a further extension of the facility to allow time for refinance and/or the completion of the project.

18. [18]

    On 31 October 2012 the Bank sent a Review and Variation letter to the Defendants extending the facilities to 30 November 2012. That letter of offer was accepted by the Defendants on 2 November 2012.

19. [19]

    The facility was not repaid by 30 November 2012 and the Bank granted a further two week extension to 14 December. In a note of further discussions between Mr Michael and Mr Bragg it is recorded that Mr Bragg had said an offer had been received to purchase the Lake Conjola property. He sought a further extension until 28 February 2013 to enable refinance and property sales discussions to continue. Although Mr Michael recommended this extension it was declined by the Bank.

20. [20]

    The Bank thereafter made demand on the Second Defendant including the service of a notice under s 57(2)(b) of the Real Property Act 1900 (NSW). Mr Bragg responding by sending what he called a Courtesy Notice and an invoice to the Bank requiring them to pay a quantity of three ounces of silver for what was asserted to be their wrongdoing in relation to the demands made. It should be said that Mr Bragg’s notices made no sense in law or otherwise. However, the letters of demand and the notices forwarded to the Defendants were not met.

21. [21]

    On 13 June 2014 the Bank and the Defendants, as well as Benarca Pty Ltd and Mrs Bragg, as a guarantor, entered into a deed with the Bank. The Deed contained the following recitals:

22. [22]

    The Deed then went on to provide:

23. [23]

    The Defendants had engaged a solicitor, Mr Milan Djekovic of Djekovic, Hearne and Walker to act on the purchase of the property. Thereafter Mr Djekovic continued to act for the Defendants from time to time in the Defendants’ dealings with the Bank although the contemporaneous documents show that most of the negotiations between the Defendants and the Bank were conducted by Mr Bragg personally. However, Mr Djekovic acted in relation to this Deed.

24. [24]

    He provided a certificate saying that he had explained to Mr Bragg before he signed the documents the general nature and effect of those documents including the risk of loss of any security property and other assets owned by him. A similar certificate was provided by a solicitor Stephen Hearne for Mrs Bragg.

25. [25]

    On 13 June 2014 on exchange of the Deed of Settlement the Defendants paid to the Plaintiff the sum of $630,000 as the Deed required.

26. [26]

    The balance of the debt was required to be paid by 13 September 2014. It was not paid on that date and has not since been repaid. No other repayments under the loan facility or the Deed have been paid by the Defendants.

27. [27]

    On 7 October 2014 Christian Sprowles and Alan Hayes were appointed by the Plaintiff as Receivers and Managers of the property of the Second Defendant including the Lake Conjola property. On 20 February 2015 those persons were retired by the Plaintiff as Receivers and Managers of the Second Defendant’s property and were appointed as the agents of the Plaintiff in its capacity as mortgagee of the Lake Conjola property.

The pleadings

1. [28]

   In its Statement of Claim the Plaintiff sought possession of the Lake Conjola property based on a breach of the loan agreement and the mortgage.

2. [29]

   In their Defence the Defendants raised three matters of substance. In answer to paragraph 6 of the Statement of Claim which pleaded the loan agreement the Defendants said this:

3. [30]

   Paragraph 7 of the Statement of Claim pleaded that it was a term of the loan agreement that the facilities would be repaid by 30 September 2012. The Defendants’ answer was that the loan agreement of 20 June 2012 was signed under duress.

4. [31]

   Paragraph 10 of the Statement of Claim alleged that it was a term of the mortgage that the mortgage became enforceable if default was made in the payment of the secured monies or any part thereof. The Defendants’ answer to that was as follows:

5. [32]

   In answer to the Defence the Plaintiff filed a Reply on 11 September 2015. The Reply pleaded three matters of substance. The first was a denial that Xpress Mortgages Pty Ltd was the Bank’s broker or agent. Secondly, it denied that it withheld progress payments required to be paid in accordance with the loan agreements. Thirdly, it denied that the loan agreement was signed under duress and pointed to the Deed of Settlement of 13 June 2014 which it said estopped the Defendants from denying or pleading that the loan agreement of 20 June 2012 was not valid and binding on them.

The adjournment application

1. [33]

   The hearing of the matter proceeded up to the morning tea adjournment on 25 October 2016. When the Court resumed Mr Bragg sought an adjournment of the hearing on the basis that it was only on that morning that a friend had arranged for a lawyer to speak to Mr Bragg. The lawyer was said to have advised him that the Defendants should be bringing what I understood to be a cross-claim against the Bank although no basis for the cross-claim was identified. I refused the adjournment and said I would provide reasons in the final judgment. These are the reasons.

2. [34]

   The proceedings commenced on 3 March 2015. Mr Hearne from Djekovic, Hearne & Walker initially acted for the Defendants. On 23 June 2015 the Defendants filed a Notice of Removal of Solicitor. Mr Bragg agreed that he had sacked Mr Hearne. No other solicitor was retained. I case-managed the proceedings from 24 July 2015. The Defendants thereafter acted for themselves with Mr Bragg being given leave to appear for the Second Defendant.

3. [35]

   The Defendants filed two defences, one on 23 June 2015 and a further Defence on 22 July 2015. I struck out those defences: Australia and New Zealand Banking Group Limited v Bragg [2015] NSWSC 1009. Those Defences made reference to the Contracts Review Act 1980 (NSW) and the Banking Code of Practice but quite how they were called in aid was not articulated in the Defences.

4. [36]

   An Amended Defence was filed on 24 August 2015. That is the Defence referred to at [29] – [31] above. It contained no reference to the Contracts Review Act nor to the Banking Code. The matter was thereafter prepared for hearing on the basis of the pleadings. On 16 October 2015 when only the Plaintiff’s evidence in reply was outstanding I directed the parties to obtain a hearing date. Dates of 1 and 2 March 2016 were appointed.

5. [37]

   On 4 December 2015 the Defendants filed a Notice of Motion seeking to amend their Defence and to file a Cross-Claim both asserting reliance on the Contracts Review Act, unconscionability and breach of the “National Consumer Protection Act 2009 (Cwth)” (presumably the National Consumer Credit Protection Act 2009 (Cth)). On 14 December 2015 I dismissed that Motion: Australia and New Zealand Banking Group Limited v Bragg (No. 2) [2015] NSWSC 1903.

6. [38]

   On 1 March 2016, the first day of the hearing, Mr Bragg applied to vacate the hearing on the basis that he had lodged a complaint with the Financial Ombudsman Service (FOS). The Bank took the view that under the rules relating to FOS it had no alternative but to agree to the adjournment. In a short judgment on that day Beech-Jones J said that it was only because of the Bank’s approach to its obligations with FOS that he would vacate the hearing.

7. [39]

   The lodgement of an application to FOS within a few days before the hearing gives rise to an inference that the application was deliberately timed to result in a vacation of the hearing date. Mr Bragg has provided no explanation why the application was lodged at that time.

8. [40]

   In circumstances where the matter had commenced some 18 months earlier, where it was fixed on a second occasion for hearing, where the hearing had commenced, where the Defendants had previously had a solicitor acting for them but had sacked that solicitor, and where there was no explanation for why an arrangement had only been made for Mr Bragg to see another lawyer as late as the morning of the hearing, the view I took was that an adjournment was neither consistent with ss 56 and 58 of the Civil Procedure Act 2005 (NSW) nor was it fair to the Plaintiff which had not contributed to any delay in the matter.

The Defendants’ evidence

1. [41]

   The First Defendant read two affidavits he had sworn on 14 October 2015 and 2 November 2015. He also read an affidavit of his wife sworn 30 October 2015.

2. [42]

   The affidavits were, in substance, submissions rather than evidence. Although the Plaintiff notified objections to much of the affidavits because of their form, when I indicated to counsel for the Plaintiff that I would read the affidavits as submissions, he accepted that position and, quite appropriately, did not pursue the objections.

3. [43]

   Counsel for the Plaintiff helpfully distilled the material in the Defence and the Defendant’s affidavits as raising the following complaints by the Defendants:

4. [44]

   The Defendants also purported in the affidavits to claim damages against the Bank for a variety of reasons including that there was misleading and deceptive conduct, unconscionable conduct and that the loan was unjust. These claims must now be disregarded. As noted above, on 14 December 2015 I dismissed the Defendant’s Motion seeking leave to amend the Defence to raise the unjustness of the contract and unconscionable lending and dismissed the application to file a cross-claim seeking damages. I said that the matter would proceed to trial on the issues contained in the pleadings being the Statement of Claim filed 3 March 2015, the Defence (entitled Amended Defence) filed 24 August 2015 and the Reply dated 11 September 2015.

The Bank’s claim

1. [45]

   The Bank establishes that it entered into a loan agreement with the Second Defendant on 20 June 2012, guaranteed by the First Defendant, and that such loan was to be repaid by 30 September 2012. The Bank establishes that the loan was not repaid by 30 September 2012 and that on 31 October 2012 it made a further offer extending the facilities to 30 November 2012, which offer was accepted by the Defendants on 2 November 2012. The facility was not repaid by 30 November 2012. Under cl 7.1 of the mortgage the failure to repay the secured monies, defined in cl 2.2 of the mortgage, meant that a default event occurred. Under clauses 7.2 and 7.3 one power that the Bank obtained from a default event and a failure to rectify it was a right to take possession of the property.

2. [46]

   In order to see if that right of the Bank to possession is impugned, it is convenient to consider the complaints by the Defendants to which reference was made at [43] above.

3. [47]

   This complaint seems to be closely aligned with the assertion of the Defendants that Xpress Mortgages was the Bank’s broker and not the borrower’s broker.

4. [48]

   In Perpetual Trustee Co Ltd v Burniston (No 2) [2012] WASC 383 Edelman J said:

5. [49]

   Those principles provide the starting point but it is necessary in every case to examine the arrangements between the parties.

6. [50]

   On 22 February 2011 the First Defendant on behalf of the Second Defendant entered into an agreement with Xpress Mortgages entitled “Mandate to Act”. Xpress Mortgages was a trading name of a company called Loans and Mortgages of Australia Pty Ltd with whom the agreement was made. The agreement relevantly provided:

7. [51]

   That agreement makes clear that Xpress Mortgages was the Defendants’ broker. Mr Bragg sought to argue that even if it was the Defendants’ broker it was, as he put it, a double agent, which I took to mean that it was also a broker acting on the Bank’s behalf. The word “exclusively” in the contract would appear to be a complete answer to such a submission.

8. [52]

   As indicated earlier, it is not clear if the Bank was approached by Xpress Mortgages or came to be involved by direct arrangement with Mr Bragg. However, what is clear is that there is nothing in any of the Bank documents that even suggests a discussion concerning a loan for 15 years. All of the relevant material is found in the various letters of offer and other documents to which reference has already been made. Mr Bragg claimed in submissions that in his first discussion with Mr Michael they were discussing “a 10 to 15 year loan”. There is simply no evidence to support such a submission.

9. [53]

   The various letters of offer from the Bank limited the term of the loans in the manner I have set out. There is nothing in the contemporaneous material indicating any concern or complaint about those terms.

10. [54]

    It should not be forgotten that the Second Defendant exchanged contracts to buy the land before Mr Bragg approached the Bank for the money to complete the purchase and to complete the development. The Defendants were in no position to make demands about the length of the loan facilities. The loan agreement of 13 May 2011 was no doubt accepted by the Defendants because they had to settle the purchase. That position had not been brought about by the Bank.

11. [55]

    This complaint appears to be related to assertions made by Mr Bragg that in the email of 8 August 2011 (set out at [10] above), Mr Michael imposed an additional requirement about the staging of the development that was not contained in the loan agreement set out in the letter of offer of 6 July 2011. Mr Bragg submitted that the 8 August 2011 email was a requirement by the Bank that the staging of the balance of the development be broken down into lots of three villas at a time.

12. [56]

    However, Mr Bragg agreed during submissions that he was the one who wanted to do it in lots of three. An email he sent to Mr Michael on 9 November 2011 confirms that any change in the staging originated with him. That email relevantly reads:

13. [57]

    That email and Mr Bragg’s agreement that it was he who wanted to carry out the bulk of the development in lots of three demonstrates that what Mr Michael was seeking to achieve in the email of 8 August 2011 was to have written confirmation from the council of a development approval broken down by staging as the Defendants desired. Mr Michael was not seeking to impose additional terms over and above those contained in the letter of offer of 6 July 2011. Indeed, one of the conditions precedent in that letter was this:

14. [58]

    Although it was not established on the evidence that the Bank did know that repayments were to be made from capital, the conditions attached to the loan offer of 6 July 2011, and the subsequent letters of offer, pointed in that direction. That was no doubt why it was a condition that physical development was to commence within 30 days of the property settlement “and to be finalised prior to 30/09/2011”.

15. [59]

    Similarly, the letter of offer of 9 March 2012 required that physical development be finalised prior to 30/04/2012 and in that respect failure to achieve it would be considered a review event.

16. [60]

    When the work was not completed by 30 April 2012 Mr Bragg told Mr Michael that he thought full completion was possible in three to four weeks and was hopeful of obtaining titles for settlement in June. Again, on 12 June 2012 Mr Bragg told Ms Hughes from the Bank that construction of the villas was complete with minor internal electrical connections to be completed. Internal road works were to be completed and sewer works were required to finish the project. He expected the remaining work and the development to be completed in six to eight weeks.

17. [61]

    Finally, on 15 October 2012 Mr Bragg provided reasons to Mr Michael why the development had not been completed.

18. [62]

    All of this evidence suggests that Mr Bragg always had a considerably shorter time frame than 15 years and that the Bank indeed would be repaid from the sale of the units. The Defendants executed each of the loan offers without any complaint that the loan was not for 15 years or for a longer period. The reason for that appears clearly to be that Mr Bragg fully expected to have completed the development within the time stipulated in each loan offer so that repayments could be made to the Bank.

19. [63]

    Although paragraph 7(b) of the Defence asserts that the Bank delayed completion of the project by withholding progress payments, there is no complaint shown in the contemporaneous documents by Mr Bragg to the Bank about any failure of the Bank to make such payments. Mr Bragg offered a number of different excuses to the Bank for the failure to complete the project but none of those excuses was that the Bank withheld progress payments.

20. [64]

    It is apparent from the diary note of Mr Michael of 7 May 2012 that the Defendants had Mr Djekovic of Djekovic, Hearne and Walker acting for them at that time. The diary note says:

21. [65]

    Mr Michael noted in the diary note the matters in relation to possible completion in three to four weeks. The diary note relevantly went on to say:

22. [66]

    The diary note went on to say that Mr Bragg sought advice about paying a small progress claim. Mr Michael then said that Mr Bragg needed to discuss the position quickly with the various unit purchasers and seek their confirmation that they still wished to proceed with their purchases even though sunset clause dates may be reached. Mr Bragg advised that he would do this and consult his solicitor on the subject when they were meeting that week.

23. [67]

    The diary note of Alison Hughes of 12 June 2012 noted, as I have referred to above, that Mr Bragg advised that the construction of the villas was complete with some electrical connections, internal road works and sewer works to be finished. The diary note went on to say this:

24. [68]

    None of this contemporaneous material suggests any form of duress. Moreover, the Defendants were seeking a further extension of the loan on top of the extension that had been provided in March 2012. That was in circumstances where the original loan was repayable on 31 December 2011.

25. [69]

    In Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 McHugh JA (with Samuels and Mahoney JJA agreeing) said (at 45-46):

26. [70]

    In Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36 McLure P said:

27. [71]

    This passage was followed by the Court of Appeal in Victoria in Doggett v Commonwealth Bank of Australia (2015) 47 VR 302; [2015] VSCA 351 at [73].

28. [72]

    In the present case there were no unlawful threats by the Bank. Indeed, the Defendants do not show that there were threats of any sort. It must be asked, therefore, whether the Bank acted unconscionably in relation to the entry into the Loan Agreement of 20 June 2012.

29. [73]

    In Australia and New Zealand Banking Group Limited v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344 the Court rejected the notion that a transaction may be set aside “on the basis of unconscionable conduct, absent any special disability, in circumstances where all that can be said is that the victim “is by pressure impeded” from following his or her best interests. The Court continued at [68]:

30. [74]

    The Defendants both wanted and needed a further extension of the loan. The development had not been completed by two dates stipulated by the Bank, nor had the facilities been repaid by two repayment dates. As the diary note of 7 May 2012 makes clear it was Mr Bragg who was asking the Bank to continue funding the development through to completion.

31. [75]

    Nothing in the evidence suggests the absence of choice for the Defendants to enter into the loan agreement constituted by the letter of offer of 20 June 2012. If there was any absence of choice, it was only that the Defendants needed a further extension. That position had been brought about their failures. The loan agreement of 20 June 2012 was not entered into under duress.

32. [76]

    The diary notes of 7 May 2012 and 12 June 2012 are also a complete answer to the assertion appearing in paragraph 3(a) of the Defence which claims that the Bank created a new contract without consultation with the Defendants.

33. [77]

    In any event, the Defendants executed the deed of 13 June 2014 where they expressly acknowledged that the Second Defendant was indebted to the Bank for the debt (which was defined as being the sum of the business loan and the overdraft and that the Bank was entitled to possession of the Lake Conjola property pursuant to the Lake Conjola property mortgage.

34. [78]

    The Bank seeks to rely on the deed of 13 June 2014 by asserting that the Defendants are estopped from denying that the Second Defendant is indebted to the Bank, that the guarantee by Mr Bragg is valid and subsisting and that the Bank is entitled to possession of the Lake Conjola property.

35. [79]

    The difficulty for the Bank, however, is that it does not bring its claim against the Defendants in reliance on the deed. It pleads in the Statement of Claim the loan agreement of 20 June 2012, the entry into the mortgage, the failure to repay the monies due by 30 September 2012 and the entitlement to claim possession based on that default.

36. [80]

    After the Defendants pleaded duress in relation to the loan agreement of 2012, the Bank filed a reply pleading that the Defendants were estopped from pleading or adducing evidence to the effect that the loan agreement dated 20 June 2012 was entered into under duress because in the deed of 13 June 2014 the Defendants acknowledged that the loan agreement of 20 June 2012 was valid and binding upon them. The Bank could have amended its claim to sue alternatively on the deed by reason of an event of default under that deed. The Bank chose not to do so. In those circumstances the principle is that an estoppel will not arise to prevent the Defendants from impugning the loan agreement of 20 June 2012.

37. [81]

    In Carpenter v Buller (1841) 8 M & W 209; 151 ER 1013 at 1014 Parke B delivering the judgment of the Court of Exchequer, said:

38. [82]

    The principle has been reaffirmed in more recent times in McCathie v McCathie [1971] NZLR 58; Re Patrick Corporation Ltd and The Companies Act [1981] 2 NSWLR 328 at 332-333; and Offshore Oil NL v Southern Cross Exploration NL (1985) 3 NSWLR 337 at 341-345. In the last case, Clarke J (as his Honour then was) considered whether the principle might have been liberalised by the approach of Lord Denning MR in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84 at 121ff but concluded, partly in reliance on what had been said subsequently in the English Court of Appeal in Keen v Holland [1984] 1 WLR 251; [1984] 1 All ER 75, that a single judge of this Court should strictly apply the rule stated by Baron Parke (see at 344-345).

39. [83]

    Accordingly, no estoppel arises as a result of the deed of 13 June 2014 as far as the validity of the loan agreement of 20 June 2012 is concerned nor the indebtedness of the Defendants. Nevertheless, as Baron Parke said, the recital can certainly be used as evidence of what is asserted. What was agreed by the execution of the Deed is further support for the conclusion I have reached that no duress was involved in the execution of the loan agreement of 20 June 2012.

40. [84]

    For the reasons given in the last section of this judgment, this issue does not really arise. However, it should be noted that at the time the Defendants and Mrs Bragg executed the deed, a Solicitor’s Certificate was provided in relation to each of Mr and Mrs Bragg. Those solicitors were solicitors in the firm which was acting for the Defendants. The solicitor who provided the certificate for Mr Bragg was Mr Djekovic who had been retained by Mr Bragg from before the purchase of the property and at the time he entered into the June 2012 agreement. It could not be said of Mr Djekovic that he did not understand the background to the Deed he was advising about.

41. [85]

    The Solicitor’s Certificate said this in part:

42. [86]

    Quite apart from that Certificate, there was no evidence, apart from assertion, from Mr Bragg that he or the Second Defendant entered into the Deed under duress. Whilst it is true he may have been under some financial pressure, that pressure was entirely brought about by his failure to complete the development in compliance with a number of deadlines that he promised in the various loan agreements, and in his inability ultimately to sell the development to repay the money that was undoubtedly owing to the Bank.

43. [87]

    No specific evidence was given by Mr Bragg of how the Deed came to be negotiated and executed. The evidentiary onus was on him to do so when the Bank sought to rely on the Deed, not as the basis for its claim but as evidence that the Defendants acknowledged their indebtedness and the Bank’s rights as a result.

44. [88]

    In my opinion the Deed of Settlement of 2014 was not entered into under duress.

45. [89]

    The only matter raised by Mr Bragg relating to the Bank preventing the sale of the property was an assertion by him that the Bank would not give him an exact payout figure so that he could enter into a contract to sell the property.

46. [90]

    This assertion by Mr Bragg does not seem to take account of correspondence passing between his solicitors and the Bank’s solicitors nor of the fact that until a settlement date is appointed the Bank cannot calculate precisely what will be owing.

47. [91]

    On 6 September 2016 solicitors acting for the Defendants wrote to the Bank’s solicitors. The letter said (inter alia):

48. [92]

    The Bank’s solicitors replied on 22 September 2016 saying that the Bank took no position in relation to the proposed upcoming auction nor did the Bank consent to its occurrence. The letter concluded by saying:

49. [93]

    Mr Djekovic replied on 23 September by email saying that the Bank had failed to provide confirmation of the amount claimed to be secured by the Bank’s mortgage.

50. [94]

    That same day the Bank’s solicitor replied by email saying that an indicative payout figure as at that date was approximately $1,656,709. The email said that the figure was subject to change and in particular was an estimate because it included enforcement costs which were yet to be finalised. The email concluded by saying that an exact payout figure would be provided if and when the borrower was in a position to repay the loan.

51. [95]

    An email from Mr Djekovic to the Bank’s solicitor on 14 October 2016 said this:

52. [96]

    Two things emerge from that correspondence. The first is that the Bank provided an indicative figure. It is clear that such an indicative figure was sufficient because the intention of the solicitors was not to sell for a price less than that figure plus $100,000. Further, the Bank gave an indication of what other costs might be involved.

53. [97]

    The second thing is that offers were made at or after the auction which well exceeded what was owing to the Bank. When I asked the Defendant during his submissions why he did not accept the offer that was way above the indicative figure the Defendant said that he had another debt with people who had put a caveat on the property. He also told me that the prospective buyers had reduced their offer to $2m. There was no evidence of that assertion but, assuming it is correct, that is still a figure well in excess of what the Bank is owed.

54. [98]

    If the Defendants are unable to accept those offered sums because other debts have to be paid out of the sale, that is a very clear indication that it is not the Bank which is preventing the sale of the property.

55. [99]

    In any event, even if it was established there was some failure on the Bank’s part in this regard, that is not a matter which goes to impugn the right of the Bank to obtain possession of the property. It may, at best, justify a claim for damages against the Bank. However, no such claim is made in the present proceedings.

Conclusion

1. [100]

   Nothing put forward by the Defendants establishes any reason why the Bank is not entitled to possession of the property. The evidence does not demonstrate any wrongdoing on the part of the Bank whether illegal or unconscionable. The evidence shows that the Bank granted a number of indulgences to the Defendants when the Defendants were not able to comply with their obligations under the arrangements with the Bank. The Bank took no advantage of the Defendants who, in any event, were being advised by solicitors who acted for them from a time before the Bank was approached up until after litigation commenced.

2. [101]

   Accordingly, I make the following orders: