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Yue v CN-AU Capital Pty Ltd[2021] QSC 248

Yue v CN-AU Capital Pty Ltd[2021] QSC 248

SUPREME COURT OF QUEENSLAND

CITATION:

Yue v CN-AU Capital Pty Ltd & Anor [2021] QSC 248

PARTIES:

LIANSHENG YUE

(plaintiff)

v

CN-AU CAPITAL PTY LTD ACN 625 191 246

(first defendant)

CN-AU INVESTMENT GROUP PTY LTD ACN 622 657 649

(second defendant)

AUSTRALIAN SN INTERNATIONAL INVESTMENT GROUP PTY LTD ACN 601 511 577

(defendant by counterclaim)

FILE NO/S:

BS 1164 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

1 October 2021

DELIVERED AT:

Brisbane

HEARING DATE:

17 September 2021

JUDGE:

Kelly J

ORDER:

  1. Pursuant to s 127(1) of the Land Title Act 1994, the following caveats be removed forthwith:
    1. (a)
      Caveat no 719713120 over Lot 1 on Registered Plan 45125 contained in Title Reference 11790135 located at 50 to 74 Riedel Road Carbrook in the State of Queensland; and,
    2. (b)
      Caveat no 719713134 over Lot 2 on Registered Plan 45125 contained in Title Reference 15702150 located at 4 to 48 Riedel Road Carbrook in the State of Queensland.
  1. The Registrar of Titles be notified and authorised to execute all documents on behalf of the plaintiff that are necessary to effect the removal of the caveats referred to in sub-paragraphs 1(a) and (b).
  2. Within 14 days of the date of these orders, the first defendant recover from the plaintiff, and the plaintiff deliver up to the first defendant, vacant possession of:
    1. (a)
      Lot 1 on Registered Plan 45125 contained in Title Reference 11790135 located at 50 to 74 Riedel Road Carbrook in the State of Queensland; and,
    2. (b)
      Lot 2 on Registered Plan 45125 contained in Title Reference 15702150 located at 4 to 48 Riedel Road Carbrook.
  3. The application filed by the plaintiff on 13 August 2021 (CFI 36) is dismissed.
  4. I will hear the parties as to costs.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the plaintiff and first defendant are parties to a deed of agreement – where the deed of agreement provides that “Mr Yue shall cause the Second Payment to be made to [Capital] on or before 24 May 2021, made payable to the JCL Trust Account” – where the central issue of construction concerns what was required of Mr Yue for him to “cause the Second Payment to be made to [Capital] on or before 24 May 2021” – where the plaintiff contends that a cheque drawn on a solicitor’s trust account satisfied the contractual requirement whether by bank cheque or clear funds – where the first defendant contends the primary obligation required the plaintiff to cause the second payment to be made on or before 24 May 2021 by way of cleared funds on or before that date – whether a reasonable business person in the position of the parties would have understood that, in order for the plaintiff to effect payment in accordance with the clause, and thereby become entitled to the release of the Mortgages, cleared funds were required to be provided on or before 24 May 2021

PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – DECLARATIONS – APPROPRIATE FORM OF RELIEF – DISCRETION OF COURT – OTHER CASES – where the deed of agreement provides for the plaintiff to make payments to the first defendant – where a dispute arose after the first defendant refused to accept a payment of the balance funds by a solicitors’ trust account cheque – where the plaintiff seeks a declaration that the plaintiff has not breached the deed of agreement – whether the declaration ought to be made in the terms sought by the plaintiff

EQUITY – EQUITABLE REMEDIES – SPECIFIC PERFORMANCE – ENFORCEMENT – where the deed of agreement provides for the plaintiff to sell property – where the property was not sold because the first defendant refused to accept payment of the balance funds by a solicitors’ trust account cheque – where the plaintiff seeks performance of the deed of agreement for the sale of property – whether the discretionary factors militate in favour of granting specific performance

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – PENALTIES AND LIQUIDATED DAMAGES – GENERAL PRINCIPLES – where the plaintiff contends that the default consequences contained in the deed of agreement sought to contract out equity’s jurisdiction, in compelling to not resist sale to another party, and to allow it to have the benefit of the $2,600,000 payment without a trial to determine the validity of the Mortgages – where the first defendant contends that the deed of agreement did not provide for the imposition of an additional and different liability or detriment in the event of the plaintiff’s breach of a primary obligation – whether the contractual provision is a penalty clause based on the terms and circumstances of the contract and judged as at the time of the making the contract

EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – GENERALLY – where the plaintiff contends for a serious question or prima facie case to arise out of the validity or enforceability of the deed of agreement as well as in relation to the claims made by him in the proceeding – where the first defendant contends it did not hinder or prevent performance by the plaintiff – where the plaintiff submits that there is a prima facie case in relation to the validity or enforceability of the deed of agreement and the balance of convenience favours the grant of the interlocutory injunctions – whether the injunctions should be granted

REAL PROPERTY – TORRENS TITLE – CAVEATS AGAINST DEALINGS – REMOVAL – PARTICULAR CASES – where the plaintiff lodged caveats claiming an equitable interest in the property –  where the first defendant contends, in addition to direct enforcement, that the plaintiff’s obligations under the deed of agreement are a powerful consideration in favour of removal of the caveat – where the plaintiff’s undertaking is of little or no value – whether there is a serious question to be tried –  whether the balance of convenience favours the removal of the caveats

Land Title Act 1994, s 127(1)

Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301

Adani Mining Pty Ltd v Pennings [2020] QSC 275

Andrew v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618

Cousins Securities Pty Ltd v CEC Group Ltd [2007] 2 Qd R 520

Crown Melbourne v Cosmopolitan Hotel (2016) 260 CLR 1

Donnelly v Amalgamated TV Services (1998) 45 NSWLR 570

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640

Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455

Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161

Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126

Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Racecourse Totalizators Pty Ltd v Totalisator Administration Board of Queensland (1995) 58 FCR 119

Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656

Sun North Investments Pty Ltd (as Trustee of Sun Development Trust) v Dale [2014] 1 Qd R 369

Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315

Team Dynamik Racing Pty Ltd v Longhurst Racing Pty Ltd [2007] QSC 32

Zhu v Treasurer of New South Wales (2004) 218 CLR 530

COUNSEL:

M T Hickey and C Chiang for the plaintiff

D G Clothier QC and AI O'Brien for the first defendant

SOLICITORS:

Rice Legal for the plaintiff

James Conomos Lawyers Pty Ltd for the first defendant

  1. [1]
    The plaintiff (Mr Yue) is the registered owner of two parcels of land situated at 4 and 50 Riedel Road, Carbrook (the Riedel Road Properties).[1] The first defendant (Capital) holds registered mortgages over the Riedel Road Properties.
  2. [2]
    There are three interlocutory applications before me namely:
    1. (a)
      an application filed by Capital to remove caveats lodged by Mr Yue over the Riedel Road Properties (the Caveat Application);[2]
    2. (b)
      an application filed by Capital to recover possession of the Riedel Road Properties from Mr Yue (the Recovery of Possession Application);[3] and
    3. (c)
      an application filed by Mr Yue for a declaration in relation to, and specific performance of, a Deed of Agreement dated 23 April 2021 made between Mr Yue and Capital (the Settlement Deed) or, alternatively, injunctive relief (Mr Yue’s Application).[4]
  3. [3]
    It has been convenient to structure these Reasons by reference to the following headings:
    1. (a)
      Background to the proceeding;
    2. (b)
      Overview of the proceeding;
    3. (c)
      The Settlement Deed;
    4. (d)
      Events after the Settlement Deed;
    5. (e)
      The proper construction of the Settlement Deed;
    6. (f)
      Mr Yue’s Application;
    7. (g)
      Capital’s Applications.

Background to the proceeding

  1. [4]
    In about 2014, Mr Yue commenced discussions with the Logan City Council regarding the possible development of the Riedel Road Properties.[5] In the context of those discussions, he was introduced to a group of potential investors.[6] Mr Yue signed a letter of intent with some of the investors on 20 June 2014.[7] Capital and the second defendant (Investment Group) are corporations connected to the investors.
  2. [5]
    Between March 2016 and March 2017, Mr Yue granted mortgages in respect of the Riedel Road Properties and another property, his former home, situated at 54 Bordeaux St, Eight Mile Plains (54 Bordeaux Street).[8] The mortgage transactions occurred as follows:
    1. (a)
      On or about 15 March 2016, the property situated at 4 Riedel Road Carbrook (4 Riedel Road) was mortgaged to La Trobe Financial Asset Management Limited (La Trobe);[9]
    2. (b)
      On or about 14 June 2016, the property situated at 50 Riedel Road Carbrook (50 Riedel Road) was mortgaged to Fleming Family Super Fund Pty Ltd (Fleming);[10] and
    3. (c)
      On or about 15 March 2017, 54 Bordeaux Street and 4 Riedel Road were mortgaged to Fleming.[11]
  3. [6]
    I will refer to the Mortgages given to Fleming as “the Fleming Mortgages” and the mortgage given to La Trobe as the “the La Trobe Mortgage”. I will refer to the Fleming Mortgages and the La Trobe Mortgage collectively as the “the Mortgages”. The Mortgages were registered.
  4. [7]
    By a Facility Agreement dated 14 June 2016 (the Facility Agreement), Fleming, at the request of Mr Yue,[12] had agreed to lend monies to the defendant by counterclaim (Australian SN) for the purpose, inter alia of funding the acquisition of 50 Riedel Road.[13] Mr Yue guaranteed Australian SN’s obligations under the Facility Agreement.[14] The Fleming Mortgages secured the obligations under the Facility Agreement and Mr Yue’s guarantee.[15] The principal debt involved an advance of $1,060,000.[16] Australian SN’s obligations under the Facility Agreement extended to the payment of interest[17] and the costs and expenses of enforcement.[18]
  5. [8]
    The La Trobe Mortgage was provided as security for monies owed by Mr Yue to La Trobe.[19] Mr Yue’s obligations under the La Trobe Mortgage extended to the repayment of an advance of $1,430,000,[20] the payment of interest[21] and the costs and expenses of enforcement.[22]
  6. [9]
    On 3 November 2017, Mr Yue, as vendor, and Investment Group, as purchaser, executed a contract of sale in respect of the Riedel Road Properties for a price of $9,600,000 (the First Riedel Road Contract).[23] The original settlement date was nominated as being 90 days from the date of the contract. Detailed Special Conditions formed Annexure A, which, inter alia:
    1. (a)
      acknowledged payment of an initial deposit of $500,000 and provided for balance payments of $200,000 on 15 November 2017, $760,000 on 20 December 2017 and $2,140,000 on the Settlement Date; [24]
    2. (b)
      provided for vendor finance in an estimated amount of $6 million;[25]
    3. (c)
      acknowledged that Investment Group required the approval of the Chinese Government before it could make an international funds transfer to settle the purchase;[26]
    4. (d)
      provided for termination in the event that the First Riedel Road Contract had not settled within six months of the original settlement date.[27]
  7. [10]
    From the date of the First Riedel Road Contract, 3 November 2017, until in or around March 2018, Investment Group paid the interest or instalments owing by Mr Yue to his mortgagees.[28] The date of the First Riedel Road Contract was amended to 13 November 2017 which meant that the settlement date became 12 February 2018.[29]  By 6 February 2018, Investment Group had paid $700,000 of the deposit under the First Riedel Road Contract.[30]
  8. [11]
    On or about 13 April 2018, Capital and Fleming executed a Deed of Assignment by which Fleming assigned to Capital, the Fleming Mortgages and the debt pursuant to the Facility Agreement in consideration for the payment by Capital of $1,070,000.[31] On or about 13 April 2018, Capital paid to Fleming the amount of $1,070,000 (the Fleming Assignment Payment).[32]
  9. [12]
    On or about 30 November 2018, Capital and La Trobe executed a Deed of Assignment by which La Trobe assigned to Capital, the La Trobe Mortgage and the debt owed to La Trobe by Mr Yue in consideration for the payment by Capital of $1,430,000.[33] On or about 30 November 2018, Capital paid to La Trobe the amount of $1,430,00 (the La Trobe Assignment Payment).[34]
  10. [13]
    The transfers of the Fleming Mortgages and the La Trobe Mortgage were registered.
  11. [14]
    Mr Yue fell into arrears and, since in or about September 2019, has not paid any amounts owing under the Fleming Mortgages and the La Trobe Mortgage.[35]
  12. [15]
    On 11 September 2019, Capital issued a notice of demand to Mr Yue under the Fleming Mortgages.[36] On 1 October 2019, Capital issued a notice of exercise of power of sale to Mr Yue under the Fleming Mortgages (the Notice of Power of Sale).[37] In or about October 2019, Capital engaged a real estate agent to commence a marketing campaign for the Riedel Road Properties.[38] On 4 November 2019, two days before the scheduled auction, but unbeknownst to Capital, Mr Yue lodged caveats over the Riedel Road Properties and 54 Bordeaux Street (the Caveats).[39] The grounds for each caveat were stated to be:[40]

“The improper exercise of power of sale by the mortgagee … because the principal debt and the guarantee secured by the mortgage have been discharged.”

  1. [16]
    On 6 November 2019, at the auction of the Riedel Road Properties, the highest bid was $3,300,000, and a contract of sale was executed (the Second Riedel Road Contract).[41] The Caveats prevented the Second Riedel Road Contract from settling.[42]
  2. [17]
    On 3 February 2020, Mr Yue commenced the proceeding against Capital and Investment Group.

Overview of the proceeding

  1. [18]
    In the proceeding:
    1. (a)
      Mr Yue materially alleges that:
      1. prior to 13 April 2018, by reason of correspondence exchanged during March 2018, he agreed with Investment Group that, in exchange for Mr Yue agreeing to extend the date for settlement of the First Riedel Road Contract to 31 August 2018, Investment Group would pay the debt owed to Fleming under the Facility Agreement to discharge the Fleming Mortgages, with the payment being treated as a payment towards the purchase price under the First Riedel Road Contract (the Discharge Agreement);[43]
      2. the Fleming Assignment Payment was in fact a payment made pursuant to the Discharge Agreement;[44]
      3. the debt under the Facility Agreement and Mr Yue’s personal guarantee to Fleming have been discharged;[45]
      4. the Fleming Mortgages are unenforceable against Mr Yue;[46]
      5. Capital and Investment Group are estopped from contending for any indebtedness under the Fleming Mortgages and from enforcing Mr Yue’s personal guarantee;[47]
      6. Mr Yue treated Investment Group’s termination of the First Riedel Road Contract as a repudiation,[48] elected to accept the repudiation and terminated the First Riedel Road Contract;[49]
    2. (b)
      Capital alleges that on or about 13 April 2018 it made the Fleming Assignment Payment as consideration for the assignment of the Fleming Mortgages;[50]
    3. (c)
      Investment Group denies the existence of the Discharge Agreement and alleges that it terminated the First Riedel Road Contract on 18 August 2019 and is entitled to recover the monies it paid pursuant to the First Riedel Road Contract.[51]
  2. [19]
    On 6 November 2020, the Caveat Application was filed and was returnable on 26 November 2020.[52]
  3. [20]
    On 10 November 2020, Mr Yue, as vendor, and a Ms Hsiao Ying Chen, as purchaser, entered into a contract to sell 54 Bordeaux Street for the purchase price of $1,080,000 (the 54 Bordeaux Street Contract).[53]
  4. [21]
    On 24 November 2020, Mr Yue, as vendor, and NY Forever Win Pty Ltd (NY Forever), as purchaser, entered into a contract to sell the Riedel Road Properties for the purchase price of $3,500,000 (the Third Riedel Road Contract).[54] A deposit of $500,000 was payable on 21 December 2020[55] and the settlement period was 120 days.[56]
  5. [22]
    On 25 November 2020, Mr Yue filed an interlocutory application against Capital and Investment Group seeking injunctive relief to enable him to sell 54 Bordeaux Street and the Riedel Road Properties and pay the balance proceeds into Court pending the resolution of the proceeding (the Injunction Application).[57]
  6. [23]
    On 26 November 2020, the Caveat Application and the Injunction Application were adjourned to 16 December 2020.[58]
  7. [24]
    The Discharge Agreement as pleaded in the Statement of Claim is concerned with the discharge of the Fleming Mortgages. By an affidavit affirmed on 14 December 2020, Mr Yue described the Discharge Agreement as extending to the La Trobe Mortgage.[59]
  8. [25]
    On 16 December 2020, the applications were further adjourned to 16 March 2021.[60] The deposit under the Third Riedel Road Contract was not paid in full until 24 February 2021.[61] On 5 February 2021, settlement was extended to 24 May 2021.[62] Prior to 16 March 2021, Mr Yue and Capital were able to reach an “in principle” agreement to resolve the Injunction Application and the Caveat Application.[63] On 16 March 2021, the Caveat Application and the Injunction Application were adjourned by consent to a date to be fixed.[64] Following the adjournment, the parties continued their negotiations and endeavoured to document their “in principle” agreement.[65]
  9. [26]
    On 23 April 2021, the Settlement Deed was executed by Mr Yue, Capital and Mr Junyan Lu, a director of Capital.[66]  It was common ground that the Settlement Deed had been negotiated and settled by lawyers on behalf of their clients.[67]

The Settlement Deed

  1. [27]
    The Settlement Deed relevantly provided:[68]
    1. (a)
      By clause 1.1:
      1. “Application” was defined to mean the Caveat Application;
      2. “Caveats” was defined to mean the Caveats;
      3. “First Payment” was defined to mean the sum of $500,000 being the deposit paid pursuant to the Third Riedel Road Contract;
      4. “JCL” was defined to mean “James Conomos Lawyers Pty Ltd ACN 169 902 318”;
      5. “JCL Trust Account” was defined to mean:

“the following account:

Bank: CBA

BSB: 064 129

A/c No: 1055 7239”;

  1. (vi)
    “Mr Yue’s application” was defined to mean the Injunction Application;
  2. (vii)
    “Mortgages” was defined to mean the Fleming Mortgages and the La Trobe Mortgage;
  3. (viii)
    “Sale Contract” was defined to mean the Third Riedel Road Contract.
  4. (ix)
    “Second Payment” was defined to mean “the sum of $2,000,000”
  5. (x)
    “Balance Payment” was defined to mean:

“… the balance payable under [the Third Riedel Road Contract] after payment of:

  1. (a)
    the First Payment;
  1. (b)
    the Second Payment;
  1. (c)
    adjustments pursuant to [the Third Riedel Road Contract];
  1. (d)
    reasonable legal fees fixed in the sum of $3,500 plus GST plus outlays of Mr Yue in acting solely in regard to [the Third Riedel Road Contract] and not in respect of the Application or the Proceeding;
  1. (e)
    the sum of $100,000, which is payable to Mr Yue.”
  1. (b)
    By clause 2:

“2. Acknowledgments

  1. (a)
    Mr Yue acknowledges that [the Third Riedel Road Contract] is due to complete on or before 24 May 2021.
  1. (b)
    Mr Yue acknowledges that the (sic) NY Forever has paid a deposit of $500,000 as a deposit pursuant to [the Third Riedel Road Contract], which sum is held in the trust account of Rice Legal as stakeholder.
  2. (c)
    Mr Yue acknowledges and agrees that upon payment of the First Payment to [Capital] hereunder, [Capital] shall be entitled to assume that the payment has been made with the full authority of NY Forever on the basis that NY Forever has no further claim to the deposit of $500,000 on any account whatsoever.
  3. (d)
    For the purposes of clause 2(c) above, and at the time of the payment in clause 3.1 below, Mr Yue shall provide to [Capital], or its solicitors, the written consent of NY Forever to the payment of the First Payment hereunder on the basis that NY Forever has no further claim to the deposit of $500,000 on any account whatsoever.
  4. (e)
    Subject to clause 3.4, Mr Yue acknowledges and agrees that he shall not extend or agree to extend that (sic) date for completion of [the Third Riedel Road Contract] beyond 24 May 2021 without the prior written consent of [Capital], which consent will not be unreasonably withheld by [Capital].
  5. (f)
    Subject to clause 3.4, Mr Yue acknowledges and agrees that he shall not change or seek to change or vary any terms of [the Third Riedel Road Contract], without the prior written consent of [Capital], which consent will not be unreasonably withheld by [Capital].
  6. (g)
    [Capital] acknowledges and agrees that it will release its mortgage (sic) over the Properties at Completion of [the Third Riedel Road Contract] in exchange for Mr Yue effecting payments in accordance with clauses 3.1 and 3.2 of this Deed.
  7. (h)
    [Capital] agrees that settlement or completion of [the Third Riedel Road Contract] may be effected on or before that date which is 60 days after the date of this Deed or otherwise as provided in clause 3.4.”
  1. (c)
    By clause 3:

“3. Payment and Release of Mortgage

3.1 First Payment

Mr Yue shall cause the First Payment to be made to [Capital] within 7 days of the date of this Deed, made payable to the JCL Trust Account.

3.2 Second Payment

Mr Yue shall cause the Second Payment to be made to [Capital] on or before 24 May 2021, made payable to the JCL Trust Account.

3.3 Third Payment

From the proceeds of [the Third Riedel Road Contract], Mr Yue shall pay or cause to be paid the Balance Payment and any payment made pursuant to clause 3.4(a)(iv) below to be paid into Court in the Proceeding pending determination of the issues in dispute between Mr Yue and [Capital] in the Proceeding.

3.4 Extension of Date for Completion of the Sale Contract

  1. (a)
    [Capital] acknowledges that Mr Yue and the Buyer under [the Third Riedel Road Contract] may agree to extend the Date for Completion under [the Third Riedel Road Contract] to a date not later than 28 June 2021 (the Extension) if and only if:
  1. (i)
    Mr Yue has strictly complied with clause 3.1 above; and
  1. (ii)
    Mr Yue has strictly complied with clause 3.2 above; and
  1. (iii)
    Mr Yue has otherwise strictly complied with all other terms of this Deed; and
  1. (iv)
    Mr Yue or the Buyer under [the Third Riedel Road Contract] pays to (sic) the sum of $5,000 upon Completion of [the Third Riedel Road Contract] pursuant to the Extension, in addition to the Balance Payment as the price for the Extension.”
  1. (d)
    By clause 4:

“4 Disposal of Application

  1. (a)
    Upon payment pursuant to the terms of the Deed of:
  1. (i)
    the First Payment; and
  1. (ii)
    the Second Payment; and
  1. (iii)
    the Balance Payment,

Capital] and Mr Yue will consent to orders that the Application and Mr Yue’s Application be dismissed with no other order.

  1. (b)
    If Mr Yue commits an Event of Default hereunder:
  1. (i)
    [Capital] may relist the Application and seek orders for the removal of the Caveats and costs;
  1. (ii)
    Mr Yue shall consent to the removal or withdrawal of the Caveats and costs of the Application;
  1. (iii)
    Mr Yue acknowledges that [Capital] may sell the Properties for a sum not less than $3.5 million excluding GST and he shall not oppose or seek to oppose such sale on any basis whatsoever;
  1. (iv)
    Mr Yue will deliver up vacant possession of the Properties to [Capital] within 14 days after an Event of Default occurs;
  1. (v)
    agree (sic) that [Capital] will be entitled to take whatever action it deems necessary or considers appropriate to enforce the Mortgages, to the full extent permitted by law;
  1. (vi)
    on completion of the sale contemplated by clause 4(b)(iii), [Capital] will pay the proceeds of sale as follows:
  1. (A)
    adjustments pursuant to the Contract;
  1. (B)
    reasonable legal fees fixed in the sum of $3,500 plus GST plus outlays of [Capital] as mortgagee;
  1. (C)
    the sum of $2,600,000 to [Capital], payable to the trust account of JCL;
  1. (D)
    the balance to be paid into Court in the Proceeding pending determination of the issues in dispute between Mr Yue and [Capital] in the Proceeding.
  1. (c)
    For the purposes of this Deed, an Event of Default occurs if:
  1. (i)
    Mr Yue does not make any payment referred to in clause 3.1, 3.2 and 3.3 strictly on time; or
  1. (ii)
    Mr Yue does not strictly comply with clause 3.4;
  1. (iii)
    Mr Yue stops payment on any cheque or payment required to be made by Mr Yue pursuant to this Deed; or
  1. (iv)
    Mr Yue does not provide to [Capital] the written consent of NY Forever to the payment of the First Payment hereunder on the basis that NY Forever has no further Claim to the deposit of $500,000 on any account whatsoever as required by clause 2(d) above; or
  1. (v)
    Save for the Extension in clause 3.4 above, Mr Yue extends or agree (sic) to extend that (sic) date for completion of [the Third Riedel Road Contract] beyond 24 May 2021 without the prior written consent of [Capital], which consent was not unreasonably withheld; or
  1. (vi)
    Save for the Extension in clause 3.4 above, Mr Yue changes or seek (sic) to change or vary any terms of [the Third Riedel Road Contract] without the prior written consent of [Capital], which consent was not unreasonably withheld; or
  1. (vii)
    Due to conduct of Mr Yue, this Deed is or becomes wholly or partly void, voidable or unenforceable or is claimed to be so by Mr Yue.”
  1. (e)
    By clause 11 time was stated to be of the essence of the Settlement Deed;
  2. (f)
    By clause 17:

“17 Independent Advice

  1. (a)
    Mr Yue warrants:
  1. (i)
    that he has taken separate and independent legal advice as to the nature, effect and extent of this Deed;
  1. (ii)
    that the Deed has been read to him by a person speaking Mandarin;
  1. (iii)
    that he understands the nature and extent of the obligations in this Deed;
  1. (iv)
    that he enters this Deed voluntarily and of his own free will;
  1. (v)
    that he is aware that [Capital] is relying upon these warranties in executing this Deed”
  1. [28]
    Although the term “Properties” was not defined by the Settlement Deed, it seems clear that by reason of the definition of “Sale Contract”, the expression “Properties” was objectively intended to refer to the Riedel Road Properties.

Events after the Settlement Deed

  1. [29]
    The Second Payment was to be made on or before 24 May 2021 to coincide with completion of the Third Riedel Road Contract.[69] On 13 May 2021, NY Forever’s financier’s solicitors requested cheque directions from NY Forever.[70] On 17 May 2021, Capital’s solicitors sent an email to Mr Yue’s solicitors and NY Forever’s solicitors proposing that completion occur at 2:30pm on 24 May 2021 at Capital’s solicitors’ offices.[71] On 18 May 2021, by an email to Capital’s solicitors and Mr Yue’s solicitors, NY Forever’s solicitors confirmed that settlement would occur at that nominated time and place and requested that mortgage releases “be ready for our client’s bank collection at settlement” (sic).[72] On 20 May 2021, Mr Yue’s solicitors emailed NY Forever’s solicitors (copying Capital’s solicitors) and relevantly requested that:[73]

“After cheques for rates, water and land tax adjustments, by bank cheques, please pay the balance:

  1. $2 million to James Conomos Lawyers P/L Law Practice Trust Account; …”
  1. [30]
    On 21 May 2021, NY Forever’s solicitors sent an email to NY Forever’s Mortgagee’s solicitor relevantly stating:[74]

“Please draw the following bank cheque for the above settlement on Monday 24 May 2021, at James Conomos Lawyers @2:30

James Conomos Lawyers P/L Law Practice Trust Account - $1,845,639.52”

  1. [31]
    On 24 May 2021, the day of settlement:
    1. (a)
      at around 12:56pm, Capital’s solicitors emailed NY Forever’s solicitors and Mr Yue’s solicitors advising that the releases of the Mortgages would be handed over at settlement and requesting that “… the cheques for $2m and $876,3352.99 are bank cheques;”[75]
    2. (b)
      at around 1:31pm, NY Forever’s solicitors emailed Capital’s solicitors and Mr Yue’s solicitors noting that there was a delay in preparing the settlement cheque and requesting that settlement be re-scheduled to occur at 3:30pm;[76]
    3. (c)
      at around 2:34pm, Capital’s solicitors emailed NY Forever’s solicitors and Mr Yue’s solicitors confirming that settlement would occur at 3:30pm;[77]
    4. (d)
      at around 3:30pm Capital’s solicitor (Mr Angeli), Mr Yue’s solicitor (Mr Cheng) and a settlement agent on behalf of NY Forever (Mr Hall)[78] met at the offices of Capital’s solicitors.[79] Messrs Angeli, Cheng and Hall waited for the arrival of NY Forever’s Mortgagee’s representative.[80] At this time, all documents and cheques were agreed to be in order except that there was an outstanding cheque in the amount of $1,845,251.20 payable to James Conomos Lawyers P/L Law Practice Trust Account.[81] NY Forever had provided a bank cheque payable to James Conomos Lawyers P/L Law Practice Trust Account in the amount of $154, 748.80.[82] Mr Cheng’s evidence was that the parties’ representatives waited for NY Forever’s Mortgagee’s representative to “arrive with the $1, 845, 251.20 bank cheque”.[83] 
    5. (e)
      At around 3.40 pm Mr Cheng was advised by NY Forever’s solicitors to the effect that NY Forever’s mortgagee would not be able to provide a bank cheque because the cut off time for drawing bank cheques had passed.[84] Mr Cheng relayed this information to Mr Angeli;[85]
    6. (f)
      At around 3.45 pm, Mr Cheng received a telephone call from Mr Ewan Wu (Mr Wu), NY Forever’s solicitor. Mr Wu asked Mr Cheng whether “[Capital] would accept solicitors’ trust cheques instead of bank cheques to give effect to settlement today”.[86] Mr Wu relayed this request to Mr Angeli who, after taking instructions, advised Mr Cheng that Capital would not accept a solicitors’ trust account cheque and required a bank cheque.[87] Mr Cheng then asked Mr Angeli whether Capital would agree to an extension of time to complete on 25 May 2021. Mr Cheng says that Mr Wu advised him, whilst he was on speaker phone and Mr Cheng was in the presence of Mr Angeli, to the effect that “NY Forever would be able to get the $1,845,251.20 drawn as a bank cheque tomorrow”.[88] Mr Cheng says that he asked Mr Angeli whether Capital would “agree to a one day extension under clause 3.4 of the Settlement Deed”.[89] He further asked Mr Angeli to take instructions that Capital would not rely on clause 3.4(a)(iv) of the Settlement Deed which provided that Mr Yue had to pay $5000 in exchange for [Capital’s] consent to an extension of the Date for Completion under the Third Riedel Road Contract.[90] Mr Angeli said to Mr Cheng that he would need to take instructions regarding an extension.[91]
    7. (g)
      At around 4:10pm, NY Forever’s solicitors emailed Capital’s solicitors and Mr Yue’s solicitors requesting an extension of the settlement date to 25 May 2021 with time to remain of the essence, because “our client’s financier is unable to attend settlement for today.”[92]
    8. (h)
      At around 4.20 pm, Mr Cheng and Mr Hall left the offices of Capital’s solicitors.[93]
    9. (i)
      At around 4:47pm Mr Yue’s solicitors emailed NY Forever’s solicitors and Capital’s solicitors advising to the effect that Mr Yue agreed to extend settlement by one day. The email from Mr Yue’ solicitors also stated, inter alia, “Given the circumstances, we are instructed to seek your client’s agreement to effect settlement without any additional fees.”[94]
  2. [32]
    On 25 May 2021, Capital’s solicitors emailed Mr Yue’s solicitors advising to the effect that as the Second Payment was not made on 24 May 2021, Mr Yue was in default under the terms of the Settlement Deed, Capital proposed to relist the Caveat Application and Capital required Mr Yue to deliver vacant possession of the Riedel Road Properties.[95]
  3. [33]
    On 21 July 2021, Capital filed the Recovery of Possession Application.
  4. [34]
    Mr Yue’s Application was filed on 13 August 2021.

The proper construction of the Settlement Deed

  1. [35]
    Before turning to the three interlocutory applications, it is necessary to address the proper construction of the Settlement Deed.
  2. [36]
    It was common ground between the parties that the Settlement Deed was a commercial contract.[96] Unless a contrary intention is indicated in the contract, a Court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption “that the parties intended to produce a commercial result”.[97] There is no contrary intention indicated in the Settlement Deed. Further, a commercial contract is to be interpreted so as to avoid it “making commercial nonsense or working commercial inconvenience”.[98] The commercial purpose of the contract is the purpose of reasonable persons in the position of the parties at the time of the contract.[99] Hence, in determining meaning, the Court has to ask “what a reasonable business person would have understood” the contract to mean?[100] This question directs the Court to considering “the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract”.[101] The whole of the contract has to be considered as the meaning of one part may be revealed by other parts.[102] Literal interpretations which lack commercial efficacy or common sense are, where possible, to be avoided.[103]
  3. [37]
    In cases where the meaning of contractual language is ambiguous, recourse may be had to objective events, circumstances and things external to the contract for the purpose of identifying the commercial purpose or objects of the contract.[104] In Mount Bruce Mining Pty Ltd v Wright Prospecting, French CJ, Nettle and Gordon JJ said[105]:

“What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations”.

  1. [38]
    The central issue of construction concerns clause 3.2 of the Settlement Deed and, more particularly, what was required of Mr Yue for him to “… cause the Second Payment to be made to [Capital] on or before 24 May 2021”. Mr Yue submitted that a cheque drawn on a Solicitor’s trust account satisfied the contractual requirement. He submitted that any cheque was sufficient and there was no contractual requirement for a bank cheque or cleared funds.[106] Mr Yue’s argument placed particular significance on the language “made payable to” as it appears in clause 3.2 and he noted the absence of the word “paid” within that clause.
  2. [39]
    Capital submitted that clause 3.2 contained a primary obligation which required Mr Yue to cause the Second Payment to be made on or before 24 May 2021.[107] It submitted that the reference to “made payable to the JCL Trust Account” merely denoted the destination of the payment and nothing more.[108] In terms of the discharge of the primary obligation, Capital submitted that the Second Payment was to be regarded as made on or before 24 May 2021 if, and only if, there had been a payment by way of cleared funds on or before that date.[109]
  3. [40]
    I prefer the construction advanced by Capital. Clause 3.2 of the Settlement Deed contemplated the sum of money comprising the Second Payment to be made to Capital on or before 24 May 2021. Reading the Settlement Deed as a whole, that was a payment that was to be made “strictly on time”,[110] with time being of the essence.[111] The Settlement Deed contained an acknowledgement by Mr Yue that the Third Riedel Road Contract was due to complete on or before 24 May 2021.[112] The Settlement Deed also contained an acknowledgement and agreement by Capital that it would “release its mortgage (sic) over the Properties at Completion of [the Third Riedel Road Contract] in exchange for Mr Yue effecting payments in accordance with clauses 3.1 and 3.2 of this Deed”.[113] Having regard to the language and circumstances addressed by the Settlement Deed, I find that a reasonable business person in the position of the parties would have understood that, in order for Mr Yue to effect payment in accordance with clause 3.2, and thereby become entitled to the release of the Mortgages, cleared funds were required to be provided on or before 24 May 2021. The construction contended for by Mr Yue involves the parties having objectively contemplated that a release of the Mortgages would be provided in exchange for uncleared funds. I regard that construction as not commercial.
  4. [41]
    I have noted that Mr Yue’s submissions placed particular emphasis upon the words in clause 3.2 “made payable to the JCL Trust Account”. I accept Capital’s submission that those words denote the destination of the Second Payment. In this regard, I note that the expression “JCL Trust Account” was defined to mean an account with an identified BSB and account number. This definition in my view tends to support Capital’s submission that the words “made payable to the JCL Trust Account” were concerned with the destination, not the form, of the payment. Properly construed, Clause 3.2 countenanced a cheque or electronic payment so long as it involved the provision of cleared funds on or before 24 May 2021.
  5. [42]
    I have reached my conclusion as to the proper construction of the Settlement Deed having regard to the language of the Settlement Deed and the circumstances addressed by the Settlement Deed. I have not found that language to be relevantly ambiguous.
  6. [43]
    If contrary to that conclusion, there is relevant ambiguity, two materially relevant extrinsic facts support the construction advanced by Capital.
  7. [44]
    First, the Second Payment was contemplated to be made in exchange for the release of the Mortgages.[114] Each of the Mortgages contained provisions which required cleared funds to discharge the liabilities they enshrined.[115] Second, at the hearing, Capital relied upon the evidence of an independent Solicitor, Mr Askin, who practised in the area of real estate and property law and who deposed to being familiar with the customs and practices of conveyancing processes in Queensland.[116] Mr Askin relevantly deposed that:
    1. (a)
      at the settlement of a conveyance, the custom and practice in Queensland is that all parties with an interest in the transaction, including any outgoing mortgagee and any incoming mortgagee attend the agreed location for settlement;[117]
    2. (b)
      at a physical settlement, an outgoing mortgagee customarily requires repayment of the outstanding loan balance by way of a bank cheque in exchange for it delivering a release of its mortgage;[118]
    3. (c)
      this customary requirement was because a bank cheque is drawn on cleared funds.[119]
  8. [45]
    Mr Askin’s evidence included the following passage:[120]

“… in conveyances of real property where physical attendance is required at settlement, it would be highly unusual for an outgoing mortgagee to hand over its release of mortgage unless it was provided with a bank cheque. I have never encountered such a situation. In my opinion, that is because cheques other than bank cheques (for example personal cheques or trust account cheques) may be cancelled more easily and do not necessarily evidence that the funds for which the cheque is made out are cleared.”

  1. [46]
    Mr Askin’s evidence was not objected to and he was not cross examined. Mr Yue submitted that Mr Askin’s evidence whilst not “entirely irrelevant” should be given “little weight”.[121] I consider that the evidence of Mr Askin is objective evidence which is relevant to the identification of the commercial purpose of the Settlement Deed, it being recalled that this purpose is taken to be the purpose of reasonable persons in the position of the parties at the time of the Settlement Deed.
  2. [47]
    Mr Yue did not rely upon any extrinsic facts in support of his suggested construction and I was not able to identify any such facts in the material.
  3. [48]
    If clause 3.2 of the Settlement Deed is relevantly ambiguous, the relevant extrinsic material supports the construction that, in order for Mr Yue to effect payment in accordance with clause 3.2, and thereby become entitled to the release of the Mortgages, cleared funds were required to be provided on or before 24 May 2021.

Mr Yue’s Application

  1. [49]
    Paragraph 1 of Mr Yue’s Application seeks a declaration that he has not breached the Settlement Deed. On 24 May 2021, Mr Yue offered to provide a solicitor’s trust account cheque payable to the JCL Trust Account in the amount of $1,845,251.20. He did not provide a bank cheque or cleared funds for the amount of the Second Payment on or before 24 May 2021. I find that, in those circumstances, he did not cause the Second Payment to be made to Capital on or before 24 May 2021 within the meaning of clause 3.2 of the Settlement Deed.
  2. [50]
    By reason of this state of affairs, an Event of Default occurred within the meaning of clause 4(c)(i) of the Settlement Deed. By reason of the Event of Default:
    1. (a)
      Capital became entitled to relist the Caveat Application and seek orders for the removal of the Caveats and costs;
    2. (b)
      Mr Yue became obliged to consent to the removal or withdrawal of the Caveats and the costs of the Caveat Application;
    3. (c)
      Mr Yue acknowledged that Capital might sell the Riedel Road Properties for a sum not less than $3,500,000 excluding GST and Mr Yue was obliged not to oppose or seek to oppose such sale; and
    4. (d)
      Mr Yue was obliged to deliver up vacant possession of the Riedel Road Properties to Capital within 14 days after the Event of Default.
  3. [51]
    Paragraphs 2 to 4 of Mr Yue’s Application seek specific performance of the Settlement Deed so as to enable Mr Yue to sell the Riedel Road Properties to NY Forever. Having regard to my findings as to the proper construction of clause 3.2 of the Settlement Deed and the existence of an Event of Default committed by Mr Yue, these paragraphs of Mr Yue’s Application do not involve specific performance of the Settlement Deed. Rather, the orders sought would be contrary to the terms of the Settlement Deed, in particular, the rights conferred upon Capital in circumstances of an Event of Default and the acknowledgements provided by Mr Yue in the circumstances of an Event of Default.
  4. [52]
    In the alternative to the orders contained in paragraphs 1 to 4, Mr Yue’s Application sought a series of injunctive orders. Notably, these alternative orders were to the effect that Mr Yue was required to sell the properties to NY Forever pursuant to the Third Riedel Road Contract within 30 days. At the settlement of the Third Riedel Road Contract, Capital was required to provide full releases of the Mortgages and Mr Yue was required to pay by deduction from the sale proceeds his reasonable legal costs fixed in the sum of $3,500 plus GST, his outlays in relation to the Third Riedel Road Contract, any other outlays or adjustments usually payable upon and incidental to the transfer of land, the sum of $2,100,000 to Capital and the remaining proceeds into Court, to be held pending the determination of the proceeding or earlier order.
  5. [53]
    In Australian Broadcasting Corporation v O'Neill,[122] Gummow and Hayne JJ observed about interlocutory injunctions:

“The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd.[123] This Court … said that on such applications the court addresses itself to two main inquiries and continued:[124]

‘The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … the second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.’

By using the phrase ‘prima facie case’, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. … With reference to the first inquiry, the Court continued[125]

‘How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks’”

  1. [54]
    The proposed interlocutory orders have the character of mandatory injunctions. It is convenient to identify some relevant principles in relation to mandatory interlocutory injunctions. When an applicant seeks a mandatory interlocutory injunction, it has been said that it is necessary for the Court to “feel a high degree of assurance that at trial it will appear the injunction was rightly granted”.[126] In Racecourse Totalizators Pty Ltd v Totalisator Administration Board of Queensland,[127] Kiefel J (as the Chief Justice then was) explained that concept in these terms:

“It was submitted … that because a mandatory interim injunction is sought the applicant must show that its case is strong, so that the Court has the requisite ‘high degree of assurance’ that such an order is appropriate: Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 at 314 per Cooper J…. the applicant however relied upon Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1982) 82 ALR 499 at 502 where Gummow J, as he then was, adopted the remarks of Megarry J in Tito v Waddell (No 2) [1977] Ch 106 at 321, which included the following statement:

‘If it appears to the Court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a ‘high degree of assurance’ about the plaintiff’s chances of establishing his right, there cannot be any rational basis for withholding the injunction’

I concede to having difficulty with such an approach. It seems to me that the effect which the grant or withholding of such an order will have are taken into account in considering where the balance of convenience lies. The risk of irreparable harm is one such effect and necessarily then part of that inquiry and no further guiding principle is necessary. I respectfully agree with Cooper J: Active Leisure at 313. But it is another thing to say that a technical classification of an order as ‘mandatory’ automatically attracts a requirement that the Court have further confidence in the correctness of the order. Simply because an order requires something to be done, does not seem to me to require, as a matter of course, an examination of the strength of the applicant’s case. Such an approach is not consistent with the process involved in a consideration of the balance of convenience and does not follow from the authorities, including Active Leisure. What is first required is a consideration of what it is that is required to be done by the order and the effect that will have. It is where the order can be seen to have a profound effect that further ‘assurance’ will be necessary. This may be so where the matter would then be financially determined and a defendant who has raised a triable issue is thereby denied a right to a full hearing, the rationale between the ‘traditional test’ referred to in Active Leisure at 314. It may also arise at a lesser level where, for instance, what is required is very costly and time consuming. In these cases the position is reached where the making of the order cannot be justified without another strong factor being able to be weighed against these effects and that factor may be a strong case being shown for final relief, although the difficulty in assessing it at an interlocutory stage may often have the result that the relief is denied.” 

  1. [55]
    A striking aspect of the proposed interlocutory orders is that Capital would be required to provide a full release in respect of the Mortgages without receiving a complete discharge of the indebtedness owing under the Mortgages.[128] The effect of the orders would be to leave Capital in an unsecured position and at risk of not recouping the amounts owed under the Mortgages. The proposed interlocutory injunctions should be regarded as having significant financial implications for, and a profound effect upon, Capital. In these circumstances, I am satisfied that it is appropriate, in considering whether to grant such injunctions, to consider whether, on the basis of the strength of Mr Yue’s case, there exists a high degree of assurance that such orders are appropriate.
  2. [56]
    In terms of Mr Yue’s case, he contended for a prima facie case to arise out of the validity or enforceability of the Settlement Deed as well as in relation to the claims made by him in the proceeding (most notably those concerning the Discharge Agreement).
  3. [57]
    Mr Yue submitted that by not accepting the prospective tender of a solicitor’s trust account cheque, Capital had hindered or prevented his performance of the Settlement Deed.[129] He submitted that Capital’s conduct in this regard absolved him from any requirement to tender the full amount of the Second Payment.[130] It was also submitted that Capital’s conduct amounted to breaches of clause 9 of the Settlement Deed (which relevantly obliged Capital to do anything necessary or desirable to give effect to the Settlement Deed and the transaction contemplated by it) and of the implied obligations to act in good faith and to do all things necessary to enable Mr Yue to have the benefit of the Settlement Deed.[131] Ultimately, these submissions were based upon the following position articulated in Mr Yue’s written submissions.[132]

“By refusing to accept payment of the balance of the Second Payment by way of [a] solicitor’s trust account cheque, late in the afternoon of 24 May 2021, knowing that the other parties would not be able to sensibly procure another form of payment within time on that day, [Capital] acted inconsistently with its obligation to take necessary steps to effect settlement by:

  1. (i)
    accepting payment of the Second Payment on 24 May 2021, in the manner [Mr Yue] was ready willing and able to provide;
  1. (ii)
    concurrently with that, delivering a release of the Mortgages.
  1. [58]
    I have found that, on the proper construction of clause 3.2 of the Settlement Deed, Mr Yue was required to effect payment of the Second Payment by way of cleared funds on or before 24 May 2021. Mr Yue did not effect payment in that manner and Capital did not hinder or prevent him from performing the Settlement Deed in that manner. I find that there is no prima facie case in relation to Capital having hindered or prevented performance by Mr Yue. It follows from this finding that there is also no prima face case in relation to any suggested breach of clause 9 of the Settlement Deed or the alleged implied terms to act in good faith or to do all things necessary to enable Mr Yue to have the benefit of the Settlement Deed. The duty to do what is necessary to enable the other party to have the benefit of the contract is limited to acts which are necessary to the performance of obligations under the contract.[133] In the present case, Mr Yue’s relevant obligation was to effect payment of the Second Payment by way of cleared funds on or before 24 May 2021. Accepting a solicitor’s trust account cheque was not an act which was necessary to the performance of that obligation. Capital simply required Mr Yue to perform his obligations in accordance with the Settlement Deed.
  2. [59]
    Mr Yue then submitted that preventing him from selling the Riedel Road Properties to NY Forever in accordance with the Third Riedel Road Contract and paying the balance of the sale proceeds into Court pending trial, constituted a clog on his equity of redemption.[134] It may be accepted that it is an essential feature of a mortgage that the mortgagor has a right to discharge the mortgage in payment of the debt for which security has been given. Even if the mortgagor does not repay a loan in time, and loses the contractual right to redeem, there will exist an equitable right to redeem.[135] The equity of redemption may be enforced until the point in time when the mortgagee’s power of sale has been exercised or a Court has made an order for foreclosure.[136] In Team Dynamik Racing Pty Ltd v Longhurst Racing Pty Ltd,[137] Muir J, as his Honour then was, observed:

“As a general proposition, conduct which has the effect of hampering redemption after the contractual date for redemption has passed is not permitted and equity will grant relief by allowing redemption. The remedy, which operates in personam, has as its foundation the prevention of unconscionable conduct. In cases such as this, unconscionability is to be found in the lender’s exercising rights which constituted, in substance, a penalty or a forfeiture.

  1. [60]
    In Sun North Investments Pty Ltd v Dale, after having referred to these comments of Muir J, Henry J observed:[138]

“The principle is thus founded upon the unconscionability inherent in the transaction otherwise allowing the lender to exercise rights amounting to a penalty or forfeiture. It is the nature of the transaction, if allowed, which is unconscionable.”

  1. [61]
    Mr Yue prefaced his submissions by submitting that “The sale of the [Riedel Road Properties] to NY Forever is, in effect, akin to a refinance as NY Forever is a company controlled by [Mr Yue’s son] and funded by his brother.”[139] He then submitted as follows:[140]

“Here, [Mr Yue] has an unconditional sale contract which if completed would, in effect, allow him to realise sufficient funds to redeem the principal owing under the Mortgages (approximately $2,800,000) and close to sufficient funds to cover the disputed interest and costs of about $513,051.81 alleged to be owing, if the Court were to determine, after a trial, that [Mr Yue] is liable to pay those amounts to [Capital].

[Mr Yue’s evidence] is that he is unemployed and impecunious. He relies on the financial support of his family members. Hence, the only practical way for [Mr Yue] to refinance the [Riedel Road Properties] whilst his family members can still retain ownership of them to realise their development potential is to sell the [Riedel Road Properties] to NY Forever. It is also the only way in which [Mr Yue] can attempt to mitigate his loss, given the unlikelihood of recovering damages against [Investment Group] even if he were successful at trial. Nonetheless, the only way for [Mr Yue] to obtain declaratory relief that he is not liable for the Mortgages is to persist with a trial, as [Mr Yue] contends that [Capital’s and Investment Group’s] liabilities are intertwined.

As such, [Mr Yue’s] equity of redemption would be destroyed and his ability to mitigate his loss would be lost if he were not permitted by the Court to sell the [Riedel Road Properties] to NY Forever.

  1. [62]
    Capital submitted to the effect that there was no analogy to a refinance because Mr Yue did not intend to refinance but rather intended to sell the Riedel Road Properties. It was submitted that Mr Yue did not intend by the proposed sale to redeem because the relevant intention was to sell for an amount which was less than the amount currently claimed to be owing under the Mortgages and there was no intention on the part of Mr Yue to pay out the Mortgages as a result of the settlement of the sale.[141] It was also submitted by Capital that there was no provision contained in the Settlement Deed which sought to prevent Mr Yue from seeking to redeem the Mortgages according to their terms or in equity. I accept Capital’s submissions. Mr Yue does not seek to enforce his equity of redemption. Rather, he is seeking to sell the Riedel Road Properties without redeeming the Mortgages and with the benefit of an order that the Mortgages be released.
  2. [63]
    Regardless of Mr Yue’s established intention, I also do not regard it to be unconscionable for Capital, in circumstances of an established Event of Default within the meaning of the Settlement Deed, to seek to exercise the rights conferred upon it by the Settlement Deed. It should be observed that there was no submission made to the effect that there had been any unconscionable conduct in the circumstances leading to the entering into of the Settlement Deed. In this regard I note the warranties provided by Mr Yue in paragraph 17(a) of the Settlement Deed. For reasons which I will now explain I do not regard the exercise of the rights conferred by the Settlement Deed as involving a penalty or forfeiture.
  3. [64]
    As to the question of a penalty, Mr Yue submitted that the default consequences contained in the Settlement Deed sought to “contract out equity’s jurisdiction, in compelling [Mr Yue] to not resist [Capital’s] sale to another party, and to allow it to have the benefit of the $2,600,000 payment without a trial to determine the validity of the Mortgages”.[142] Reference was made to the doctrine that a provision is to be regarded as a penalty if, as a matter of substance, it is collateral to a primary stipulation in favour of a second party and the collateral stipulation imposes upon the first party an additional detriment (the penalty), to the benefit of the second party.[143] Mr Yue sought to fortify his submissions by reference to the following contentions:[144]
    1. (a)
      as at 24 May 2021, the parties were ready, willing and able to perform the obligations under the Settlement Deed but for Capital’s unreasonable refusal to accept payment at settlement of a solicitor’s trust account cheque;
    2. (b)
      in any event, a bank cheque would have been presented the next day after settlement;
    3. (c)
      in the circumstances that occurred at the time of settlement, Capital’s only loss was limited to default interest for one day on the balance amount of the Second Payment which would have been adequately compensated by the $5,000 extension fee payable under clause 3.4(a)(iv) of the Settlement Deed had there been granted an extension to the date for settlement of the Third Riedel Road Contract;
    4. (d)
      clause 4(b) of the Settlement Deed imposes additional detriments upon Mr Yue in conceding $2,600,000 of the disputed amount to Capital without the benefit of keeping the Riedel Road Properties within Mr Yue’s family in addition to his consenting to paying Capital’s costs of the Caveat Application and not being able to challenge any sale by Capital;
    5. (e)
      the exercise of the power of sale by Capital as per the default provisions of the Settlement Deed carried with it a likelihood that the sale would be for an amount not far greater than $3,500,000, which amount did not take into account the development potential of the Riedel Road Properties.
  4. [65]
    Capital submitted that, upon its proper construction, the Settlement Deed did not provide for the imposition of an additional and different liability or detriment in the event of Mr Yue’s breach of a primary obligation. Rather, Capital characterised the Settlement Deed as being one pursuant to which Mr Yue was provided with the opportunity to pursue his own interests, albeit on strict terms.[145] As Capital submitted, in the event Mr Yue did not comply with the agreed terms, he agreed that he would not prevent Capital from taking enforcement steps pursuant to its pre-existing rights as mortgagee.[146]
  5. [66]
    To the extent that Mr Yue seeks to characterise Capital’s refusal to accept the tender of a solicitor’s trust account as unreasonable, by reason of my finding as to the proper construction of the Settlement Deed, I consider that Capital was not acting unreasonably in refusing to accept the tender of a solicitors’ trust account cheque but merely requiring performance in accordance with the parties’ agreement as contained in the Settlement Deed. Capital in refusing to accept that tender was merely insisting upon strict performance of the Settlement Deed which I have found required the tender of cleared funds. To the extent that Mr Yue seeks to characterise the default provisions contained in the Settlement Deed as a penalty, Mr Yue’s reliance upon events that transpired on the day of settlement is misplaced. Whether a contractual provision is a penalty is a question of construction to be decided upon the terms and circumstances of each particular contract and judged as at the time of the making the contract, not at the time of the alleged breach.[147] In any event, as to Mr Yue’s reliance upon clause 3.4(a)(iv) of the Settlement Deed, the material indicates that he was contending that an extension might occur but that he not be obliged to pay the agreed extension fee.[148]
  6. [67]
    I do not consider that the Settlement Deed, properly construed imposed “additional” burdens upon Mr Yue so as to attract the penalty doctrine. Rather, in exchange for the valuable commercial opportunity to proceed to settlement of the Third Riedel Road Contract on the promise by Capital that it would, on certain conditions, release the Mortgages, Mr Yue agreed to confer certain rights upon Capital in the circumstances of an Event of Default, within the meaning of that term as defined by the Settlement Deed. That was the quid pro quo for the compromise reflected by the Settlement Deed. Mr Yue’s promises provided under the Settlement Deed in relation to Events of Default cannot in my view be construed as a collateral stipulation providing for an additional detriment in the nature of a penalty for non-performance of a primary obligation. I find that the Settlement Deed did not impose any collateral or accessory stipulation in the nature of a penalty.
  7. [68]
    As to forfeiture, Mr Yue submitted:[149]

“It is in accordance with the equitable principles to allow [Mr Yue] to realise his equity of redemption through selling the [Riedel Road Properties] to NY Forever to mitigate his loss through continuing to develop the [Riedel Road Properties] within his family to realise its (sic) proper potential, notwithstanding [Capital’s] contractual rights to the contrary. The unconscionability inherent in the exercise of those rights is that, in substance, it constitutes a forfeiture.

  1. [69]
    In support of the submission that the exercise of rights under the Settlement Deed was unconscionable, Mr Yue submitted that.
    1. (a)
      it had been unreasonable for Capital to refuse to accept the solicitor’s trust account cheque and to refuse to extend settlement to 25 April 2021;[150]
    2. (b)
      Capital was insisting on selling the Riedel Road Properties on the open market in circumstances where there was a likelihood that the purchase price achieved as a result of the exercise of any power of sale would be less than the true value of the Riedel Road Properties taking into account their development potential;[151]
    3. (c)
      Capital was alleging that significant interest, late payment penalties and costs had accrued on the two loans;[152]
    4. (d)
      Mr Yue was unlikely to be able to satisfy any judgement.[153]
  2. [70]
    Capital submitted that the Settlement Deed, properly construed, did not involve any relevant forfeiture. It submitted that all that had occurred was that, in the circumstance of an Event of Default, the agreed stay on Capital taking enforcement steps had been lifted and Mr Yue had agreed not to interfere with those steps.[154]
  3. [71]
    In terms of the matters relied upon by Mr Yue, by reason of my findings in relation to the proper construction of the Settlement Deed, it was not unreasonable for Capital to refuse to accept a solicitor’s trust account cheque at settlement. Capital in refusing to accept that tender was merely insisting upon strict performance of the Settlement Deed which I have found required the tender of cleared funds. There was no implied obligation upon Capital to extend the settlement date in circumstances where an Event of Default had occurred. Indeed, the parties had expressly turned their minds to the prospect of an extension of the Date for Completion under the Third Riedel Road Contract and had agreed that an extension could only happen in identified circumstances involving strict compliance with, inter alia, clause 3.2 of the Settlement Deed. The implied term contended for by Mr Yue would contradict the parties’ express agreement as contained in the Settlement Deed.
  4. [72]
    Further, in seeking to put the Riedel Road Properties to the open market, Capital is acting in a manner that was within the objective contemplation of the parties at the time of the Settlement Deed. By the Settlement Deed, Capital is allowed to sell the Properties for a sum not less than $3,500,000, being the amount of the sale price under the Third Riedel Road Contract. Mr Yue submitted that, in putting the Riedel Road Properties to the market on the basis that no contract would be entered into for a price less than $3,500,000, there was a likelihood that Capital would sell the Properties for significantly less than the true value of the Properties.
  5. [73]
    In this regard, there is a discernible tension in Mr Yue’s position that to allow Capital to sell on the open market for a price not less than $3,500,000 would be unconscionable when Mr Yue seeks an order from the Court by way of mandatory injunction which would entitle to him to sell the Riedel Road Properties for that price, thereby placing a cap or limit upon the existing value of Capital’s secured interest under the Mortgages. To the extent that Capital intends to sell the Riedel Road Properties on the open market for no less than that price, Mr Yue contends that such a sale would likely be a sale at an undervalue. It is difficult to understand what is unconscionable about Capital being allowed to sell for a price not less than the sale price under the Third Riedel Road Contract which Mr Yue seeks to enforce. Indeed, Mr Yue elsewhere submitted that the price under the Third Riedel Road Contract was “a reasonable price”.[155]
  6. [74]
    Mr Yue’s submission that there is a reasonable likelihood that Capital will sell the Riedel Road Properties for significantly less than their true value seemed to be premised, in part at least, on the fact that the purchaser under the Second Riedel Road Contract had been a neighbour of one of Capital’s directors. There is uncontradicted evidence before me that, to achieve the Second Riedel Road Contract, real estate agents were appointed, a marketing campaign was conducted, an independent market valuation was obtained and the auction was conducted with several registered bidders.[156] The Second Riedel Road Contract was for a price approximately 33% above the independent market valuation.[157] This evidence is not suggestive of a risk that the Riedel Road Properties will be sold by Capital for significantly less than their true value.
  7. [75]
    Finally, the fact that interest, late payment penalties and costs have accrued in respect of the debt secured by the Mortgages and that Mr Yue is unlikely to have assets to satisfy any judgement obtained at a trial do not in my assessment have a significant bearing upon the question whether the performance of the Settlement Deed should be regarded as unconscionable.
  8. [76]
    I find that there is no prima facie case in relation to the validity or enforceability of the Settlement Deed.
  9. [77]
    That leaves for consideration any prima facie case arising out of the proceeding. Mr Yue submitted that “… the central dispute in the [proceeding] is … whether or not [the Mortgages] are enforceable against Mr Yue because the underlying indebtedness for which he was liable has or has not been extinguished.”[158] I turn then to the issue concerning the Discharge Agreement which arises out of the Statement of Claim and the affidavit affirmed by Mr Yue on 14 December 2020. On the basis of the material presently before me, having regard to the nature of the rights asserted by Mr Yue and the practical consequences likely to flow from the interlocutory orders he seeks, I am not satisfied that there is a sufficient likelihood of the Discharge Agreement being established to justify those orders. I do not accept that there is a prima facie case in relation to the Discharge Agreement. I do not feel a high degree of assurance that, at any trial, the Discharge Agreement will be established. It will suffice for me to make the following observations in relation to the Discharge Agreement.
  10. [78]
    To the extent that the Discharge Agreement is said to have involved the Fleming Mortgages the Discharge Agreement is alleged to be contained in or evidenced by an exchange of correspondence.[159] No conversations or conduct are alleged to have given rise to the Discharge Agreement as pleaded. It is convenient to set out the material parts of the final two letters in the pleaded exchange of correspondence.
  11. [79]
    The first of these letters was from Mr Yue’s solicitors to Investment Group’s solicitors dated 26 March 2018 (the 26 March Letter).[160] The 26 March Letter proposed 15 conditions and the extract below sets out only 4 of those conditions. Relevantly the 26 March Letter provided:

“Please be advised that our client has given new instructions in this matter.

New Instructions – Offer to Settle

On a without prejudice basis, our client is agreeable to grant extension of the settlement date under the Contract to 31st August 2018 with time to remain of the essence on the basis that:-

  1. The new Settlement Date under the Contract is now fixed as “31st August 2018” with time to remain of the essence (“Settlement Date”);
  1. The Buyer is to pay the balance Purchase Price in the amount of $3,600,000.00 less any monies paid under the Contract or directly to the Seller …;
  1. The Buyer is agreeable and undertakes to pay the amount of $1,070,000.00 to Fleming Family Super Fund Pty Ltd ACN 142 453 432 and Fleming Key Employees Superannuation Fund Pty Ltd ACN 115 974 760 (“Second Mortgagee”) to discharge all the Mortgages registered in favour of Second Mortgagee by 4pm Thursday, 29 March 2018;
  1. The Buyer is agreeable and undertakes to pay the Seller or our Trust Account $100,000.00 by 4pm Thursday, 29 March 2018 …;

….

The offer made in this letter by our client will expire on 5pm, 27th March 2018 unless revoked by our client…The Buyer cannot accept this offer after expiry or revocation by our client, any attempt to do so shall be of no effect.

If you client wishes to accept this offer, please confirm the Buyer’s unconditional acceptance in writing prior to the expiry date or revocation of this offer. …..”

  1. [80]
    The next letter was from Investment Group’s solicitors to Mr Yue’s solicitors dated 28 March 2018 (the 28 March Letter). Relevantly, the 28 March Letter provided:

“We refer to the above matter and to your letter dated 26 March 2018.

Our client’s instructions in response to your New Instructions obtained on 26 March 2018

On a without prejudice basis, our client confirms your client’s acceptance of the settlement date under the Contract to 31st August 2018 with time to remain of the essence.

In relation to your client’s proposed new conditions number 2 to 15, our client requires more time to discuss the details of each condition with their partners in China and as they will be travelling back to China only on or around the 1st April 2018 and hence your client requesting us to reply you (sic) without a confirmation by 5pm 27th March 2018 is unreasonable and such deadline you now placed in your New Instructions were never discussed in the meeting between out client and your client last week.

Your client would be aware that our client in principal (sic) agrees and will do their best endeavours to fulfil your client’s proposed new conditions number 3 … and 4. Your client would be aware that our client’s entity consists of a large number of shareholders and sufficient time is needed to seek everyone’s authority to release the funds for this purpose.

….

Our client hereby reiterates their agreement to make the repayment that is forthcoming on the 8th April 2018 to ensure that the Second Mortgagee is satisfied and to ensure that no prejudicial actions against your client will be taken by the Second Mortgagee.

Hence, we respectfully note that your client’s demands for payment within a specific time is (sic) causes our client tremendous hardship. Furthermore, as the Easter holidays is upon us, with the public holidays it means the banks will require more time to process these funds across.

In light of the above, please confirm that your client agrees to allow our client the time to perform transfers of funds and will not hold your proposed time of payment against us in this matter any further….”

  1. [81]
    On my reading, these letters do not evidence a binding agreement. To begin with the offer contained in the 26 March Letter appears to have expired before it was purportedly accepted. Further, the 28 March Letter does not appear to have communicated an unqualified acceptance to the litany of conditions contained in the 26 March Letter. In relation to the La Trobe Mortgage, the relevant correspondence relied upon does not speak in terms of a discharge of the La Trobe Mortgage but rather of an entity affiliated with Investment Group paying the mortgage amount “via a Deed of Assignment”.[161]
  2. [82]
    Mr Yue’s submissions did not address in any detail the various estoppels that are alleged in the Statement of Claim.[162] Mr Yue’s evidence extended to some of the material facts which are alleged to have given rise to the estoppels.[163] To the extent that he identified representations (be it the “Discharge Agreement Representation” as referred to in his affidavit or “the Representation” as pleaded and defined by the Statement of Claim) it was not entirely clear what precise form of estoppel he sought to rely upon in the sense of a common law or equitable estoppel. In my view, on the basis of the evidence, I apprehend that there is an arguable case available to Mr Yue in relation to the estoppels. Despite my findings in relation to the Discharge Agreement, it may be arguable that, depending upon the precise nature of the estoppels, a representation lacking contractual certainty might still be sufficient to establish an estoppel.[164] Whilst I am prepared to find that there is an arguable case for an estoppel, I am not satisfied that there is a high degree of assurance about an estoppel being established or, indeed, the precise form of any estoppel.
  3. [83]
    As to the balance of convenience, Mr Yue is unemployed and impecunious.[165] Although he offers the usual undertaking as to damages, I am entitled to consider the worth of that undertaking and, on the material before me, it does not appear that the undertaking would be sufficient to cover any shortfall to which Capital is exposed as a result of being ordered to release the Mortgages to facilitate the settlement of the Third Riedel Road Contract. The evidence includes certificates of indebtedness dated 15 September 2021 for the Mortgages.[166] The certificates of indebtedness identified the amount of the principal debt and interest due and payable as at 15 September 2021 under the Fleming Mortgages ($1,558,686.67) and the amount of the principal debt, interest and late payment fees under the La Trobe Mortgage ($1,804,364.94). Those calculations make no allowance for the costs and expenses of enforcement. On these figures alone, Capital would be exposed to the prospect of a significant shortfall in the event that the interlocutory injunctions sought by Mr Yue were granted and he failed to establish his case at trial. The fact that Mr Yue’s undertaking as to damages is of little or no value is a recognised powerful discretionary factor against the grant of an interlocutory injunction.[167]
  4. [84]
    I also consider that the injunctions are not directed to maintaining the status quo but rather to materially altering it by requiring one party, Capital, to act to its detriment by releasing its security to enable the settlement of the Third Riedel Road Contract. Mr Yue is not offering to pay into Court the full amount secured by the Mortgages or to pay interest owing under the Mortgages until trial.[168] The proposed injunctive orders are also contrary to the express terms of the Settlement Deed by which the parties agreed as to what was to happen in the event of an Event of Default under the Settlement Deed. The Settlement Deed contemplates that Capital is only entitled to sell the Riedel Road Properties for a sum not less than the sale price of the Third Riedel Road Contract, which Mr Yue’s submissions described as a reasonable price. I accept that there is a risk that, in the event Mr Yue establishes a case for damages at trial, Capital and Investment Group may not be able to satisfy the award of damages. However, whilst taking that risk into account, I do not consider that it outweighs the other factors I have identified as being relevant to the balance of convenience which I consider militate strongly against the grant of the orders sought.
  5. [85]
    I have decided to refuse Mr Yue’s application for injunctive relief because I am not satisfied that there is a prima facie case in respect of the validity or enforcement of the Settlement Deed or in relation to the issues raised by Mr Yue in the proceeding. Further, and in any event, I consider that the balance of convenience favours the refusal, rather than the grant, of the interlocutory injunctions.

Capital’s Applications

  1. [86]
    The Caveat Application is made pursuant to s 127(1) of the Land Title Act 1994. On such an application the onus is on Mr Yue to satisfy the Court that there is a serious question to be tried and that the balance of convenience favours the retention of the caveats on the title.[169] Mr Yue did not make any substantive submissions additional to those advanced in relation to Mr Yue’s Application.
  2. [87]
    I am conscious that when considering the Caveat Application, it would not be appropriate to approach the resolution of the issues on the basis that any mandatory injunctive relief is being sought by Mr Yue or indeed that any orders are being sought by him. In resisting the Caveat Application, Mr Yue is essentially seeking to maintain the status quo.  The identified grounds of claim for each of the Caveats is expressed in terms that “the principal debt and the guarantee secured by the mortgage have been discharged”[170]. I do not consider that Mr Yue has demonstrated a sufficient likelihood of success to justify the preservation of the status quo based upon the allegations concerning the Discharge Agreement. I do not consider there to be a prima facie case in respect of the alleged Discharge Agreement.  The grounds of claim do not in terms identify the alleged estoppels. If the grounds of claim, properly construed, extend to the alleged estoppels, then I am conscious that in respect of the Caveat Application, Mr Yue is resisting the Caveat Application to preserve the status quo. The High Court has said that, in determining a sufficient likelihood of success, how strong the probability of success needs to be depends upon the practical consequences likely to flow from the rights asserted and the orders sought.[171]  Taking into account these matters, and bearing in mind Mr Yue’s onus, I am prepared to find that there is a prima facie case in respect of the estoppel claims for the purpose of the Caveat Application.
  3. [88]
    I consider that the balance of convenience favours the removal of the Caveats. Whilst I have found a prima facie case for the purposes of the Caveat Application, I do not regard that case as being a strong case. On the basis of the material before me, it is difficult to form a clear view of its prospects, I do not consider that the estoppel claims are more likely to succeed than fail. The undertaking as to damages is of little or no value and, by the Settlement Deed, Mr Yue agreed to consent to the removal of the Caveats in circumstances where he committed an Event of Default. Pursuant to the Settlement Deed, Capital is permitted to sell the Riedel Road Properties for a sum not less than the sale price of the Third Riedel Road Contract, which, as I have noted, Mr Yue’s submissions describe as a reasonable price. I accept that there is a risk that, in the event Mr Yue establishes a case for damages at trial, Capital and Investment Group may not be able to satisfy the award of damages. However, whilst taking that risk into account, I do not consider that it outweighs the other factors I have identified as being relevant to the balance of convenience which I consider favours the removal of the Caveats.
  4. [89]
    In relation to the Recovery of Possession Application, I have found that there is no prima face case in relation to the validity and enforceability of the Settlement Deed and there is no prima facie case in relation to whether the Mortgages have been discharged pursuant to the Discharge Agreement. Mr Yue did not make any substantive submissions additional to those advanced by him in relation to Mr Yue’s Application. Whilst there may be a prima facie case in respect of the estoppel claims, for similar reasons to those I have expressed in relation to the Caveat Application I would not be prepared to grant an interlocutory order preventing Capital from taking possession. The Fleming Mortgages and the La Trobe Mortgages entitled the Mortgagee to take possession in circumstances of default by Mr Yue.[172] By clause 4(b)(iv) of the Settlement Deed, Mr Yue agreed to deliver up vacant possession of the Riedel Road Properties to Capital within 14 days after an Event of Default. The evidence established default by Mr Yue under the Mortgages and an Event of Default under the Settlement Deed. Capital is entitled to recover possession of the Riedel Road Properties from Mr Yue.
  5. [90]
    At the outset of the hearing, Capital objected to certain parts of the affidavits sought to be read by Mr Yue. The objections are exhibit 1. The objections, broadly stated, concern evidence that is directed to the relationship between Capital and Investment Group, alleged discord amongst the shareholders of Capital and Investment Group and the timing of the resignation and appointment of directors to the board of Capital. The objections are made on the ground of relevance. Having read the paragraphs of the affidavits and the exhibits to which objection is taken, I have formed the view that the material objected to is irrelevant to the issues that arise for determination on the hearing of the applications before me. I accordingly uphold the objections contained in exhibit 1.   

Orders

  1. [91]
    Pursuant to s 127(1) of the Land Title Act 1994, the following caveats be removed forthwith:
    1. (a)
      Caveat no 719713120 over Lot 1 on Registered Plan 45125 contained in Title Reference 11790135 located at 50 to 74 Riedel Road Carbrook in the State of Queensland; and,
    2. (b)
      Caveat no 719713134 over Lot 2 on Registered Plan 45125 contained in Title Reference 15702150 located at 4 to 48 Riedel Road Carbrook in the State of Queensland.
  2. [92]
    The Registrar of Titles be notified and authorised to execute all documents on behalf of Mr Yue that are necessary to effect the removal of the caveats referred to in paragraphs [91](a) and (b).
  3. [93]
    Within 14 days of the date of these orders, Capital recover from Mr Yue, and Mr Yue deliver up to Capital, vacant possession of:
    1. (a)
      Lot 1 on Registered Plan 45125 contained in Title Reference 11790135 located at 50 to 74 Riedel Road Carbrook in the State of Queensland; and,
    2. (b)
      Lot 2 on Registered Plan 45125 contained in Title Reference 15702150 located at 4 to 48 Riedel Road Carbrook.
  4. [94]
    The application filed by Mr Yue on 13 August 2021 (CFI 36) is dismissed.
  5. [95]
    I will hear the parties as to costs. 

Footnotes

[1]The Riedel Road Properties are described as Lot 1 on RP 45125 contained in Title Reference 11790135 located at 50 to 74 Riedel Road Carbrook in the State of Queensland and Lot 2 on RP 45125 contained in Title Reference 15702150 located at 4 to 48 Riedel Road Carbrook in the State of Queensland.

[2]Interlocutory Application filed 6 November 2020 (CFI 13).

[3]Interlocutory Application filed 21 July 2021 (CFI 34).

[4]Interlocutory Application filed 13 August 2021 (CFI  36).

[5]Affidavit of Liansheng Yue filed 17 December 2020 (CFI 25) [5].

[6]Ibid [6].

[7]Ibid [11].

[8]54 Bordeaux Street is described as Lot 89 on RP 803039 contained in Title Reference 17508082.

[9]Affidavit of Junyan Lu filed 9 November 2020 (CFI 15), Ex JL-1 at 97-99.

[10]Ibid, Ex JL-1 at 41-42.

[11]Ibid, Ex JL-1 at 155-158.

[12]Affidavit of Junyan Lu filed 23 November 2020 (CFI 18), Ex JL-2 at 38.

[13]Ibid, Ex JL-2 at 7, 8, 26.

[14]Ibid, Ex JL-2 at 38.

[15]Ibid, Ex JL-2 at 13, 31.

[16]Ibid, Ex JL-2 at 31.

[17]Ibid, Ex JL-2 at 10, 31.

[18]Ibid, Ex JL-2 at 20; Affidavit of Junyan Lu filed 6 November 2020 (CFI 15), Ex JL-1 at 179.

[19]Affidavit of Junyan Lu filed 6 November 2020 (CFI 16), Ex JL-1 at 408.

[20]Ibid, Ex JL-1 at 391-392, 396, 409.

[21]Ibid, Ex JL-1 at 391-393.

[22]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15), Ex JL-1 at 225, 237.

[23]Ibid, Ex JL-1 at 5.

[24]Ibid, Ex JL-1 at 26-27.

[25]Ibid, Ex JL-1 at 30.

[26]Ibid, Ex JL-1 at 27.

[27]Ibid, Ex JL-1 at 28.

[28]Statement of Claim (CFI 1) [14]; Defence of Capital (CFI 4) [14].

[29]Statement of Claim (CFI 1) [15]; Defence of Capital (CFI 4) [15].

[30]Statement of Claim (CFI 1) [17]; Defence of Capital (CFI 4) [17].

[31]Affidavit of Junyan Lu filed 23 November 2020 (CFI 18) [13]-[16].

[32]Ibid [15].

[33]Ibid [30]-[33].

[34]Ibid [32].

[35]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15) [10], [23].

[36]Ibid [11].

[37]Ibid [13].

[38]Ibid [18].

[39]Ibid [16]; The Caveats comprised Caveat No 719713120 over 50 Riedel Road, Caveat No 719713134 over 4 Riedel Road and Caveat No 719713146 over 54 Bordeaux Street.

[40]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15) [17].

[41]Ibid [19(b)], [19(g)].

[42]Ibid [21].

[43]Statement of Claim (CFI 1) [23].

[44]Ibid [24].

[45]Ibid [26].

[46]Ibid.

[47]Ibid [42]-[47].

[48]Ibid [36]-[37].

[49]Ibid [37(b)].

[50]Defence of Capital (CFI 4) [24].

[51]Defence of Investment Group (CFI 3).

[52]Interlocutory Application filed 6 November 2020 (CFI 13).

[53]Affidavit of Liansheng Yue filed 25 November 2020 (CFI 20) [23].

[54]Ibid [30].

[55]Affidavit of Liansheng Yue filed 25 November 2020 (CFI 20), Ex LSY-5 at 30.

[56]Ibid.

[57]Mr Yue’s Application (CFI 19).

[58]Order of Applegarth J dated 25 November 2020 (CFI 22).

[59]Affidavit of Liansheng Yue filed 17 December 2020 (CFI 25) [40].

[60]Order of Brown J dated 16 December 2020 (CFI 27).

[61]Affidavit of Yu Yue filed 15 March 2021 (CFI 30) [10].

[62]Ibid [11].

[63]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [5].

[64]Order of Bowskill J dated 16 March 2021 (CFI 31).

[65]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [8].

[66]Ibid [9].

[67]T1-16.40-44.

[68]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35), Ex AA-4 at 1.

[69]Ibid, Ex AA-4 at 4.

[70]Ibid, Ex AA-4 at 83.

[71]Ibid, Ex AA-4 at 27.

[72]Ibid, Ex AA-4 at 33.

[73]Ibid, Ex AA-4 at 40.

[74]Ibid, Ex AA-4 at 79.

[75]Ibid, Ex AA-4 at 52.

[76]Ibid, Ex AA-4 at 58.

[77]Ibid, Ex AA-4 at 62.

[78]Affidavit of David Hall filed 20 August 2021 (CFI 39) [4].

[79]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [24].

[80]Affidavit of Dave Cheng filed 20 August 2021 (CFI 40) [39]-[40].

[81]Ibid; Affidavit of David Hall filed 20 August 2021 (CFI 39) [6]; Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [26(b)].

[82]Affidavit of Dave Cheng filed 20 August 2021 (CFI 40) [54].

[83]Ibid [40].

[84]Ibid [41].

[85]Ibid [42].

[86]Ibid [43].

[87]Ibid [43]-[45].

[88]Ibid [47].

[89]Ibid [49].

[90]Ibid [49].

[91]Affidavit of Anthony Angeli filed 27 August 2021(CFI 43) [21(b)].

[92]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [27], Ex AA-4 at 65-67.

[93]Affidavit of Dave Cheng filed 20 August 2021 (CFI 40) [51].

[94]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [27], Ex AA-4 at 68.

[95]Ibid [32], Ex AA-4 at 100-101.

[96]T1-20.5-14.

[97]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117 [51] per French CJ, Nettle and Gordon JJ; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 657 [35] per French CJ, Hayne, Crennan and Kiefel JJ.

[98]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117 [51] per French CJ, Nettle and Gordon JJ.

[99]Zhu v Treasurer of New South Wales (2004) 218 CLR 530 at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ.

[100]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 116 [47] per French CJ, Nettle and Gordon JJ.

[101]Ibid.

[102]Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 per Gibbs J.

[103]Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455 at 464 per Mason, Murphy, Brennan, Deane and Dawson JJ.

[104]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117 [49] per French CJ, Nettle and Gordon JJ.

[105]Ibid at 117 [50] per French CJ, Nettle and Gordon JJ.

[106]T1-18.5-T1-19. 45.

[107]T1-22.15-17.

[108]T1-22.16.

[109]T1-15.1-4.

[110]Settlement Deed, cl 4(c)(i).

[111]Ibid, cl 11.

[112]Ibid, cl 2(a).

[113]Settlement Deed, cl 2(g).

[114]Ibid.

[115]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15), Ex JL 1 at 180 (clause 12.7 of the common provisions of the Fleming Mortgages “All money payable by the Mortgagor under the Mortgage must be paid in cleared funds … Payments will be credited to the Mortgagor only when actually received by the Mortgagee”) and at 232 (clause 7.2 of the La Trobe Mortgage provisions “an amount paid will not be credited until it is actually received by the mortgagee in cleared funds and there is no obligation to refund it”).

[116]Affidavit of Mark Kenneth Askin filed 27 August 2021 (CFI 42) [6].

[117]Ibid [13(e)].

[118]Ibid [13(g)].

[119]Ibid [13(g)].

[120]Ibid [13(h)].

[121]T1-19.14-18.

[122](2006) 227 CLR 57 at 81-82 [65]-[66] per Gummow and Hayne JJ.

[123](1968) 118 CLR 618.

[124]Ibid at 622-623 per Kitto, Taylor, Menzies and Owen JJ.

[125]Ibid at 622 per Kitto, Taylor, Menzies and Owen JJ.

[126]Adani Mining Pty Ltd v Pennings [2020] QSC 275 at [12] per Martin J; Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 at 314 per Cooper J.

[127](1995) 58 FCR 119 at 122-123 per Kiefel J.

[128]Mr Yue’s application [7].

[129]Mr Yue’s written submissions [46].

[130]Ibid [47].

[131]Ibid [53]-[56].

[132]Ibid [60].

[133]Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126 at [51] per McMurdo J.

[134]Mr Yue’s written submissions [78(a)].

[135]Sun North Investments Pty Ltd (as trustee) v Dale [2014] 1 Qd R 369 at 382 [74] per Henry J.

[136]Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265 at 274-275 per Kitto J; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 331 per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ.

[137][2007] QSC 32 at [58] per Muir J.

[138][2014] 1 Qd R 369 at 383 [78] per Henry J.

[139]Mr Yue’s written submissions [79].

[140]Ibid [88]-[90].

[141]T1-33.24-30.

[142]Mr Yue’s written submissions [92].

[143]Andrew v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205 at 216 [10] per French CJ, Gummow, Crennan, Kiefel and Bell JJ.

[144]Mr Yue’s written submissions [96]-[98].

[145]T1-36.20-26.

[146]Ibid.

[147]Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656 at 662 [11] per Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ.

[148]Affidavit of Anthony Angeli filed 21 July 2021 (CFI 35) [27], Ex AA-4 at 68.

[149]Mr Yue’s written submissions [100].

[150]Ibid [101(a)]-[101(b)].

[151]Ibid [101(c)], [101(e)].

[152]Ibid [101(d)].

[153]Ibid [101(f)].

[154]T1-36.30-34.

[155]T1-13.21-25.

[156]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15) [19(a)]-[19(k)].

[157]Ibid [19(g)].

[158]T1-6.36-40.

[159]Statement of Claim (CFI 1) [23].

[160]Affidavit of Liansheng Yue filed 17 December 2020 (CFI 25), Ex LSY-17 at 36.

[161]Affidavit of Liansheng Yue filed 17 December 2020 (CFI 25), Ex LSY-22 at 47.

[162]Statement of Claim (CFI 1) [42]-[47].

[163]Affidavit of Liansheng Yue filed 17 December 2020 (CFI 25) [42]-[43], [73].

[164]Crown Melbourne v Cosmopolitan Hotel (2016) 260 CLR 1 at 43-44 [142]-[143] per Keane J, 65 [211] per Nettle J.

[165]Mr Yue’s written submissions [89].

[166]Affidavit of James Nicholas Conomos filed 16 September 2021 (CFI 45) Ex JNC-6 at 1-6.

[167]Donnelly v Amalgamated TV Services (1998) 45 NSWLR 570 at 575 per Hodgson CJ.

[168]cf Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164-165 per Walsh J and at 168-169 per Barwick CJ, Menzies and Gibbs JJ.

[169]Cousins Securities Pty Ltd v CEC Group Ltd [2007] 2 Qd R 520 at 533 [38] per Holmes JA.

[170]Affidavit of Junyan Lu filed 6 November 2020 (CFI 15) [17].

[171]Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 81-82 [65]-[66] per Gummow and Hayne JJ.

[172]Ibid, Ex JL-1 at 174, 225.

Close

Editorial Notes

  • Published Case Name:

    Yue v CN-AU Capital Pty Ltd & Anor

  • Shortened Case Name:

    Yue v CN-AU Capital Pty Ltd

  • MNC:

    [2021] QSC 248

  • Court:

    QSC

  • Judge(s):

    Kelly J

  • Date:

    01 Oct 2021

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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