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Symx Land Developments Pty Ltd v Pugh[2025] QSC 137

Symx Land Developments Pty Ltd v Pugh[2025] QSC 137

SUPREME COURT OF QUEENSLAND

CITATION:

Symx Land Developments Pty Ltd v Pugh [2025] QSC 137

PARTIES:

SYMX LAND DEVELOPMENTS PTY LTD ACN 606 744 727 (AS TRUSTEE FOR THE LAND DEVELOPMENT UNIT TRUST)

Plaintiff

v

SHANE LLOYD PUGH

First defendant

VANESSA CAROL PUGH

Second defendant

FILE NO:

BS 10828/22

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

10 June 2025

DELIVERED AT:

Brisbane

HEARING DATES:

21-22 October 2024, 1 November 2024

JUDGE:

Hindman J

ORDER:

Subject to hearing from the parties about the form of orders, judgment is to be entered for the plaintiff against the defendants as follows:

  1. $2,280,000 pursuant to a guarantee given by each of the defendants on 28 August 2020.
  2. Interest pursuant to s. 58 of the Civil Proceedings Act 2011 (Qld) on the amount in (a) calculated from 30 August 2022. 
  3. The second defendant’s counterclaim is dismissed. 
  4. The defendants are to pay the plaintiff’s costs of the proceeding. 

CATCHWORDS:

CONTRACT OF GUARANTEE – CONSTRUCTION AND EFFECT – GENERALLY – where the plaintiff owned and was selling property – where the first defendant and the second defendant were married to each other – where the first defendant was the director of a company – where the company entered into an agreement to purchase the property from the plaintiff – where this agreement relevantly comprised a contract, a deed of variation that contained a deed of guarantee, and a further deed of variation – where the second defendant was appointed a director of the company after the date of the contract but before the deed of variation was executed – where the defendants signed documents referred to as “undertakings” that provided they would guarantee the buyer company’s obligations under the contract – where settlement proceeded and title in the property was transferred to the company – where the company failed to provide to the plaintiff the whole of the purchase price under the contract – where the plaintiff claims against the defendants a debt and damages, including pursuant to the deed of guarantee – whether the deed of variation (and guarantee) is void for uncertainty – whether the deed of variation (and guarantee) is void and unenforceable against the second defendant on the basis of unconscionability at common law or under s. 20 of the Australian Consumer Law – whether the defendants in fact guaranteed the company’s obligations under the contract – whether the contract and later contractual documents were in fact entered into by the plaintiff

Civil Proceedings Act 2011 (Qld), s. 58

Competition and Consumer Act 2010 (Cth), sch. 2, s. 20

Corporations Act 2001 (Cth), ss. 126, 127(1)

Property Law Act 1974 (Qld), s. 45

ANZ Banking Group v Londish [2014] NSWSC 202, cited

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, considered

Commonwealth Bank of Australia v Crowe [2004] NSWSC 330, cited

Commonwealth Bank of Australia v Ridout Nominees Pty Ltd [2000] WASC 37, cited

Council of the Upper Hunter County District v Australia Chilling and Freezing Company Ltd (1968) 118 CLR 429, applied

Cranfield Pty Ltd v Commonwealth Bank of Australia [1998] VSC 140, cited

Garcia v National Australia Bank Ltd (1998) 194 CLR 395, considered

Good Living Company Pty Ltd v Kingsmeade Pty Ltd (2021) 284 FCR 424, considered

HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153, cited

Yerkey v Jones (1939) 63 CLR 649, considered

COUNSEL:

M A Goldsworthy for the plaintiff

A J H Morris KC initially for both defendants, and then only for the second defendant Shane Pugh, on his own behalf for part of the hearing (first defendant)

SOLICITORS:

Ramsden Lawyers for the plaintiff

Australian Law Partners initially for both defendants, and then only for the second defendant

Introduction

  1. [1]
    This proceeding involves a claim for debt and damages by a seller of a property (the plaintiff) against two individuals (directors of the corporate buyer of the property) (the defendants) pursuant to alleged guarantees and agreements to pay certain amounts to the seller.
  1. [2]
    The plaintiff is entitled to judgment against both defendants.  The second defendant’s counterclaim against the plaintiff fails.

Factual background

Symx seeks to sell property

  1. [3]
    The plaintiff (Symx) was the owner of the properties situated at 101 and 105 Mount Gravatt-Capalaba Road, Upper Mt Gravatt (Property).  The Property comprised vacant land and was suitable for development, with a development approval (DA) and building approval (BA) for a 53 residential unit complex in place.  
  2. [4]
    Symx at all material times was represented by Xiaoguang Yu, also known as Vincent Yu (Mr Yu).  Mr Yu was the sole director of Symx from 12 November 2019 to 4 December 2020.[1]  There was no secretary of Symx at that time.  A new director and secretary of Symx was appointed on 4 December 2020.  Symx has authorised Mr Yu to continue to deal with all matters relating to the Property since that time.   
  3. [5]
    In 2020, Symx had been the owner of the Property for a number of years and had been looking to sell the Property since about late 2018 or early 2019.  It was keen to recoup from the sale the original purchase price plus holding costs, such that it was interested in achieving a sale price exceeding $3.8m (excluding GST).  
  4. [6]
    Having had no success selling the Property through a different agent, in about late 2019 the Property was placed for sale with Jane Tan (Ms Tan), a real estate agent.  The agreed commission payable on a successful sale was to be 2% plus GST of the contract price.  Ms Tan advertised the Property for sale through various channels, including a BBX trade group.  BBX Australia is a trade platform, like Bartercard. 
  5. [7]
    A BBX trade group listing for the Property around 18 October 2019 indicates that the Property may have been advertised as land with DA and BA for 53 residential units, at a price of $3,388,000 with 20% of that amount payable in BBX trade dollars.[2]  Ms Tan recalled the Property also being advertised as open to expressions of interest and offers over $4m/$3.8m.

A possible purchaser for the Property

  1. [8]
    One of the users of the BBX trade group was Rozlyn Ingles (Ms Ingles).  Ms Ingles is a real estate agent. 
  2. [9]
    Ms Ingles contacted Ms Tan indicating that she could introduce a buyer to purchase the Property.  A conjunction sale was proposed, with a split commission of 50/50.  A conjunction agreement dated 2 September 2020 was eventually executed.[3]   
  3. [10]
    The buyer Ms Ingles introduced to Ms Tan was Valour Investment Group No 3 Pty Ltd (Valour).  Valour was the trustee of the V3 Trust that was established on 24 June 2019.     
  4. [11]
    The controlling mind behind Valour (and its sole director at the time) was the first defendant, Shane Pugh (Mr Pugh).  Mr Pugh was also the sole unit holder of the V3 Trust.  Mr Pugh, by trade, was an experienced commercial flooring contractor.  He performed that work through a company/companies.  He described working in that industry as up and down, hot or cold.  He had ambitions to engage in property development.  He envisaged building properties and supplying flooring for same.  He had some experience in investing in residential property, including through companies and trusts.  It appears that at various times he had interests (directly or indirectly) in about 13 residential properties.  But he was not a particularly successful property investor.  A property deal that went sour had resulted in his personal bankruptcy, but by 2020 he was no longer in bankruptcy.  He had no real financial ability to engage in any substantial property development but he did not see that as an impediment: in his view property developers often had financially successful projects, including the development of blocks of multiple units, without committing any of their own funds.  He had “no money to buy the land.  We had actually no money at the time.”[4]  He described his involvement in property development at the time he became aware of the Property as “none whatsoever”.   
  5. [12]
    Mr Pugh was a married man.  His wife, the second defendant, Vanessa Pugh (Mrs Pugh), at the time had been a stay-at-home mother for many years.  She did perform some formal roles as part of Mr Pugh’s business dealings (for example, as a director of companies), but seemingly only at the request of Mr Pugh and without exercising any independent judgment in relation to same.  Like Mr Pugh, Ms Pugh had no real financial worth at the time. 
  6. [13]
    Mr Pugh had had previous dealings with Ms Ingles and seemed to perceive her as someone who might be able to help him obtain opportunities to improve his financial position.  Mr Pugh said that Ms Ingles was used to dealing with developers and had put together a lot of deals. 
  7. [14]
    It is not clear whether Ms Ingles brought the advertising of the sale of the Property to Mr Pugh’s attention or vice versa.  In any event, prior to May 2020 they together worked on a plan to make an offer for Valour to purchase the Property and develop it with a residential unit block.  Mr Pugh had other professional people that he went to for advice in addition to Ms Ingles, including an accountant, a finance broker and a solicitor. 

The negotiations for a contract to purchase the Property

  1. [15]
    Initial negotiations occurred around May 2020.  There was some suggestion that there was a contract that did not proceed.[5]  The precise terms of that contract and the reason it did not proceed were not disclosed.[6]  Mr Yu’s evidence suggested there was merely an offer that was not accepted because it was not on terms suitable to Symx.[7]  Regardless, there were further negotiations for a new contract between May 2020 and August 2020. 
  2. [16]
    In an overview of those negotiations, the following matters appear uncontentious:
    1. At least initially Mr Pugh seemed to primarily deal with Ms Ingles and then Ms Ingles would deal with Ms Tan.  Mr Pugh referred to there being “a few difference (sic) scenarios thrown ar – thrown around”.[8]  That seems to be a reference to the terms of a “deal” being discussed.
    2. Before the second contract was signed there came a point where Mr Pugh and Mr Yu started having some direct discussions.  That seems to have been an outcome that occurred when the seller’s side perceived Ms Ingles as too “pushy” and did not wish to deal with her any longer;
    3. Mr Pugh intended that the purchase of the Property would be by Valour as trustee for the V3 Trust; 
    4. Valour was willing to pay what Symx was hoping to achieve in terms of a sale price – $3.8m plus GST.  However, Valour was trying to structure a deal where it did not have to come up with the whole of the purchase price at once (which would not be possible for it).  Mr Pugh gave evidence that he had no money to purchase the Property and he had to “get some type of situation where Vincent or his company would hold some type of vendor finance terms so that there was enough equity in the property to move forward and build the units”;
    5. Mr Yu said that there were never any offers received from Valour that involved the payment of the whole of the purchase price on settlement; there was always proposed to be payments over time;[9]  
    6. Apparently with input from Ms Ingles who assisted in the structuring of an offer, the purchase price for the Property was therefore proposed (initially) to be paid as follows:
      1. (i)
        small deposit ($5,000);
      1. (ii)
        $1.3m bank cheque at settlement;
      1. (iii)
        $400,000 of BBX trade dollars at settlement;
      1. (iv)
        the balance purchase price of $2.48m by way of:
      1. (A)
        refunded GST on the construction costs during construction up to practical completion being paid to Symx;
      1. (B)
        at practical completion, a further $400,000 in BBX trade dollars and the balance by way of bank cheque being paid to Symx,
    7. Symx was not initially familiar with BBX trade dollars, but to achieve its desired sale price for the Property, it was prepared to entertain both part payment by that means and a delay in the payment of the balance of the purchase price linked to the development of the Property to be undertaken by Valour;
    8. The type of deal being proposed was beyond the usual experience of Ms Tan;
    9. Symx was concerned if Valour and Mr Pugh were persons actually capable of doing the proposed development of the Property (so that Symx would be eventually paid in full).  Mr Yu spoke with Mr Pugh about his experience and it is plain that Mr Pugh made statements that made it appear that he was far more experienced with property development than he was actually.[10]  Mr Pugh appeared to be engaging in conduct that might colloquially be described as “fake it until you make it”;  
    10. The negotiations at some point included the idea of Valour gifting two of the completed residential units in the development to Symx.  Mr Pugh suggested a feasibility study (assumedly carried out by him) on the project showed that the project would be sufficiently profitable to allow that to occur.  There were also discussions about Symx being given units in the V3 Trust that at completion of the project could be converted into another residential unit in the development;
    11. By about 24 July 2020 Symx had decided that some security would be required in order to do the type of deal that was being proposed by Valour involving delayed payment.  The minimum security contemplated by Symx was a first registered mortgage over the Property and a second guarantor (with confirmation of their credit history and references from a financial institution).  Valour offered in response on 29 July 2020 that:
      1. (i)
        Mrs Pugh will become a director of Valour;
      1. (ii)
        Mrs Pugh will guarantee the obligations under the contract;
      1. (iii)
        Symx will be issued with units in the unit trust that would be reduced as payment is made (but Symx would have no input into the construction of the project);

By email from Symx’s solicitors to Valour’s solicitors dated 31 July 2020[11] (copied to Ms Ingles and Ms Tan) the above correspondence was summarised and it was noted that Valour’s offer of security did not meet the minimum requirements specified by Symx.  A request for further security was made;  

  1. Before the second contract was signed, Mr Pugh obtained an independent valuation of the Property.  The date of inspection and valuation was 3 August 2020.  The market value opined for the Property was $2.8m excluding GST.  Mr Pugh thinks he provided the valuation to Mr Yu;      
  2. Mr Pugh gave evidence that he was at first “completely shattered” by the valuation.[12]  However, only a few days later, on 6 August 2020 he communicated to his solicitor and Ms Ingles:[13]

Hi Matthew

The Valuation has come in at $2,800,000

Due to the configuration of units, after re configuration property will be worth the contract price

Im now in a position to settle within two weeks but the vendor will have to take less up front $1,200,000 and shares in the trust with the balance paid as per agreement

ive spoken to Maya[14] and she agrees this hole thing is ridiculous and need to be sorted out

Can u email Maya what ive outline above to get this sorted

Time is of the essence

  1. Negotiations continued, mostly it seems between Mr Yu and Mr Pugh, orally, by text and by email,[15] those negotiations still contemplating some sort of “deal” as mentioned above, plus security in the form of guarantees from the defendants.[16]   
  1. [17]
    Mr Pugh’s planned funding for the purchase of the Property and to profitably develop it with a unit block seems to have relied upon vendor finance or vendor equity, a refund of GST on the land purchase price, refunds of GST during construction being used to pay back the vendor, and other financing.  Mr Pugh said, “that way it would seem to be that that was paying for itself”.[17]  If there was more sophistication to the plan than that, Mr Pugh did not disclose it.      

The contractual arrangements

  1. [18]
    The “deal” that was eventually struck between Symx and Valour was recorded in two documents:
    1. the contract for sale dated 25 August 2020 (Contract);[18]
    2. a deed of variation dated 27 August 2020 (Deed of Variation)[19] which at Schedule 1 had a deed of guarantee (Guarantee).
  2. [19]
    There was also a deed of gift[20] dated 27 August 2020 in favour of Symx in relation to two residential units in the development.  It was expressly stated to be supplementary to the “Contract” – but the “Contract” as defined in recital A to the deed of gift seems more likely to be a reference to the Contract and the Deed of Variation in combination.  On its face, the deed of gift appears to have been signed by Mr Yu on behalf of Symx on 27 August 2020 and by the defendants on behalf of Valour on 28 August 2020.  
  3. [20]
    Each of the Deed of Variation with Guarantee and the deed of gift appears to have been prepared by Valour’s solicitor, and then was provided to Symx’s solicitor on 26 August 2020.[21]
  4. [21]
    The Contract contemplated a purchase price of $3.8m plus GST ($4.18m) without any complexity.  The Contract was not subject to finance.  There were no special conditions.  Settlement was to be on or before 24 September 2020.  The Contract was signed by Mr Yu for Symx, and by Mr Pugh for Valour (his signature was witnessed by Mrs Pugh).  
  5. [22]
    The Deed of Variation reflected the more complex payment arrangements (the “deal”) mentioned above.  On its face it appears to have been signed by Mr Yu on 27 August 2020 on behalf of Symx, and by both defendants on 28 August 2020 on behalf of Valour.   
  6. [23]
    It is not of any consequence in the scheme of this dispute whether the two or three documents were always contemplated to together be the arrangement, or if the Contract was first entered into and then the Deed of Variation with Guarantee and the deed of gift separately entered into.  The former seems more likely as the complexity of the payment arrangements disclosed by the Deed of Variation with Guarantee, along with the deed of gift, are unlikely to have been something that was raised only after the Contract was signed and resolved within a period of a couple of days.  Also, the negotiations reveal that the “deal” was always what was actually contemplated by the parties.
  7. [24]
    Ms Tan gave evidence that the Contract and the Deed of Variation with the Guarantee together was always the arrangement agreed,[22]  but did give some apparently conflicting evidence that the matters set out in the Deed of Variation were only negotiated between 25 and 27 August 2020.[23]
  8. [25]
    Whilst Mr Yu and Mr Pugh both gave evidence about the dates they signed the various documents, it seems unlikely to me that they can recall the dates or the order of signing with precision given the length of time that has elapsed and they are likely to be highly influenced now by the dates appearing on the documents themselves.  What I do accept, and what the negotiations reveal, is that by 25 August 2020 the terms of the deal were effectively agreed and just needed to be documented and finalised (including so that the defendants gave the guarantees that had been contemplated for a month or so by that time).  
  9. [26]
    It appears to me to be most likely, and I find, that Mr Yu signed all three documents on or about 27 August 2020, and the defendants signed/witnessed all three documents on or about 28 August 2020.  Mrs Pugh had only become a director of Valour on 26 August 2020.[24]  The date of 25 August 2020 on the Contract was likely handwritten in at an earlier time by the same person who handwrote in the bank details for the deposit holder (likely Ms Tan – the writing seems the same).
  10. [27]
    Mr Pugh emailed the signed Contract and the Deed of Variation with Guarantee, to Mr Yu and others at 10.52am on 28 August 2020.[25] 
  11. [28]
    The Deed of Variation, in addition to changing how the purchase price under the Contract was to be paid, also provided for security (the Guarantee). 
  12. [29]
    Clause 4 of the Deed of Variation was in these terms:
  1. 4.1
    The Buyer will provide guarantees from Shane Pugh and Vanessa Pugh in the terms set out in the annexure for the performance of the obligations of the Buyer under this Agreement and the Contract;
  1. 4.2
    The Buyer will execute a 2nd Mortgage as prepared by the Seller over the property in favour of the Seller.  The parties agree that the terms of the mortgage will be standard commercial terms;
  1. 4.3
    The Seller shall be granted units in the V3 Trust equivalent to the value of the balance purchase price owing under the Contract on Settlement.  As each payment is made, the Seller shall transfer unit of equal value back to the Buyer.
  1. [30]
    The annexure to the Deed of Variation was headed SCHEDULE 1 DEED OF GUARANTEE.  In terms, it was a guarantee given by each of the defendants as guarantor to Symx. 
  2. [31]
    Insofar as the Guarantee records that:

IN CONSIDERATION of the Seller agreeing, at the request of the Guarantor, to enter into the Contract with the Buyer, the Guarantor hereby agrees with the Seller as follows:….

given the findings I have made at [26] above, that is not past consideration. 

  1. [32]
    The Guarantee provided that the first and second defendants guaranteed:
    1. the due and punctual performance and observance of all of Valour’s obligations, agreements, stipulations and covenants under the Contract;
    2. the payment of all monies payable under or pursuant to the Contract including the Purchase Price by each respective due date set out in the Deed of Variation; and
    3. the payment of all loss and damage (including legal costs calculated on a solicitor and own client basis) arising in any way out of any breach (actual, anticipatory or otherwise) or default in performance by the Buyer [Valour] of any term or condition of the Contract of Sale.
  2. [33]
    The Deed of Variation, including each page of the Guarantee, was initialled by Mr Yu and the defendants.  The Guarantee did not have provision for separate signing by the defendants.  And there was no separate deed of guarantee document signed by Mr and Mrs Pugh at any time.

After contract signing – further deed of variation

  1. [34]
    Prior to settlement, it appears that the existing DA on the Property lapsed and Symx on 19 October 2020 obtained an extension of the currency period for the DA until 16 September 2022.
  2. [35]
    Mr Pugh communicated to Mr Yu on 19 October 2020 by email[26] that:

Due to the lengthy delays in closing our transaction at 101 Capalaba Road, Mt Gravatt QLD (5 months).  My lenders have become very cautious and are withholding $200,000 at settlement, which will bring the closing funds to 1.1 million.  Also they have addressed that after the property is reconfigured the value is substantially higher and we are able to draw back on these funds including the $200,000 they are holding back. 

What i’m proposing is, settle the property at 1.1 million to you.  After reconfiguration you will receive the $200,000 shortfall from settlement and an additional $100,000 from the draw back of extra funds.  As discussed it is thought this may take 3 to 4 months after settlement.

  1. [36]
    That issue appears to have resulted in a further deed of variation.  On 5 November 2020 Symx and Valour entered into a further deed of variation (Further Deed of Variation). 
  2. [37]
    The Further Deed of Variation recorded in recital B that it was intended to be supplementary to the Contract and the Deed of Variation.  It was signed by Mr Yu on behalf of Symx and by the defendants as directors on behalf of Valour.   
  3. [38]
    The Further Deed of Variation further varied the payment mechanism under the Contract to the following effect:
    1. small deposit ($5,000);
    2. $1.1m bank cheque at settlement;
    3. $400,000 of BBX trade dollars at settlement;
    4. $300,000 bank cheque within 3 months of settlement; 
    5. the balance purchase price of $2.38m by way of: 
      1. (i)
        refunded GST on the construction costs during construction up to practical completion being paid to Symx;
      1. (ii)
        at practical completion, a further $400,000 in BBX trade dollars and the balance by way of bank cheque being paid to Symx.
  4. [39]
    On the same day, each of the defendants signed a document styled “Undertaking” in favour of Symx[27] (First Undertakings).[28]  The only relevance of those documents seems to be that in paragraph 2 in same there is reference to each of the defendants confirming that they are a guarantor “as security for the performance of the obligations of the Buyer under the Contract.”  Paragraph 3 also confirms that the Contract, Deed of Variation and Further Deed of Variation are to be read as a whole.  Paragraph 16 includes an indemnity given by the defendants in particular terms but that has not been relied upon by the plaintiff in the proceeding in any discernible way.[29]    

Settlement

  1. [40]
    Settlement proceeded thereafter on 5 November 2020.  The amounts due at settlement were paid.  Title in the Property was transferred to Valour. 

Post-settlement

  1. [41]
    The $300,000 due 5 February 2021 was not paid. 
  2. [42]
    On or about 16 June 2021 Symx entered into an agreement with Valour and Mr and Mrs Pugh whereby the time for payment of the $300,000 was extended to 18 August 2021 (the Extension Agreement).  
  3. [43]
    The Extension Agreement comprised a letter dated 14 June 2021 from Symx’s solicitors to the defendants recording an agreement.  The defendants were asked to countersign the letter to confirm the agreement.  They did so. 
  4. [44]
    Attached to the letter and executed by the defendants on their own behalves and on behalf of Valour was a document referred to as an undertaking (Second Undertakings).
  5. [45]
    The Second Undertakings acknowledged the terms of the Extension Agreement and then provided that each of the defendants will:

Ensure that the payment of $300,000 will be made on or before 18 August 2021 to SYMX LAND DEVELOPMENTS PTY LTD AS TRUSTEE UNDER INSTRUMENT NO 717135220 pursuant to the terms of the relevant Contract and Deed of Variation. 

  1. [46]
    The $300,000 due 18 August 2021 was not paid. 
  2. [47]
    On 29 August 2022 Symx purported to terminate the Contract for breach or alternatively accepted Valour’s repudiation of the Contract. 
  3. [48]
    Valour has subsequently entered into external administration.  The anticipated development at the Property by Valour never commenced. 

Evidence given in the proceeding

  1. [49]
    Two witnesses were called on behalf of the plaintiff – Mr Yu and Ms Tan.  Their evidence was not seriously shaken in cross-examination and I generally accept their evidence.
  2. [50]
    Two witnesses were called on behalf of the defendants – Mr Pugh and Mrs Pugh.  Without independent corroboration I would be hesitant to accept as entirely accurate any evidence that Mr Pugh gave.  He has been demonstrated to be a person who is loose with the truth in order to further his own interests.  I do not have the same level of concern about Mrs Pugh.  She did present as someone who would generally just go along with whatever Mr Pugh required of her, although perhaps somewhat deliberately not properly informing herself when she had the capacity to do so, simply in order to keep the peace between herself and her husband. 

Preliminary finding

  1. [51]
    Although ultimately I do not think anything turns on it, the defendants pleaded that Ms Ingles was the agent of Symx.  I reject that contention.  Ms Ingles was plainly acting as buyer’s agent – on behalf of Valour – as the factual background adequately demonstrates.  It does not matter that Valour did not pay her or that for that reason Mr Pugh did not consider her to be Valour’s agent.  Nor does it matter that she ultimately received payment for her part in the sale of the Property through the commission that was paid by Symx (under the conjunction agreement).    

Claim made by Symx

  1. [52]
    By the proceeding, Symx seeks to recover from Mr and Mrs Pugh:
    1. $300,000 pursuant to the terms of the Guarantee and/or Extension Agreement (or more precisely the Second Undertakings);
    2. $1.98m as damages for Valour’s breach of contract, pursuant to the terms of the Guarantee (the cash component of the balance purchase price not paid at settlement,[30] less the $300,000 referred to above);
    3. interest and costs. 
  2. [53]
    No claim is made by Symx in respect of any unpaid BBX trade dollars or pursuant to the deed of gift.  

Defences of Mr and Mrs Pugh 

  1. [54]
    The primary defence of both defendants is that the Deed of Variation (and the Guarantee within it) is void for uncertainty such that the Guarantee is not enforceable against either of the defendants.
  2. [55]
    There are a number of other defences pleaded by both defendants about which no specific submissions were made by the defendants.  Whilst the second defendant’s counsel was instructed not to abandon any pleaded defences, he candidly acknowledged that he had orally addressed the defences that he considered had prospects.  The second defendant did not make any submissions of substance beyond indicating his reliance on the submissions made on behalf of the second defendant.  I will deal with each of the defences not specifically addressed by the defendants in submissions in a relatively brief way.   

Defence of Mrs Pugh only

  1. [56]
    There is then a defence (and counterclaim) that was pleaded on behalf of Mrs Pugh only, namely that the “Transaction Documents”[31] and the Guarantee, to the extent that those documents would otherwise bind Mrs Pugh, are void and unenforceable against her on the basis of unconscionability either under s. 20 of the Competition and Consumer Act 2010 (Cth), sch. 2 (the Australian Consumer Law (ACL)) or at common law.   
  2. [57]
    There has emerged a dispute about the proper scope of the pleaded case and whether Mrs Pugh, by closing submissions made on her behalf, seeks to impermissibly stray beyond the pleaded defence and counterclaim.  I will address that dispute first.   

Unconscionability under s. 20 ACL and the common law - general comments

  1. [58]
    Section 20 ACL is in these terms:

A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time.

  1. [59]
    The unwritten law (or common law) concerning unconscionability invokes equitable doctrines and is not confined to closed categories of cases.
  2. [60]
    There are, however, well known categories of cases that the courts recognise involve unconscionability where the court will intervene.  These are often described by reference to the case names of cases involving an example of the particular category of case.
  3. [61]
    The cases relevant here are:
    1. Yerkey v Jones (1939) 63 CLR 649 (Yerkey v Jones) – both the first and the second limbs;
    2. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 (Amadio);
    3. Garcia v National Australia Bank Ltd (1998) 194 CLR 395 (Garcia) (which is a modern example of the application of the second limb in Yerkey v Jones).   
  4. [62]
    Yerkey v Jones considered the circumstances in which a mortgage executed by a wife as security for a loan for the benefit of her husband will be invalidated against the mortgagee.  The Court, delivering separate opinions, unanimously held that the facts in that case did not justify a finding that the wife should be released from her obligations under the mortgage.
  5. [63]
    However, Dixon J (as his Honour then was) distinguished between two limbs upon which an equity to set aside the security may be founded:
    1. the first limb dealt with “cases in which a wife, alive to the nature and effect of the obligation she is undertaking, is procured to become her husband’s surety by the exertion by him upon her of undue influence, affirmatively established”;
    2. the second limb was not concerned with actual undue influence, but rather “cases where [a wife] does not understand the effect of the document or the nature of the transaction of suretyship”.
  6. [64]
    Whilst the second limb in Yerkey v Jones would now be considered a case involving unconscionability, that was not the language that was employed at the time.
  7. [65]
    That analysis was affirmed by the plurality (consisting of Gaudron, McHugh, Gummow and Hayne JJ) in Garcia.  At [23], their Honours explained:

In his reasons for decision in Yerkey v Jones, Dixon J dealt with at least two kinds of circumstances: the first in which there is actual undue influence by a husband over a wife and the second … in which there is no undue influence but there is a failure to explain adequately and accurately the suretyship transaction which the husband seeks to have the wife enter for the immediate economic benefit not of the wife but of the husband, or the circumstances in which her liability may arise. The former kind of case is one concerning what today is seen as an imbalance of power … The latter case is not so much concerned with imbalances of power as with lack of proper information about the purport and effect of the transaction.

  1. [66]
    Their Honours went on to explain the circumstances that constitute unconscionability in the second limb in Yerkey v Jones at [31]-[33]:

what makes it unconscionable to enforce it in the second kind of case is the combination of circumstances that: (a) in fact the surety did not understand the purport and effect of the transaction; (b) the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed); (c) the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet (d) the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.

…

To enforce the transaction against a mistaken volunteer when the creditor, the party that seeks to take the benefit of the transaction, has not itself explained the transaction, and does not know that a third party has done so, would be unconscionable.

  1. [67]
    In Amadio, the respondents, a married couple, executed a guarantee and mortgage for the indebtedness of their son’s company in favour of the appellant bank.  At the time they executed the guarantee and mortgage, the respondents mistakenly believed that their maximum potential liability was limited to $50,000 when it was in fact unlimited.  Both respondents had a limited grasp of written English and relied on their son for the management of their business affairs.  They mistakenly believed that their son’s company was prosperous and successful.  When the lengthy and complex document was presented to them for signing, there was little to no discussion or explanation of the transaction and the respondents received no independent advice.
  2. [68]
    In these circumstances, the Court set aside the transaction on the basis of unconscionability on the part of the bank.  In reaching that conclusion, the Court considered that unconscionable dealing is made out when, first, a party to a transaction is under a “special disability” or “special disadvantage”, and, second, when that disability (known to the other party) makes it unconscientious for the other party to rely on the disabled party’s conduct: see at 461-2 per Mason J and at 474 per Deane J (Wilson J agreeing).  This presence of a special disability or disadvantage, and the other party’s knowledge of it, gives rise to one of the main types of situations in which equitable relief will be granted on the basis of unconscionability.[32]
  3. [69]
    Turning then to Garcia.  The facts in Garcia concerned the second limb in Yerkey v Jones.  Garcia involved a mortgage executed by the appellant and her then husband to secure a loan made to the husband for use in his business.  The appellant also signed further guarantees in respect of debts payable by her husband’s company.  After the appellant and her husband separated some years later, the husband’s company was wound up and the appellant commenced proceedings seeking declarations that the mortgage and guarantees she signed were void.  It was found that the appellant did not understand the purport or effect of the transactions, she was given no independent advice, and the creditor did not explain the transactions to her.  Accordingly, the plurality considered that the circumstances fell within the second limb outlined by Dixon J in Yerkey v Jones and the appellant was not bound by the mortgage or the guarantees: see at [23], [41]-[42].

What defence is properly within the pleaded case

  1. [70]
    The pleaded unconscionable conduct defence (and counterclaim) commences at [28] of the fourth amended defence and counterclaim filed 15 October 2024 (Defence) and relies upon some earlier pleaded matters ([19], [20], [21], [22], Defence).
  2. [71]
    The key parts of the pleading concerning the second defendant’s unconscionability defence are these:
    1. [22], Defence that concerns characteristics of Mrs Pugh and provides:

At all times material to this proceeding, the Second Defendant was:

  1. married to the First Defendant;
  2. a person who had no experience in property development;
  3. a person who lacked financial capacity to purchase the Properties;
  4. susceptible to being influenced because she had little to no understanding or experience surrounding the purchase of property, the tax implications of the purchase of property, the development of property, conveyancing, BBX dollars, loans, mortgages or securities; and
  5. not capable of discerning, without independent legal and accounting advice, whether or not the transactions envisaged by the Contract of Sale, the Deed of Variation, the Further Deed of Variation, the Guarantees and the Undertakings, were in her best interests.
  1. (b)
    [29], Defence that alleges that Mr Pugh communicated to Symx through its agents (who are alleged to be Ms Tan and Ms Ingles), that the defendants both had no experience in property development and no financial capacity to purchase the Property;
  1. (c)
    [30], Defence that alleges that by reason of certain matters (including those in [22] and [29], Defence) Symx knew that Mrs Pugh was at a “special disadvantage” to Symx because of five identified factors which are that:
  1. (i)
    each of the Defendants was incapable of developing the Property;
  1. (ii)
    the Property was not worth more than about $2,800,000;
  1. (iii)
    the sale of the Property for $4,180,000 was for the sole benefit of the plaintiff;
  1. (iv)
    the sale of the Property for $4,180,000 would not allow the V3 Trust to develop the Property profitably; and
  1. (v)
    the Transaction Documents, if they were valid and enforceable, amounted to an improvident transaction.
  1. (d)
    [31] and [32], Defence that alleges:
  1. [31]
    If the Transaction Documents were valid and enforceable, which the Defendants deny … then it would be unconscionable within the meaning of that term under the common law to allow the Plaintiff to enforce each of the Transaction Documents against the Second Defendant.
  1. [32]
    In the premises of paragraphs 19 to 22 and 28 to 31, above, the Plaintiff’s conduct as against the Second Defendant:
  1. was unconscionable within the meaning of Section 20 of the ACL; and
  2. contravened Section 20 of the ACL.
  1. [72]
    It is not entirely clear to me what is the “Plaintiff’s conduct as against the Second Defendant” that is being referred to in [32], Defence.  No conduct is specifically pleaded, but I assume it is intended to refer to Symx requiring Mrs Pugh to enter into the Deed of Variation, Guarantee, Further Deed of Variation and the First Undertakings (and perhaps the Second Undertakings) in her personal capacity.
  2. [73]
    The pleaded defence and counterclaim on its face appears to plead an Amadio style unconscionable conduct case.  That is plain having regard to particularly (1) the allegations of Mrs Pugh being at a “special disadvantage” to Symx, (2) the allegations of knowledge made against Symx, and (3) the allegation of Symx’s conduct against Mrs Pugh being unconscionable.  

What occurred during the trial

  1. [74]
    The plaintiff’s case opened and closed on day one of the trial.  The defendants’ case was opened and the defendants’ first witness was Mr Pugh.  His evidence-in-chief was partially completed at the end of day one. 
  2. [75]
    At the commencement of day two of the trial, before the evidence-in-chief of Mr Pugh resumed, counsel for Symx raised a matter concerning the pleaded defence of Mrs Pugh.  He expressed concern that the examination-in-chief of Mr Pugh perhaps appeared directed to supporting an argument Mrs Pugh should have no liability based on “some sort of Yerkey v Jones style argument”.   He expressed that (from T2-2):  
    1. Symx had come to meet the pleaded case;
    2. the relevant matters that would need to be proven on a Yerkey v Jones unconscionability argument were not pleaded;
    3. the case that was pleaded was that Mrs Pugh was at a special disadvantage by virtue of five identified factors ([30], Defence);
    4. insofar as [22(d)], Defence referred to Mrs Pugh being susceptible to being influenced, that general allegation is very different to a specific allegation of undue influence by a husband as against a wife;
    5. if a Yerkey v Jones argument was to be pleaded it would need to identify which limb is enlivened and the material facts supporting same;
    6. insofar as the second limb of Yerkey v Jones is concerned, that would require a pleading that Mrs Pugh did not understand the purpose and effect of the Guarantee and there is no such pleading (and [22(e)], Defence is not sufficient).
  3. [76]
    Counsel for Symx at T2-4, LL 1-9 said:
  1. MR GOLDSWORTHY:
    And before I sit down, just to reiterate, the bright line test of which I’m talking about, the difficulty is, there are these allegations in ’22 in particular.  They’re broad allegations.  They could have sensibly – there could be a number of questions and a number of answers that are ostensibly related to those which could hypothetically be weaponised on a Yerkey v Jones.  And they wouldn’t be objectionable because they would fall under that, but I just want to make it very clear that, to the extent that they do attempt to be weaponised later, I’ll be confining it to the – or submitting that your Honour should confine it to the pleadings and your Honour is on notice that that’s our position.
  1. [77]
    That led to the following exchange with the defendants’ counsel (who at the time was representing both defendants):
  1. MR MORRIS:
    Your Honour, I don’t propose to address this point at length at this stage because I suspect my learned friend is starting at cellos.  To bring myself within the Yerkey v Jones principle, I would have to be able to make out a case that Mrs Pugh did not understand that she was signing a document that contained a guarantee; that sort of thing.  I can’t do that, and I won’t attempt to do that.
  1. HER HONOUR:
    No. Okay. Well, you’re on notice that - - -
  1. MR MORRIS:
    Yes, I am.
  1. HER HONOUR:
    - - - you’re being held to your pleading.
  1. MR MORRIS:
    Yes, I am.
  1. HER HONOUR:
    I’m not sure that there’s anything particularly I can do because if you were attempting to move beyond your pleading, then you might stand up and say something different.
  1. MR MORRIS:
    Indeed, your Honour. And one might’ve thought at the outset of the case that this was – someone at my age and seniority – a sort of Dave and Goliath battle, but my learned friend has demonstrated an extremely acute capability of presenting his client’s position and I’m sure that if I were to stray in that direction, my learned friend would be the first one to raise it.
  1. HER HONOUR:
    Okay. We’re all on notice.
  1. [78]
    I consider it plain enough that counsel for the defendants was referring to the second limb in Yerkey v Jones in stating at T2-4, LL 14-17:

To bring myself within the Yerkey v Jones principle, I would have to be able to make out a case that Mrs Pugh did not understand that she was signing a document that contained a guarantee; that sort of thing.

The first limb in Yerkey v Jones, dealing with actual undue influence, would not have required any proof that Mrs Pugh did not understand that she was signing a document containing a guarantee; or “that sort of thing”.  That is something required by the second limb in Yerkey v Jones.  Accordingly I conclude that counsel for the defendants was expressly disclaiming a defence (and counterclaim) based on the second limb in Yerkey v Jones. 

  1. [79]
    I consider that consistent with the case pleaded on behalf of Mrs Pugh also.  The material facts pleaded in respect of unconscionable conduct were that Symx knew Mrs Pugh was “at a special disadvantage to [Symx]”, that it would be unconscionable to allow Symx to enforce the Transaction Documents, and that, in the premises, Symx contravened s. 20 of the ACL.[33]  There is nothing pleaded about Mrs Pugh’s lack of understanding of the Transaction Documents, whether Mrs Pugh was a volunteer for the purposes of the transaction, or Symx’s failure to explain the transaction to Mrs Pugh – all of which are facts material to a finding of unconscionability under the second limb in Yerkey v Jones.
  2. [80]
    In closing submissions counsel for Mrs Pugh squarely relied upon what he described as a Garcia type defence, which is no more than the second limb in Yerkey v Jones.  He stated that he had only disclaimed a defence based on the first limb in Yerkey v Jones.  For the reasons stated above, I do not consider that correct. 
  3. [81]
    The case that counsel for Mrs Pugh squarely attempted to advance in closing submissions was that Mrs Pugh was not sufficiently knowledgeable about the nature of the obligation contained in the Guarantee.  It was not submitted that Mrs Pugh did not have an understanding that she was signing a guarantee, that the guarantee was for a significant sum of money and that if Valour did not pay the guarantee could be called upon (which she did not have the financial capacity to meet).  Instead, it was submitted that the critical thing Mrs Pugh did not understand was the risk associated with the giving of the Guarantee in circumstances where she did not know:
    1. that the contract price was way over the market price;
    2. that the prospect of Valour meeting its obligations depended on Mr Pugh being able to successfully complete a very sophisticated development of residential apartments which he had never done before.[34] 
  4. [82]
    Those are matters that, if a second limb in Yerkey v Jones style defence was to be run, ought to have been pleaded. 

Outcome 

  1. [83]
    For the reasons outlined above, I consider that a defence under the second limb in Yerkey v Jones was expressly disclaimed by counsel for Mrs Pugh, and that in any case no such defence was pleaded.  It would cause significant prejudice to the plaintiff to permit a second limb in Yerkey v Jones style defence and counterclaim to be run at this late stage, and I do not allow it. 
  2. [84]
    It is worth noting that the courts have not considered a “special disadvantage or disability” to be a necessary finding or relevant consideration to the second limb in Yerkey v Jones.  Rather, courts have tended to consider whether the second limb in Yerkey v Jones has been made out, then consider as a separate question whether a party had a special disadvantage for the purposes of an Amadio­ type unconscionability claim.[35]  The two categories of unconscionability are thus treated as independent and it cannot be said that a pleading of a special disadvantage encompasses or implies any reliance on a Yerkey v Jones type unconscionability claim.
  3. [85]
    I should also note that the inclusion of s. 20 ACL in the defence does not itself mean that a defence under the second limb in Yerkey v Jones becomes available.  There is some doubt as to whether a Yerkey v Jones type unconscionability claim falls within the ambit of s. 20 ACL as a matter of law.  In Good Living Company Pty Ltd v Kingsmeade Pty Ltd (2021) 284 FCR 424, Allsop CJ remarked that “the ‘fact-pattern which fits the equitable paradigm’ … requires for s. 20 ACL a special disability of which the stronger party takes unconscientious advantage” (at [4]), potentially suggesting that Yerkey v Jones type unconscionability is not covered by s. 20 ACL at all.  In any case, even if s. 20 ACL does cover Yerkey v Jones unconscionability (which is the view I would prefer and that seems consistent with Garcia), the ACL claim in the Defence relies solely on facts pleaded to support a “special disadvantage” or an Amadio type unconscionability claim.  And it does not change the fact that the material facts required to establish the second limb in Yerkey v Jones are not pleaded.
  4. [86]
    No application was made for leave to further amend the Defence.  The defendants are held to their defence and therefore a defence under the second limb in Yerkey v Jones cannot be relied upon by Mrs Pugh.

Unconscionability defence and counterclaim pleaded

  1. [87]
    Counsel for Mrs Pugh did not ultimately submit that an Amadio type of unconscionability case was made out.  That was the correct position. 
  2. [88]
    Mr Pugh did not come up to proof on [29], Defence.[36]  Absent those factual matters being established by the defendants in relation to Ms Tan (who was Symx’s agent), there was no basis upon which to conclude that Symx had the requisite knowledge of Mrs Pugh being at any special disadvantage.  The pleaded unconscionability defence and counterclaim fails.   

The defendants by the Deed of Variation did not guarantee anything

  1. [89]
    This is the defence pleaded at [6(c)], Defence.  The defendants say that they did not by schedule 1 to the Deed of Variation (the Guarantee) guarantee anything because they were not parties to the Deed of Variation.
  2. [90]
    Whilst this was not a defence about which the defendants made any specific submissions, it is a logical place to otherwise start. 
  3. [91]
    As recorded in the factual background, the Deed of Variation, that has as schedule 1 the Guarantee, was apparently signed by Mr Yu on 27 August 2020 on behalf of Symx, and by both defendants on 28 August 2020 on behalf of Valour.  Each page of the document, including the schedule, is initialled by each of Mr Yu and the defendants.  The Guarantee did not have provision for separate signing.  And there was no separate deed of guarantee document signed by Mr and Mrs Pugh.
  4. [92]
    I agree that Mr and Mrs Pugh were not parties to the Deed of Variation.  They did not need to be.  The question is whether they actually gave the guarantees recorded in the Guarantee.  Despite the document being headed “Deed of Guarantee” there is no requirement that the guarantees actually be given by way of deed – agreement is sufficient. 
  5. [93]
    Here, by their conduct in initialling each page of the Guarantee and sending it back to Symx as part of the Deed of Variation, and with the signed Contract, I am satisfied that the defendants did in fact provide guarantees in the form of the Guarantee.  The consideration given for the Guarantee is recorded on the face of the document.  This pleaded defence fails.     

The alleged uncertainty of the Deed of Variation

  1. [94]
    This defence is applicable to both defendants. 
  2. [95]
    In particulars[37] the defendants contended that the Deed of Variation was uncertain and unenforceable as:
    1. clauses 3.1(b) and (c) are uncertain as to:
      1. (i)
        the nature and meaning of the obligation to pay $400,000 “as BBX Trade Dollars” at settlement;
      1. (ii)
        the meaning of the words “Upon commencement of building works all GST credits to be forward on to Seller per quarterly BAS”;
      1. (iii)
        the meaning of the word “Project” in subparagraphs 3.1(c)(ii) and (iii);
      1. (iv)
        the meaning of the words “GST payment schedule shall run to practical completion of Project”;
      1. (v)
        the meaning of the words “Practical Completion” in subparagraph 3.1(c)(iii);
      1. (vi)
        the nature and meaning of the obligation to pay upon “Practical Completion”:
      1. (A)
        $400,000 as “BBX Trade dollars”;
      1. (B)
        the balance then owing by Bank Cheque,
    2. clause 3.3 is uncertain as to the meaning and requirement to “deduct this from the first GST payment”.
  3. [96]
    Orally submissions were only advanced on behalf of the second defendant (and adopted by the first defendant) that the Deed of Variation introduced an element of uncertainty in terms of when the balance payment under the Contract would be made and as a consequence the Deed of Variation is void for uncertainty. 
  4. [97]
    Symx contends there is nothing uncertain about the Deed of Variation that would result in the Deed of Variation (and therefore the Guarantee) not having operation. 
  5. [98]
    The parties agree that the relevant principles about voidness for uncertainty are those set out in Council of the Upper Hunter County District v Australia Chilling and Freezing Company Ltd (1968) 118 CLR 429, particularly at 436-437 wherein Barwick CJ stated:

But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd. ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) & Nephew Ltd. v. Ouston is not “so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention”, the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.

  1. [99]
    Dealing then with each of the pleaded and orally submitted bases of uncertainty in the Deed of Variation.

Cl 3.1(b) - the obligation to pay $400,000 “as BBX Trade Dollars” on settlement

  1. [100]
    There is nothing uncertain about this clause.  It does not lack meaning.  Both parties had sufficient familiarity with the BBX platform by the time the Deed of Variation was entered into to understand precisely this reference.  And it in fact occurred.  

Cl 3.1(c)(i) - the meaning of the words “Upon commencement of building works all GST credits to be forward on to Seller per quarterly BAS”

  1. [101]
    There is nothing uncertain about this clause.  It does not lack meaning.  The parties contemplated that after settlement Valour would commence construction of a unit block on the Property.  That would involve construction costs being incurred by Valour.  Valour would submit BAS statements quarterly that were anticipated to result in net credits of GST.  Valour was agreeing to pay the amount of the net credits of GST to Valour, whatever that amount be each quarter. 

Cl 3.1(c)(ii) and (iii) - the meaning of the word “Project”

  1. [102]
    There is nothing uncertain about this clause.  It does not lack meaning.  In the context of the surrounding circumstances the project was the intended development of the Property to include a multiple residential unit complex, and it was anticipated that the building works would proceed promptly and would at some point in time reach practical completion (a term well known in the construction industry).  The precise detail was not important.

Cl 3.1(c)(ii) - the meaning of the words “GST payment schedule shall run to practical completion of Project”

  1. [103]
    There is nothing uncertain about this clause.  It does not lack meaning.  It simply sets the time at which the arrangements made about GST credits in the preceding subparagraph will come to an end.  As above, the concept of practical completion is well known in the construction industry.        

Cl 3.1(c)(iii) - the meaning of the words “Practical Completion”

  1. [104]
    There is nothing uncertain about this clause.  It does not lack meaning.  As above, the concept of practical completion is well known in the construction industry.  Nothing flows from the capitalisation of Practical Completion in this subclause. 

Cl 3.1(c)(iii) - the nature and meaning of the obligation to pay upon “Practical Completion” $400,000 as “BBX Trade dollars” and the balance then owing by Bank Cheque

  1. [105]
    There is nothing uncertain about this clause.  It does not lack meaning.  As above, the concept of practical completion is well known in the construction industry.  And as above, the concept of BBX trade dollars was understood by the parties.  The cheque payment amount was just a mathematical exercise.

Cl 3.3 - the meaning and requirement to “deduct this from the first GST payment”

  1. [106]
    There is nothing uncertain about this clause.  It does not lack meaning.  The difference in the relevant stamp duties was simply to be deducted from the first payment to be made by Valour to Symx pursuant to cl. 3.1(c)(i). 

Oral submissions 

  1. [107]
    In terms of the uncertainty created by the Deed of Variation, the defendants orally pointed to:
    1. the “project” being unidentified; what the project consisted of being unidentified;
    2. the building works for the project commencing at some unidentified time;
    3. Valour being committed to doing something with the land – the project, whatever that precisely be.  
  2. [108]
    I do not consider any of those matters lead to the Deed of Variation in this case being void.  It did not lack meaning.  In the context of the surrounding circumstances the project was the intended development of the Property to contain a multiple residential unit complex, and it was anticipated that the building works would proceed promptly and would at some point in time reach practical completion.  The precise detail was not important.  It is clear enough how the parties intended the balance of the purchase price to be paid.
  3. [109]
    Insofar as it was posited for the defendants that the arrangements did not contemplate a situation where a wealthy investor came along and sought to buy the undeveloped land from Valour, I do not see that causes any difficulty.  Valour would have been subject to an implied obligation to complete the Contract so as to give Symx the benefit of the Contract.  I cannot see that any court would have permitted Valour to on-sell the Property or not proceed with the project in a way that would have resulted in Valour avoiding payment obligations to Symx. 

The other defences

  1. [110]
    The remainder of the defences appear to fall into the category of pleaded defences where no specific submissions were made about same by the defendants.

How the plaintiff signed certain documents

The Contract

  1. [111]
    First, the defendants deny that Symx entered in the Contract on the basis that:[38]
    1. the Contract was envisaged and required to be signed by the plaintiff pursuant to s. 127(1) of the Corporations Act 2001 (Cth) (CA);
    2. the Contract was signed by Mr Yu only;
    3. at the date of Mr Yu signing the Contract he was not the sole director and secretary of Symx. 
  2. [112]
    A company search in evidence demonstrates that Mr Yu was the only director of Symx at the time of the signing of the Contract and there was no secretary. 
  3. [113]
    I do not accept that the Contract was envisaged and required to be signed by the plaintiff pursuant to s. 127(1) CA.  The contract signing page in fact provided where the seller’s signature was to be placed that: 

By placing my signature above I warrant that I am the Seller named in the Reference Schedule or authorised by the Seller to sign. 

  1. [114]
    That is consistent with s. 126 CA and indicates that Symx executed the Contract via an individual acting with Symx’s authority and on behalf of Symx.  Compliance with s. 127(1) CA is one way in which a corporation may bind itself; it is not the only way.  This defence fails.  Symx entered into the Contract.     

The Deed of Variation

  1. [115]
    Second, the same defence is repeated in substance in relation to Symx’s entry into the Deed of Variation ([5], Defence).
  2. [116]
    Again, the Deed of Variation was signed by Mr Yu only.  A company search in evidence demonstrates that at that time (27 August 2020) Mr Yu was the only director of Symx and there was no secretary. 
  3. [117]
    The Deed of Variation at its signing provision for Symx provided:

SIGNED SEALED AND DELIVERED by SYMX LAND DEVELOPMENTS PTY LTD A.C.N. 606 744 727 TRUSTEE UNDER INSTRUMENT 717135220 in accordance with section 127(1) of the Corporations Act 2001 (Cth) by two directors

  1. [118]
    Marked spaces for two directors to sign were present.  Plainly it was not signed in compliance with s. 127(1)(a) CA, which required two directors to sign.[39]  Regardless, I consider the Deed of Variation was signed in compliance with s. 126 CA. 

The Further Deed of Variation

  1. [119]
    Third, the same defence is repeated in substance in relation to Symx’s entry into the Further Deed of Variation ([7], Defence).
  2. [120]
    Again, the Further Deed of Variation was signed by Mr Yu only.  A company search in evidence demonstrates that at that time (5 November 2020) Mr Yu was the only director of Symx and there was no secretary. 
  3. [121]
    The Further Deed of Variation at its signing provision for Symx provided:

SIGNED SEALED AND DELIVERED by SYMX Land Developments Pty Ltd A.C.N. 606 744 727 as Trustee for the Land Development Unit Trust in accordance with section 127(1) of the Corporations Act 2001 (Cth) by two directors

  1. [122]
    The document contained one marked space for a director/secretary to sign.  Again, plainly it was not signed in compliance with s. 127(1)(a) CA, which required two directors to sign.  Regardless, I consider the Deed of Variation was signed in compliance with s. 126 CA. 
  2. [123]
    Further, in respect of each of the above documents, the fact that Symx proceeded to settle the Contract (as varied) demonstrates that Symx in any event ratified Mr Yu’s execution of each of the documents on behalf of Symx.  

The Extension Agreement

  1. [124]
    Fourth, a similar defence is repeated in relation to Symx’s entry into the Extension Agreement ([13], Defence) (after settlement).  The defendants say that the Extension Agreement was not executed by Symx.
  2. [125]
    That is not the correct way to view the relevant contractual document.  The document is a letter from Symx’s solicitors (signed by those solicitors) recording an agreement between Symx, Valour and the defendants.  The defendants indicate their agreement by signing the letter (and the attached undertakings).  No other execution of the document by Symx was required. 
  3. [126]
    The defendants further allege ([13(b)], Defence) in relation to the Extension Agreement that the document was not executed by the defendants as a deed in accordance with s. 45 of the Property Law Act 1974 (Qld) (PLA).  The plaintiff admits that allegation in [13(a)] of the further amended reply dated 16 October 2024.  I agree that the Extension Agreement is not executed by the defendants as a deed.  There was no requirement for it to be a deed – an agreement is sufficient. 
  4. [127]
    I do not see any particular relevance of s. 45 PLA.  That section is concerned with counterparts and provides:
  1. A counterpart, for a document, is a copy of the document that includes the entire contents of the document. 
  1. Despite subsection (1), a counterpart need not include –
  1. the signatures of the other persons who are to sign the document; or
  1. if a common seal is fixed to the document – the seal.
  1. [128]
    The section does not set out any guidance or requirements as to how a deed is to be executed (as seems to be implied in [13(b)], Defence).  Nor has it been suggested by any party that the Extension Agreement (or any other document) was a counterpart.

Uncertainty in other contractual documents

The Further Deed of Variation

  1. [129]
    The Further Deed of Variation is alleged to be void for uncertainty and unenforceable in [8(c)], Defence.  There are no additional grounds for such an allegation there made in the pleading, but particulars provided by the defendants on 6 June 2024 allege that the Further Deed of Variation is void for uncertainty and unenforceable because:
    1. clause 3.1 is uncertain as to:
      1. (i)
        the nature and meaning of the obligation to pay $400,000 “as BBX Trade Dollars” at settlement;
      1. (ii)
        the meaning of the words “Upon commencement of building works all GST credits to be forward on to Seller per quarterly BAS”;
      1. (iii)
        the meaning of the word “Project” in subparagraphs 3.1(c)(ii) and (iii);
      1. (iv)
        the meaning of the words “GST payment schedule shall run to practical completion of Project”;
      1. (v)
        the meaning of the words “Practical Completion” in subparagraph 3.1(c)(iii);
      1. (vi)
        the nature and meaning of the obligation to pay upon “Practical Completion”:
      1. (A)
        $400,000 as “BBX Trade dollars”;
      1. (B)
        the balance then owing by Bank Cheque,
    2. clause 3.2 is uncertain as to the meaning of the words “and any other Deed of Variation of this Agreement, including this Deed of Variation and the Further Deed of Variation dated                            ”.
  2. [130]
    I reject that clause 3.1 of the Further Deed of Variation is uncertain for the same reasons given in [100] to [105] above. 
  3. [131]
    As to clause 3.2 of the Further Deed of Variation, it provides:

Clause 4.1 is amended to add the words “and any other Deed of Variation of this Agreement, including this Deed of Variation and the Further Deed of Variation dated” after the word Contract where it appears in the last line.

  1. [132]
    The Further Deed of Variation was actually dated 5 November 2020.
  2. [133]
    Clause 4.1 of the Deed of Variation had provided:

The Buyer will provide guarantees from Shane Pugh and Vanessa Pugh in the terms set out in the annexure for the performance of the obligations of the Buyer under this Agreement and the Contract. 

  1. [134]
    The effect of clause 3.2 of the Further Deed of Variation was to amend clause 4.1 of the Deed of Variation as if it read:

The Buyer will provide guarantees from Shane Pugh and Vanessa Pugh in the terms set out in the annexure for the performance of the obligations of the Buyer under this Agreement and the Contract and any other Deed of Variation of this Agreement, including this Deed of Variation and the Further Deed of Variation dated 5 November 2020.

  1. [135]
    Whilst the language of the revised clause is clumsy (unnecessarily doubling up on the references to the Deed of Variation), it is not uncertain. 

The First Undertakings

  1. [136]
    The First Undertakings are alleged to be void for uncertainty ([9(c)(iii), Defence).  There are no additional grounds for such an allegation there made in the pleading, but particulars provided by the defendants on 6 June 2024 allege that the (First) Undertakings are void for uncertainty and unenforceable because:
    1. Item 2 is uncertain as to the nature and meaning of the words “I am a party to a contract in my capacity as a director of VALOUR INVESTMENT GROUP NO 3 PTY LTD A.C.N. 634 294 198 as trustee for V3 TRUST ABN 71825693408” and “further in capacity as a guarantor as security for the performance of the obligations of the Buyer under the Contract” in circumstances where the Defendants were not party to the Contract in any capacity;
    2. Item 12 is uncertain as to the meaning of the words “on commercially reasonable terms to the Seller”.
  2. [137]
    Any allegation about uncertainty in the First Undertakings goes nowhere.  It is not a document on which any liability of the defendants rests.  I think all that otherwise needs to be said is that there is no uncertainty insofar as cl. 3 of the First Undertakings confirm that the defendants are guarantors of the obligations of Valour under the Contract (which by cl. 3 includes the Deed of Variation and the Further Deed of Variation).   

The Extension Agreement

  1. [138]
    The Extension Agreement is alleged to be void for uncertainty and unenforceable in [13(c)] and [14(d)], Defence.  There are no additional grounds for such allegations there made in the pleading, but particulars provided by the defendants on 6 June 2024 allege that the Extension Agreement is void for uncertainty and unenforceable because:
    1. it is uncertain as to the nature and meaning of the words “in my personal capacity and in capacity as director for VALOUR INVESTMENT GROUP NO 3 PTY LTD A.C.N. 634 294 198 as trustee for V3 TRUST ABN 71825693408” in circumstances where the Defendants were not party to the Contract in any capacity.
  2. [139]
    Those words appear in the Second Undertakings.  The context of the words in respect of each of the defendants is:

I, [name of defendant] of [address of defendant] in my personal capacity and in capacity as director for VALOUR INVESTMENT GROUP NO 3 PTY LTD A.C.N. 634 294 198 as trustee for V3 TRUST ABN 71825693408, hereby expressly acknowledge the terms of the Extended Date and I undertake to:

  1. 1.
    Ensure that the payment of $300,000 will be made on or before 18 August 2021 to SYMX LAND DEVELOPMENTS PTY LTD AS TRUSTEE UNDER INSTRUMENT NO 717135220 pursuant to the terms of the relevant Contract and Deed of Variation.
  1. [140]
    There is no issue that the defendants were not parties to the Contract.  But they were directors of Valour and they had personally guaranteed Valour’s performance of its obligations under the Contract (including as amended). 
  2. [141]
    The Second Undertakings are not uncertain.  The defendants were simply undertaking to ensure that the payment (due from Valour) was made. That does not detract from the fact that if Valour did not make the payment, then they have personally guaranteed same.  But that does not mean that by this undertaking they were separately (apart from the Guarantee) making themselves personally liable for the $300,000 payment. 
  3. [142]
    Symx’s reliance upon the Second Undertakings as giving rise to some obligation separate to the Guarantee for the defendants to make the $300,000 payment is misplaced and fails.  It does not accord with the plain reading of the Second Undertakings.         
  4. [143]
    I also note that if the Extension Agreement were void for uncertainty it would not alter the defendants’ liability under the Guarantee for the balance purchase price payable by Valour after settlement ($2.68m, including $400,000 payment in BBX trade dollars). 

The enforceability of the First Undertakings

  1. [144]
    The defendants plead that the First Undertakings were not a written agreement between Symx and each of the defendants and that neither of the defendants entered into any agreement with Symx ([9(a) and (b)], Defence). 
  2. [145]
    The defendants further plead ([9(c)], Defence) that the First Undertakings did not give rise to any contractual obligations on the part of the defendants because:
    1. the documents were not deeds;
    2. there was no consideration for the obligations that are alleged to have arisen.
  3. [146]
    Any allegation about enforceability of the First Undertakings goes nowhere.  They are not documents on which any liability of the defendants rests. 

The enforceability of the Second Undertakings

  1. [147]
    The defendants seem to allege that the Second Undertakings were not enforceable because the Extension Agreement contemplated separate undertaking documents being signed, which were not signed ([14(b)], Defence).
  2. [148]
    I do not accept that the Second Undertakings were not enforceable merely because they were contained in or with the Extension Agreement.  There was no requirement for some wholly separate documents to be signed.  The Second Undertakings on their face purport to be separately signed, sealed and delivered. 
  3. [149]
    Regardless, as I have set out above, I do not consider that the Second Undertakings give rise to some new or separate liability of the defendants beyond what they already had pursuant to the terms of the Guarantee. 
  4. [150]
    Again, even if the Second Undertakings were void for uncertainty it would not alter the defendants’ liability under the Guarantee for the balance purchase price payable by Valour after settlement ($2.68m, including $400,000 payment in BBX trade dollars). 

Conclusion

  1. [151]
    The claim against the defendants under the Guarantee succeeds.  The separate claim against the defendants under the Extension Agreement (specifically the Second Undertakings) fails.  The defendants’ pleaded defences and the second defendant’s counterclaim fail.  Subject to hearing from the parties about the form of orders, judgment is to be entered for the plaintiff against the defendants as follows:
    1. $2,280,000 pursuant to a guarantee given by each of the defendants on 28 August 2020.
    2. Interest pursuant to s. 58 of the Civil Proceedings Act 2011 (Qld) on the amount in order (a) calculated from 30 August 2022. 
    3. The second defendant’s counterclaim is dismissed. 
    4. The defendants are to pay the plaintiff’s costs of the proceeding. 

Footnotes

[1]  D1, trial bundle.

[2]  Pages 1-6, supplementary trial bundle. 

[3]  B21, trial bundle.

[4]   T1-104, LL 11-13.

[5]   T1-63, LL 45-49.

[6]  There was evidence of a draft offer under the hand of Ms Ingles in an email to Mr Pugh dated 12 May 2020 that in broad terms contained something akin to the type of deal that was ultimately made.  There is an email from Ms Ingles to Ms Tan dated 29 May 2020 that suggests such offer was made.   

[7]   T1-39, LL 19-37.

[8]   T1-101, LL 28-34.

[9]   T1-42, LL 8-13.

[10]   e.g. T1-48, LL 29-40 (Mr Yu); T2-22, LL 13-36; T2-25, LL 4-43 (Mr Pugh).

[11]  B7, trial bundle.

[12]   T1-103, LL 15-17.

[13]  B7, trial bundle.

[14]  Solicitor for Symx about the conveyance. 

[15]  B9, B10, B11, B12, B13, B14, B15, B17, B19, trial bundle. 

[16]   Mr Yu gave evidence that the final offer from Valour included personal guarantees from both defendants: T1-42, LL 38-48.

[17]   T1-104, LL 45-49.

[18]  B16, trial bundle.

[19]  B18, trial bundle. 

[20]  Pages 147-148, supplementary trial bundle.

[21]  Pages 31-39, supplementary trial bundle.  A question from counsel for the defendants suggested that Smyx’s solicitors had prepared the Deed of Variation but there is no evidence that supports that – see T1-82, LL 37-39.  Mr Pugh suggested that the Deed of Variation was not prepared by him or anyone acting on this behalf, but that is contrary to the contemporaneous record – T1-105, LL 27-44.

[22]   T1-22, LL 29-35; T1-23, LL 17-40.

[23]   T1-34, LL 1-5.

[24]  Search at D5, trial bundle.

[25]  Pages 40-61, supplementary trial bundle. 

[26]  B25, trial bundle.

[27]  B45, trial bundle. 

[28]  In the pleadings the parties simply refer to the First Undertakings as the Undertakings.  I refer to them as the First Undertakings to distinguish them from the Second Undertakings. 

[29]  See [9] and [10], amended statement of claim. 

[30]  $2.68m less $400,000 in BBX trade dollars. 

[31]  Defined in [29] of the defence as comprising the Contract, Deed of Variation, Further Deed of Variation and the First Undertakings as defined herein.

[32]  See, e.g., Halsbury’s Laws of Australia at [185-950]; Miller’s Australian Competition and Consumer Law Annotated at [ACL.20.60].

[33]  [30]-[32], Defence.

[34]  T1-18, L 36 to T1-20, L 17.

[35]  See, e.g., Cranfield Pty Ltd v Commonwealth Bank of Australia [1998] VSC 140; Commonwealth Bank of Australia v Crowe [2004] NSWSC 330; ANZ Banking Group v Londish [2014] NSWSC 202; HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153; Commonwealth Bank of Australia v Ridout Nominees Pty Ltd [2000] WASC 37.

[36]   T2-39, L 27 to T2-41, L 15.

[37]  A7, trial bundle.

[38]  [3], Defence. 

[39]  Since that time the CA has been amended to permit signing under s. 127(1)(c)(ii) of a sole director where the company does not have a company secretary.  That provision was not in force at the relevant time. 

Close

Editorial Notes

  • Published Case Name:

    Symx Land Developments Pty Ltd v Pugh

  • Shortened Case Name:

    Symx Land Developments Pty Ltd v Pugh

  • MNC:

    [2025] QSC 137

  • Court:

    QSC

  • Judge(s):

    Hindman J

  • Date:

    10 Jun 2025

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2025] QSC 13710 Jun 2025-
Notice of Appeal FiledFile Number: CA 2881/2508 Jul 2025-

Appeal Status

Appeal Pending

Cases Cited

Case NameFull CitationFrequency
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
2 citations
Jump To
Cite 1 - (1983) 151 CLR 447
Cite 2 - (1983) 151 CLR 447
Commonwealth Bank of Australia v Ridout Nominees Pty Ltd [2000] WASC 37
2 citations
Jump To
Cite 1 - [2000] WASC 37
Cite 2 - [2000] WASC 37
Cranfield Pty Ltd v Commonwealth Bank of Australia [1998] VSC 140
2 citations
Jump To
Cite 1 - [1998] VSC 140
Cite 2 - [1998] VSC 140
Garcia v National Australia Bank Ltd (1998) 194 CLR 395
2 citations
Jump To
Cite 1 - (1998) 194 CLR 395
Cite 2 - (1998) 194 CLR 395
Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429
2 citations
Jump To
Cite 1 - (1968) 118 CLR 429
Cite 2 - (1968) 118 CLR 429
Yerkey v Jones (1939) 63 CLR 649
2 citations
Jump To
Cite 1 - (1939) 63 CLR 649
Cite 2 - (1939) 63 CLR 649

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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