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TTR1 Pty Ltd v Ruckert[2019] QDC 182

TTR1 Pty Ltd v Ruckert[2019] QDC 182

DISTRICT COURT OF QUEENSLAND

CITATION:

TTR1 Pty Ltd v Ruckert & Butcher [2019] QDC 182

PARTIES:

TTR1 PTY LTD

ACN 608 105 700

(plaintiff)

v

ANTHONY ALAN RUCKERT 

(first defendant)

ROHAN CHARLES BUTCHER

(second defendant)

FILE NO/S:

3997 of 2018

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

25 September 2019

DELIVERED AT:

Brisbane

HEARING DATE:

7-9 August, 16 September 2019 

JUDGE:

Porter QC DCJ

ORDER:

  1. Judgment shall be entered for the plaintiff against each of the defendants in the amount of $360,000 plus interest.
  1. I will hear the parties as to costs.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – GENERAL OFFERS AND THEIR ACCEPTANCE – where the parties entered into a Loan Deed and a Purchase Deed in respect of property – where the defendants defaulted under both Deeds – where the parties corresponded about settlement of debts due under the Loan Deed – whether the parties reached a binding settlement agreement – whether any binding settlement gave rise to an immediate accord and satisfaction of the existing claims under the Loan Deed – whether any binding settlement gave rise to only conditional accord and satisfaction of the existing claims under the Loan Deed such that absent performance of the terms of the settlement agreement, the defendants remained liable on the guarantees

Bentleys (Sunshine Coast) Pty Ltd & Ors v Thomson [2018] QCA 358

Fraser v Elgen Tavern Pty Ltd [1982] VR 398

Howes v Miller [1970] VR 522

Jones v Dunkel (1959) 101 CLR 298

King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251

Masters v Cameron (1954) 91 CLR 353

McDermott v Black (1940) 63 CLR 161

Netglory Pty Ltd v Caratti [2013] WASC 364

Osborn v McDermott [1998] 3 VR 1

Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605

Westpac Banking Corporation v Kingsland (1991) 26 NSWLR 700

Property Law Act 1974 (Qld), s 56

COUNSEL

M K Callanan for the plaintiff

The second and third defendants each appeared on their own behalf

SOLICITORS:

Moore Lawyers for the plaintiff

The second and third defendants each appeared on their own behalf

Contents

Introduction3
Factual background4

Introduction

4

Events leading up to purchase of 209 Jellicoe Street

4

The proposal for the 207/209 Jellicoe Street development

5

Purchase of 207 Jellicoe Street

7

TPB contracts to buy 207 Jellicoe Street

7

The Sandstone Point Hotel lunch

8

The Loan Deed and the Purchase Deed

9

Execution of the Loan Deed

14

Settlement on 207 Jellicoe Street and advance of funds under the Loan Deed

16

Key terms of the Loan Deed

17

Key terms of the Purchase Deed

17

Default under the Deeds

18

The settlement negotiations

19

The demands and the receivers

33
The witnesses33
Further findings36

Mr Catton’s instructions

36

The 21 April telephone call

36
No binding settlement agreement37

The defendants’ cases

37

Mr Ruckert’s pleaded case and submissions

37

Mr Butcher’s pleaded case and submissions

38

Pleading issues

40

Analysis of the contract formation issue

41

Character of 16 April proposal as an offer

41

No acceptance by the 23 April email

43

Subsequent communications do not give rise to any binding settlement agreement

46

Conclusion

50
Any settlement agreement was conditional on performance50

Relevant principles

50

16 April/23 April agreement: conditional accord and satisfaction

52

Other forms of agreement in no different position

52

No breach by TTR1 of its duty as mortgagee

53

Conclusion

54

Introduction

  1. [1]
    The plaintiff (TTR1) sues the defendants for $360,000 allegedly owed by them as guarantors of a loan made to a company called The Property Bar Pty Ltd (TPB) pursuant to the terms of a written loan agreement dated 7 October 2016 and supported by a mortgage of certain land acquired with the loan funds by TPB.  The plaintiff’s primary case is that the loan agreement and guarantees were in the form of a deed, that the advance was made and not repaid, and that demands had been made on the guarantors but not answered. 
  2. [2]
    At trial, the first defendant (Mr Ruckert) accepted prima facie liability under the guarantee.  He defended there had been a subsequent settlement agreement between TTR1 and TPB which discharged TPB’s principal liability under the loan agreement and therefore discharged any liability under the guarantee.
  3. [3]
    The second defendant (Mr Butcher) admitted the loan and the guarantee, however he disputed liability on the guarantee on the basis that the guarantee was not in the form of a deed because it was not properly attested and the promise to guarantee was otherwise unsupported by consideration.  The plaintiff responded to this by alleging that, if the guarantee was not in the form of a deed, consideration had been given in any event or, if not, Mr Butcher had engaged in misleading or deceptive conduct by representing that the guarantee was in the form of a deed.  If he was found to be bound by the guarantee, Mr Butcher also alleged that his liability under the guarantee had been discharged by a subsequent agreement between TTR1 and TPB.
  4. [4]
    Mr Butcher also contended that TTR1 had breached its duty as mortgagee to TPB and to him as guarantor in failing to exercise its power of sale and that he could set off that loss against liability under his guarantee (if it was found to bind him). 
  5. [5]
    For the reasons to follow, I find that:
    1. (a)
      The document containing the guarantee given by Mr Butcher was properly attested and was binding on him as a deed;
    2. (b)
      The liability of defendants on the guarantee was not discharged by any settlement agreement between TTR1 and TPB; and
    3. (c)
      There was no breach of any duty known to the law by TTR1 in its exercise of its rights under its mortgage.
  6. [6]
    Accordingly the plaintiff is entitled to judgment against each of the defendants.

Factual background

Introduction

  1. [7]
    Only five witnesses were called at trial: the two directors of the plaintiff (Mr Robertson and Ms Cantrill), the person identified on the Loan Deed as the attesting witness (Mr Franssen), the plaintiff’s solicitor at the time (Mr Catton) and Mr Ruckert.  Mr Butcher did not give or call evidence.  Much of the evidence in this trial was in documentary form or was otherwise not contentious.  There were some key factual matters, however, which were disputed.  Such matters are identified in the course of the following analysis.

Events leading up to purchase of 209 Jellicoe Street

  1. [8]
    Mr Richard Robertson and Ms Caroline Cantrill are partners in business and in life. They are the directors of the plaintiff.[1]  For some time prior to the events the subject of these proceedings, they jointly carried on the business on a small scale of buying and renovating houses to hold or for resale. 
  2. [9]
    Mr Ruckert has a background in civil engineering and computing.  In the mid-1980s he did some property investing with success and from 1987 started working as a property developer.  He gave evidence he had done projects valued at up to $30 million.  Mr Robertson and Ms Cantrill met Mr Ruckert in about 2013.  At that time it appears Mr Ruckert was carrying on business as a finance broker, though it seems he was also carrying on business in various other ways related to property development.  For example, at the time of the genesis of the Jellicoe Street transactions which are central to this case, he was working as a “project manager/broker” on a six or seven townhouse project in the same street. 
  3. [10]
    Mr Ruckert initially acted as finance broker for Mr Robertson and Ms Cantrill and their corporate entities.  Mr Ruckert soon became a trusted friend and general adviser on property matters for Mr Robertson and Ms Cantrill.  Their trust in him at the time is reflected in Mr Robertson’s request that Mr Ruckert act as a trustee of a trust of which Mr Robertson was a beneficiary for the purposes of moving trust funds on-shore from New Zealand.  Mr Ruckert introduced Mr Robertson and Ms Cantrill to the idea of property development and I accept their evidence that they believed he had knowledge and experience in the area vastly exceeding their own.  At around this time, Mr Ruckert also appears to have advanced $100,000 to cover a financing shortfall on a settlement on a property purchased by Mr Robertson and Ms Cantrill or one of their companies
  4. [11]
    It was in this context that Mr Robertson and Ms Cantrill came to invest in a property at 209 Jellicoe Street at Toowoomba, which investment was the genesis of this dispute.  The investment came about in this way.  While working on the other project referred to in paragraph [9] above, Mr Ruckert noticed that 209 Jellicoe Street was for sale.  It is uncontentious that it was Mr Ruckert’s suggestion to Mr Robertson and Ms Cantrill that they purchase 209 Jellicoe Street and build a similar project to the one he was working on.  That is, to develop six or seven townhouses.[2]
  5. [12]
    Mr Robertson and Ms Cantrill thought that suggestion worth pursuing.  In about mid-2015, they purchased 209 Jellicoe Street.  They also retained Mr Ruckert as project manager to develop the site on their behalf.  It appears Mr Ruckert was paid a fee for his project management services.[3]
  6. [13]
    209 Jellicoe Street had a dwelling located on it, but it was in poor condition.  Further, Mr Ruckert advised that it was not worth obtaining tenants as that would interfere with the conduct of the development.[4]
  7. [14]
    It is not clear how much progress, if any, was made in the development project initially contemplated for 209 Jellicoe Street between acquisition of the property in mid-2015 and December 2015.  However, it appears TTR1 paid Mr Ruckert some $34,580 for project management services.[5]

The proposal for the 207/209 Jellicoe Street development

  1. [15]
    In about December 2015, Mr Ruckert started to consider acquiring the neighboring property at 207 Jellicoe Street and conducting a larger development on both sites (the Development).[6]  Part of Mr Ruckert’s duties as project manager for the 209 Jellicoe Street development appeared to have included mowing the lawn at the property.  In the course of doing so, he began negotiations with the owner of 207 Jellicoe Street for the purchase of that property.
  2. [16]
    Each of Mr Robertson and Ms Cantrill said that Mr Ruckert told them about his idea for the larger Development but that they did not contemplate being involved as principals or joint venturers in the Development.  Rather, they each said that their understanding was that Mr Ruckert was going to arrange for an investor syndicate to buy 209 Jellicoe Street from them and that Mr Ruckert’s investors would carry out the Development.[7]
  3. [17]
    Consistent with that position, Mr Robertson said he first met Mr Butcher in mid-2016.  He said Mr Butcher came with Mr Robertson to a premises that he and Ms Cantrill were renovating.  He said that Mr Ruckert and Mr Butcher showed him plans for the larger development but that he was not interested because he understood that Mr Ruckert or his investors would buy 209 Jellicoe Street.[8]  Ms Cantrill gave similar, evidence about that meeting and her attitude to what was shown to them.[9] 
  4. [18]
    Mr Ruckert’s evidence as to the initial involvement intended for Mr Robertson and Ms Cantrill in the Development was a little different.  He said that his original idea was to carry out the Development by a joint venture between him or investors he introduced on the one hand and Mr Robertson and Ms Cantrill on the other.  He said this was necessary because he believed the larger size of the Development was too much for Mr Robertson and Ms Cantrill.[10] 
  5. [19]
    There is some documentary evidence that might suggest that Mr Robertson and Ms Cantrill originally contemplated that they would participate as joint venturers in the Development with interests associated with Mr Ruckert in the period up to about May 2016.  There are emails from Mr Robertson showing interest in the development process for the Development which is more consistent with Mr Ruckert’s recollection than that of the Mr Robertson and Ms Cantrill.[11]  Those emails also show Mr Robertson and Ms Cantrill (or TTR1) were paying expenses of the Development. 
  6. [20]
    However, that evidence might also be thought to be consistent with Mr Robertson and Ms Cantrill following the progress of the Development and funding some of the steps so as to bring about an early and profitable buy out of 209 Jellicoe Street by Mr Ruckert’s investors.  Certainly by May 2016, they had held that property for about a year as an investment with no income stream and no prospect of the original development proposal being carried out, Mr Ruckert having abandoned that proposal in favour of the joint proposal.
  7. [21]
    The documentary evidence on how the Development was initially planned to be carried out from the perspective of Mr Robertson and Ms Cantrill was incomplete and their evidence was imprecise on the early stages.  It seems likely to me that this imprecision reflects the fact that in the early stages of the proposal for the Development, it was not really clear to them to exactly how TTR1 would be involved and why. Mr Robertson and Ms Cantrill had no experience with development and relied on Mr Ruckert, and it is hard to discern from the evidence what Mr Ruckert said to them from time to time in the early stages. 
  8. [22]
    Ultimately, it is unnecessary to make a final finding on how it was intended that TTR1 be involved in the early stages because the matter is of no relevance to the resolution of the issues in this case.  That is so for two reasons:
    1. (a)
      First, the key point is that it was clearly never intended that TTR1 carry out the whole Development itself.  That is not in dispute in the evidence before me (and it is inconsistent, incidentally, with Mr Ruckert’s email to his solicitors at sent on 28 August 2016[12]); and
    2. (b)
      Second, as will be seen (see paragraph [32]), Mr Robertson and Mr Cantrill must have withdrawn any interest they did have in being equity participants with Mr Ruckert’s investors in the Development in any way by mid-2016. 

Purchase of 207 Jellicoe Street

TPB contracts to buy 207 Jellicoe Street

  1. [23]
    There is little evidence as to how the Development was progressing after about May 2016.  It might be inferred from the lack of evidence on the subject, that not a great deal of progress was being made.  Certainly, there was no persuasive evidence of any investors being interested in a concrete way in funding the Development over this period (or at any time really).  There were various assertions to the contrary from time to time by Mr Ruckert, but those assertions were generally in vague terms.
  2. [24]
    Despite the seeming lack of interest of external investors (or perhaps because of it) on 2 August 2016, Mr Ruckert caused TPB to enter into a contract to buy 207 Jellicoe Street.[13]  As has been noted, that was a company owned and controlled by Mr Ruckert.  Mr Butcher was briefly a director of TPB at about this time. 
  3. [25]
    Ms Cantrill said that the decision by Mr Ruckert to purchase of 207 Jellicoe Street through TPB occurred without any prior warning to or discussion with Mr Robertson and Ms Cantrill.[14]  She said Mr Ruckert called Mr Robertson one day and told Mr Robertson he was on the way up to sign the contract.  The contract was signed on 2 August 2016.  The phone call must have occurred on or about this date.  Ms Cantrill gave evidence that she called Mr Ruckert immediately on being told by Mr Robertson what was happening and told him not to buy the property thinking that she and Mr Robertson were going to fund it.  I accept that evidence.  Apart from the fact that I found Ms Cantrill to be generally a reliable historian, such a comment would be likely from her given the delay which had already occurred in the realisation of 209 Jellicoe Street.
  4. [26]
    Mr Ruckert confirmed a conversation occurred on the way up to contract to buy the lot.  He did not give evidence about Ms Cantrill’s recollection nor was he cross-examined on it.  However he also suggested that Mr Robertson and Ms Cantrill would have known he was going to buy the property because he would have been staying in contact with the developments of the project.[15] There was no documentary evidence supporting this assertion.  It was given in terms of something that would have happened not something that Mr Ruckert recalled and it was unsupported by any context or document.  To the extent Mr Ruckert intended to convey that he had been in on-going contact about the possibility of TPB buying 207 Jellicoe Street prior to  2 August 2016, I reject it.
  5. [27]
    What is also established on the evidence is that the request which was made by Mr Ruckert that Mr Robertson and Ms Cantrill fund the acquisition of 207 Jellicoe Street came as an unpleasant surprise to them.  It is to that request I now turn.

The Sandstone Point Hotel lunch

  1. [28]
    On 24 August 2016, Mr Robertson and Ms Cantrill met Mr Ruckert for lunch at the Sandstone Point Hotel.  At that lunch, Mr Ruckert asked Mr Robertson and Ms Cantrill to fund the settlement of the contract to buy 207 Jellicoe Street.  Settlement was due on 9 September 2016.[16]
  2. [29]
    No witness gave a detailed account of the conversation on that day.  Mr Robertson’s evidence was limited to recalling being asked to fund the settlement.  Ms Cantrill’s evidence did not go much further.  Both, however, had a clear recollection of being asked to fund the acquisition and that this was the first time this had been suggested.  They also both recalled feelings of dismay at being asked.  Each recalled being concerned about the request in circumstances where they understood at that time that they were going to be bought out of the Development by Mr Ruckert’s investors.  Each said they were concerned about what they were asked to do and only reluctantly agreed to fund the purchase.[17]  Although they did not specifically recall expressing their concerns, it is highly probable in my view that they did so. 
  3. [30]
    Mr Ruckert’s evidence on the other hand tended to suggest that:[18]
    1. (a)
      He put the proposal to Mr Robertson and Ms Cantrill on the basis that they could fund the acquisition as seed funding for the Development if they chose and that he queried whether they were “okay with this”; and
    2. (b)
      He could have obtained alternative funding if they were too concerned about the risks of doing so. 
  4. [31]
    To the extent that Mr Ruckert intended to convey that he put a choice to Mr Robertson and Ms Cantrill and suggested that if they did not fund the acquisition, he could still manage to fund 209 Jellicoe Street, I prefer the evidence of Mr Robertson and Ms Cantrill and do not accept that of Mr Ruckert on this point. 
  5. [32]
    I have already mentioned that I accept the evidence of Mr Robertson and Ms Cantrill that by the middle of 2016, they were interested only in being bought out of 209 Jellicoe Street, not in being involved in the Development.  It is convenient at this point to identify the reasons why:
    1. (a)
      First, their evidence is consistent with the uncontentious fact that they were novices in this kind of property development. Further, the smaller project had been abandoned by Mr Ruckert and the larger project was making little progress.  Their funds had been tied up with no income from rent for over a year and had no prospect of income for the foreseeable future.  It is unsurprising that in that situation they would seek an exit from the large project which had replaced the smaller one they had thought they were going to undertake;
    2. (b)
      Second, as will be seen, the agreements signed by the defendants and TPB finalised in early September 2009 included an agreement for TPB to buy them out of 209 Jellicoe Street.  That is consistent with their evidence; and
    3. (c)
      Third, Mr Robertson and Ms Cantrill struck me as persons who were reasonably cautious in the extent to which they took risks in their small scale property activities.  It was recognised by Mr Ruckert that even the 209 Jellicoe Street project was a significant step for them.  It is consistent with their approach to their affairs that they would be seeking an exit from the Development as soon as possible once it seemed that the original project was no longer going to happen and the larger one seemed to involve delay and risk.
  6. [33]
    In that context, it is highly probable that if Mr Ruckert had suggested or even implied that he had an alternative source of funding, or that Mr Robertson and Ms Cantrill were not needed to fund the settlement, then they would have chosen not to fund 207 Jellicoe Street.  To the extent Mr Ruckert’s evidence suggested as much, I reject it. 
  7. [34]
    Further, I reject Mr Ruckert’s evidence that he had alternative funding he could have put in place if they had said no.  He was asking for funding just 15 days before settlement.  His evidence that he could have funded the settlement in another way was not supported by any documentary evidence and his oral evidence on the point was vague.[19]  Mr Robertson and Ms Cantrill were reluctant lenders well outside their comfort zone, as Mr Ruckert knew.  There would have been no good reason to approach them other than that Mr Ruckert had no other credible alternatives.
  8. [35]
    I find that Mr Robertson and Ms Cantrill were reluctant funders of the acquisition of 207 Jellicoe Street, made that clear to Mr Ruckert, and would have avoided doing so if they thought they had an alternative which would protect their investment in 209 Jellicoe Street.

The Loan Deed and the Purchase Deed

  1. [36]
    Although the discussion of the details of Mr Ruckert’s proposal for funding 207 Jellicoe Street and buying 209 Jellicoe Street was not the subject of oral evidence, the situation of both parties is reflected in email exchanges soon after the Sandstone Hotel meeting.
  2. [37]
    On 28 August 2016, Mr Ruckert sent instructions in the following terms to his solicitors:

Hi Dave and Troy,

As discussed with Dave the other day, BAR has come to an agreement with one of my clients for them to fund the purchase of 207 Jellicoe St. Client currently owns the property next door at 209 Jellicoe St (which will be sold to BAR in the future).

Purchase price is $344,000 with $5,000 deposit paid, leaving $339,000 plus costs at settlement.

Client has agreed to fund an amount of $360,000 towards the purchase/development of #207.

Funder is TTR1 Pty Ltd – company detail attached.

What is required

Purchase of 207 Jellicoe St

-  Loan Agreement between The Property BAR Pty Ltd and TTR1 Pty Ltd – TTR1 Pty Ltd lending to The Property BAR Pty Ltd - $360,000 for purchase and cost of 207 Jellicoe St

-  TTR1 Pty Ltd is have [sic] a mortgage over 207 Jellicoe

-  Loan agreement to be $360,000 drawdown / 12 month loan term / interest capitalizing at 10% pa flat rate / loan can be paid out early at pro rata per month interest charge / The Property BAR to pay costs from own funds or from the loan

-  Settlement to be Friday 2 Sep 2016

Heads of Agreement for 209 Jellicoe St

-  The Property BAR agrees to pay interest at 10% pa (flat rate) on the amount of $457,435.48 starting at settlement of the purchase / loan for 207 as noted above – expected to be Friday 2 Sep 2016

-  Term to be 12 months – interest capitalizing – but generally coinciding with the loan as noted about for purchase of 207 Jellicoe St

-  TTR1 Pty Ltd agrees to sign all required applications and forms to allow the lodgement and approval for a DA over the two sites

-  TTR1 Pty Ltd agrees to give The Property BAR Pty Ltd full access to the property at 209 Jellicoe St for the purpose of the DA

-  TTR1 Pty Ltd agrees to sell 209 Jellicoe St to The Property BAR Pty Ltd for the amount of the loan agreement of $457,435.48 plus capitalised interest within 12 months or at a time as agreed between the parties on completion of the DA process

I know this is short notice. Richard and Carolyn owners of TTR1 Pty Ltd are clients of mine and they have several business connections with me already. They were to develop 209 & 207 themselves but have now opted to fund The Property BAR in a semi JV to do the development.

TTR1 is preparing the funds for transfer into your trust account for next Wednesday or Thursday (send me the details please), ready for settlement on Friday. So we need these agreements – at least the loan for the $360,000 for the purchase of 207 – by Tuesday? If required the Heads of Agreement for 209 can follow.

This will just be a loan agreement with the option to purchase and will not go through the AFSL / Lending set up (do not want to settle or actually go to contract on 209 just yet due to stamp duty costs etc). We are planning to set up the AFSL etc structure to buy out TTR1 in the future after the DA is approval [sic] and for the AFSL to raise the funding for the payout of TTR1 and construction of the development.

[Underlining in original, bold text added]

  1. [38]
    On 29 August 2016, Mr Robertson sent an email to Mr Ruckert in the following terms:[20]

Hi Anthony,

We are still trying to get our heads around the finer details of what you presented law Wednesday – the whole thing has changed considerable [sic] from the original plan & it has created a bit of panic here:

Some thoughts:

We understand the plan now as: we lend BAR $360k to buy 207 (This is not good), then Investors buy 207 & 209 (This is good).

This meanwhile leaves us with a lot of eggs in one very uncertain basket, for ___ ??? months until the Investor Cavalry arrive. (This is not good)

- particularly, and despite your re-assurances, as Gordon St hasn’t moved yet. However, from where we were sitting, Hood St happened quite quickly…?

- what was your promised timeframe for all this again ?

Also, if we are lending $360k to BAR, to be in the 207 Solicitors account this Friday, our lawyer will need time to check your paperwork, before any money moves anywhere, before Friday…

Coffee ??

  1. [39]
    Mr Ruckert responded as follows:[21]

Hi Carolyn and Richard,

Can we get together tonight? Understand this is a stretch but due to delays with Matusik (Michael has been sick – I gave him my flu) we have been unable to prepare the full IM (Information Memorandum) to be able to raise funds for the purchase and have the investment structure set up. And Garry putting his house on the market meant we had to act or risk losing control of the block.

A draft copy of the IM is attached.

We are working to complete the Matusik information and the investment company structure this week and move on to the full wholesale raising from there.

I’m also looking to put in an allowance for profit share and/or wholesale purchase plus the interest payment in the IM so this will be a good deal for the investors.

I have written instruction to the solicitors to prepare mortgage docs for 207 so you will have a mortgage over the property at settlement as well as an agreement for the development to buy you out of 209, and start the clock on the 10% interest on both properties.

At this point I see this as the best way I can protect your input so far, I know you are investing more but it is so I can get the project to buy you out of 209 at a project on what you have invested, instead of driving the price down like I was forced to do with 207. Last thing you need is to have another development take control of 207 and try to buy you out of 209.

Everyone in the BAR group agrees that you will be look [sic] after and that you will make a profit on your investment so far. I have been thinking (have not talked to the others about it as yet) about of [sic] offering Richard a directorship of BAR, that way you have a say in what the development company does and you can see on the inside what is happening with this and the other project we have in the pipeline. It means you would be doing the part of the developer as well as the bank/investor.

If you look at 207 by itself there is an issue for you, but when combined with the buyout of 209 it bring [sic] it back to something better for you. At this point you are in all buy name the developer for the sites and BAR is doing the consulting work at no charge.

As you can see in the draft IM there is a profit to be made, land purchase price needs to adjusted [sic] and funding calculations are on the low side but in general it is showing that it is a good project. Michael Matusik is happy with the pricing of the new units, the down side of this is he believes that this is showing the Gordon Ave is overpriced at $330,000 to $430,000 – that is a problem for the project and something else I need to deal with. I was not part of the planning of that project or the original setting of the value of the units otherwise there would be a different result now and a different product on the site.

We are doing everything possible to set this up to be a successful project and if you can support it through this stage I will ensure you will make a good return on your money invested.

  1. [40]
    The following observations should also be made:
    1. (a)
      First, despite the optimism in that email and the draft Information Memorandum, there was no concrete evidence at trial that any investors were attracted to the Development;
    2. (b)
      Second, Mr Ruckert recognised both the reluctance of Mr Robertson and Ms Cantrill and their objective being to be bought out of the development; and
    3. (c)
      Third, the comment that Mr Robertson and Ms Cantrill were “in all but name the developer of the sites” might have been true, but it was inconsistent with any intention or wish they ever had.  That situation had been procured by Mr Ruckert’s conduct and influence.
  2. [41]
    Further, I note the bold text comment in the 28 August 2016 email.  Even on Mr Ruckert’s evidence at this trial, the statement that Mr Robertson and Ms Cantrill were to fund the Development themselves was wrong.  Further, the implication in the statement that they “opted to fund” TPB into a semi-JV was also misleading, at least to the extent it suggested a free and informed judgment. 
  3. [42]
    As I have found, the manner in which they reluctantly came to agree to fund the purchase of 207 Jellicoe Street could hardly be characterised in that way. Further, in cross-examination, Mr Ruckert sought to rely on Mr Robertson’s lack of written response to this email (which was copied to him), seemingly as indicating some acceptance of the truth of those comments.  Mr Robertson said he did note that comment and did object to it.  It might be thought that detail was reconstructed by Mr Robertson.  If so, of itself it does not much affect his credit.  It is clear from the other evidence and documents that Mr Ruckert’s statements were wrong. 
  4. [43]
    Mr Robertson sensibly sought legal advice on the issue.  He retained Mr Catton of Catton Roderick Lawyers to advise TTR1 on the transactions.  Mr Catton gave evidence that he advised Mr Robertson and Ms Cantrill to require personal guarantees.  I accept that evidence.  Although it was not specifically addressed in evidence, I infer the defendants were nominated to give guarantees because they were directors of TPB and because both were involved in the transactions (remembering Mr Butcher had met with Mr Robertson and Ms Cantrill about the Development earlier).
  5. [44]
    The documents were drafted by TPB’s lawyer, Mr Evans, largely on the terms specified in the 28 August 2016 email with personal guarantees added.  The documents were prepared quickly.  Settlement was due on 9 September 2016.  It appears that documents, signed and in a form satisfactory to Mr Catton, were provided to him on 8 September 2016.[22]
  6. [45]
    Mr Robertson gave evidence that he was not going to complete the transaction unless reassured that all documents had been properly executed.[23]  That was credible evidence given the deteriorating trust he had in Mr Ruckert, particularly given the proposal that TTR1 fund the purchase of 207 Jellicoe Street.  That was confirmed by Mr Catton who also gave evidence that he was concerned to ensure all documents were properly executed.  He gave evidence he reviewed the electronic versions of the transactions documents for proper signature and tried to insist on receiving originals before settlement.  When that was not possible in time for settlement, he accepted an undertaking from Mr Evans to courier originals to him.[24]  This is consistent with Mr Catton taking the care one would normally expect of a solicitor retained in a lending transaction.
  7. [46]
    Ultimately, the following documents were executed:
    1. (a)
      A Loan Deed between TTR1 and TPB and the defendants as guarantors;[25]
    2. (b)
      A Purchase Deed between TTR1 and TPB providing for TPB to purchase 209 Jellicoe Street;[26] and
    3. (c)
      A mortgage in registerable form of 207 Jellicoe Street given by TPB in favour of TTR1.
  8. [47]
    The mortgage is dated 8 September 2016.  It is clear from the documentary record that the Loan Deed and the Agreement were signed on the same date.  Those latter two documents were ultimately signed by TTR1 on 7 October 2016, the date those documents bear.

Execution of the Loan Deed

  1. [48]
    The originals of the Loan Deed and the Purchase Deed were not produced by either party at the trial. Copies were tendered without objection.  Apart from one issue, those two documents were not contentious.
  2. [49]
    That issue is of course the question of the validity of the manner of execution of the Loan Deed which is challenged by Mr Butcher.  He pleaded that the Loan Deed did not take effect as a deed because it was not validly attested by the witness.  That involves an issue of law and an issue of fact.  The issue of fact is whether Mr Butcher’s signature was in fact signed before the witness, Mr Franssen, as the attesting clause asserts.
  3. [50]
    Mr Franssen gave evidence.  At that time he was working as a plumber.  He recalled attending Mr Butcher’s business premises about the time of the execution of the Loan Deed because he had been called to the premises with a colleague to deal with a leak which caused significant damage.  He recalled being asked as they were leaving if they would witness some documents and he said he volunteered to do so.  He conceded that he did not specifically recall seeing Mr Butcher sign in front of him.  However he gave evidence that:[27]
    1. (a)
      He did recall Mr Butcher, and did recall Mr Butcher actually being in the room when he witnessed the documents.  In contrast he said he did not recall Mr Ruckert (but of course Mr Ruckert does not suggest that his signature was not properly attested);
    2. (b)
      He recalled the set out of the room and going in there to witness the documents;
    3. (c)
      He did not have a specific recollection of watching Mr Butcher sign but he was highly confident he would not have put his signature to the document without the presence of the other person.  He said he knew how “these things work and I wouldn’t have signed it had I not witnessed an actual signature, definitely”.
    4. (d)
      He had no previous or on-going relationship with anyone in the litigation and had not even known about the Court case until a week before he gave evidence.
  4. [51]
    Mr Franssen was cross-examined by Mr Butcher.  He put to Mr Franssen that he had already signed the document when it was put before Mr Franssen.  Mr Franssen disagreed. 
  5. [52]
    It is convenient to deal with this issue now.
  6. [53]
    It should be noted that when Mr Franssen first described what occurred, he said that he sat down, a document was put in front of him and he witnessed Mr Butcher’s signature.  On one view that could be interpreted as stating that he signed immediately a document which already had a signature.  However, this part of his evidence is equivocal.  It depends on what was meant by witnessing the signature.  That potential ambiguity does not persuade me to reject Mr Franssen’s evidence.  The plain tenor of the whole of his evidence was as stated in paragraph [50] above.  While it is true that his evidence relating to the actual observation of Mr Butcher signing is based on what he would have done rather than an actual memory, it is not surprising he might not recall seeing the signing occur. 
  7. [54]
    Further, his evidence that he would not have signed without actually witnessing the signature was persuasive for a number of reasons:
    1. (a)
      First, it was explained by a specific matter; i.e. that he knows how witnessing worked.  He was not challenged on this;
    2. (b)
      Second, he had no particular reason to give anything other than honest evidence.  No suggestion was made of partiality.  He had no link with any party and he did not strike me as someone eager to get into the spotlight of a trial. Quite the contrary; and
    3. (c)
      Third, his manner of giving evidence was consistent with the kind of attention to detail which is suggested by his approach to witnessing.  He was careful in identifying exactly what he specifically recalled and what he did not.
  8. [55]
    It is true that he was not cross-examined with any particular skill or effect.  However, that is no reason of itself to doubt his evidence.  A fortiori when Mr Butcher was the cross-examiner, who it can be assumed was familiar with his own recollection of the signing process. 
  9. [56]
    Finally on this issue, Mr Butcher chose not to go into evidence at all.  Mr Franssen’s account is not disputed by any other evidence.  Of course that does not mean I must accept it, but given it is otherwise persuasive evidence, it is relevant that there is nothing to contradict it from Mr Butcher.  One can therefore infer that his evidence would not have assisted his case on this issue.[28]  It might be thought a little strict to apply the rule in Jones v Dunkel to a litigant conducting his own case, but for two considerations: 
    1. (a)
      First, I did specifically warn Mr Butcher at the time he indicated he would not be giving evidence that if he did not, there would be no evidence to contradict Mr Franssen’s evidence;[29] and
    2. (b)
      Second, Mr Butcher’s case otherwise depended on little if any evidence that he could admissibly give on the other issues raised in his defence.  His recognition of that during the trial[30] seemed to be justified based on the nature of his defences, other than the witnessing point.  It is hard to identify any reason for not giving evidence other than that his evidence based on his recollection would not have assisted.
  10. [57]
    I therefore find that Mr Butcher did sign the Loan Deed as guarantor before Mr Franssen. 
  11. [58]
    The effect of that finding of fact is to dispose of Mr Butcher’s arguments on the binding effect of the Loan Deed as a deed.  It is unnecessary therefore to consider whether the Loan Deed would not have taken effect as a deed as a matter of law if the signature was not applied before Mr Franssen but was adopted in his presence.  Mr Callanan directed me in this respect to the judgment of Edelman J (when a judge of the Supreme Court of Western Australia) in Netglory Pty Ltd v Caratti [2013] WASC 364 at [148] to [169] where his Honour concluded that a deed not executed by the covenantor before an attesting witness was not properly attested and did not take effect as a deed under the equivalent Western Australian provision to s. 45 Property Law Act 1974 (Qld).  At first blush, his Honour’s analysis would seem to applicable to s. 45, however, as there are some differences in language and the matter was not fully argued, I express no concluded view on that legal issue. 
  12. [59]
    The effect of my finding as to circumstances of attestation also makes it unnecessary for me to deal with the alternative grounds advanced by Mr Callanan for Mr Butcher’s liability under the Loan Deed as an agreement or alternatively for Mr Butcher’s liability for misleading or deceptive conduct in propounding a document apparently signed validly and relied upon as such by the plaintiff, though its solicitor.

Settlement on 207 Jellicoe Street and advance of funds under the Loan Deed

  1. [60]
    There is some suggestion in Mr Butcher’s defence that he does not admit the advance of funds by TTR1 under the Loan Deed to complete the settlement of the acquisition of 207 Jellicoe Road.  The inference that the settlement of 207 Jellicoe Street on 9 September 2016 was effected by loan funds provided by TTR1 is on all the evidence, including that of Mr Ruckert for TPB, overwhelming.  That the total sum of $360,000 was advanced for that purpose is made out on the documents.[31]

Key terms of the Loan Deed[32]

  1. [61]
    The parties to the Loan Deed were TTR1, TPB and the defendants as guarantors.  It was executed in the form of a deed.  The Loan Deed provided relevantly as follows:
    1. (a)
      By clause 2.1, that TTR1 was to provide the Loan (identified in the Schedule as $360,000) to TPB so long as TPB was not in default on the Commencement Date (identified in the Schedule as 9 September 2016);
    2. (b)
      By clause 3.1, that TPB had to repay the Loan on or before the Repayment Date (identified in the Schedule as, in effect, 9 September 2017);
    3. (c)
      By clause 2.3, that TPB had to pay interest at 10 per cent, repayable on the Repayment Date if paid on that date, but otherwise at 20 per cent (that is, interest was capitalised and payable when the loan was repaid);
    4. (d)
      By clause 5.1, that the Guarantor (identified in the Schedule as each of the defendants) guaranteed payment of the Loan; and
    5. (e)
      By clause 6, that if the Loan was not paid when due, then the Guarantors must immediately “on demand from the Lender” pay to the Lender the Loan.
  2. [62]
    It is to be noted that the guarantee did not extend to all sums payable under the Loan Deed. It was limited to a guarantee of payment of the Loan.  The Loan was defined as the capital sum of $360,000.  It was accepted by the plaintiff that this limited the amount guaranteed by the defendants.
  3. [63]
    The effect of the Loan Deed was that TPB was required to repay the loan of $360,000 plus interest on 9 September 2017.

Key terms of the Purchase Deed[33]

  1. [64]
    The parties to the Purchase Deed were TTR1 and TPB, no guarantees were given for the obligations under that deed.
  2. [65]
    The  Purchase Deed relevantly provided:
    1. (a)
      By clauses 1 and 2, that TPB agreed to enter into a contract of sale by which TPB would purchase 209 Jellicoe Street from TTR1 for $457,435.48;
    2. (b)
      By clause 3, that TPB would pay interest on that sum at 10 per cent per annum from completion of the acquisition by TPB of 207 Jellicoe Street (which in fact occurred on 9 September 2016 as contemplated);
    3. (c)
      By clauses 4, 5 and 6, that TPB would seek, and TTR1 would co-operate in seeking, development approval for development of the property;
    4. (d)
      By clauses 7 and 8, the parties would enter into the contemplated contract of sale at the latest within 12 months after the date of the Purchase Deed and complete the contract within 45 days thereafter;
    5. (e)
      By clause 9, all the interest would be capitalised and paid at settlement; and
    6. (f)
      The property would remain untenanted unless both parties agreed to a tenancy.
  3. [66]
    The Purchase Deed was most probably executed by TPB on 9 September 2016, but was executed by TTR1 on 7 October 2016.  Depending on the date properly identified as the date of the Purchase Deed, TPB was required at the latest by 21 November 2017 to complete a contract to purchase 209 Jellicoe Street for $457,435.48 plus interest of some $45,000.

Default under the Deeds

  1. [67]
    TPB defaulted under its obligations under the Loan Deed and then the Purchase Deed.
  2. [68]
    On 7 September 2017, Mr Catton wrote to Mr Evans noting that the Loan was due to be repaid on 9 September and recording his instructions from Mr Robertson that Mr Ruckert had said he was not able to repay the amounts under the Loan Deed.  Mr Catton proposed payment of interest at the default rate of 20 per cent until the Loan was repaid and for settlement of the obligations under the Loan Deed on 21 November 2017, the date specified for completion of the obligations under the Purchase Deed.  The letter called for a response by the next day.[34]  Thereafter, Mr Catton wrote demanding performance under both Deeds on 19 December 2017[35] and 25 January 2018.[36]  It is evident from that correspondence that TPB through Mr Ruckert had in fact made one default interest payment of some $6,600, apparently in response to the demands in the 7 September letter.  Further, on 25 January 2018 TTR1 gave a Notice of Exercise of Power of Sale under the mortgage of 207 Jellicoe Street.
  3. [69]
    It is uncontentious that the obligations under the Deeds remained unperformed and have never been performed. 
  4. [70]
    In the period following the defaults under the Deeds, Mr Robertson and Ms Cantrill continued to deal directly with Mr Ruckert and others from TPB including Brad Fuller.  There is evidence of a proposal made in December 2017 for the obligations in the Deed to be met from yet another attempt to carry out the Development, with at least one meeting to discuss that possibility.[37]  There was never any suggestion that TPB or the guarantors had the funds to meet the obligations under the Deeds, and some clear statements to the contrary.
  5. [71]
    I observe here that over the following months there were further proposals for carrying out of the Development.  Mr Ruckert gave evidence of various attempts to do so,[38] and such proposals and potential investors are frequently mentioned in the correspondence. What is absent from any of the evidence adduced in this trial is any persuasive evidence sourced from outside TPB or Mr Ruckert indicating that there was any real prospect of the Development in fact being carried out in accordance with those proposals.  There is no written evidence sourced from investors or purchasers.  There is no evidence as to how the Development could be financed otherwise.  Mr Ruckert stated that the slowing in the property market made successful development problematic.  It is difficult to avoid the conclusion on the evidence before me that there was never any concrete prospect of the Development being carried out nor of the obligations under the Deed being met, at the least from September 2017.
  6. [72]
    While it is reasonable to assume that some discussions were on-going between Mr Ruckert and Mr Robertson and Ms Cantrill, the next specific event identified in the evidence was a meeting on or about 16 March 2018 between Mr Robertson and Ms Cantrill and Mr Ruckert and Mr Fuller.  While the specific purpose of the meeting was not dealt with in oral evidence, it appears to have been convened so Mr Ruckert could set out how he intended to deal with the defaults under the Deeds.  The 16 April 2018 email from Mr Robertson and Ms Cantrill[39] states that there were three outcomes of the meeting being:
    1. (a)
      That Mr Ruckert would provide a feasibility report by 20 March 2018 with a proposal as to how the Development could proceed;
    2. (b)
      That Mr Ruckert would provide fortnightly updates on progress in the Development or attempts to pay the sums due under the Deeds; and
    3. (c)
      That TPB would transfer the rental income stream from 207 Jellicoe Street from TPB to Mr Robertson and Ms Cantrill. 
  7. [73]
    There was no challenge to this summary in the evidence at trial.  The particular focus of the oral evidence about events at this meeting was the last matter: the transfer of the rental stream.  Ms Cantrill said that at about the time of the 16 March meeting, she and Mr Roberston realised that TPB was getting rental income from 207 Jellicoe Street while 209 Jellicoe Street was untenanted on Mr Ruckert’s advice and while TPB was in default under both Deeds.  She said that Mr Ruckert agreed to direct the rental payments to TTR1 as some compensation for the on-going default and failures to pay any default interest.[40]  Mr Ruckert gave substantially similar evidence.[41] 
  8. [74]
    There is no suggestion that Mr Ruckert’s direction of the rental payments to TTR1 was in contemplation of, or referable to, any settlement agreement.

The settlement negotiations

  1. [75]
    The events which are central to the main issues in this proceeding began on 16 April 2018.  As already noted, by that time the 16 March meeting had come and gone and the only promise made at that meeting which had been kept to the satisfaction of Mr Robertson and Ms Cantrill was the redirection of the rent for 207 Jellicoe Street. 
  2. [76]
    On 16 April 2018, Mr Robertson and Ms Cantrill wrote the following email addressed to each of Mr Fuller, Mr Ruckert and Mr Butcher (the 16 April email):[42]

Good morning Anthony, Brad and Rohan (The Property Bar)

It is over 1 month since our meeting and we still have no feasibility report sent to us despite reminder emails to you (30 March and again 3 April).

Our understanding of outcomes from that meeting were to:

  1. Provide a feasibility report (you guys had allocated 4 days (due 20 March) – to prove accurate information on which we could decide if we would consider proceeding with joint venture work with you all
  2. Improvement of Communication – with the emphasis on regular updates (fortnightly updates as suggested by you as monthly was considered too far apart) – none have occurred
  3. Rent transfer from 207 Jellicoe st to us – thankyou we are now receiving this Anthony.
  4. Urgency of action – it has now been 6 months past the date in which The Property Bar was to pay us out of this agreement. Cash flow for us has become critical. You have not honoured your default interest nor provided a feasibility report as promised to show forward progress.

Further, the safety of 209 Jellicoe street is of major concern. Upon your advice Anthony we have not rented it out so it has now remained vacant for over 2 ½ years – we are maintaining yards at our expense.

After receiving information from our gardener (4 April) involving a broken laundry window and squatters in the house causing damage, we contacted the Toowoomba Police. They said the tenant from 207 Jellicoe st had reported the break-in and squatters on the 27 March. Police had contacted Sovereign Property who refused to give them any information about us, the owners. Police were unable to enter and take fingerprints nor contact us. We understand confidentiality but not why communication with us was not instigated by you guys. Securing this vacant property is becoming a very costly experience for us (this is twice in 2 months).

We have also been in contact with Council since January trying to get them to clear their section of the back vegetation which has already been set on fire once – the boundary line of the property is not clear and they refuse to do anything. Our side cannot be cleared until we know where the boundary is. It is a dangerous fire hazard. (Hence prompt action for our survey request Anthony would be appreciated – also any information on work done while you were Project Manager would be good too).

Basically you guys have not acted on what was agreed at the meeting and we are once again stuck in a time wasting exercise in which all our money is tied up in those two properties when it should have been released to us last September.

We cannot move on with any plans and you have placed us in a situation which despite you insistence that you want to do “what’s best for us”, you actions/lack of actions indicate otherwise.

We acted as Private Lenders for you for 12 months albeit grudgingly. A bank would have insisted on interest being paid with immediate monthly repayments.

We supported you for 12 months with your plans only to have you throw your hands in the air and say “so sad we have no money to meet our agreement”. That is not honourable and what you’re doing now is not either.

We need out of this nightmare, preferably with cash and not properties. With all your business experience between the 3 of you why don’t you contact your other investors and get us out of this!

Alternatively we have listed below what you actually owe us to date re this agreement vs our proposal for an “out” option.

Amounts owed as per Agreement (due 9 September 2017):

209 Jellicoe street:

$503 179.03 – Agreed payout price

$25 158.96 – Default interest owed since 9/9/17

$528 337.99 – Total owed

207 Jellicoe street:

$396 000.00 – Agreed payout price

$39 600.00 – Default interest owed since 9/9/17

$435 600.00 – Total owed

Total payout as of 13/4/18: $963 937.99

Our Proposal:

  1. The Property Bar Pty Ltd transfers 207 Jellicoe Street (Lot 3 of RP19476) to us (TTR1 Pty Ltd ACN 608105700)
  2. The Property Bar pays for all expenses re this change to agreement (as agreed to in original agreement) including:
  1. Stamp duty
  2. Property valuations
  3. Registration fees
  4. All legal expenses (including $3,000 incurred by us since 9/9/17)
  5. Return of all rent collected by you from 207 Jellicoe (we calculated 33 fortnights @508.56 = $16,782 this has been adjusted for management fees)
  6. Return of our costs outlaid on this project since original purchase 209 Jellicoe (since no goals as outlined in information memorandum 26th May 2016 were ever actually met)

“Project management - $34 580

Rates + water + insurance - $12,432.90 (which you were supposed to be paying but never did)

Proposed Cash Payout : $66,794.90

Please note that this proposed cash figure is probably considerably less that what you are budgeting to complete this project. At this stage we can only guess what your budget might be because we haven’t received your overdue feasibility report.

Be aware also we have not factored in to this:

  1. Any adjustments now these properties are worth considerably less than purchase price
  2. Any default interest/profit that we should have received either as default or payout amounts ($234 500.45)
  3. What we could and were planning to do with our money had it been repaid last September as per agreement
  4. Any stress/loss of goodwill that your failure to honour the original agreement has created

The Property Bar Ltd which is all 3 of you (including 2 guarantors) need to take this matter seriously.

We are over the excuses, procrastination and lack of respect that we have received what all we were doing was helping out a friend.

The three of you are experienced businessmen and developers – is this really how you do business?

All of the above losses (listed in 1 – 4 above) we are offering to take as our loss if this matter is finalised promptly.

But we want this finalised within 1 month (no later than 16 May)

[Emphasis in original]

  1. [77]
    More will be said about this email but it is convenient to note here that the amount of $66,794.90 is the total of the amounts specified in paragraphs 2(d) to (f).  The matters following the heading “Our Proposal” (including all the text down to the last line, which in my view, on an objective reading of the email, is a part of the proposal put) shall hereafter be referred to as the 16 April proposal.
  2. [78]
    Most of the key evidence in this case is recorded in contemporaneous documents, such that differing recollections are of limited relevance to the facts in issue.  A significant exception is the content of a conversation between Ms Cantrill and Mr Ruckert on 21 April 2018 (the 21 April conversation).  Importantly, both agree that a conversation occurred on or about that day and there is much overlap in their recollection of what was said.  The important divergence however is whether Mr Ruckert purported to accept the 16 April proposal in that conversation.
  3. [79]
    Ms Cantrill recollection was as follows:[43]

MR CALLANAN:  Yes.  I’m just asking to tell me everything you remember about that telephone call?  About, specifically, the telephone conversation?

Yes?  Termites.  We discovered termites in the property – the 77F Lindsay, rental property, that we’d renovated about 15 – 18 months previously.  I’d gone – we’d found the termites that morning.  Taken photos of the termite damage.  I had immediately rung Anthony, because termites – big dollars.  I was extremely distressed, because we were starting to get, particularly, financially squeezed, at that particular time, because they had not returned funds.  And I left a voice mail message.  Mr Ruckert called me back later.  We – I was in Bunnings.  We were renovating at the time:  a property in Margate.  I remember walking up and down the aisles of Bunnings.  He was talking to me.  Basically, what I said was, “We’ve just discovered termites in 77F Lindsay” – he knew that property because he’d come and visited it with Mr Butcher while we were renovating – and I was extremely distressed.  I said, “Basically, we’re stuffed.  We don’t have the money to do this.  And you owe us money.  You need to give us back our money.”  I indicated that they hadn’t even been paying default interest.  And Mr Ruckert indicated that he didn’t have the money.  He’d told us before he couldn’t afford to give us back the money.  And I insisted that – that we needed the money.  We were in a very, very difficult situation.  I was quite distressed at the time.  I remember Mr Ruckert, initially, was quite, sort of, stand-offish.  But then I managed to calm down a – a little bit, and explain that we really were quite financially strapped, and this termite situation was very difficult for us.  He, then, offered to give us $5000.  And I just went, “Fantastic”.

Okay?  There was no discussion of the proposal.  I don’t even know whether he knew about it at the time.

Okay.  So did he indicate to you, at the time, that he knew about it?  No, there was no indication.  We were, simply, talking termites.  And give us our money back.

Okay.  Now, at that point in time, the 16 April offer, was that something that you wanted accepted?  We had come to the point where we were 

HIS HONOUR:  Was that something you wanted accepted?  Yes.  At the time, we were very hopeful that it would be accepted.

  1. [80]
    Mr Ruckert’s version was as follows:[44]

Okay.  Now, I’m now going to move to Ms Cantrill’s evidence about how you came to offer to pay $5000 in a telephone call, okay?  Yes, your Honour.

All right.  If you turn to divider 20?  Number 20.  Sixteenth of April 2018? 

Yes?  Yes, your Honour.

Sitting here now, do you recall when you first read that email?  It would have been that morning.  This has been sent at 6.29 am.  So I’m normally at the office some time before 10 o’clock, depending on how busy I am, but certainly after – certainly before 10 o’clock that day. 

All right.  Now, you recall Ms Cantrill’s evidence about how you came to offer to pay $5000?  Yes, your Honour.

She gave evidence of a telephone call she had with you in which she told you about pressure they were under financially because they had discovered termite damage to one of their properties?  Yes, your Honour.

And she said, in effect, that ultimately you offered to pay $5000 to help them out, or in response to that particular crisis?  Mmm.

Now, that’s her evidence.  What, if any, discussions do you say you had with Mr Robertson or Mrs Cantrill about the payment of the $5000, which it seems uncontentious was made on the 24th of April?  Yes.

Go ahead?  Your Honour, I do remember the phone call, but not as clearly as Ms Cantrill does, but I do remember that she was quite emotional and very upset about it and that 

Upset about what?  The white ants and 

Okay?  … she was freaking out about the white ants.  I don’t freak out about white ants as much as some people do, so for me in the experience of the – in the building industry and renovated many houses over the last 35 years, it wasn’t such a drama to me, but it was certainly a drama to her and she was freaking out.  And also, I think, the stress for them is was they had discovered white ants in a property that they only just renovated themselves, less than 18 months ago.  So there was concern that they had – you know, that they had created a problem for themselves.  They said they did not have the money and such like.  I was – this loan document here was certainly fresh on the thing.  And my memory is reflected in my email of the 24th. I think the phone call was being – was the 21st – is that correct, or 22nd?  The 24th is the Monday.

Well, what do you recall saying in the telephone conversation?  I remember when I – I remember – I’m pretty sure it was a weekend.  Now, I’d had a missed call from them.  I rang them back.  I know she was extremely upset.  That’s my memory of it.

Yes?  I wasn’t even sure which house they were talking about with the white ant damage.  They have multiple properties and I honestly, at the time, I thought it was a different one, until just recently.

Okay.  Well, she said to you that she had white ant issues.  She was very upset about it.  They didn’t have the money to deal with it.  What do you say passed in that conversation after that?  I’m saying I can try to help out as best I can and in my recollection was I’ll start making a payment towards the loan agreements.  And on the – I’m pretty sure it’s the 24th when I replied.  That is in line with the way I normally try to do business of – as per your phone call.  Here is – here’s the details of what’s 

Do you have any independent recollection of that sitting here, or is it just what’s said in your diary note?  It’s – its practice for me.

Well – all right.  Okay.  Yes?  It’s – I have – I have memory that that’s there and for me to write it in that format afterwards is – my [indistinct] recollection apart from the fact that she was extremely upset and I do refer to it that they need money in the email, because these are people I have been doing business with for five, six years by now.  It’s 

Do you recall any other discussions about their proposal in that telephone call?  No, your Honour.  It was purely.. 

Do you remember, sitting here now, anything specifically you said about the proposal, apart from, “I’ll make a payment towards the loan agreement”?  I certainly wouldn’t have got into the details as clear as the email there, but it was – my memory of the – of the conversation was, “I will start making payments, as per your proposal.  We’ll get that agreement finalised.  I’ll get money to you to get it moving.”  And at that time, your Honour, I think in my email I said that I could pay them on Thursday when there was a settlement coming through…

[Underlining added] 

  1. [81]
    Later in cross-examination, Mr Ruckert said this:[45]

We’re talking about the telephone call that happened on the 21st?---It is my memory of the telephone call. And my response of that is I did not have the agreement in front of me on the 21st, and neither did Ms Cantrell. My understanding of my comments during that is, “I will give you $5000, agreeing that I owe you this money based on the proposition that you’ve put forward to us.” I was not giving them $5000 to fix termite damage.

Okay. So you say you wrote that email to your lawyer - - -?---Because, subsequent to this - - - - - - in circumstances?--- - - - there’s – we are moving through agreement’s there, mathematics have been done, I’m trying to - - -

You stick to your evidence that?--- - - - get clarification.

- - - the call happened?---The call happened.

Now, and you say that your recollection of the call is what’s contained in the 23 April email?---That I agreed to the agreement and I would put $5000 towards their proposal. I did not put $5000 towards [indistinct] damage.

  1. [82]
    The defendants contend that by this telephone conversation, TPB by Mr Ruckert accepted the 16 April proposal so as to give rise to a binding settlement agreement.  I will make a finding about this conversation in due course.
  2. [83]
    The next event was the email from Mr Ruckert to Ms Cantrill and Mr Robertson on 23 April 2018 (the 23 April email).  That email stated:[46]

Hi Carolyn & Richard

First up I can tell you I’m taking this very seriously and will do my best to resolve this s quickly as I can.  I’m typing this up quickly as I have another meeting I need to get to and I wanted to get something to you.

I will be sending your proposal to my solicitor to begin drawing up the revised agreement.

Your proposal has a “Cash Payout” of $66,764.90.  This includes the items noted in parts 2(a) to (f).

The way it reads the property known as “207” is transferred to TTR1 plus a cash payment of $66,764.90 and by this action that will be the end of this.

From our phone call over the weekend I understand your concerns regarding your current cash flow so I’m putting forward a “With Out Prejudice Offer” to give you some cash now while we are sorting out this agreement, I wish to make an advanced payment by way of:

-  I have a settlement from one of the project [sic] I’m looking after, settlement is booked for this Thursday – I will pay you $5,000 direct to your nominated bank account (from my commission payment) at settlement on Thursday

-  Payment will be made direct to you

-  This will be part payment of your requested $66,764.90

-  This amount of $5,000 will come off the total of $66,764.90 leaving $61,764.90 payable

-  I’m assuming payment will be made to TTR1 Trust [account details]

-  If this account is incorrect please advise of the correct account number

I will call you later today, I need to get to another appointment now as this meeting has gone over time. I will call you instead of Brad (as discussed with him this morning I believe he was going to call – I will do so instead).

  1. [84]
    On 24 April 2018, Mr Ruckert paid $5,000 to TTR1.  His transfer record contained the following reference “207 Jellico Street”.[47]  The entry in the TTR1 books described the payment as “Interest expenses TTR1-207 Jellicoe Street”.[48]  It was unclear who gave the payment that description.  It was probably Mr Robertson, though he was not asked about the matter.[49]
  2. [85]
    The next relevant communication was Mr Ruckert’s text to Mr Robertson on 30 April 2018, which stated:[50]

Hi mate

Details have been sent to solicitor to draw up the agreement based on your email Assume next couple of days

Have transfer $333.33 for other

Will try to pay another $5,000 before agree-

ments are sorted out to get something to you

  1. [86]
    Mr Ruckert gave evidence of instructing Mr Evans as stated in his text.  The only evidence of the 16 April and 23 April emails being sent to Mr Evans, however, was contained in Mr Ruckert’s email to Mr Evans of 9 May 2018 set out in paragraph [93] below.  His evidence on the matter was consistent with the text of that email in that he recalled querying the meaning of paragraphs 2(a) to (f) of the proposal and how it related to the total sum stated.[51]  However, it appears likely that there was an earlier communication by which the 16 and 23 April emails were sent to Mr Evans, though none was in evidence, because of the tenor Mr Ruckert’s 9 May email which seems to refer to earlier communications.
  2. [87]
    The next relevant communication is a text from Mr Robertson to Mr Ruckert sent on 4 May at 7.54 am stating “Hi Anthony, $333 banked thanks. Should we have heard from Solicitor by now? Cheers Richard”.  Mr Ruckert did not respond until 12.27 pm when he said “Have not got anything back as yet Will follow up this arvo”.[52] 
  3. [88]
    On 4 May 2018, Mr Robertson then communicated for the first time with Mr Catton about the 16 and 23 April emails.  Immediately after this email to Mr Ruckert, he sent the following email to Mr Catton (including the 16 and 23 April emails):[53]

Hi Darren

I do apologise for any recent lack of communication with you regarding the Anthony Ruckert and Jellicoe St matter.

There has however, as per the below emails, been a change in direction regarding this, hopefully for the positive.

At this stage I believe We (collectively) have agreed to settlement via the transfer of property (207 Jellicoe St) AND a cash figure as per out proposed, emailed to Anthony Ruckert 16th April, below.

I believe that Anthony Ruckert has accepted these terms as he has:

deposited $5,000 towards the cash figure, into the TTR1 Bank account (24th April)

mentioned arranging another $5,00 to be transferred…soon,

and, send details to his solicitor to draw up the agreement based on the email below (according to a text message from Anthony, Monday 30th April).

The apparently accepted cash figure however includes the payment of all legal fees since 9th September 2017.

This should therefore also include your recent amount to us dated 13th April (attached).

May I therefore humbly request that you now redirect this, and any further (related) accounts to your colleagues at Evans Lawyers, with whom you have been previously corresponding, so that these ongoing expenses may be included and accounted for in the cash settlement.

Following this unorthodox approach of ours, may I also humbly request that we now leave this matter in your hands, and look forward to hearing from you regarding any further developments.

Kindest Regards

Richard Robertson

  1. [89]
    There is no evidence of any activity by Mr Catton in response to this email until his 30 May email to Mr Evans set out in paragraph [97] below.  Mr Catton gave evidence that he initially did nothing with the email pending the passing of the 16 May deadline.  He thought the ball was in the other party’s court.  He gave evidence that he received no further communications from Mr Robertson nor further instructions until after his 30 May 2018 email.
  2. [90]
    The next relevant communications were on 9 May 2018.
  3. [91]
    The first communication on 9 May was from Mr Robertson to Mr Ruckert who sent an email in the following terms:[54]

Anthony & Rohan

As Guarantors of our original agreement, we are taking this very seriously too and I feel it therefore very necessary to inform you that We are getting concerned here as this proposal (below) finally Expires in a week.

By depositing the $5,000 (yes, to be taken off the total cash) we understand you have accepted these terms of this more than generous proposal, however all this waiting for solicitors to draw up yet another “agreement” will be pointless if there is no actual Valuation and Settlement Date etc. happening before the final expiry date.

8 months on, we don’t want any more procrastinating, drip-feeding or “agreements” that clearly aren’t worth the paper they are written on. We have been more than generous and you have had More than ample time.

Question ) Considering that I have still not yet heard from any Solicitor: Can I therefore, finally look forward to the following Real results, within the next 7 days, please?

  1. Property Valuation  $______________ dated ____/ April or May 2018
  2. Transfer documents including Settlement Date set on ____/ May / 2018
  3. Confirmation of payment ( of $______ on ___/ May / 2018 ) to include All stamp duties, solicitors fees and all other associated and all listed or otherwise expenses, including those you have previously avoided, by none-the-less for which You are ultimately Accountable.

Thank you.

Richard

  1. [92]
    Oddly, there is no evidence that this email was sent to Mr Catton. 
  2. [93]
    The second communication was when Mr Ruckert sent a copy of the 16 and 23 April emails and Mr Robertson’s email of 9 May to Mr Evans with the following covering email:[55]

Hi Dave,

Further to the proposed agreement please see below an email from Richard

As discussed we are looking to be able to come to terms with this and be able to pay them out – not sure how at this point.

I’m still very concerned that the additional items such as stamp duty etc is not clear if this is included in the payout figure as per my reply to them (copy below).

Also I do not believe Rohan is a Guarantor to this agreement as I’m sole Director of The Property Bar.

Please reply so we get an agreement sorted out.

Regards

Anthony

  1. [94]
    The relevance of this email was queried by me at trial.  Ultimately, I think Mr Callanan was correct that it was admitted without limitation. However, it is irrelevant as showing subjective belief or understanding as to the meaning of terms in any binding agreement and given that is was uncommunicated to TTR1, it is irrelevant to inferring intention to be bound or not bound by any agreement at the time.
  2. [95]
    Further, as noted in paragraph [86] above, this is the only evidence of Mr Ruckert providing the 16 and 23 April emails to Mr Evans, though the tenor of the email is that there had been some previous communication.
  3. [96]
    Thereafter there were a number of text exchanges between 24 and 28 May 2018 in which Mr Ruckert reported on interest said by him to have been shown in the properties by potential purchasers.[56]  The efforts by Mr Ruckert to sell one or both properties continued all the way through to the end of the dealings between the parties.  From time to time he would report that he had an interested buyer.  There was no evidence independent of those assertions of any such buyer.  Whether Mr Ruckert was exaggerating the interest in the property and/or was unrealistically optimistic as to the nature of the interest or not, the reality is that the properties were never able to be sold.
  4. [97]
    On 30 May 2018, Mr Catton  sent an email to Mr Evans in the following terms:[57]

Robertson ATF TTR3 Trust – 207 & 209 Jellicoe Street

We refer to the above and have been instructions [sic] by our client that our respective clients have agreed to settle in relation to this matter.

We attach* a copy of an email from Anthony Ruckert dated 23 April 2018 and a copy of an email from our client to Anthony Ruckert, Brad and Rohan of the Property Bar dated 16 April 2018.

The Agreement reached between the parties is that:

  1. The Property Bar transfer 207 Jellicoe Street to our client; and
  2. The Property Bar pay for all expenses in relation to the Change of Agreement totalling $66,794.90;

We note that Mr Ruckert advises that he would be sending the Proposal to his solicitors for the drawing up of the revised Agreement.

Can you please confirm that you have received instruction from Mr Ruckert accordingly and that you are currently preparing a revised Agreement.

We await your reply to this letter.

  1. [98]
    It is convenient to note that:
    1. (a)
      This email was not sent to Mr Robertson;
    2. (b)
      The reference to the TTR3 Trust seems erroneous.  There is no evidence that it has anything to do with this matter;
    3. (c)
      Mr Catton has assumed that the amount of $66,794.90 is the total amount payable under the proposal, despite the fact that that amount is only the sum of the specific amounts in paragraphs 2(d) to (f) of the 16 April proposal; and
    4. (d)
      Mr Catton has omitted to refer to the specification of 16 May 2018 as the date by which Mr Robertson and Ms Cantrill wanted “this finalised”.
  2. [99]
    Mr Evans responded confirming he had instructions from Mr Ruckert some time ago and that he had started the drafting and hoped to have a draft to Mr Catton the next day.  Later that day, Mr Evans emailed Mr Catton saying he was too busy to complete the draft and that he had referred it to “Troy”. This email was then forwarded Mr Robertson by Mr Ruckert the next day along with another comment that a buyer was interested and he was waiting on a confirmed offer.[58]  There is no evidence of any such offer. The 30 May email from Mr Catton does not appear to have been forwarded. Mr Robertson responded only to express hope that the properties could be sold. 
  3. [100]
    On 4 June 2018, Troy (Manhire) of Mr Evans office sent a draft deed to Mr Catton asking for his “advices as to the Settlement Date and any changes proposed by your client”.[59]  The draft deed relevantly:
    1. (a)
      Continued with the construction of the proposal that the $66,794.90 was the total sum payable;
    2. (b)
      Provided for a transfer of 207 Jellicoe Street;
    3. (c)
      Both events to occur on the “Settlement Date”; and
    4. (d)
      A release for TPB and guarantors subject to TPB complying with the settlement obligations under the deed.
  4. [101]
    It does not appear this draft was responded to until 24 July 2018,[60] as set out in paragraph [111] below.
  5. [102]
    The next relevant communication is an email from Mr Ruckert to Mr Robertson and Ms Cantrill on 6 June 2018.[61]  It contains various excuses for his delay in communicating put down to the many other urgent matters he has to deal with.  He then informs them that he has a potential buyer for both blocks for use as a National Disability Insurance Scheme (NDIS) housing estate.  He says there have been meetings and there is strong interest. (Again there was no statement of who the potential buyer was nor the strong interest represented.  It might have been Trilogy, as noted by Mr Butcher three months later,[62] though that is unclear). 
  6. [103]
    Mr Ruckert then writes:

To this end we need to formalize the listing with the agent who has made the introduction so they can progress to a contract.

At this time I [sic] looking at a total sale price of $900,000 (+ GST if applicable) to achieve this price both block [sic] would need to be sold at the same time.  The agent has provided the required Form 6 (attached) which need to be signed in order to progress to a contract.

  1. [104]
    Mr Ruckert then emphasises the urgency of the matter, says there is not a lot more he can tell them (presumably apart from the name of the buyer and whether any actual offer had been made, which he did not reveal) and promises a more detailed briefing report hopefully later that day. 
  2. [105]
    The attached Form 6 invited TTR1 to appoint as agent Built Innovations Pty Ltd (Built Innovations).  That was a company controlled by Mr Butcher.  In cross-examination, Mr Ruckert accepted that Mr Robertson and Ms Cantrill might not have known that Mr Butcher was involved with Built Innovations.  I find that they did not.  Given their attitude to Mr Ruckert and Mr Butcher at this point in the story, they would certainly have responded forcefully to any suggestion of Mr Butcher benefitting from the sale while TTR1 remained unpaid.  Mr Ruckert’s response when challenged on this issue in cross-examination reflected poorly on his credit.[63]
  3. [106]
    The next relevant communication is an email from Mr Robertson and Ms Cantrill to Mr Ruckert on 7 June 2018, where they write:[64]

Good morning Anthony, Rohan and Brad,

It seems all of you have difficulties returning our phone calls/messages which makes effective communication between us rather difficult.

Given recent events it seems there is much to discuss and it would be most efficient to do this via a face to face meeting with all of us involved.

ASAP would be great.

We are rather confused as to what is going on.

Since our meeting with Anthony and Brad back in March 16 we’ve gone from:

  1. (a)
    Waiting a month for a Feasibility Report that was promised to us in 4 days – which never tuned up;
  2. (b)
    Presenting an extremely generous offer via email (April 16) to allow this matter to be finalised quickly- which was accepted and we’ve been waiting for your Solicitor to send through the paperwork now for 7 weeks
  3. (c)
    To receiving a text message from Anthony (22 May) saying he may have someone interested in buying both sites – when was selling even discussed with us?
  4. (d)
    To receiving an email request we sign an inaccurate Form 6 to engage an Agent we don’t even know to secure a “deal’ we don’t even know about
  5. (e)
    And learning that apparently there have been meetings with potential buyers, agents and others which we haven’t been told about and certainly not included in.

Hmmmm – definitely have a few things to discuss.

Given the urgency of this matter, how about that meeting happen [sic] tomorrow or Monday so we can all get on the same page?

We look forward to catching up

Carolyn & Richard

  1. [107]
    I note that a draft deed had been provided on 4 June to Mr Catton by Mr Manhire.  No explanation for Mr Robertson and Ms Cantrill being unaware of that event was provided, though I have no reason to doubt they did not know of it at this time.  Given there was no response from Mr Catton until 24 July, it seems likely the draft deed was not provided to them for some time after its receipt. 
  2. [108]
    Mr Ruckert responded 34 minutes later to Mr Butcher and Mr Fuller proposing finding a buyer for both sites and again suggesting a sale to NDIS.  He did not grapple with any of the other points raised.[65]  I cannot see any other response to  Mr Robertson and Ms Cantrill’s 7 June email in the evidence.
  3. [109]
    On 18 June 2018 there was another text exchange in which Mr Robertson queried how a meeting with unidentified investors had gone.  Mr Ruckert replied that those investors could not buy but he was putting a proposal to other persons.  Again no names were given.[66]
  4. [110]
    Between 28 June and 2 July, there were further email exchanges by which Mr Ruckert proposed a complex plan to develop first 209 Jellicoe Street with a large dwelling and later 207 Jellicoe Street with a large dwelling.  Architects had provided some preliminary design work.  Mr Robertson expressed skepticism about the proposal, how it would be funded and how it would get TTR1 repaid.  Mr Ruckert said he had someone who wanted the product, again no names were mentioned.  Notably, this contemplated 209 Jellicoe Street continuing to be held in the near future.  There was no mention of transferring title to TTR1.[67]
  5. [111]
    The next material communication was an email from Mr Catton to Mr Evans sent on 24 July, responding to the draft deed sent by Mr Manhire on 4 June 2018.  The delay in responding was not explained at trial so far as I could determine, though Mr Robertson confirmed giving instructions as recorded in it.[68]  Mr Catton wrote as follows:[69]

We refer to the above and advise that our client does not accept your client’s settlement agreement.

Our client requires the following:

  1. That The Property Bar pay for all legal costs including al [sic] legal costs incurred by our client so far with us and all legal costs involving the Deed and Release;
  2. That The Property Bar pay for all associated stump duties, valuations of property, transfer costs and all and any related costs;
  3. Any monies received by our client so far is to be not considered as being part of the settlement (for example the $5,000 received on the 24th of April 2018 and rent paid to our client’s account for 207 Jellicoe Street).
  4. Rent from 2017 [sic] Jellicoe Street continue to be paid directly into our client’s account up to and including settlement as is not to be considered part of the settlement payout.
  5. Rates, water and other property costs up to the date of settlement must be paid in full by The Property Bar.
  6. Date of settlement be 31st July 2018.
  7. The cash payout figure to be paid to our client to be $76,794.90.

We await your reply.

  1. [112]
    Mr Ruckert responded as follows that day:[70]

Hi Carolyn & Richard,

I have just received this and have not had time to really look at it but on first pass how can you be saying that the $5,000 paid to you in good faith is not part of the repayment?

And rent not going toward repayments of any sort?

Why would this continue if you are not taking it into account at all?

Anthony

  1. [113]
    Mr Robertson and Ms Cantrill responded on 25 July 2018 with a lengthy email, the gravamen of which was that TTR1 was owed a lot more than the amount they sought in the 24 July 2018 email.  Neither party at this stage acted as if they considered they were bound by any settlement agreement or made any such assertion.
  2. [114]
    Thereafter, there was continuous correspondence between the parties which tended to reflect the tenor of the communications set out above.  Mr Ruckert and occasionally Mr Butcher[71] raised various possibilities for sale of the properties and Mr Robertson and Ms Cantrill expressed skepticism about that.  Eventually, Ms Cantrill took an active role in trying to sell the properties.  There was also communications relating to the tenancy of 207 Jellicoe Street from Mr Ruckert, the tenor of which was that Mr Robertson and Ms Cantrill could make decisions on that matter.  Given the issues in this proceeding, it is unnecessary to set out those communications in any detail.  What is clear is that both parties were trying hard to sell the properties and neither succeeded.

The demands and the receivers

  1. [115]
    TTR1 served demands on each of the defendants pursuant to the guarantee on 26 October 2018 (Mr Ruckert) and 15 November 2018 (Mr Butcher).
  2. [116]
    Also on 26 October 2018, TTR1 appointed a receiver to 207 Jellicoe Street under the mortgage given by TPB.
  3. [117]
    It was common ground that 207 Jellicoe Street has not yet been sold.  No evidence was adduced as to the acts of the receiver since appointment.

The witnesses

  1. [118]
    As I have explained, there are few issues upon which issues of credit materially intrude. The primary issues are:
    1. (a)
      Whether and to what extent instructions were given to Mr Catton to send the email of 30 May 2018 given that 16 May 2018 had passed at that time; and
    2. (b)
      Whether Mr Ruckert purported to accept the 16 April proposal in the telephone call on 21 April 2018.
  2. [119]
    In addition, each of Mr Robertson, Ms Cantrill and Mr Ruckert also gave evidence from time to time as to their intentions in relation to, and subjective understanding of, the key documents said to comprise the alleged settlement agreement.  Such evidence is of little relevance to the issues in this proceeding. 
  3. [120]
    It is unnecessary to add anything to my observations about Mr Franssen made above.
  4. [121]
    As to Mr Robertson and Ms Cantrill, each appeared to be affected somewhat by continuing anger at Mr Ruckert, in particular, for the losses they had suffered under his guidance.  On occasions they resisted making concessions which the documents suggested should be made.  However, ultimately they were willing to make appropriate concessions and allowance must be made for the fact that they were being cross-examined by the persons they saw as responsible in a broad sense for TTR1’s losses. Further, their capacity for reliability was reflected in my view by their correspondence during the dispute which was largely direct, accurate, fair and avoided misrepresentation of events or exaggeration.  Even in midst of the dispute with the defendants, therefore, they were able to be accurate and reasonable in their statements and behavior.  I found them to be generally reliable witnesses.
  5. [122]
    Mr Catton’s evidence was not entirely satisfactory.  It is difficult to see why, for example, he would have chosen not to write to Mr Evans pending the passing of the 16 May 2018 deadline, then would have written two weeks later asserting there was a settlement when he did not have instructions to that effect and the 16 April proposal appeared to be to the contrary.  In my view, the problems with Mr Catton’s evidence might arise from embarrassment at dilatoriness in carrying out instructions.  Another example is the unexplained apparent failure of Mr Catton immediately to communicate the receipt of the draft deed on 3 June 2018 to Mr Robertson. However, I do accept Mr Robertson’s evidence about his dealings with Mr Catton, which largely resolve the issues which arise in this proceeding involving Mr Catton.
  6. [123]
    I do not find Mr Ruckert a reliable witness.  That conclusion arose not only from his evidence at trial but also from his conduct in relation to Mr Robertson and Ms Cantrill and the tenor of his correspondence from the start of the Jellicoe Street dealings, which seemed to me on occasion to be misleading. Some of the matters which led me to doubt his reliability are as follows.
  7. [124]
    He was cross-examined about the Form 6 benefitting Mr Butcher’s company referred to in paragraph [105] above.  His suggestion that Mr Robertson and Ms Cantrill “possibly” did not know Mr Butcher was related to the corporate agent on the Form 6 was evasive.  Plainly, given the circumstances and the prior correspondence, if they had known, they would have been very upset and would have said so.  I find he intended to conceal Mr Butcher’s involvement for reasons known only to him. His explanation of how that arrangement would not have resulted in any net loss to TTR1 because any commission would have been repaid, was ridiculous.[72]  It reflected an inability to give frank evidence on a matter embarrassing to him. 
  8. [125]
    Further, Mr Callanan was correct to characterise Mr Ruckert’s evidence about the key part of the 21 April 2018 telephone conversation as being suggestive of reconstruction.  The passages set out in paragraphs [80] and [81] tended in my view to show an evolving process in the witness box itself of Mr Ruckert relying first on the 23 April email as a record which he adopted then coming to believe that he recalled the key statement being made.  His evidence in cross examination set out in paragraph [81] above was particularly unsatisfactory.  It was never suggested by Ms Cantrill that the money was for termite damage, rather her evidence was that the discovery of that damage was the catalyst for the demand for some kind of payment on the existing liabilities. 
  9. [126]
    There were other instances where I got the distinct impression that Mr Ruckert tended to state as a recollection something which he thought would have happened, without being conscious of the difference (as Mr Franssen was).  There are other improbabilities in respect of his evidence about that telephone conversation which lead me to reject that evidence discussed below.
  10. [127]
    In addition, for the reasons explained in paragraphs [32] to [34] above, I found his evidence about offering an alternative to Mr Robertson and Ms Cantrill to funding the 209 Jellicoe Street purchase to be extremely improbable in the circumstances then existing and in the light of the contemporaneous documents.  In my view, at best, that evidence was an example of reconstructed evidence, not referable to any actual recollection.
  11. [128]
    His correspondence also had a tendency to misrepresent.  A clear example is his email to Mr Evans referred to in paragraphs [41] and [42] above where he told Mr Evans that Mr Robertson and Ms Cantrill (or TTR1) were intending to fund the whole of the Development.  That was incorrect at the time it was written and was always so.[73]  As will be seen, I conclude that the 23 April email falls into the same category of misrepresenting the dealings between the parties.  I reject below Mr Ruckert’s version of the 21 April telephone conversation on the question of accepting the proposal.  Given that, it seems to me that the purpose of the 23 April email when dealing with the characterisation of the $5,000 was to introduce the suggestion that it be on account of the possible settlement of the claims against TPB and the guarantors when that had not been discussed nor was it the basis agreed on for making the payment. 
  12. [129]
    Finally, it is concerning that Mr Ruckert never adverted to the potential for a conflict of interest and duty between his interest in acquiring 209 Jellicoe Street and benefitting from the larger Development, and his duty to give primacy to the interests of TTR1 and Mr Robertson and Ms Cantrill as their project manager and adviser.  As it turned out, the failure properly to give his undivided loyalty to TTR1 was the root cause of much of the harm suffered by Mr Robertson and Ms Cantrill and TTR1, resulting as it did in him pressuring them into funding the 209 Jellicoe Street contract which doubled their exposure to this small corner of the property market at the wrong time.  Even at trial, Mr Ruckert showed an inability to recognise this conflict and how it had influenced his conduct to the detriment of his clients.  An inability to discern the inappropriate pursuit of his self-interest in his dealings with his clients at the least gives cause for caution in accepting his ability to give reliable evidence as to those dealings.

Further findings

Mr Catton’s instructions

  1. [130]
    As will be seen, Mr Callanan contends that if a contract arose from Mr Catton’s 30 May email being treated as an acceptance of an offer made by Mr Ruckert’s 23 April email (which is Mr Ruckert’s pleaded case), it does not bind TTR1 unless Mr Catton had express or implied authority to make a binding offer on 30 May 2018.  A finding is therefore required as to whether the 30 May email was sent with any more specific instructions than the 4 May email.  Mr Robertson said he gave no further instructions after 4 May and before 30 May to Mr Catton.  I accept that evidence.  There is no evidence to the contrary and seems consistent with Mr Robertson’s conduct at the time.  It is also Mr Catton’s evidence.  I find accordingly.

The 21 April telephone call

  1. [131]
    I reject Mr Ruckert’s evidence that he purported to accept the 16 April proposal in the 21 April telephone conversation.  I have already explained why I do not find him generally to be a reliable witness.  That does not necessarily mean that his evidence on this point must be rejected.  However, there are numerous other considerations telling against his version.
  2. [132]
    First, as I have explained in paragraph [125] above, Mr Ruckert’s evidence at trial about the part of the conversation in which he accepted the proposal was unsatisfactory and unpersuasive. 
  3. [133]
    Second, at no time in subsequent correspondence did Mr Robertson or Ms Cantrill refer to the oral acceptance, despite such an event being significant for them and despite their frank recognition that the 23 April email seemed to be such an acceptance.  If the proposal had been accepted orally on 21 April, it is highly likely it would have been referred to in subsequent communications. 
  4. [134]
    Third, Mr Ruckert (whose pleadings were drawn by legal practitioners) never alleged oral acceptance and indeed such an allegation was first made by amendment by Mr Butcher in the shadow of the trial.  Mr Butcher gave no evidence at all about the matter.  The overwhelming inference is that the allegation was made in Mr Butcher’s pleading based on the suggestion in the 23 April email that the acceptance had been made in the conversation.  Mr Ruckert only adopted this position at the trial itself and as I have said, his evidence strongly gave me the impression that it was reconstructed based on the language in the 23 April email.
  5. [135]
    Fourth, Ms Cantrill gave credible evidence as to how a promise to pay $5,000 was extracted separately from acceptance of the proposal: they had great need for money given events on that day and TPB (and Mr Ruckert as guarantor) owed them a lot of money.  Acceptance of the 16 April proposal was not a necessary explanation for the promise and the payment.
  6. [136]
    Fifth, although Mr Ruckert frequently referred to his 23 April email in subsequent communications referring to the alleged settlement agreement, he never referred to the conversation on 21 April which suggests no such acceptance occurred.
  7. [137]
    Sixth, the tenor of the 23 April email is not entirely consistent with Mr Ruckert’s version in any event.  Notably:
    1. (a)
      It does not say that the 16 April proposal was accepted in a conversation.  The first four sentences communicate acceptance of the proposal without referring to the conversation at all.
    2. (b)
      When the phone call is first mentioned, it is only for the purpose of referring to the cash flow concerns.  That is the part of the conversation which both witnesses agree occurred.  Further, the tenor of that part of the email is that a new proposition is being put about the $5,000: “I’m putting forward…” an offer “to give you some cash now”.  There is no suggestion express or implied in this part of the email that there was already an agreement to pay the $5,000 on account of the obligations under the 16 April proposal.
    3. (c)
      Finally, the making of the payment on a without prejudice basis, even from a non-lawyer, objectively communicates that the payment should not be taken to be a concession or admission. Taken with the phrase “while we are sorting out this agreement”, it objectively communicates that there is no binding agreement to the proposal.  That is inconsistent with there having been an earlier unconditional oral acceptance of the kind described in Mr Ruckert’s evidence.

No binding settlement agreement

The defendants’ cases

  1. [138]
    Each of Mr Ruckert and Mr Butcher allege that the terms of the settlement agreement were that TPB transfer 207 Jellicoe Street and pay $66,794.90 (the Settlement Agreement).  Their pleadings and submissions differ as to how such agreement was formed from the events following the 16 April proposal.

Mr Ruckert’s pleaded case and submissions

  1. [139]
    Mr Ruckert pleads that the Settlement Agreement arose on 30 May 2018 as follows:[74]
    1. (a)
      The 23 April email comprised an offer to settle the debt due by TPB under the Loan Deed; and
    2. (b)
      The 30 May letter from Mr Catton comprised the acceptance of that offer.
  2. [140]
    Paragraph 4(c) of Mr Ruckert’s defence also pleads that on 24 April 2018, TPB paid $5,000 pursuant to the terms of the settlement agreement.  That allegation is hard to fit into the offer and acceptance analysis in the form pleaded.  If the offer is the 23 April email, and it was accepted on 30 May, then the payment on 24 April is neither offer nor acceptance.  Reading the pleading a little more broadly, it might be intended to allege that acceptance is to be inferred from the sending of the 30 May email in circumstances where the $5,000 had already been accepted as a payment on account of the settlement agreement.
  3. [141]
    Mr Ruckert’s defence does not expressly allege that the principal debts and obligations under the guarantees were immediately discharged in return for the promise to perform the settlement agreement, rather than being conditional on such performance.  The particulars to paragraph 4(a), however, suggest that and it can be assumed in Mr Ruckert’s favour as being raised by the pleadings.
  4. [142]
    In his written closing submission, Mr Ruckert took a different approach to the articulation of the manner in which the Settlement Agreement was formed.  After extensive recitation of, and commentary on, some of the key events in the negotiation period, he submitted that “acceptance of the Plaintiff [sic] offer occurred between 16 April 2018 and 30 May 2018”.[75]  This seems to advance a case (not pleaded by Mr Ruckert) that the 16 April proposal was the relevant offer and the consensus on the terms of the Settlement Agreement arising from that offer is to be inferred from the whole of the conduct post the 16 April offer.  Other aspects of Mr Ruckert’s submissions, however, seem to press the proposition that the acceptance arose on 21 or 23 April, with the subsequent conduct tending to show intention to be bound at that time.
  5. [143]
    Mr Callanan submitted that Mr Ruckert should be held to his pleading.

Mr Butcher’s pleaded case and submissions

  1. [144]
    Mr Butcher pleads that the Settlement Agreement arose on 21 April 2018[76] as follows:[77]
    1. (a)
      By the 16 April proposal, TTR1 offered to settle its claims against TPB under the Loan Deed by:
      1. Transfer of 207 Jellicoe Street to TTR1 within one month; and
      2. Payment of $66,794.90.
    2. (b)
      In the 21 April 2018 telephone conversation, Mr Ruckert accepted the 16 April offer. 
  2. [145]
    Mr Butcher then pleads as an alternative manner of formation of the Settlement Agreement starting (like Mr Ruckert) with the 23 April email.  He alleges (simplifying the text and omitting some seemingly irrelevant flourishes)[78]:
    1. (a)
      The 23 April email comprised an offer by TPB to TTR1 to settle (presumably the claims under the Loan Deed);
    2. (b)
      Mr Butcher was not a party to the 23 April email;
    3. (c)
      The payment of $5,000 on 24 April was accepted without reservation by TTR1;
    4. (d)
      By the 9 May email, TTR1 accepted that payment of the $5,000 meaning that TPB had accepted the terms of the proposal (presumably the 16 April proposal though that is not expressly stated);
    5. (e)
      On 4 May:
      1. TTR1 gave Mr Catton the 16 and 23 April emails;
      2. Instructed Mr Catton that it had settled its claim against TPB on the terms of the 16 April proposal;
      3. Instructed Mr Catton that TTR1 believed it proposal had been accepted by payment of the $5,000; and
      4. Collected the rent from 207 Jellicoe Street;
    6. (f)
      On 21 May Mr Ruckert sought instructions from TTR1 on renewal of the lease on 207 Jellicoe Street;
    7. (g)
      On 30 May, Mr Catton wrote to Mr Evans, attaching the 16 and 23 April emails, and confirming settlement had been reached and confirming the terms of the Settlement Agreement (as originally defined presumably);
    8. (h)
      Alternatively, the email of 30 May comprised TTR1’s acceptance of the offer comprised in the 23 April email; and
    9. (i)
      From 30 May until appointment of the receiver, TTR1 received rent on 207 Jellicoe Street, gave directions as to tenancy matters and negotiated to sell the property. 
  3. [146]
    It is difficult to identify with precision the nature of the alternative case on the formation of the Settlement Agreement from these allegations.  It seems that the overall contentions were either:
    1. (a)
      The 23 April email was an offer, accepted by Mr Catton’s 30 May email; or
    2. (b)
      Formation of the contract on the terms of the Settlement Agreement arises from the whole of the dealings starting with the 23 April email as the initial offer by TPB.
  4. [147]
    The case as developed in Mr Butcher’s closing submission focused on the primary case pleaded: i.e. treating the 16 April proposal as the offer.[79]  In submissions, Mr Butcher added a variation on his pleaded case by relying on the 23 April email (as well as the 21 April oral acceptance) as acceptance of the 16 April email.  Though the acceptance by the 23 April email was not pleaded, I did not understand Mr Callanan ultimately to object to the Mr Butcher adding this alternative.
  5. [148]
    Mr Butcher’s closing submissions then appeared to treat the subsequent conduct pleaded in his defence as going to demonstrate an intention to be immediately bound by the terms of the contract allegedly formed by acceptance of the 16 April offer.

Pleading issues

  1. [149]
    Thus the case as ultimately put by each defendant differed somewhat from their pleaded case.  That was probably most obvious for Mr Ruckert, who advanced a case premised on the 16 April email as the initial offer.  That was inconsistent with his pleaded case. Mr Callanan submitted that Mr Ruckert should be held to his pleadings.
  2. [150]
    Mr Butcher focused on his primary case on formation with the innovation of relying on the 23 April email as acceptance.  As I have noted, I did not understand Mr Callanan to oppose that change.  In submissions Mr Butcher did not advance his alternative case based on the 23 April email as an offer.  The question is whether he ought to be taken to have abandoned it.
  3. [151]
    I am conscious of the authority to the effect that litigants in person should generally be required to comply with the rules of pleading.[80]  Similarly, litigants in person ought generally not to be permitted to depart from their pleadings at trial simply because of their unrepresented status.  The purpose of holding litigants in person to pleading rules prior to trial is, in substantial part, to ensure fairness to the represented party at trial.
  4. [152]
    However, in this matter it seems to me that the defendants ought to be permitted to advance their cases on formation in the manner articulated in their submissions. 
  5. [153]
    The changes in approach by the defendants comprised changes in the legal characterisation of the communications between the parties, and with the exception of the 21 April conversation, those communications are in writing.  The 21 April conversation was of course already in dispute on the Mr Butcher’s pleading and was fully litigated.  The only other factually contentious issue was the state of Mr Catton’s instructions, but that matter was also in dispute already.  Mr Callanan did not suggest he had been taken by surprise by the defendant’s submissions or had not had sufficient time to respond to them.

Analysis of the contract formation issue

Character of 16 April proposal as an offer

  1. [154]
    The primary contention of Mr Butcher and the tenor of some of the submissions by Mr Ruckert was that a binding Settlement Agreement was formed by classic offer and acceptance analysis: the 16 April email being the offer and the 21 April conversation and/or the 23 April email (perhaps together with the acceptance of the $5,000) comprising acceptance.  I do not accept that contention.
  2. [155]
    A preliminary point is the question of whether the offer was made just to TPB, or was made to TPB and each of the guarantors, such that all three had to accept the offer if it was to be properly accepted according to its tenor.  The defendants submit that the offer was made just to TPB.  I accept that submission:
    1. (a)
      Although the 16  April email was sent to the three individuals: the two defendants and Mr Fuller, addressing the email to them was explicable on the basis that they were the persons who were responsible for the affairs of TPB;
    2. (b)
      The 16 April proposal called on TPB to take certain steps (rather than calling for promises to take those steps, as is discussed below), and nowhere, expressly or by implication, does the 16 April email seek any guarantee or promise of performance by TPB from the addressees of the email; and
    3. (c)
      The proposal is followed by this sentence: “The Property Bar Pty Ltd which is all 3 of you (including 2 guarantors) need to take this seriously”.  Looked at objectively, this explains the inclusion of all three as addressees of the email as being by reason of their status as the guiding minds of TPB, not as potential obligees in their own right.
  3. [156]
    Thus the 16 April email contained a proposal directed to TPB.  Further, in my view, the 16 April proposal comprised an offer capable of acceptance so as to bring about a release of the claims under the Loan Deed (including the guarantees).  However, it is important to identify the character of the offer and how it contemplated acceptance occuring.
  4. [157]
    In my view, the 16 April proposal was an offer to TPB to release claims under the Loan Deed (including the guarantees) on performance of all the steps specified in the proposal, rather than an offer to accept the promise to perform.  That is, it is an offer which could be accepted by performance but not otherwise.[81]  Matters of both context and construction support that characterisation.
  5. [158]
    Looking first at matters of context:
    1. (a)
      As is correctly stated in the text of the email, at the time of its sending TPB had been in extended default of its obligations under the Loan Deed and the Purchase Deed with no evident prospect of the obligations being met by the company or its guarantors.  An offer to accept a promise to perform the obligations in the proposal in place of the promise to perform the obligations in Loan Deed would have left TTR1 in a similar position to that in which it already found itself: i.e. dependent on performance of promises by a company already shown to be unable or unwilling to perform its existing obligations which was in the control of people whose ability to cause TPB to perform its obligations had been shown to be doubtful at the least; and 
    2. (b)
      As noted in paragraph [155] above, the 16 April proposal was an offer made to TPB, not TPB and each of the guarantors.  Accordingly, if the 16 April proposal was an offer to accept the promise of performance rather than actual performance, TTR1 would have released a guaranteed obligation under the Loan Deed, with a replacement promise not the subject of a guarantee. 
  6. [159]
    Looking to the text, the following matters are relevant.
  7. [160]
    First, the email identifies at length the failures of TPB and its directors to meet the obligations under the Loan Agreement.  That reinforces the relevance of the contextual matters identified in paragraph [158].
  8. [161]
    Second, the proposal is articulated not in terms of promises to transfer 207 Jellicoe Street and to pay certain sums, but to actually do those acts.  Thus point 1 of the proposal states that “The Property Bar Pty Ltd transfers 207 Jellicoe Street” not that TPB undertakes to do so.  Similarly, point 2 states TPB “pays for all expenses…” not that TPB undertakes to do so.  This form of language has been recognised as indicating an intention to require actual performance before any release is given, on the unsurprising basis that that is the ordinary meaning of such words.[82] 
  9. [162]
    Third, there is the express imposition of a time limit in the last two lines of the email.  TTR1 offered to take the losses identified if the matter was finalised promptly, which it wanted done “within 1 month (no later than 16 May)”.  In the context of the email as a whole, finalised objectively communicated that TTR1 offered to accept money paid and the transfer completed by that date, not a promise to do so.  Nothing else could reasonably be seen as, for example, getting the writers out of the “nightmare”.  The identification of a short time frame for completion is more consistent with an offer to accept actual performance rather than an offer to accept a promise of performance.[83]
  10. [163]
    Fourth, the 16 April proposal calls for a transfer of real property.  That necessarily required any agreement to transfer the property to be recorded in writing.[84]  However, the 16 April proposal avoids any difficulties on this front if construed as an offer to accept performance rather than a promise to perform.  In that case, TPB simply had to do what was called for: transfer the land.  That could have been done by delivery of an executed transfer document.  A promise to perform which provided an agreement in writing sufficient to be enforceable under s. 59 of the Property Law Act 1974 (Qld) was otiose in that context.
  11. [164]
    If the proper construction of the offer is as an offer that could only be accepted by performance, it could not be accepted by a promise of performance.  Neither the 21 April acceptance (which I have found never occurred) nor the 23 April email comprised acceptance in the manner required by the offer.  The defendants’ cases, to the extent they rely on a binding contract being formed by acceptance of the 16 April proposal by a promise to perform, must therefore fail.
  12. [165]
    I am conscious that this approach to the 16 April proposal was not expressly contended for by the plaintiff.  However, it involves the same issues which informed the analysis of the character of any binding agreement from the perspective of accord and satisfaction (which of course was raised by the plaintiff) and arises on the face of the communications in evidence.
  13. [166]
    However, even if it were thought the case should not properly be disposed of on this basis, the defendants still fail for the reasons to follow.
  14. [167]
    Let it be assumed that the 16 April proposal should be construed as being one which could be accepted by a promise to perform the steps called for.  If so, the next question is whether the offer was accepted in the 21 April conversation or the 23 April email.

No acceptance by the 23 April email

  1. [168]
    I have already found that Mr Ruckert did not accept the 16 April proposal orally on 21 April.  That leaves the 23 April email as the only potential acceptance of the offer.  In my view, the 23 April email did not give rise to a binding Settlement Agreement on the terms contended for by the defendants or at all.  That is so for two reasons.
  2. [169]
    First, Mr Ruckert’s acceptance did not correlate with the terms of the offer made in the 16 April proposal in respect of the expenses to be paid.  The proposal in this respect was as follows:[85]
  1. The Property Bar pays for all expenses re this change to agreement (as agreed to in original agreement) including:
  1. Stamp duty
  2. Property valuations
  3. Registration fees
  4. All legal expenses (including $3,000 incurred by us since 9/9/17)
  5. Return of all rent collected by you from 207 Jellicoe (we calculated 33 fortnights @508.56 = $16,782 this has been adjusted for management fees)
  6. Return of our costs outlaid on this project since original purchase 209 Jellicoe (since no goals as outlined in information memorandum 26th May 2016 were ever actually met)

“Project management - $34 580

Rates + water + insurance - $12,432.90 (which you were supposed to be paying but never did)

Proposed Cash Payout : $66,794.90

  1. [170]
    Mr Ruckert accepted that part of the proposal in the following terms:[86]

Your proposal has a “Cash Payout” of $66,764.90.  This includes the items in parts 2(a) to (f)

  1. [171]
    In my view, looked at objectively, the 16 April proposal did not offer to accept the cash payout figure as being inclusive of all the expenses claimed in paragraphs 2(a) to (f). Rather it called for payment of all the expenses identified, whatever they turned out to be:
    1. (a)
      It is uncontroversial that the figure of $66,764.90 is the sum of the specific figures mentioned in paragraph 2(d) to (f) of the proposal.  That figure allows no amount for items 2(a) to (c), nor does it allow for legal expenses above $3,000.  Prima facie, it seems therefore that the specific sum stated did not objectively communicate that that sum was the total to be paid;
    2. (b)
      It could be argued to the contrary that read as a whole, the $66,764.90 was the nomination of a total sum to be accepted on account of all the items in paragraph 2.  However, that proposition is inconsistent with the chapeau words in paragraph 1 of the proposal which introduce the list of items with the statement that TPB “pays for all expenses…including”.  Those words are inconsistent with a construction of the paragraph to the effect that TTR1 would accept the total amount stated on account of all the expenses;
    3. (c)
      This conclusion draws particular force from paragraph 2(d) which requires payment of all legal expenses and then identifies the $3,000 as merely part of those expenses.  It is difficult to see how that express requirement could be consistent with a construction that treated the $66,764.90 as a total sum to be accepted on account of expenses.  A fortiori where the arithmetic shows that the $66,764.90 appears to be calculated on the basis of only $3,000 being allowed for that item;
    4. (d)
      This conclusion also gains some support from the reference to the original agreement.  It seems plain to me that that is a reference to the Loan Deed (which is the original agreement between the parties relating to 207 Jellicoe Street).  Clause 13.1 of the Loan Deed required TPB to pay all costs in connection with the agreement including legal costs; and 
    5. (e)
      Finally, there is a logical reason why a specific sum was nominated as the Proposed Cash Payout: this was the sum which at the time of writing, TTR1 knew had to be paid.  Valuation costs, stamp duty and total legal expenses all remained to be finally determined; and it is unlikely that lay persons would know what the registration fees would be.
  2. [172]
    It can be accepted that the specification of a specific sum as the Proposed Cash Payout might at first blush seem to introduce some uncertainty. However, for the reasons given, it is my view that the objective meaning of paragraph 2 is that all the expenses in paragraphs 2(a) to (f) as actually incurred had to be paid.  Indeed, the condition imposed by Mr Ruckert’s response on this issue specifying that the sum included all the items in paragraphs 2(a) to (f) tends to reveal an awareness at the time of writing of at least the prospect that the offer did not mean (or might not mean) what Mr Ruckert was seeking to characterise it as meaning. 
  3. [173]
    Accordingly, the 23 April email’s acceptance did not correlate with the offer of 16 April in relation to paragraph 2 of the proposal.  It was ineffective as acceptance of that offer.  At best it was a counteroffer.
  4. [174]
    Even if I am wrong on that conclusion, I consider further that the 23 April email did not comprise an acceptance of the 16 April proposal so as to give rise to an immediately binding contract because the acceptance was conditional on further negotiation of the terms of the agreement and/or conditional on a formal agreement being prepared by solicitors and executed.
  5. [175]
    Two aspects of the 23 April email point to that conclusion.
  6. [176]
    The first is Mr Ruckert’s statement that he would be sending the proposal to his solicitor “to begin the drawing up of the revised agreement”.  That is suggestive that Mr Ruckert’s agreement to the proposal was not intended to be binding until the revised agreement was formalised between solicitors.  By itself, however, it might be thought to be equivocal.  The mere fact that a party contemplates the drafting of a formal agreement when purporting to accept an offer does not of itself compel the conclusion that an intention not to be immediately bound to the terms stated at that time is revealed.  Such a situation might be construed as giving rise to an agreement to be immediately bound but with a proposal for the terms to be more formally recorded (the so-called first category in Masters v Cameron[87]).
  7. [177]
    However, such a construction of the 23 April email is excluded in my view by the fifth paragraph of that email.  There Mr Ruckert stated:

From our phone call over the weekend I understand your concerns regarding your current cash flow so I’m putting forward a “With Out Prejudice Offer” to give you some cash now while we are sorting out this agreement.  I wish to make an advance payment of […]

  1. [178]
    He then goes on to deal with the mechanics of the payment of the $5,000 referred to.
  2. [179]
    The use of the phrase “without prejudice offer” linked to the payment is one which, even in the context of lay persons dealing with each other, objectively communicates at the least that the payment is not to be treated as binding the payer to an obligation.  The balance of the sentence identifies what that obligation is: the agreement which is to be sorted out.  In my view, that paragraph communicates that Mr Ruckert is willing to pay $5,000 immediately but on the basis that it should not be taken as indicating immediate assent to the 16 April proposal, but rather as a payment on account pending the finalisation of the agreement contemplated by the exchange of emails, i.e. the completion of the “sorting out [of] this agreement”.
  3. [180]
    If, as Mr Ruckert contended, the sorting out extended only to recording the agreement in formal terms, it is impossible to see what objectively meaningful purpose was served by making the payment expressly without prejudice.  Accordingly, in my view, at best, the 23 April email comprised a counteroffer which was conditional upon finalisation of any agreement in satisfactory terms in a formal document.
  4. [181]
    Once that conclusion is reached, the fact of payment of the $5,000 and acceptance by TTR1 of those funds takes the question of formation of a contract no further.  Those are acts consistent with the express conditional basis upon which the money was paid.
  5. [182]
    Accordingly, no binding settlement agreement was formed as at 23 April 2018.

Subsequent communications do not give rise to any binding settlement agreement

  1. [183]
    As has been noted, the primary case advanced by each of Mr Butcher and (seemingly) Mr Ruckert at trial relied on a binding agreement arising from the 16 April email and the 21 April discussion or the 23 April email.  Both defendants, however, submit or plead that in various ways, a binding Settlement Agreement arose on the terms identified in the 23 April email: transfer of 207 Jellicoe Street and payment of $66,764.90 from the dealings following the 23 April email.
  2. [184]
    On no view of the subsequent communications, however, can a binding agreement be established, whether in those terms of the Settlement Agreement alleged or at all.
  3. [185]
    The first matter to note is that in the period between 23 April and 9 May 2018, Mr Ruckert and Mr Robertson communicated with each other on the basis that the settlement proposal was with Mr Ruckert’s solicitor for drawing up of a formal agreement. These exchanges do not materially alter the position communicated by the 23 April email.
  4. [186]
    Emphasis was placed by the defendants on the 4 May email from Mr Robertson to Mr Catton.  This email reflects Mr Robertson’s subjective beliefs about the existence and terms of an agreement.  It is not relevant to either matter given that it was not communicated to Mr Ruckert.  To the extent it might be characterised as an admission of intention to be legally bound, the email itself:
    1. (a)
      Demonstrates that the parties were not in fact ad idem on the amount to be paid; Mr Robertson asserting the construction in paragraph [171] above; and
    2. (b)
      Suggests that Mr Robertson was himself uncertain as to whether a binding agreement was in place: his email is replete with tentative comments such as that it was his “belief” there was an agreement and that the proposal had been “apparently” accepted.
  5. [187]
    Before leaving the 4 May email, it is necessary to note that Mr Catton was provided with the 16 and 23 April emails and the matter was then “left in his hands”.  The scope of his instructions however were defined by the content of the emails attached to the 4 May email.  They objectively communicated the requirement for completion by 16 May 2018 and that TTR1 required payment of all expenses, not limited to the $66,764.90 amount.  This defines the scope of any authority which might be inferred from those words to enter into a settlement agreement.
  6. [188]
    Central to the question of any agreement being inferred from the communications post 23 April 2018, however, is Mr Robertson’s 9 May email.  That email is set out in paragraph [91] above.  It is to be borne in mind that this email was sent in the context where, at best for the defendants, the 23 April email was a counteroffer.
  7. [189]
    The 9 May email communicates the following matters:
    1. (a)
      First, that the 16 April proposal “finally expires in a week”.  To the extent that amounts to a remaking of the offer in the 16 April email, it does so in a manner which unequivocally communicates that performance is required by 16 May 2018;
    2. (b)
      Second, that Mr Robertson was again asserting that payment had to be made in accordance with the construction of the 16 April email set out in paragraph  [171] above: see points 2) and 3) of the email; and
    3. (c)
      Third, TTR1 calls for performance without any formal written agreement.
  8. [190]
    If the 23 April email was an offer to contract on the basis of a promise to transfer 207 Jellicoe Street and pay $66,764.90 (and not an offer subject to formal agreement),  then the 9 May email was a decisive rejection of that offer.  Also importantly, the 9 May email confirmed (or offered) to settle on the basis of the 16 April email only if the transfer occurred and payments were made by 16 May.  Needless to say, none of the required steps were taken by TPB.[88] 
  9. [191]
    Attention must now be turned to the 30 May email from Mr Catton.  That email must be considered in the context of the preceding analysis.  That context includes, at best for the defendants:
    1. (a)
      The lack of correlation between the 16 April  proposal and the 23 April email on the question of sums to be paid;
    2. (b)
      That at the time it was sent, Mr Robertson had rejected any counteroffer made in the 23 April email by the 9 May email and offered to accept only performance of the terms of the 16 April, and by 16 May 2018;
    3. (c)
      That Mr Ruckert’s 23 April email on its proper construction was a conditional acceptance in any event, upon preparation of a written agreement by his solicitor;
    4. (d)
      That the 16 May deadline had passed some two weeks before, with the consequence that the counteroffer of 9 May (if it be characterised as such) had expired; and
    5. (e)
      That Mr Robertson had continued to show interest in receiving documentation of the proposed agreement from Mr Ruckert’s solicitors.
  10. [192]
    To that must be added my finding that Mr Catton had had no instructions from Mr Robertson since 4 May 2018 and in particular had not sought or received instructions about what to do in light of the passing of the time specified in the 16 April proposal (though the lack of instructions post 4 May was a matter not known to Mr Ruckert of course).
  11. [193]
    Even without regard to the lack of instructions of Mr Catton, it is impossible in my view to characterise his letter as comprising acceptance of the 23 April email or as giving rise, in all the circumstances of the dealings between the parties up to that time, to a binding Settlement Agreement.  That is so for at least the following reasons.
  12. [194]
    First, Mr Ruckert would be taken to have known of the 9 May email, even if Mr Catton did not.  Indeed, Mr Evans was also aware of the 9 May email because it was sent to him by Mr Ruckert.  A reasonable person in Mr Ruckert’s position would have known that the disclosed basis of Mr Catton’s assertion (i.e. that the agreement arose from the 16 April and 23 April emails) was wrong and omitted a key communication from TTR1, which amongst other things forcefully asserted the requirement of performance by 16 May. It is to be observed in this regard that Mr Catton’s first two paragraphs are in the nature of commentary on the two emails, not a distinct offer to settle on specified terms.
  13. [195]
    Second, the 30 May letter continues the misunderstanding as to the proper construction of the 16 April proposal in respect of amounts payable by TPB.  The fact Mr Catton made this assertion might be thought to be an offer by TTR1 to accept that construction, but this confronts the difficulty again that Mr Catton’s third paragraph is in the nature of commentary on the text of the two emails (which he seemingly did not read with care) and which discloses the inconsistency in offer and acceptance on an objective reading.
  14. [196]
    Third, Mr Catton’s letter is consistent with a binding agreement to be formed only when the proposal referred to is recorded in a revised agreement which is executed by the parties.  For reasons I have already given, that is the tenor of the 23 April email.  But in addition, this is a letter from a solicitor (who, absent express authority, does not have authority to commit a client to a contract: see paragraph [198] below).  The letter expressly contemplates the provision of a revised written agreement yet to be drawn up.  It is improbable that a solicitor’s letter referring to a future written version of a settlement agreement would be intended to commit a client to the terms of an agreement before the written document was produced. 
  15. [197]
    That inference is reinforced, to the extent it is suggested that formation of the agreement is to be inferred from the whole of the conduct of the parties, by the terms of the email from Mr Manhire sent on 4 June 2018 on behalf of TPB with the draft deed, which invited advice on the settlement date and “any changes proposed by your client”.

Mr Catton had no authority to contract on the terms of the 30 May letter

  1. [198]
    Even if the 30 May letter could be characterised as giving rise to a binding acceptance of an offer by TPB to contract immediately on the terms of the 23 April email, or as demonstrating a consensus on those terms, such an agreement would not bind TTR1 in any event.
  2. [199]
    I refer to paragraphs [187] and [192] above.  A solicitor will not have authority to commit his or her client in contract without clear and cogent evidence of authority to do so.  Further, there is no presumed ostensible authority outside settlement of litigation which is on foot.[89] 
  3. [200]
    It is to be doubted that Mr Catton had any authority to commit TTR1 in contract after 16 May 2018 based on his instructions in the 4 May email and the terms of the 16 April and 23 April emails.  Even if he did, however, he certainly had no authority to contract on the basis that TPB had to pay only $66,764.90. That was directly inconsistent with both the 16 April proposal and the instructions in 4 May 2018 email. 
  4. [201]
    Thus any contract arising out of the terms of the 30 May email is not binding on TTR1 in any event. 
  5. [202]
    The only subsequent communication which is materially relevant is Mr Robertson and Ms Cantrill’s email sent on 7 June 2018 (see paragraph [106] above).  As noted above, this seems to have been sent without knowledge of the 4 June 2018 draft and indeed it is hard to reconcile with Mr Robertson and Ms Cantrill being aware of the 30 May letter from Mr Catton.  I find they were not aware of that letter, not least because they would almost certainly have reacted forcefully to the suggestion that the only amount payable was the $66,764.90.
  6. [203]
    In those circumstances, the comment in the 7 June email at paragraph b) has no contractual significance.  It is introduced with the words “we are confused as to what is going on”.  It appears as part of a list of events which have led to that confusion.  The reference to the agreement is made only in that context.  At most, it might suggest a willingness to consider a written agreement prepared by TPB’s solicitor on the terms of the 16 April proposal though, frankly, it does not even say that.
  7. [204]
    Accordingly, by 7 June 2018 no binding contract on the terms of the Settlement Agreement or at all had been reached.  That conclusion makes it possible to deal with all the subsequent events with dispatch.
  8. [205]
    The defendants seek to rely on the receipt of rent by TTR1 from 207 Jellicoe Street, the active steps by TTR1 to sell the property and the directions given to the agents as being consistent with a binding agreement having been formed.  None of those steps unequivocally point to that conclusion.  Indeed, they do not point to that conclusion at all.  The rent was directed to TTR1 before any discussion of settlement and for the purpose of making some funds available to TTR1 to address the default under the Loan Deed and the Sale Deed.  The instructions to the letting agents by TPB was a corollary of that arrangement.  And of course both parties made efforts to sell both properties. 
  9. [206]
    For the sake of completeness, I observe that it is not possible to construe or infer a binding Settlement Agreement from the whole of the parties’ dealings from 16 April 2018 (to the extent that is alleged or contended for).  To establish such an agreement the objective assessment of the whole of the conduct must unequivocally point to the existence of a binding agreement in the terms alleged by the defendants: i.e. a release on payment of $66,764.90 plus a transfer of 207 Jellicoe Street.[90]  For the above reasons, the whole of the conduct of the parties does not unequivocally point to that conclusion.  Indeed, in my view, it supports the conclusion that the parties never reached a binding agreement of any kind.

Conclusion

  1. [207]
    For the above reasons:
    1. (a)
      No binding agreement arose from acceptance of the 16 April proposal;
    2. (b)
      No binding agreement arose from acceptance of an offer arising out of the 23 April email; and
    3. (c)
      No binding settlement agreement can be construed from the whole of the dealings from 16 April 2018. 

Any settlement agreement was conditional on performance

Relevant principles

  1. [208]
    This section of my reasons is premised on the assumption that, contrary to my conclusions in the previous paragraph, a binding agreement arose as alleged by the defendants on the terms of the Settlement Agreement.  It is not in dispute that the terms of that agreement were never performed by TPB.  Indeed, when Mr Robertson expressly called for performance on 9 May 2018, none was forthcoming.  Mr Ruckert never at any stage tendered performance.  The question which arises in those circumstances is whether the plaintiff was precluded from suing on the guarantees contained in the Loan Deed.  This turns on construction of the alleged Settlement Agreement by reference to the principles of accord and satisfaction and in particular, whether the effect of the Settlement Agreement was that TTR1 accepted promises of performance in discharge of the existing obligations under, relevantly, the guarantees contained in the Loan Deeds.
  2. [209]
    The relevant principles were authoritatively articulated by Dixon J in McDermott v Black (1940) 63 CLR 161 at 184-185 where his Honour said:

The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted, the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim. The distinction between an accord executory and an accord satisfaction remains as valid and as important as ever. An accord executory neither extinguishes the old cause of action nor affords a new one. The decision of the Court of Appeal in British Russian Gazette &c. Ltd. And Talbot v. Associated Newspapers Ltd [(1933) 2 K.B. 616], though doubtless some of the reasons display less zeal for principle rather than for reform, does not appear to me to be inconsistent with received doctrine that no new cause of action is given by an accord executory.

[…]

The case, therefore, provides no more than an illustration of the doctrine, finally established perhaps by Flockton v. Hall [(1849) 14 Q.B. 380], that of accord and satisfaction there are two cases, one where the making of the agreement itself is what is stipulated for, and the other, where it is the doing of the things promised by the agreement. The distinction depends on what exactly is agreed to be taken in place of the existing cause of action or claim. An executory promise or series of promises given in consideration for the abandonment of the claim may be accepted in substitution of the existing liability. Or, on the other hand, promises may be given by the party liable that he will satisfy the claim by doing an act, making over a thing or paying an ascertained sum of money and the other party may agree to accept, not the promise, but the act, thing or money in satisfaction of his claim. If the agreement is to accept the promise in satisfaction, the discharge of the liability is immediate; if the performance, then there is no discharge unless and until the promise is performed.

  1. [210]
    The analysis of Dixon J was binary.  His Honour’s analysis was that either there was either no alternative right (accord executory) or the alternative right was the only right (accord satisfaction).  A third category has since been recognised: that of an accord and conditional satisfaction, where there is a binding agreement to accept certain acts in satisfaction of the pre-existing right, but the release is deferred until performance is completed.  The tripartite categorisation of accord and satisfaction was reviewed and restated in Osborn v McDermott [1998] 3 VR 1 at 10-11 where Phillips JA with whom Winneke P and Charles JA agreed, summarise the position as follows:

Thus there are three possibilities, not two. First, there is a mere accord executory which, on the authorities, does not constitute a contract and which is altogether unenforceable, giving rise to no new rights and obligations pending performance under which, when there is performance (but only when there is performance), the plaintiff’s existing cause of action is discharged. Secondly, at the other end of the scale is the accord and satisfaction, under which there is an immediate and enforceable agreement once the compromise is agreed upon, the parties agreeing that the plaintiff takes in satisfaction of his existing claim against the defendant the new promise by the defendant in substitution for any existing obligation. Somewhere between the two, there is the accord and conditional satisfaction, which exists where the compromise amounts to an existing and enforceable agreement between the parties for performance according to its tenor but which does not operate to discharge any existing cause of action unless and until there has been performance.

Where there is a mere accord executory, no suit can be maintained upon the compromise unless and until there has been performance, and then suit is ordinarily unnecessary. Upon default in performance, the plaintiff’s existing cause of action continues unaffected. With accord and satisfaction, either party may sue upon the compromise, but only on the compromise and nothing else: the original cause of action has gone. Where there is accord and conditional satisfaction, the plaintiff is bound to await performance and accept it is tendered, but if there be no performance, then the plaintiff may proceed according to general principles called into play when any agreement is repudiated: the plaintiff may either treat the agreement (accord) at an end and proceed on his original cause of action; or he may, at his option, sue on the compromise agreement, in place of the original cause of action. Thus, the consequence should there be default in performance varies according to the case and, as indicated by Murphy J. in Fraser at 401-2, it would be surely in the best interests of the parties if their legal advisors was to it, when settling litigation, that the intended consequence upon default was clearly expressed and not left to implication. 

16 April/23 April agreement: conditional accord and satisfaction

  1. [211]
    I have already explained that in my view, on the proper construction of the 16 April proposal, it comprised an offer to accept performance itself rather than a promise of performance.  Such a characterisation is in substance to construe the proposal as a mere accord satisfactory (to use Phillips JA’s taxonomy).
  2. [212]
    However, even if the 16 April proposal was capable of acceptance so as to give rise to a binding agreement, it is my view that it was a contract which committed the plaintiff to a release of the claims under the Loan Deed only on performance.  The matters in paragraphs [157] to [164] above support that conclusion, even if it is accepted that by the 23 April email, TPB could and did accept the 16 April proposal. 
  3. [213]
    There was nothing in terms of the 23 April email which was apt to lead to a different conclusion.  In particular, the mere fact that there was a reference to the proposal being drawn up by the solicitor of TPB is not sufficient to lead to a different characterisation of the offer being accepted (that is the 16 April proposal).  Further, as at 23 April, there was sufficient time prior to 16 May for such a document to be produced and performance tendered. 
  4. [214]
    Accordingly, even if an immediately binding agreement arose from the 23 April email, it remained open to the plaintiffs to sue on the Loan Deed where the terms of the settlement were not performed.

Other forms of agreement in no different position

  1. [215]
    I cannot see any reason to conclude that any of the other possible ways that a binding agreement could have been formed on the terms of the alleged Settlement Agreement would lead to a different conclusion.
  2. [216]
    Any analysis based on the communications between the parties after 23 April 2018 must take into account the insistence in the 9 May email that actual performance be tendered, and the inclusion in the 30 May letter from Mr Catton of the 16 April proposal which, as I have said, objectively communicated at best conditional accord only.
  3. [217]
    Further, there is no clear statement anywhere in the communications between the parties that TTR1 was willing to release TPB and the guarantors in exchange for the promises comprised in the alleged Settlement Agreement.  All the dealings of the parties after 23 April 2018 took place against the background of the existing and continuing failure of TPB and the guarantors to perform the Loan Deed and of the reality that if there was an immediate release, TTR1 would have substituted one promise from a defaulting promisor for another promise from the same promisor, but without the benefit of the guarantees.  These matters continued to suggest that it was improbable that TTR1 would agree to an immediate release.  In those circumstances, in the absence of clear words, one could not objectively infer such an intention in this case.

No breach by TTR1 of its duty as mortgagee

  1. [218]
    This matter can be dealt with in brief terms.
  2. [219]
    Mr Butcher was the only one to plead this matter and the only one to advance submissions about it. He submitted that TTR1 had breached its duty as mortgagee in failing to appoint a receiver under the mortgage until 26 October 2018, despite the default under the Loan Deed and the mortgage occurring in September 2017.  It was said that this caused loss because interest (which was not covered by the guarantees) has accrued which reduced the amount which could be appropriated to the principal debt amount of $360,000 on sale of the security.  Mr Callanan for TTR1 gave short shrift to the contention, simply submitting orally that no loss could possibly have arisen because despite the best efforts of all parties, the property had not been able to be sold anyway.
  3. [220]
    He was correct to submit that the contention has no merit.  Not only could no loss be made out, but neither was the duty alleged one known to the law nor was there any evidence of a breach of the duty alleged or the duty as properly articulated.
  4. [221]
    Mr Butcher submitted that TTR1 had “an equitable duty to act in good faith and to take reasonable care and not act in neglect when dealing with its security”.[91]  No authority was cited for this broad range of obligations as mortgagee.  In the context of exercise of power of sale under a mortgage, the proposition that the mortgagee owes a duty to take reasonable care to obtain a proper price has been rejected in Australia.[92]  In equity, a mortgagee’s duties to the mortgagor (and to a surety) are limited to not acting in bad faith or needlessly sacrifice the interests of the mortgagor, or perhaps more generally, that the mortgagee not take unconscientious advantage of rights under the security. That equitable obligation must however be considered in the context of the particular character of a mortgage and the rights it confers: that is to permit the mortgagee to recoup the secured debt when it is not paid in accordance with its terms.  For that reason the mortgagee is recognised as not being a fiduciary of the mortgagor in exercising powers under the security.[93]
  5. [222]
    Further, it has been expressly recognised that a mortgagee is not obliged to exercise powers under a security and owes no duty to the mortgagor or a guarantor in that regard.  The mortgagee may exercise a power of sale if it so chooses and when it so chooses.[94]
  6. [223]
    In any event, no evidence was led to justify the conclusion that TTR1 had failed to take reasonable care in its decisions as to when to appoint the receiver and when to seek to sell (either through the receiver or otherwise), much less any evidence of any bad faith in those decisions.  I also observe that the argument seemed to be premised on the incorrect assumption that it was only on appointment of the receiver that the sale could have occurred. 
  7. [224]
    Finally, as Mr Callanan emphasises, the evidence discloses that both Mr Ruckert and TTR1 had made continual efforts to sell one or both properties from at least September 2017 without success.  It is difficult to see how any loss could flow from any breach of the kind pleaded in those circumstances.
  8. [225]
    The contention that there had been a breach of duty by TTR1 as mortgagee is rejected.  It is hard to see how, properly instructed on the law, it could ever have succeeded in this matter.
  9. [226]
    Finally, Mr Ruckert also pleaded that the claim on the guarantee should be reduced by the value of the security.  On the evidence before me, no sum has been yet received by TTR1 from sale of the security.  It is therefore not relevant to the liability of the guarantors as matters stand.  Even if the property had been sold, issues might arise as to appropriation of the sale proceeds to parts of the principal liabilities not covered by the guarantees (recalling that the guarantee is only for the principal debt amount of $360,000).  This contention is rejected.

Conclusion

  1. [227]
    There was no genuine dispute of the plaintiff’s claim on the guarantors under the Loan Deed once the question of attestation was resolved.  TTR1 made out its prima facie entitlement to judgment under the guarantees for the principal sum.
  2. [228]
    The defendants’ contentions that their liabilities under the Loan Deed were discharged by an immediate release of those obligations by accord and satisfaction contained in a binding Settlement Agreement have failed.
  3. [229]
    There was no breach of any duty owed to the guarantors in TTR1’s conduct in relation to its decisions on appointing the receiver or the exercise of the power of sale under the mortgage.
  4. [230]
    The consequence is that judgment shall be entered for TTR1 against each of the defendants in the amount of $360,000 plus interest.
  5. [231]
    I will hear the parties as to costs.

Footnotes

[1]  Exhibit 86.

[2]  TS3-35.4 to .10.

[3]  TS3-46.6.

[4]  Evidence of Mr Robertson at TS1-106.23; evidence of Ms Cantrill at TS2-85.14 to .21. 

[5]  The figure in Exhibit 65 was never challenged.

[6]  TS3-35.7 to .16.

[7]  TS2-79.28.

[8]  TS1-106.

[9]  TS2-82.

[10]  TS3-36.10 and TS3-37.40.

[11]  Exhibits 51 to 55.

[12]  Exhibit 56.

[13]  Exhibit 90.

[14]  TS2-80.25 to .44.

[15]  TS3-39.30 to 40.20.

[16]  Exhibit 25.

[17]  TS1-107.26; TS2-81.35.

[18]   TS3-41.

[19]  TS3-41.25.

[20]  Exhibit 24.

[21]  Exhibit 24.

[22]  Exhibit 1: there was some reservation about an additional clause 17 in Mr Catton’s letter.  It is unclear to what that refers but the point did not come up further at trial.

[23]  TS1-108.5.

[24]  TS1-71.41 to 73.47.

[25]  Exhibit 62.

[26]  Exhibit 63.

[27]  TS1-67 to 68.

[28] Jones v Dunkel (1959) 101 CLR 298 at 320.

[29]  TS3-111.1 to .11.

[30]  TS3-108.22 to .34.

[31]  Exhibit 3 at page 2; exhibit 7; exhibit 12; exhibit 13; exhibit 14; exhibit 15 at paragraphs [6] and [7]; exhibit 25 at page 2; evidence of Mr Catton at TS1-84.1 to .4.

[32]  Exhibit 62.

[33]  Exhibit 63.

[34]  Exhibit 58.

[35]  Exhibit 17.

[36]  Exhibit 18.

[37]  TS2-62; exhibit 60.

[38]  TS3-44.

[39]  Exhibit 65 and see [76] below.

[40]  TS2-86 to 87.

[41]  TS3-47.

[42]  Exhibit 65.

[43]  TS2-89 to 90.

[44]  TS3-48 to 49.

[45]  TS3-77.8 to .27.

[46]  Exhibit 66.

[47]  Exhibit 40.

[48]  Exhibit 81.

[49]  TS2-107.

[50]  Exhibit 41.

[51]  TS3-51.4.

[52]  Exhibit 31.

[53]  Exhibit 19.

[54]  Exhibit 32.

[55]  Exhibit 91.

[56]  Exhibit 35.

[57]  Exhibit 20.

[58]  Exhibit 36.

[59]  Exhibit 70.

[60]  TS1-80.10 to .21.

[61]  Exhibit 69.

[62]  Exhibit 61.

[63]  TS3-82 to 83.

[64]  Exhibit 70.

[65]  Exhibit 92.

[66]  Exhibit 38.

[67]  Exhibit 71.

[68]  The matter was not addressed by any witness: see TS2-11 to 12 (Mr Robertson in cross-examination).

[69]  Exhibit 11.

[70]  Exhibit 72. 

[71]  Mr Butcher’s email of 13 September 2018 (Exhibit 61) provides an overview of the steps which had been taken to sell the properties and the development them to that end.

[72]  TS3-81 to 83.

[73]  TS3-37.37.

[74]  First Defendant’s Further Amended Defence paragraphs 4(a) and (b).

[75]  First Defendant’s written closing paragraph 81.

[76]  Mr Butcher actually pleads 21 or 22 April as the date of acceptance but plainly refers to the date of the telephone conversation between Ms Cantrill and Mr Ruckert which is uncontroversially 21 April 2018.

[77]  Second Defendant’s Further Amended Defence paragraph 10A(b)(i) and (ii).

[78]  Second Defendant’s Further Amended Defence paragraph 10A(b)(iii) to (xiii).

[79]   See in particular paragraphs 35 to 68 of the second defendant’s closing submission.

[80]Bentleys (Sunshine Coast) Pty Ltd & Ors v Thomson [2018] QCA 358 at [8].

[81]  Carter, Contract Law in Australia (7th edition) at [3-49].

[82] Fraser v Elgen Tavern Pty Ltd [1982] VR 398 at 403.21 to .44; Howes v Miller [1970] VR 522 at 526 cases dealing with the issue of the characterisation of accord and satisfaction but equally relevant to construction on this issue.

[83]  See Fraser v Elgen Tavern Pty Ltd [1982] VR 398 where Murphy J concluded that the inclusion of a date for payment of a settlement sum with time of the essence supported the construction in that case that there was a conditional accord and satisfaction: see page 402.

[84]Property Law Act 1974 (Qld) s. 59.

[85]  Exhibit 65.

[86]  Exhibit 66.

[87]  (1954) 91 CLR 353 at 360. It might also suggest a category two situation though that is inapposite for this case.

[88]  Indeed, Mr Ruckert emailed Mr Evans and disclosed his own equivocal views on the existence of a binding agreement and its terms (see paragraph [93] above).  Like the email to Mr Catton, I do not see this communication as relevant to whether a contract was ever formed and on what terms, reflecting as it does subjective state of mind.

[89] Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605 at [138] to [148] per Beazley JA with whom Bathurst CJ and Meagher JA agreed.

[90] King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251 at [12] to [21] especially [21] per Bond J with whom Gotterson JA agreed and Fraser JA generally agreed.

[91]  Second defendant’s submissions at  paragraph 170.

[92]  Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage (3rd Australian Edition) at [20.21].

[93]Fisher and Lightwood at [20.21].

[94]Westpac Banking Corporation v Kingsland (1991) 26 NSWLR 700 at 705B.

Close

Editorial Notes

  • Published Case Name:

    TTR1 Pty Ltd v Ruckert & Butcher

  • Shortened Case Name:

    TTR1 Pty Ltd v Ruckert

  • MNC:

    [2019] QDC 182

  • Court:

    QDC

  • Judge(s):

    Porter DCJ

  • Date:

    25 Sep 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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