Lawrence v Sammut - [2021] FCCA 1929

FEDERAL CIRCUIT COURT OF AUSTRALIA
Lawrence v Sammut [2021] FCCA 1929

File number(s): SYG 346 of 2021

Judgment of: JUDGE MANOUSARIDIS

Date of judgment: 20 August 2021

Catchwords: BANKRUPTCY – application to set aside bankruptcy notice on ground that applicant has counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt – bankruptcy notice based on a judgment entered on the registration of a costs certificate recording the assessment of costs debtor was ordered to pay to the creditors in proceedings in the Supreme Court of New South Wales in which debtor unsuccessfully claimed he had an interest in land – debtor claims he has counter-claim, set-off or cross demand based on money he spent and work performed in relation to the property – whether in determining whether debtor has counter-claim, set-off or cross demand the Court is restricted to considering the affidavit filed when the debtor filed application to set aside bankruptcy notice – Court not so restricted – whether the proceeding in relation to which the debtor could not have set up counter-claim, set-off or cross demand is the proceeding in which the order for costs was made or instead in the proceeding in which the certificate for costs was registered – the latter is the relevant proceeding which means that the counter-claim, set-off or cross demand the debtor claims he has could not have been set up in that proceeding – whether there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy – there is sufficient substance in relation to some amounts but the amounts do not in total exceed the amount of the judgment debt – application adjourned to a date for the purpose of making an order dismissing the application and an order as to costs.

Legislation:
Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(7)

Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) r 3.02

Federal Circuit Court Rules 2001 (Cth) r 1.06

Home Building Act 1989 (NSW) ss 4, 5, 6, 7(2)(g), 7BA, 7BB(2), 10(1)

Real Property Act 1900 (NSW) s 74K

Cases cited:
Crimmins v Glenview Home Units [1999] FCA 515

Glew v Harrowell, in the matter of Glew [2003] FCA 373

James v Hill [2005] FCA 981

Lawrence v Ciantar [2019] NSWSC 464

Lawrence v Ciantar [2020] NSWCA 89

Massih v Esber [2008] FCA 1452

Port of Melbourne Authority v Anshun Pty Ltd (1981) [1981] HCA 45; (1981) 147 CLR 589

Re Brink; Ex parte The Commercial Banking Company of Sydney Ltd [1980] FCA 78; (1980) 44 FLR 135

Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183

Vickery v Jjp Custodians [2002] NSWSC 782

Number of paragraphs: 85

Date of last submission/s: 20 August 2021

Date of hearing: 6 and 7 July 2021

Place: Sydney

The Applicant: Appeared in person, by telephone

Counsel for the Respondents: Mr A Spencer, by video

Solicitor for the Respondents: McLean & Associates Solicitors
ORDERS

SYG 346 of 2021

IN THE MATTER OF WAYNE JAMES LAWRENCE

BETWEEN:
WAYNE JAMES LAWRENCE

Applicant

AND:
ALICE ALEXANDRIA SAMMUT

First Respondent

PAUL WILLIAM CIANTAR

Second Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

20 AUGUST 2021

THE COURT ORDERS THAT:
1.The matter is listed at 4:00 pm on 27 August 2021 for the purpose of making the following orders:
(a)The application is dismissed.
(b)The applicant pay the respondents’ costs.

2.There be liberty to apply before 27 August 2021 if any party wishes to apply for a different costs order to the one referred to in order 1(b).
3.On the assumption that no act of bankruptcy has occurred, the time for compliance by the applicant with the requirements of the bankruptcy notice number BN 251796 dated 19 February 2021 and served on the applicant on 19 February 2021 is extended up to and including 5:00 pm on 27 August 2021.

REASONS FOR JUDGMENT
INTRODUCTION

The applicant, Mr Lawrence, applies to set aside a bankruptcy notice that was served on him on 19 February 2021.
The bankruptcy notice demands payment of $262,275.71. That is the amount of a judgment entered by the Supreme Court of New South Wales on 18 February 2021 on the respondents registering with that Court a certificate for costs determination (Certificate for Determination). The Certificate for Determination was issued in relation to the assessment of the respondents’ costs Mr Lawrence was ordered to pay in a proceeding Mr Lawrence commenced in the Supreme Court of New South Wales (SC proceeding),[1] and in an appeal Mr Lawrence commenced in the New South Wales Court of Appeal (Court of Appeal) against the orders made in that proceeding (CA proceeding).[2]
[1] Lawrence v Ciantar [2019] NSWSC 464
[2] Lawrence v Ciantar [2020] NSWCA 89
Mr Lawrence, who is not legally represented, applies to set aside the bankruptcy notice principally on the ground that he has “a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt” (Asserted Claim) within the meaning of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (Act). The respondents oppose Mr Lawrence’s claim on two grounds. First, Mr Lawrence failed to file within the time for compliance with the requirements of the bankruptcy notice evidentiary material that was capable of attracting s 41(7) of the Act, as required by r 3.02 of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) (Bankruptcy Rules). Second, the Asserted Claim is not one Mr Lawrence could not have set up in the SC proceeding.
To be in a position to describe the Asserted Claim and assess the competing contentions, it will be necessary to set out the history of the dealings between Mr Lawrence and the respondents that led to the SC proceeding, and the findings made in the judgments given in the SC and CA proceedings. It will also be necessary to set out some of the relevant provisions of the Home Building Act 1989 (NSW) (HB Act). That is so because the central controversy between Mr Lawrence and the respondents in the SC and CA proceedings was whether the HB Act applied to the agreement or agreements Mr Lawrence and the respondents entered into in relation to a property and, if so, whether the HB Act operated to deny to Mr Lawrence any interest in that property, either as a transferee or as a mortgagee. I will then set out the principal findings made in the judgments given in the SC and CA proceedings, and identify the material on which Mr Lawrence relies for the Asserted Claim. After I describe the Asserted Claim, I will identify the principles that are relevant to my determining Mr Lawrence’s application.
EVENTS LEADING TO SC PROCEEDING
In July 2013 the Warringah Council (Council) approved a development application (DA approval) in relation to a property of which the respondents were the registered proprietors (Property). The DA approval required the development be carried out in compliance with the plans that accompanied the development application (DA). Those plans included the construction of a driveway, a retaining wall as part of a retention tank, and drainage works.[3]
[3] Lawrence v Ciantar [2019] NSWSC 464, at [131]
In early 2014 the respondents advertised the Property for sale. Mr Lawrence, who was then a licenced builder, responded to the advertisement and, on 2 March 2014, he inspected the Property.
On 3 March 2014 Mr Lawrence submitted a written proposal to the respondents’ agent in which he offered to purchase lot 3 of the proposed development in return for his carrying out the work required to complete the development described in the DA (DA work). Negotiations followed, initially between Mr Lawrence and the respondents’ agent, then directly between Mr Lawrence and the respondents, and, finally, between the respective lawyers for Mr Lawrence and the respondents. That led to the respondents’ lawyer, Mr Walker, sending a letter dated 24 October 2014 to Mr Lawrence’s lawyer, Mr Hedges, summarising what had been agreed on outstanding points. The principal terms of the agreement included the following:[4]
(a)The Property has an estimated value of approximately $1.7 million.
(b)There was a mortgage registered on the title that secured a debt of approximately $1 million.
(c)The respondents had equity of approximately $700,000 in the Property.
(d)The estimated cost of the DA work was $435,000. As his contribution to “the joint venture” Mr Lawrence “will be responsible for the costs of” the DA work.
(e)In consideration of Mr Lawrence “paying the cost of the sub-division works”, Mr Lawrence “is to be granted a 1/3 share of ownership in the whole of the property subject to the mortgage loan”.
(f)The “existing equity contributions” by each member of the joint venture are to be treated “as loans to the joint venture”, and to be repaid as funds become available from the sale of any properties after the subdivision.
[4] Lawrence v Ciantar [2020] NSWCA 89, at [16]
On 12 November 2014 Mr Lawrence and the respondents signed an agreement “in similarity to what was set out” in the letter dated 24 October 2014 from Mr Walker (November 2014 Agreement). The principal terms of the agreement were as follows:[5]
(a)A “share transfer for 1/3 share” of the Property will be executed by the parties, the original of which will be held by Mr Walker and Mr Hedges.
(b)An unregistered mortgage “as to the works of $435,000 which is applicable to the existing D/A approval” would be executed.
(c)A caveat “is to be provided in favour of the” proposed mortgage.
(d)On completion of the DA work “and the certificate which supports those works are completed in accordance with the D/A” the original transfer will be provided to Mr Lawrence.
(e)Before proceeding with the construction works, within three months or at a time mutually agreed, the parties “will . . . reach any further variation or agreement”.
[5] Lawrence v Ciantar [2020] NSWCA 89, at [18]. The agreement is at Exhibit WJL-3, “TAB 1”, page 4
It appears that on 12 November 2014 Mr Lawrence arranged to deposit $3,000 into the bank account the respondents maintained to enable them to meet their mortgage repayments.[6]
[6] Exhibit WJL-2, page 19
On 15 January 2015 a restriction was placed on Mr Lawrence’s builder contract licence to the effect that he was not able to enter into contracts to which the HB Act applied in excess of $20,000.[7]
[7] Lawrence v Ciantar [2020] NSWCA 89, at [20]
By 4 February 2015 Mr Lawrence lodged a caveat over the title to the Property.[8] The caveat claimed Mr Lawrence held an equitable charge over the Property by “virtue of the facts stated below”, namely:
To secure moneys advanced by the Caveator to the Registered Proprietor for the performance of works upon the property at the request of the registered proprietors pursuant to an oral agreement entered into between the parties to charge the property as security for payment of moneys so advanced.
[8] Lawrence v Ciantar [2020] NSWCA 89, at [19]; Exhibit WJL-3, pages 27-28
On 26 March 2015 Mr Lawrence and his solicitor, Mr Hedges, met with the respondents and their solicitor, Mr Walker. According to a note Mr Walker prepared,[9] the meeting occurred to “summarise the current position”. The note recorded the following:
[9] Exhibit WJL-3, “TAB 1”, page 3
We discussed the transfer and mortgage and the agreement that was prepared by Wayne Lawrence which is dated 12/11/.2014 [sic] and this was signed. I said I would copy it and deliver it to Steve Hedges office for him to hold in escrow pending the finalisation of the subdivision.
At the present time the following has occurred:-
1.The DA has issued and a construction certificate has issued and Wayne has done a lot of the clearing work and it is estimated that as per the agreement the work will be completed by the agreed date which is November, 2015.
2.On completion of the work the partnership has two years to sell and this will give them sufficient time to make a further development application to convert one block to two blocks.
3.It was agreed that we would do a Minute of this meeting because we can’t do a joint venture agreement. The Minute will record the fact that on the settlement of this project the debt will be repaid a[s] follows:-
·     In repayment of the first mortgage debt;
·     In repayment of the monies advanced by Alice [Sammut], Paul [Ciantar] and Wayne [Lawrence] pro rata;
·     Any balance to be divided equally 1/3, 1/3 an[d] 1/3.
·     The right of first refusal will go to:
·     Alice – Lot 1
·     Paul – Lot 2
·     Wayne – Lot 3
The amounts advanced are as per Alice’s hand written notes:
·Alice has put in $532,000.00 plus she is banking $500.00 per month
·Paul has put in $200,000.00
·Wayne Lawrence as per his agreement $435,000.00.
Need to sort out the actual Minutes with Steve Hedges before we send them to the parties for signature.
Under cover of a letter dated 8 April 2015 Mr Walker sent to Mr Hedges the “following documents executed by” the respondents, namely, an “Agreement dated 26^th March, 2015”, a “Deed of Loan dated 26^th March, 2015”, a “Transfer”, and a “Mortgage”.[10] The agreement dated 26 March 2015 referred to in Mr Walker’s letter appears to consist of the re-execution of the November 2014 Agreement;[11] and in these reasons I will refer to this re-executed agreement as “the Agreement”. The mortgage and the transfer appear to be the documents the respondents signed at the meeting of 26 March 2015. The mortgage provided that the respondents “acknowledge [the] advance of money made to them by the Mortgagee”, and that “while any moneys advanced to them by the Mortgagee remains [sic] due and owing to the Mortgagee, this mortgage shall continue and remain in full force and effect”.[12] By the transfer the respondents transferred to Mr Lawrence a “[o]ne third share of the property”.[13]
[10] Exhibit WJL-3, “TAB 1”, pages 1-2
[11] Lawrence v Ciantar [2020] NSWCA 89, at [21]
[12] Exhibit WJL-3, page 26
[13] Exhibit WJL-3, page 24
The “Deed of Loan” to which Mr Walker referred in his letter dated 8 April 2015 recited that Mr Lawrence (defined as “the Lender”) at the request of the respondents (defined “the Borrowers”), agreed to advance the “Principal Sum”, namely, $435,000 for the performance of works on the Property. The principal terms of the Deed of Loan included the following:[14]
(a)Mr Lawrence agreed to advance the “Principal Sum”, and the respondents agreed to take the advance of the “Principal Sum” to be used “to pay for subdivision works to be carried out on the Property”.
(b)The respondents agreed to repay the “Principal Sum” within 24 months after “the date of making this loan” or, if before the expiration of 24 months, the Property or any part of the Property is sold, on the day on which the sale is settled, or Mr Lawrence were to give written notice demanding repayment if an “Event of Default”, as defined in cl 1.1 of the Deed of Loan, occurs.
(c)The respondents charged the Property to secure the respondents’ performance of the terms of the Deed of Loan.
[14] Exhibit WJL-3, pages 18-23
The Deed of Loan also provided that the “Principal Sum need not be advanced unless and until the first mortgage has been provided to” Mr Lawrence. That appears to be the mortgage to which Mr Walker referred in his letter dated 8 April 2015.
In addition to providing the documents he identified in his letter dated 8 April 2015, Mr Walker stated the following:
We note that minutes of the abovementioned meeting are to be prepared recording the following:-
1.The due date for completion of the subdivision work and registration of the plan of subdivision is 30^th November, 2015; and
2.On settlement of the project the debt is to be repaid as follows:-
·In repayment of the first mortgage debt;
·In repayment of the monies advanced by Alice [Sammut] ($532,000.00), Paul [Ciantar] ($200,000.00) and Wayne [Lawrence] ($435,000.00) pro rata;
·This balance to be divided equally 1/3, 1/3 and 1/3;
·Rights of “first refusal” as follows:
oAlice – Lot 1
oPaul – Lot 2
oWayne – Lot 3
Please confirm that the above accurately records the meeting of the 26^th ultimo so that the minutes can be finalised.
Mr Hedges did not provide any confirmation, although it appears the completion date Mr Walker stated in his letter was accepted by the parties to be correct.[15]
[15] Lawrence v Ciantar [2020] NSWCA 89, at [25]
Mr Lawrence has described in a number of documents the work that was carried out in relation to the Property, and the amounts that were spent in connection with that work. But delays occurred. It appears that one cause of delay was in the issue of a subdivision construction certificate (SCC). Mr Lawrence applied to the Council for a SCC on 18 June 2015 but, on 14 August 2015, the Council informed Mr Lawrence the engineering plans he supplied did not address some of the conditions attached to the DA approval, and the Council requested further information.[16] The Council issued the SCC on 22 December 2015.[17]
[16] Lawrence v Ciantar [2020] NSWCA 89, at [30], [31]
[17] Lawrence v Ciantar [2020] NSWCA 89, at [35]
In the meantime, by letter dated 12 October 2015 Mr Lawrence’s solicitor, Mr Hedges, informed the respondents’ solicitor, Mr Walker, that there would be a delay in excess of 28 weeks, and that Mr Lawrence and the respondents had agreed that the DA work be completed on 30 May 2016. By letter dated 20 October 2015 Mr Hedges informed Mr Walker that Mr Lawrence and the respondents had agreed that the time for the completion of the DA work would be further extended to November 2016.[18] By letter dated 27 November 2015 to Mr Hedges, Mr Walker requested information about the reasons for the delay to “consider an extension to May 30th 2016”,[19] thus suggesting that Mr Lawrence and the respondents may not have agreed to any extension.
[18] Lawrence v Ciantar [2020] NSWCA 89, at [32]
[19] Lawrence v Ciantar [2020] NSWCA 89, at [33]
On 21 January 2016 Mr Lawrence and the respondents met with Mr Hedges and Mr Walker to discuss variations to the Agreement and the extended timetable.[20] On 25 February 2016 Mr Hedges sent an email to Mr Walker setting out information Mr Lawrence instructed Mr Hedges to provide. That information included the following:[21]
(a)Originally the timetable envisaged the subdivision works would be completed within 12 months. For whatever reason, the respondents did not give the final go ahead until 26 March 2015, and they did not provide the necessary security documents until Mr Walker’s letter dated 8 April 2015.
(b)Mr Lawrence commenced work “just prior to” the meeting of 26 March 2015. Mr Lawrence engaged a contractor to draw up plans; he lodged applications with the Council for “various approvals”; he paid $12,567.43 to the Council; and he engaged a contractor to carry out electrical works required to be installed on the site.
(c)From the very beginning the parties realised that the three block subdivision would not provide sufficient return to warrant the carrying out of the subdivision; if a profit were to be available to the parties, it would require an amended DA for a fourth block. Mr Lawrence, therefore, engaged surveyors to draw up plans for a four block subdivision.
(d)Having taken all these steps Mr Lawrence was not able to proceed with the DA work until the consultants prepared and delivered their designs and plans.
(e)As information came to Mr Lawrence from various contractors, he proceeded with the DA work. This included gas connection, and the completion of the sewer design plan.
(f)It was not until after these steps had been completed that Mr Lawrence could have been in position to apply for a SCC.
[20] Lawrence v Ciantar [2020] NSWCA 89, at [36]
[21] Exhibit WJL-3, pages 59-60

On 8 March 2016 Mr Walker and Mr Hedges met. According to Mr Walker’s file note of 9 March 2016, it was noted that the SCC was issued on 22 December 2015, and it was agreed Mr Lawrence would summarise the work that had been done to date, and what work remained to be done.[22] The evidence reveals no written communications passed between the parties until 25 January 2017. On that day the respondents wrote to Mr Lawrence requesting that he provide a full accounting in relation to the DA work that had been done, but Mr Lawrence did not respond.[23] That was followed by a letter dated 22 February 2017 from the respondents’ newly appointed solicitor, Ms McLean, to Mr Lawrence. Ms McLean expressed concern that the DA work was unsatisfactorily protracted, and she sought an accounting of all money Mr Lawrence had expended, together with all Council records in relation to Mr Lawrence’s attempts to obtain approval for the subdivision.[24] Mr Hedges wrote to Ms McLean on 15 March 2017 stating that all the DA work required to be done had been completed, except for the stormwater detention tank, and the laying of the concrete driveway. Mr Hedges asserted the work had not been done because the respondents had instructed it not be done because they wished to amend the terms of the DA to include a fourth block.[25] Ms McLean responded by letter dated 20 March 2017 stating that her instructions differed from the instructions Mr Hedges said he had received. Ms McLean requested the accounting and supporting documents she had previously requested, noting that those documents should be provided before an alternate contract could be progressed.[26]
[22] Lawrence v Ciantar [2020] NSWCA 89, at [39]
[23] Affidavit K McLean 04.02.2019, [31], reproduced in Exhibit KMC-1, pages 48-56
[24] Lawrence v Ciantar [2020] NSWCA 89, at [40]
[25] Lawrence v Ciantar [2020] NSWCA 89, at [41]
[26] Lawrence v Ciantar [2020] NSWCA 89, at [42]
On 17 May 2017 Ms McLean sent by email a letter to Mr Hedges which included the following:[27]
[27] Exhibit WJL-3, “TAB 7”, page 157; Lawrence v Ciantar [2020] NSWCA 89, at [43]
Despite numerous requests, your client has failed to entertain our request and has not provided our office with any information and/or documentation in support of the works which he has undertaken.
We have discussed your client’s non-response with our clients, who submit that the correct conclusion to draw is that, although your client represented to our clients that he intends to proceed the subdivision of the fourth block of land, that this is no longer the case.
In the event that your client has a different view in this regard, we seek that he provide us with written notice thereof within 7 days setting out his views. We will also require an undertaking from your client to provide the requested accounting.
Should we not hear from you, we will infer that the business relationship between our clients has ended, and will require your client to comply with the following directions by 16 June 2017:
1.Complete all outstanding works on the property;
2.Ensure that the property is clean and free from all builders rubble, rocks, wood, dead trees and excess materials;
3.The wooden cabin situated at the front of the property is to be demolished and removed.
4.Ensure that the property is appropriately turfed and ready for pre-sale inspections;
5.All documentation regarding the DA approval and the subdivision must be left with Alice Sammut together with all draft applications and provisional documentation with regard to the fourth block subdivision; and
6.Ensure that all your clients [sic] equipment and personal belongings are removed from the property.
Upon completion of the above, our client [sic] will commence the marketing of the first block of land. The proceeds of which will be used to pay your client in terms of the agreement, upon payment your client will be required to provide us with the Notice of Withdrawal of Caveat, return any unregistered mortgage held by him and return any other security which he may hold over our clients and/or their property.
In his response given by letter on 18 May 2017 Mr Hedges asserted the Agreement comprised the November 2014 Agreement, letters he sent to Mr Walker of 25 September 2015 and 17 October 2014, and Mr Walker’s letters to him of 8 and 24 October 2014.[28] Mr Hedges again asserted the delay was due to the respondents, in particular Ms Sammut, wishing to pursue a four lot subdivision. Mr Hedges said:
The terms of the Agreement are quite clear, our client has undertaken to perform works necessary to obtain the subdivision approval to 3 blocks only and thereupon obtain from the council release of the deposited plan to allow registration of same at LPI NSW. The cost of those works, no matter what they may be is our client's liability. If by performing any of the works himself, our client can reduce the costs of the works that is to his benefit but of course, his skill and labour in performing those works are at a cost to him being the opportunity lost for him to perform works on other developments of his own. If alternatively, the cost of the works exceeds the estimated amount, then that is our client's liability and that is a risk he undertook in entering into the agreement.
[28] Lawrence v Ciantar [2020] NSWCA 89, at [45]
On 28 July 2017 Mr Hedges again wrote to Ms McLean. He stated that the mortgage granted to Mr Lawrence was to secure the agreed value of the works Mr Lawrence had performed at his own cost and expense. He repeated the contention Mr Lawrence had completed all works required under the terms of the DA for a three block subdivision, with the exception of the construction of the driveway and the stormwater detention tank. Mr Hedges said Mr Lawrence requires payment of $1,322,500 to terminate the Agreement.[29] Further communications passed,[30] until 2 September 2017 when the respondents, through Ms McLean, served a notice of rescission of the Agreement on Mr Lawrence. The notice stated it was given under the HB Act, and it made the following assertions:[31]
(a)the work required to be undertaken pursuant to the contract, being the November 2014 and March 2015 Agreements, was residential building work for the purposes of the Home Building Act;
(b)the November 2014 and March 2015 Agreements did not contain cooling off warnings, which were required to be given to Mr Ciantar and Ms Sammut; and
(c)on 30 August 2017, Mr Ciantar and Ms Sammut became aware that the contract should have contained a cooling off warning.
[29] Lawrence v Ciantar [2020] NSWCA 89, at [46]
[30] Lawrence v Ciantar [2019] NSWSC 464, at [55]-[58]
[31] Lawrence v Ciantar [2019] NSWSC 464, at [59]
THE HB ACT
It would be useful at this point to set out the relevant provisions of the HB Act on which the respondents relied for issuing this purported notice of rescission. The starting point is s 6(1) of the HB Act:
Sections 7–7E apply to a contract under which the holder of a contractor licence undertakes--
(a)to do, in person, or by others, any residential building work or any specialist work, or
(b)to vary any such undertaking to do residential building work or any specialist work or the way in which any such work is to be done.
The expression “contractor licence” is defined in Schedule 1 to the HB Act to mean a “contractor licence” referred to in s 4 or s 5 of the HB Act. Those sections, however, do not define “contractor licence”. Subsection 4(1) of the HB Act prohibits a person from performing any “residential building work”, or “any specialist work” except (among other things) as the “holder of a contractor licence authorising its holder to contract to do that work”. The reference to “contractor licence” is, however, plainly a reference to a contract that may be issued under Part 3 Div 1 of the HB Act. The significance of a contract coming within the terms of s 6 of the HB Act is that it must meet the requirements of, among other things, s 7(2)(g) of the HB Act which requires the inclusion in a contract to do “residential building work” that “a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA”. Subsection 7BB(2) of the HB Act provides that if a contract to do “residential building work” does not contain a statement prescribed by s 7BA, a person, other than “the holder of a contractor licence” may by notice in writing “rescind the contract within 7 days of becoming aware that the contract should have contained such a notice”.
These provisions assume the builder is the holder of a contractor licence. It might be that at the time the respondents issued the rescission notice they believed or assumed Mr Lawrence held a contractor’s licence to undertake the DA work. It is s 10(1) of the HB Act, however, that became relevant in the SC and CA proceedings. That subsection provides:
A person who contracts to do any residential building work, or any specialist work, and who so contracts--
(a)in contravention of section 4 (Unlicensed contracting), or
(b)under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6 (2)), or
(c)in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph,
is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.
THE SC PROCEEDING
On 7 November 2017 Mr Lawrence commenced the SC proceeding by filing a summons in which he sought two orders. The first was an order under s 74K of the Real Property Act 1900 (NSW) extending the operation of the caveat Mr Lawrence had lodged in early 2015. The second was a declaration that Mr Lawrence held a one third interest in the Property.[32] On 9 November 2017 Lindsay J made an order extending the caveat; and on 14 December 2017, after Mr Lawrence filed an amended summons, Darke J refused an application by the respondents to discharge the orders Lindsay J made on 9 November 2017.[33]
[32] Exhibit KMC-1, page 4
[33] Lawrence v Ciantar [2019] NSWSC 464, at [62]
Mr Lawrence filed a further amended summons on 15 February 2018 by which Mr Lawrence claimed the following relief:[34]
[34] Exhibit KMC-1, pages 26-28. Paragraphs 1, 2, and 3 were the forms of relief Mr Lawrence claimed when he first filed the summons. The amended summons added paragraphs 4, 5, 6, and 7. The further amended summons added paragraphs 8, 9, 10, 11, and 12.
1A declaration that the Plaintiff holds a one third interest in that part of the land being Lot 2584, in deposited plan 752038, in Certificate of Title Folio Identifier Part 2584/752038 and known as 5 Angophora Crescent FORESTVILLE (hereinafter referred to as “the Property”).
2An order pursuant to s 74K of the Real Property Act extending the operation of the caveat Registered AJ221912 until further order of the Court.
3Leave for short return of service for this Summons.
4A declaration that the plaintiff holds a proprietary interest in the property pursuant to the contractual agreement between the plaintiff and defendants.
5A declaration that the plaintiff holds an unregistered mortgage or in the alternative a charge, over the Property pursuant to an agreement dated 12 November 2014.
6Further, or in the alternative, a declaration that the plaintiff holds a unregistered mortgage in the property, pursuant to an agreement dated 26 March 2015 (2015 Agreement).
7Further, and in the alternative, an order for injunctive relief, that the defendants be restrained from any dealings with the property until further order of the court.
8A declaration that neither the 2015 Agreement nor the agreement in similar terms dated 12 November 2014 (2014 Agreement) which comprise any contract between the parties (Contract) is a contract to which section 7D of the Home Building Act 1989 (NSW) (Act) applies.
9A declaration that the notice entitled “Notice of Rescission Home Building Act 1989” dated 1 September 2017 and purported to have been given by the defendants pursuant to the provisions of section 7BB of the Act is void and of no legal effect.
10An order for specific performance of the Contract or at the election of the plaintiff damages in lieu of or in addition to specific performance.
11Such further or other declaration or order as the Court thinks fit.
12Costs.
The respondents, on 23 February 2018, filed a cross-summons against Mr Lawrence. They claimed a declaration that the Agreement, properly construed, obliged Mr Lawrence to complete the DA work. The respondents also claimed a declaration that the Agreement was a “Building Contract for the purposes of the [HB Act]”, and a declaration that the notice of rescission the respondents served on Mr Lawrence was valid and effective.
The matter was listed for hearing before Henry J on 4 and 5 February 2019. On or shortly after 29 January 2019, senior and junior counsel for Mr Lawrence circulated written submissions in which it was stated that at the hearing Mr Lawrence would seek leave to rely on a “Second Further Amended Summons” (SFAS). It was submitted that, in the alternative, the proposed SFAS sought “a declaration that the Defendants hold the Property on a constructive trust for the Plaintiff to the extent of the Plaintiff’s contributions to the development of the Property”.[35] The SFAS does not claim any such declaration. Paragraph 10A of the SFAS, however, claimed an order that “the Defendants account to the Plaintiff for the Plaintiff’s contributions to the development of the Property”.[36]
[35] Exhibit KMC-1, page 37, [17]
[36] Exhibit KMC-1, page 46
On being served with these submissions Ms McLean made an affidavit on behalf of the respondents which was filed on 4 February 2019. Ms McLean specifically addressed the submission made in paragraph 20 of Mr Lawrence’s counsels’ submission that the “proposed amendment would not substantially add to the length or complicity [sic] of the hearing”, because the “nature and extent of the Plaintiff’s contributions to the property are already an issue between the parties given the other prayers for relief sought”.[37] Ms McLean addressed this submission in a number of ways.
[37] Exhibit KMC-1, pages 49-56, [23]
One way was to identify the occasions on which she had requested information from Mr Lawrence in relation to the work performed on the Property. Ms McLean deposed to having letters dated 22 February 2017, 20 March 2017, 19 April 2017, and 2 and 17 May 2017 requesting information, before Mr Hedges replied with a letter dated 18 May 2017 in which he asserted the respondents had no right to ask for or be interested in an accounting for expenditure, noting that under the Agreement Mr Lawrence was entitled to a one third interest in return for his undertaking the DA work at his own cost.
Ms McLean further referred to an exchange of correspondence with Mr Hedges commencing by a letter dated 13 April 2018 Ms McLean sent to Mr Hedges in which she stated as follows (errors in original):[38]
We have previously extended an invitation to your client to provide any documents or comments which may aid in the quantification of the work that was completed. No documents or matters have ever been raised by your client in relation to the quantity’s surveyors, inspection or report nor there have been any documents provided that would assist in valuing the work. We anticipate that, if the works are now completed by another builder, it will impact on the parties’ abilities to assess the report already obtained and, in that regard, should you client wish to avail himself of his own report, please let us know within 7 days of the date of this correspondence.
[38] Exhibit KMC-1, page 53, [40]
Mr Hedges responded on 19 April 2018 as follows (errors in original):[39]
As to the issue of our client engaging a quantity surveyor, our client has advise [sic] that, at this time he does not believe there would be any purpose served in engaging such quantity surveyor as a quantity surveyor can only provide a report based on information that would need to be provided as to the existent state of the property prior to the works being carried out. Our client believes that he would be in a position to provide a quantity surveyor with full details of the condition and state of the property prior to the works being commenced and a nature of those works such as to enable a quantity surveyor to provide an assessment as to the value of the works should it ever become necessary for him to do, or be it, we do not believe that there is any reason for our client to need to provide a value of the works as this claim does not involve works being calculated on a quantum meruit basis.
[39] Exhibit KMC-1, page 54, [41]
The exchange of correspondence ended with the following letter Ms McLean sent to Mr Hedges on 11 May 2018:[40]
We note, and do not concede, your comments in relation to a quantity surveyor. We also note our previous request for your client to provide all information that he has in relation to the work, including a full accounting, and that he has refused or neglected to provide that to our clients.
[40] Exhibit KMC-1, page 54, [42]
On the first day of the hearing before Henry J, in the course of his opening address, Mr Kelly SC, for Mr Lawrence, said that her Honour would have seen “in our written opening a brief reference to a foreshadowed amendment to the summons”. Mr Kelly SC referred Henry J to paragraph 10A of the SFAS.[41]
If I can take your Honour to the submission which is behind tab 5 at the end where we’ve attached a copy of a draft second further amended summons. In 10A on page, on the last page of the material behind tab 5 your Honour will see that we have made so bold as to add in the alternative an order that the defendants account to the plaintiff for the plaintiff’s contributions to the development of the property. Now, as I understand it the defendants oppose leave to amend. We would have thought that as night follows day where one has an order for specific performance of a joint venture which is poised to mature and produce registration and the first sale and a necessary account that the taking of an account would follow as a matter of night follows day.
Indeed so much so that we probably don’t need 10A. It would ordinarily be picked up in the elements of specific performance but I seek leave to make that amendment, your Honour. I understand my learned friend opposes it.
[41] Exhibit KMC-1, page 112.25-112.35
Ms Peden, counsel for the respondents, then made submissions in support of the respondents’ opposition to the proposed amendment, after which the following exchange occurred between the Court and Mr Kelly SC:[42]
[42] Exhibit KMC-1, pages 115.45-116.30
HER HONOUR: Mr Kelly, you have taken me to some documents and I might need to read this over lunchtime, to be honest, and come back to you. You've taken me to some documents which set out how you say the joint venture would work and how the amounts should be paid to your client. That, as I understand, would be the basis of your specific performance claim.
KELLY: Yes, your Honour.
HER HONOUR: Is not your claim in 10(a) an alternate to that whereby you're looking at actual contributions made to the property rather than what you say were the terms of the joint venture and the accounting flowing from that?
KELLY: It could be looked at that way, your Honour.
HER HONOUR: I think that's what Ms Peden's issue is, that you are opening up a different way for your client to be given money in recognition for what you say your contribution—
KELLY: I don't seek to do that, your Honour. If that's the way it's to be read then I won't press my amendment. All I wish to do is to make it clear that I'm seeking a joint venture accounting. Whether the joint venture comes to an end on fulfilment of the project, which will happen on sale, or even if it happened as per the rescission, there still needs to be a joint venture accounting.
HER HONOUR: But if there is no finding that there is a joint venture in the terms that you allege, what then do you say is the effect of prayer for relief in 10(a)?
KELLY: For 10(a), the mortgage is still on foot, the transfer is still on foot.
HER HONOUR: I think Ms Peden might have an issue with that.
KELLY: She might.
HER HONOUR: I think, as I understand, the real issue is Ms Peden's concern is that instead of looking at the terms of the purported joint venture that your client relies on, that you are going to open up the issue of actually asking to quantify or have the Court quantify the actual value of the work that might have been by or on behalf of your client.
KELLY: No, I don't propose to do that, your Honour.

After Ms Peden addressed a number of questions from the Court, a further exchange occurred between Mr Kelly SC and the Court in which Mr Kelly SC submitted that Mr Lawrence intended nothing more than a joint venture accounting. After Ms Peden submitted that Mr Kelly SC incorrectly assumed that every joint venture agreement includes an obligation to account, the following exchange occurred (emphasis added):[43]
[43] Exhibit KMC-1, pages 117.35-118.40
HER HONOUR: Another question I have for you, Ms Peden. Let's assume, as Mr Kelly said, that the Court finds that it is a home building contract or whatever but is not a joint venture of the type. What is your client's position in relation to any moneys that – and I've only been taken to a bit of the evidence but moneys that may have been paid by Mr Kelly's client?
PEDEN: That would depend on what the state of the pleadings are. We have invited the plaintiff on numerous occasions to frame their case in relation to those moneys. So far this is what we have. In my submission an obligation to account does not automatically arise by reason of a joint venture agreement. If that is the basis upon which my learned friend wishes to prosecute his case then it ought to be identified in 10(a) that that is the basis so that we aren't taken by surprise that there's some cause of action or some other way that it's brought forward.
The flipside, of course, of an account is that if there was an order for an account or a specific performance arrangement, it would go both ways in a joint venture and, therefore, it would require the plaintiff to be completely forthright in his position, his quantum, what he says the true position is, particularly in circumstances which are identified in Ms McLean's affidavit. We’ve been asking for this information for over a year and we haven’t had it. Therefore, in my submission, that is why this appears to be an ambush and we're unclear what's going on.
HER HONOUR: I think what I will do is I will read the papers over lunchtime. What would be very useful is if, Mr Kelly, you could send up to me what you propose in terms of this order and make it clear what exactly you are seeking to prosecute there because, as I understand it, there is now a difference between what is written here and your position.
KELLY: I think there might be, yes, your Honour, because I've moved to a more general proposition of an account. Not that I wish to cavil with the point but I'm not suggesting that there is an automatic obligation to account that arises out of every joint venture. That's not my submission at all. But where there is an ongoing set of loan accounts and payments, that puts the situation in a different position. I'll see if I can massage my words a bit and improve them, your Honour. The last thing I would want to do is take my learned friend by ambush. I don't come to court with a quantity surveyor measuring work. That’s never been part the exercise.
HER HONOUR: I think Ms Peden's point is that she would have wanted an opportunity to do so if this claim had been made and that she has been shut out from it.
KELLY: I take your Honour's point.
HER HONOUR: If you could do that over lunchtime, I will try and read the papers and form a view over there. Otherwise it might have to wait till the end of today. Are you happy to proceed on that basis?
PEDEN: Yes, thank you, your Honour.
The hearing continued and, during the luncheon break, counsel for Mr Lawrence sent a message to Henry J’s chambers that Mr Lawrence would not be pressing for the amendment. Mr Kelly SC confirmed that was the case immediately when the hearing resumed:[44]
KELLY: Your Honour, may I confirm that we're not pressing on with our amendment.
HER HONOUR: Yes, Mr Kelly, thank you. I did receive a message in my chambers.
[44] Exhibit KMC-1, page 135.10
On 26 April 2019 Henry J delivered reasons for judgment in which her Honour made findings that included the following:
(a)On its proper construction the Agreement bound Mr Lawrence to carry out and complete by himself, or by supervising others, the DA work, in return for which it was intended he would receive a one third interest in the Property; and he was bound to do so by May 2016.[45] Mr Lawrence agreed to do so as “the builder and developer with the relevant expertise and skills, to carry out and complete the DA works by himself or by others by 30 May 2016”.[46]
(b)The Agreement, as construed by her Honour, was one under which Mr Lawrence undertook to do residential building work himself or by others and was caught by s 6(1)(a) of the HB Act.[47]
(c)Even if the notice of rescission was invalid or was of no legal effect under the HB Act or otherwise, Mr Lawrence is not entitled to any interest in the Property, or specific performance, or damages “due to the operation of ss 7D and 10 of the” HB Act.[48]
(d)At the time the respondents issued the notice of termination, they were entitled to terminate the Agreement because Mr Lawrence had delayed completing the DA work, and his delay was sufficiently unreasonable to evince a repudiation by Mr Lawrence of his obligations under the Agreement.[49] In those circumstances, the respondents were entitled to rely on the notice of rescission to terminate the Agreement for that reason.[50]
[45] Lawrence v Ciantar [2019] NSWSC 464, at [126]
[46] Lawrence v Ciantar [2019] NSWSC 464, at [129]
[47] Lawrence v Ciantar [2019] NSWSC 464, at [139]
[48] Lawrence v Ciantar [2019] NSWSC 464, at [179]
[49] Lawrence v Ciantar [2019] NSWSC 464, at [201], [202]
[50] Lawrence v Ciantar [2019] NSWSC 464, at [204]
Henry J summarised her principal conclusions as follows:[51]
At the hearing, Mr Lawrence accepted that if I found that the contract was caught by the Home Building Act, his claimed one-third interest in the Property and his claims for specific performance and damages were unenforceable due to the operation of ss 7D and 10 of the Home Building Act.
Mr Lawrence also accepted that he has not advanced any of the funds said to support the mortgage in his favour (being the $435,000 referred to in the deed of loan).
It follows from this and my other findings that Mr Lawrence is not entitled to enforce the transfer of the one-third interest in the Property or any interest by way of the mortgage or deed of loan in respect of the Property. It also follows that the notice of rescission has legal effect and Mr Lawrence is not entitled to specific performance of the contract or to seek damages, and his caveat over the Property should lapse.
Accordingly, Mr Lawrence is not entitled to the relief sought, as pressed at the hearing, in paragraphs 1, 4, 5, 6, 7, 8, 9 and 10 of his summons.
[51] Lawrence v Ciantar [2019] NSWSC 464, at [217]-[220]
CA PROCEEDING
The principal question in the CA proceeding was the true construction of the Agreement: did the Agreement bind Mr Lawrence to carry out the “whole of the Development Application works either by himself or under his supervision, as distinct from merely providing funds for the project”?[52] It was common ground that if, as Henry J found, the Agreement bound Mr Lawrence to carry out the whole of the DA work, “then ss 7D and 10 of the Home Building Act had the effect of denying [Mr Lawrence] any interest in the property and rendering the contract void”.[53] Bathurst CJ, with whose reasons Meagher and Gleeson JJA agreed, concluded the November 2014 Agreement required Mr Lawrence to undertake the DA work as distinct from funding a third party builder to undertake it up to the amount of $435,000;[54] and that Mr Lawrence repudiated that agreement in the manner held by Henry J, thus entitling the respondents to terminate that agreement, which the respondents did by service of the notice of rescission.[55]
[52] Lawrence v Ciantar [2020] NSWCA 89, at [80]
[53] Lawrence v Ciantar [2020] NSWCA 89, at [80]
[54] Lawrence v Ciantar [2020] NSWCA 89, at [102]
[55] Lawrence v Ciantar [2020] NSWCA 89, at [137], [138]
THE ASSERTED CLAIM
Before I attempt to describe the Asserted Claim, it will be necessary to set out the material on which Mr Lawrence relies, refer to the oral submissions Mr Lawrence made at the hearing, and then refer to the various points of set off and submissions Mr Lawrence filed, and submissions he sent after the hearing.
Material on which Mr Lawrence relies
Mr Lawrence filed and otherwise sent to the Court a large volume of documents. The documents are as follows:
(a)On 9 March 2021 Mr Lawrence filed an affidavit, together with the documents described in paragraph 7 of the affidavit as “Exhibit WJL-1 marked as court book”. In paragraph 190 of that affidavit Mr Lawrence says that “Exhibit WJL-2 [is] attached separately to this affidavit”. At the hearing on 6 July 2021 Mr Lawrence confirmed that the documents he identified in his affidavit as exhibit WJL-1 and exhibit WJL-2 are “one and the same”. I will refer to these documents as “Exhibit WJL-2”.
(b)On 22 March 2021 Mr Lawrence filed a document which contains submissions and attaches some documents.
(c)On 19 May 2021 Mr Lawrence emailed to my associate’s inbox a link to what Mr Lawrence says was a consolidation of the attachments to the previous day’s emails. Mr Lawrence identified these documents as “Exhibit WJL-3”, and at the hearing I marked them as “Exhibit WJL-3”.
(d)On 25 May 2021 Mr Lawrence filed a document titled “Points Of Set Off”. Mr Lawrence filed the document in response to an order I made on 20 May 2021.
(e)On 5 July 2021 the applicant sent to my associate’s inbox a document titled “Amended “Points of Set Off”” which in turn attached a large bundle of documents. At the hearing the documents were admitted into evidence and marked “Exhibit A”.
(f)On 6 July 2021 Mr Lawrence sent to my associate’s inbox an excel spreadsheet which appears to particularise amounts Mr Lawrence claims he spent in connection with the DA work (First Spreadsheet).
(g)On 6 July 2021 Mr Lawrence sent an email to my associate’s inbox.
(h)On 7 July 2021 Mr Lawrence sent to my associate’s inbox a document titled “Applicant outline of submissions 6 July 2021”. These were printed at the hearing and marked “MFI1”.
(i)On 14 July 2021, after the hearing, Mr Lawrence sent to my associate’s inbox a document which, on page 3, is titled “14 July 2021 Amended “Points of Set Off”” (14 July Submissions), and, later on the same day, an updated excel spreadsheet (Updated Spreadsheet).[56]
[56] On 9 July 2021, after the hearing, Mr Lawrence sent an email to my associate’s inbox indicating that he wished to file additional submissions. At my direction, my associate sent an email to the parties in which it was stated that, subject to any objection, I would permit Mr Lawrence to provide further submissions by 14 July 2021 on the basis that I would not require the respondents to file any submissions in response unless I were to invite the respondents to do so, in which case I would identify the issue or issues in relation to which the respondents would be invited to make submissions. By email sent on 10 July 2021 the solicitor for the respondents said the respondents did not object to my receiving further submissions from Mr Lawrence by 14 July 2021.
Claims made in “Points Of Set Off” filed 25 May 2021
In this document Mr Lawrence claims as follows:
(a)The Agreement was not intended to be a building contract to construct a single dwelling under the HB Act; it was “a partnership/joint venture agreement to purchase one third of” the Property.[57]
(b)It was established that the respondents had not taken all necessary steps to obtain a construction certificate.[58]
(c)A certificate of homeowners insurance names the concreter, Salvador Cavallaro, as the builder.[59] Photographs that are in evidence show work was being carried out on the Property which contradicts evidence in submissions made by the respondents on 5 February 2019 in the SC proceeding that Mr Lawrence brought forward not a single contractor, and had never advanced the $435,000 to the respondents.[60]
(d)Mr Lawrence and the respondents are parties to a Deed of Loan, mortgage, and transfer, and the “primary question to the Federal Court [sic] by the applicant is why this offset was not dealt with in” the SC proceeding.[61] The judgment of the Court of Appeal only dealt with the HB Act, and that, in turn, dealt with two items that did not include the Deed of Loan, the transfer, or the mortgage.[62]
(e)The HB Act is not relevant to the Deed of Loan because the “remuneration or payment was complete at the time of the hearing”, only “the taking of accounts remained to be determined by the Court”. That appears intended to be a reference to submissions senior counsel for Mr Lawrence made before Henry J. The transcript of the submissions is in evidence,[63] but it does not contain the same page numbers as those to which Mr Lawrence refers in the “Points Of Set Off”. I searched for “accounts” in the transcript, and found ten references.[64] The word appears in submissions that the arrangement between Mr Lawrence and the respondents was one in the nature of a joint venture in the course of which both sets of parties made contributions, and there was to be the taking of accounts on the sale of any one of the properties, whether or not the DA work was completed.[65]
[57] 24.05.2021 Points of Set Off, [12], [13]
[58] 24.05.2021 Points of Set Off, [17]
[59] 24.05.2021 Points of Set Off, [18]
[60] 24.05.2021 Points of Set Off, [19]
[61] 24.05.2021 Points of Set Off, [20]-[22]
[62] 24.05.2021 Points of Set Off, [24]
[63] Exhibit KMC-1, pages 100-237
[64] T100.35, T101.45, T105.40, T108.15, T108.20, T115.10, T118.20, T145.35, T192.5, and T233.25
[65] Exhibit KMC-1, pages 100.35; 101.45; 108.15; 118.20
Claims made in “Amended “Points of Set Off”” dated 5 July 2021
In this document Mr Lawrence makes the following claims:
(a)The Deed of Loan, mortgage, and transfer are still on foot and the respondents, therefore, continue to be bound “to now account for any monies advanced or in the alternative in the Federal Court a genuine offset”.[66]
(b)Evidence given by the respondents’ lawyer that the respondents instructed her they did not receive $435,000 from Mr Lawrence was not true.[67]
(c)The respondents as developers of the Property made a profit of approximately $2.6 million, but failed to account to Mr Lawrence for $972,459.[68]
(d)The person who undertook the building work after the Agreement was terminated did not hold a builder’s licence.[69]
(e)The respondents used certificates Mr Lawrence had obtained to complete the subdivision.[70]
[66] Amended Points of Set Off, [1.5]
[67] Amended Points of Set Off, [51], [52]
[68] Amended Points of Set Off, page 11
[69] Amended Points of Set Off, page 11
[70] Amended Points of Set Off, page 11
Submissions Mr Lawrence made at hearing
At the hearing before me Mr Lawrence referred to the following:
(a)A schedule (Tab 1) listing nine payments totalling $18,625.65 made by cheque from 12 November 2014 to 16 July 2015,[71] together with supporting cheque butts.[72] Mr Lawrence submitted he paid these amounts “as per the deed of loan and at the request of” the respondents.[73] (I list the amount before interest. Mr Lawrence claims 9% interest for a year on each of the amounts he identifies in his schedules.)
[71] Exhibit A, page 1
[72] Exhibit A, pages 2-4
[73] 06.07.2021 T27.20
(b)A schedule (Tab 2) of payments totalling $117,363.66 Mr Lawrence submits he made from 20 March 2015 to 25 April 2017.[74] Mr Lawrence emphasised the payment of $12,567 for “Section 94 contributions in council fees”.[75] Mr Lawrence submitted that payment represents a bond he paid but which was not returned to him until 2019 when the DA work was completed. Mr Lawrence submits the respondents used that money for their own benefit.[76] The other payments included payments to plumbers, electricians, and surveyors. These payments are supported by invoices.[77]
[74] Exhibit A, page 5
[75] 06.07.2021 T27.40
[76] 06.07.2021 T28.10
[77] Exhibit A, pages 6-15
(c)A schedule (Tab 3) listing two payments totalling $1,600.[78] One of the items is a payment for $350 to “Rygate Surveyors”. That item is supported by documents.[79] The schedule also contains an item described as “2014/2015 Surveying of land”, and claims $1,250. There are no supporting documents for this amount.
[78] Exhibit A, page 16
[79] Exhibit A, pages 17-19
(d)A schedule (Tab 4) recording amounts Mr Lawrence submits represent the amounts that would have been payable to a project manager for the period Mr Lawrence claims he performed work in relation to the Property.[80] The schedule claims 124 weeks’ worth of work and a weekly rate of $3,800, thus making a total claim of $471,200. This schedule is based on a document that appears to have been part of the evidence in the SC proceeding. The document itemises work that occurred on the Property from January 2015 to October 2017.[81] Mr Lawrence informed me that he “didn’t have a detailed list . . . because it was equity being built into it and I didn’t keep those records”.[82] This material is not reasonably capable of supporting a finding that Mr Lawrence carried out work, or the nature of the work he carried out, or the value of the labour he claims he expended in carrying out the work.
[80] Exhibit A, pages 20-33
[81] Exhibit A, pages 21-33
[82] 06.07.2021 T31.10
(e)Five emails which Mr Lawrence submitted show he “completed all the works”, noting that this was relevant because the “defendants say that I hadn’t completed any of the works of the infrastructure”.[83] The documents are emails from mgp building and infrastructure services Pty Ltd.[84]
[83] 06.07.2021 T33.45
[84] Exhibit A, pages 43-47
(f)A schedule (Tab 5) containing a table headed “PLUMBING – Tab 5”.[85] It lists a number of payments which (without the claimed 9% interest) total $13,978.33. The schedule also includes a quote for $86,300. There are some supporting documents, but these are for $1,207.70,[86] $990,[87] $1,457.59,[88] $1,390.02,[89] and $1,390.02[90], a total of $6,435.33.
[85] Exhibit A, page 38
[86] Exhibit A, page 40
[87] Exhibit A, page 41
[88] Exhibit A, page 44
[89] Exhibit A, page 50
[90] Exhibit A, page 48
(g)A schedule (Tab 6) of three payments totalling $6,187.75, together with supporting documents. The payments are for stamp duty on the mortgage the respondents granted Mr Lawrence.[91]
[91] Exhibit A, page 53
(h)A schedule (Tab 7) of 5 payments totalling $3,300.[92] There is a document that contains a copy of an ANZ withdrawal receipt for $1,000, and handwriting that reflects four of the five payments recorded in the schedule.
(i)A schedule (Tab 8) recording four items totalling $122,722.60.[93] Mr Lawrence told me that this represents the costs (including project management time) for excavation work.[94] Although the schedule is accompanied by a table identifying machinery, rates, and periods of hire, the table itself is not supported by any documents.
(j)A schedule (Tab 9) of payments totalling $54,806.10, including four payments of $10,000 each to Mr Lawrence, and payments of $8,000 and $900 to Mr Lawrence.[95] These payments are supported by cheque butts, but the documents do not reveal their purpose. Mr Lawrence said they represent payments out of a private superannuation fund of which Minsden Pty Ltd was the trustee.[96] The schedule also records two payments to the respondents, and one payment to Ms Sammut. It is apparent, however, that these payments refer to the arrangements that I identify in paragraph (q) below. For reasons I set out below, the documents support payments totalling $38,213.
(k)The Deed of Loan dated 26 March 2015.[97] Mr Lawrence submitted that the effect of the deed, and in particular cl 3.1, is that the “Principal Sum”, namely, $435,000 would become repayable in the events specified in the clause. Mr Lawrence submitted that the Deed of Loan is still on foot.[98]
(l)A schedule (Tab 10) which identifies amounts that Mr Lawrence does not claim.[99]
(m)A schedule (Tab 11) which represents refunds from the Council totalling $9,574.85.[100]
(n)A schedule of payments (Tab 12) which is the same as the schedule that is Tab 9.[101]
(o)A schedule of payments (Tab 13) totalling $2,727.61.[102] Mr Lawrence submits these are payments he made in relation to requests the respondents made. Mr Lawrence submitted that the Deed of Loan operated as a line of credit for the respondents.[103]
(p)A schedule of payments (Tab 14) totalling $8,723.80.[104] Mr Lawrence submitted these represented amounts he paid at the request of Ms Sammut.[105]
(q)A schedule (Tab 15) of payments totalling $67,676.[106] One of these items is for $34,463, and is described as “Balance brought forward as at 29/11/2016 $34,463.00”. The $34,463 is referred to in a table Mr Ciantar set out in an email he sent to Mr Lawrence on 18 December 2016. The email states that Mr Ciantar “updated the running balance of receipts for your records”.[107] The table is in part as follows:
[92] Exhibit A, pages 60-61
[93] Exhibit A, pages 62-63
[94] 06.07.2021 T34.40
[95] Exhibit A, page 64. The schedule reappears at page 85 and is described as “BALANCE SHEET – TAB 9”
[96] 06.07.2021 T36.10
[97] Exhibit WJL-3, pages 17-23
[98] 06.07.2021 T43.15
[99] Exhibit A, page 78; 06.07.2021 T36.20
[100] Exhibit A, page 81; 06.07.2021 T36.35
[101] Exhibit A, page 85
[102] Exhibit A, page 92
[103] 06.07.2021 T43.20-T44.10
[104] Exhibit A, page 94
[105] 06.07.2021 T44.45
[106] Exhibit A, pages 99-112
[107] Exhibit A, page 100
Wayne Lawrence super fund Receipts and running balance for [the Property]
Wayne started to give deposits to Paul, 30/3/16 the deposits from then on have been recorded by Paul (listed below)
. . . .
Total Balance deposited brought forward from 23/5/16. . . $25,703.00
The table records regular transfers “from com to Suncorp” of $1,250. There is also an email Mr Ciantar sent to a Mr Dunne on 7 November 2016 setting out a list headed “Wayne Lawrence super fund Receipts and running balance for [the Property]”.
(r)Tab 15 totals the amounts at $67,676. That does not reflect the sum of the entries. The table states $34,463 was brought forward as at 29 November 2016, and the schedule records three payments of $1,250 made after 29 November 2016. Thus the total should be $38,213.
(s)A schedule (Tab 16) that records, not a payment, but a quote for $183,800 for the carrying out of concrete works.[108] Mr Lawrence submitted this was relevant because the respondents entered into a contract with the concreter to construct the driveway and retention tank. That contract was 29 pages long; but the respondents added 43 pages for residential work, and it, in turn, became a contract for $300,000, and in doing so they have represented that a licensed builder has undertaken work.
(t)A schedule (Tab 17) which records various payments totalling $5,219.53.[109] The items are supported by documents.
[108] Exhibit A, pages 113-116
[109] Exhibit A, page 117

Each of the schedules to which I have referred form part of the First Spreadsheet, the first page of which lists the totals of each of the schedules.
Before I leave these documents, I should note that the payments referred to in paragraphs (j) and (q) of paragraph 48 appear to have been made under a separate agreement between Mr Lawrence and the respondents. The nature of that agreement is reflected, at least in part, in a document titled “Receipt” apparently signed by each of the respondents on 23 May 2016:[110]
This total amount of money given to Alice Sammut and Paul Ciantar for the Suncorp Mortgage at [the Property] from November 2014 to 22^nd of May 2016
As Follows:
To Alice $22,953.00 and Paul
To Paul $2,750.00 and Alice
Total $25,703.00 Paid by Wayne Lawrence
[110] Exhibit A, page 103
After referring to these documents, Mr Lawrence articulated in relatively clear terms the Asserted Claim. Mr Lawrence claims that he spent money in connection with the DA work in amounts that totalled in excess of $300,000; these amounts constituted advances within the meaning of the Deed of Loan; the respondents were liable and remain liable to repay those amounts under the Deed of Loan; and their liability remains secured under the mortgage. That is best reflected in the following passage of Mr Lawrence’s oral submissions:[111]
. . . The simplicity of it is that I complied with every part of my requirement between 14 to the date of 30 August. Everything was finished, except for the driveway and detention tank. I know I’m repeating what we talked about yesterday, but the point – to answer your question, your Honour, I have a deed, I have a transfer, and I have a mortgage. Now, you can’t terminate a mortgage because the whole of Australia would just go along to the bank and say, well, we’re terminating our mortgage. We don’t need to go to court, because the lawyer can do that himself. They can just issue - - -
HIS HONOUR: But what did the mortgage secure?
MR LAWRENCE: The mortgage secured every dollar I put forward. Every single dollar. That’s what the mortgage secured. The mortgage is still in place. They didn’t apply to remove the mortgage. The mortgage is still current at the moment, but they have sold off all the properties, because they got rid of the lapsing notice. Now, the idea of the – a caveat, is to tell the world this person has an interest in the property. Now, whether it be a share, whether it be this, it doesn’t matter. But the point is, Mr Lawrence had an interest in the property. But the quickest way to get rid of Mr Lawrence is, right, come along and say, we need a cooling-off notice in the Home Building Act. Now, wouldn’t one person say to themselves, well, hang on, this is not a Building Act?
[111] 07.07.2021 T96.45-T97.15
14 July Submissions
The submissions contained in the 14 July Submissions appear to be directed to five subjects. The first is whether Mr Lawrence could not have set up the Asserted Clam in the SC proceeding. The second subject is the submission that the respondents did not adduce any evidence in the SC proceeding or in this proceeding that shows who, other than Mr Lawrence, had performed the DA work. The third subject is an asserted liability of the respondents to account for money they spent in completing the subdivision. The fourth subject relates to the affidavit of Ms McLean made on 22 June 2021. Mr Lawrence submits it was served late, and it does not support what Mr Lawrence submits was an assumption made in the SC proceeding that Mr Lawrence did not advance $435,000 towards the DA work. The fifth subject is the assertion that the respondents’ application for the issue of a bankruptcy notice and its service on Mr Lawrence is an abuse of process.
The Updated Spreadsheet in large part reproduces the First Spreadsheet. The principal difference is the inclusion of amounts for GST.
What is the Asserted Claim?
I am now in a position to describe the Asserted Claim. The Asserted Claim consists of the following elements.
(a)The orders disposing of the SC proceeding and the CA proceeding did not affect the validity of the Deed of Loan, mortgage, or transfer the respondents executed.
(b)Mr Lawrence advanced money under the Deed of Loan which the respondents are liable to repay.
(c)The time at which the respondents became liable to pay the amounts Mr Lawrence advanced was on the sale of the first of the subdivided lots; and it was to be repaid after the taking of accounts between the parties of the Agreement in which each party’s contributions would be assessed.
(d)The orders made in the SC and the CA proceedings did not affect Mr Lawrence’s right to be repaid the amounts he advanced.
(e)The respondents are liable to account to Mr Lawrence in an amount of $972,459, being the amount stated at page 11 of the “Amended “Points of Set Off””, or $1,066,526, being the total of the amounts specified in the first page of the First Spreadsheet, or $1,069,704.90, being the total of the amounts specified in the first page of the Updated Spreadsheet.
I will also take Mr Lawrence to claim he is entitled to recover amounts he has spent in connection with the DA work that he paid at the request of, and for the benefit of the respondents and, therefore, is entitled to recover that money in an action for money paid; and that he also claims he carried out work at the respondents’ request as a result of which he is entitled to an amount that reflects the fair value of that work.
PRINCIPLES
A judgment debtor on whom a bankruptcy notice is served does not commit an act of bankruptcy if he or she satisfies the Court that he or she has:[112]
a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained.
[112] Act, s 40(1)(g)
The matters of which a Court must be satisfied before it can be satisfied that a debtor has a counter-claim, set-off, or cross demand against the creditor have been stated in different ways, and in ways that sometimes overlap. The various statements were summarised by Lindgren J in Glew v Harrowell, in the matter of Glew.[113] In broad terms, a debtor must satisfy the Court that the counter-claim, set-off, or cross demand is made in good faith, and there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy.
[113] Glew v Harrowell, in the matter of Glew [2003] FCA 373, at [9]
That the judgment debtor may have a “counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt” is relevant to whether a bankruptcy notice can be set aside only if the counter-claim, set-off, or cross demand “could not have been set up” by the judgment debtor “in the action or proceeding” in which the judgment was obtained. The expression “could not have been set up in the action or proceeding” has been construed narrowly:[114]
The words “that he could not have set up in the action or proceeding in which the judgment or order was obtained” mean “which he could not by law set up in the action.”: see Re Jocumsen (1929) 1 A.B.C., at p. 85; Re A Debtor per Avory J. [1914] 3 K.B., at p. 730 and Re Stockvis (1934) 7 A.B.C. 53 especially per Lukin J. where his Honour said: “I take a counter claim, set off, or cross demand which could not be set up as one which, from the point of time, or from its nature, or from absence of empowering provisions, or from positive inhibition so to do, could not be set up in the particular case in which judgment was obtained . . . Mere failure to take advantage of the opportunity can hardly be said to be inability” (1934) 7 A.B.C., at p. 57.
[114] Re Brink; Ex parte The Commercial Banking Company of Sydney Ltd [1980] FCA 78; (1980) 44 FLR 135, at page 139 (Lockhart J)
This question was considered by Flick J in Massih v Esber[115] in circumstances similar to those before me, namely, where the judgment on which the bankruptcy notice has been issued is a judgment that was entered in response to the registration of a costs certificate. In Massih a bankruptcy notice was issued based on a judgment of the District Court that was entered on the registration of a costs certificate following the assessment of costs the debtor was ordered to pay the creditor in litigation in the Supreme Court between the debtor and creditor in relation to a property. The debtor applied to set aside the bankruptcy notice on the ground that he had a counter-claim, set-off, or cross demand equal to or exceeding the amount of the judgment debt. Flick J held that the relevant proceeding by reference to which the question whether the cross demand could not have been set up was to be determined was the proceeding in which the costs certificate was registered. His Honour found it was not possible for the debtor to have set up his cross demand in such proceeding. His Honour said:[116]
It is not considered that the “final judgment or final order” could be constituted by the order for costs made by the Supreme Court, either on its own or together with the Certificate of Determination of Costs: Franks v Warringah Council [2003] FCA 1047 at 131 FCR 287.
[115] Massih v Esber [2008] FCA 1452
[116] Massih v Esber [2008] FCA 1452, at [35]
His Honour also said:[117]
For the purposes of s 40(1)(g) of the Bankruptcy Act, the inquiry is thus directed to determining whether or not in that proceeding in the District Court whereby the Certificate was filed, the Applicant “could not have set up” his claim to bring losses in the development of the Merrylands property into account. Those claims could not have been “set up” during the earlier administrative processes being undertaken by the costs assessor.
Nor is it considered that the Applicant’s claims could have been set up in the “action or proceeding” in the District Court. The present Respondent, having obtained the Certificate of Determination of Costs, thereafter filed the Certificate with the District Court and it was s 368(5) of the 2004 Act which gave effect to that Certificate as a “judgment” of the District Court. No submission was advanced that the filing of the Certificate with the District Court did not constitute an “action or proceeding” for the purposes of s 40(1)(g).
The fact that Part 36 r 10 of the Uniform Civil Procedure Rules confers a discretion upon the Registrar does not detract from this conclusion. Whatever be the ambit of that discretion, it would not empower the Registrar to decline to register a Certificate which had been properly obtained and properly filed and where the costs remained outstanding.
The result of the present Application, it is considered, can be stated simply. For the purposes of the present Application, it was accepted that the joint venture agreement as between the Applicant and the Respondent gave rise to losses, those losses being said to be approximately $160,000. Those losses obviously exceed the judgment debt of $77,498.96. But, as at the date upon which the Bankruptcy Notice was served in February 2008, no account had been taken — as had been ordered by Hall J in March 2007. Whether an account had or had not been taken, however, those losses could not have been set up during the process whereby the costs assessor made a determination as to costs. Nor could those losses have been set up in opposition to the filing of the Certificate of the costs assessor with the District Court and the judgment thereafter being taken to have been made by reason of s 368(5) of the Legal Profession Act.
[117] Massih v Esber [2008] FCA 1452, at [43]-[46]
Although directed to the costs regime under the Legal Profession Act2004 (NSW), his Honour’s analysis would also apply to the costs regime under the Legal Profession Uniform Law Application Act 2014 (NSW).
Also relevant are s 41(7) of the Act and r 3.02 of the Bankruptcy Rules. Subsection 41(7) of the Act provides:
Where, before the expiration of the time fixed for compliance with a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.
Rule 3.02 of the Bankruptcy Rules relevantly provides:
(1) An application to set aside a bankruptcy notice under the Bankruptcy Act must be accompanied by an affidavit stating:
(a)       the grounds in support of the application; and
(b)      the date when the bankruptcy notice was served on the applicant.
(2)      A copy of the bankruptcy notice must be attached to the affidavit.
(3) If the application is based on the ground that the debtor has a counter‑claim, set‑off or cross demand referred to in paragraph 40(1)(g) of the Bankruptcy Act, the affidavit must also state:
(a)      the full details of the counter‑claim, set‑off or cross demand; and
(b) the amount of the counter‑claim, set‑off or cross demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and
(c) why the counter‑claim, set‑off or cross demand was not raised in the proceedings that resulted in the judgments or orders to which the bankruptcy notice relates.
The respondents submit there are two stages to an application to set aside a bankruptcy notice on the ground the debtor has a counter-claim, set-off or cross demand. The first is that required by r 3.02(3) of the Bankruptcy Rules. Rule 3.02(3) of the Bankruptcy Rules must be complied within the time prescribed by s 41(7) of the Act, namely, “before the expiration of the time fixed for compliance with a bankruptcy notice”.[118]
[118] Respondents’ Outline Submissions [24]
The second stage is for the Court to determine on the basis of the material before it whether it is satisfied the debtor does have a counter-claim, set-off or cross demand of the kind referred to in s 40(1)(g) of the Act.[119] A debtor may at the second stage expand on the matters contained in any affidavit a debtor files at the time he or she applies to set aside the bankruptcy notice; but a debtor cannot at that stage file an affidavit which attempts to cure deficiencies contained in any affidavit the debtor filed before the expiration of the time for compliance with the requirements of the bankruptcy notice.[120] The respondents rely on the judgment of Hill J in Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd.[121] In that case Hill J said:[122]
The debtors, within the time limited for compliance with the bankruptcy notice, filed two affidavits. These affidavits, individually or cumulatively, did little more than assert the existence of a cross-claim, cross-demand, or setoff, and in my view did not comply with the provisions of s 41(7). The affidavit of which s 41(7) speaks must do more than merely assert the existence of a cross-claim etc of the relevant value. It must contain evidence which establishes that there is an effective cross-claim, a claim that is real; cf Lukin J in Re Vogwell; Ex parte v OgWell (1939) 11 ABC 75 at 77, affirmed on appeal by the High Court in Vogwell v Vogwell (1939) 11 ABC 83 at 85; Ebert v Union Trnstee Co of Australia Ltd (No 2) (1960) 104 CLR 346 at 350; Re McKechnie; Ex parte Weir (1991) 27 FCR 515 at 519-520 per Foster J. This is so because the affidavit in question is required to “show” a relevant counter-claim, set -off or cross-demand. An insufficient affidavit does not bring the provisions of s 41(7) into operation.
[119] Respondents’ Outline Submissions [25], referring to Crimmins v Glenview Home Units [1999] FCA 515; James v Hill [2005] FCA 981
[120] Respondents’ Outline Submissions [26]
[121] Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183
[122] Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183, at page 188
These observations were made in relation to s 41(7) of the Act which was in different terms to s 41(7) in its present form. At the time of Hill J’s judgment in Re James, s 41(7) of the Act required that the debtor file an affidavit with the Registrar. Subsection 41(7) of the Act in its current form, however, only refers to a debtor having “applied to the Court for an order setting aside the bankruptcy notice”. It is true that r 3.02 of the Bankruptcy Rules requires the filing of an affidavit which details the matters specified by the Bankruptcy Rules. But it does not necessarily follow that any non-compliance with r 3.02 of the Bankruptcy Rules puts it out of the power of the Court to permit the debtor to file additional evidence; and even if the rule were so construed, the Court would have power under r 1.06 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) to relieve compliance with r 3.02.[123] In any event, I am satisfied that an act that is properly characterised as a debtor’s applying “to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand” engages the extension for compliance with the bankruptcy notice provided for by s 41(7) of the Act.
[123] Burrell v Reavill Farm Pty Ltd & Ors [2014] FCCA 1449
DETERMINATION
The first question I must address is to what material I may have regard to determine whether Mr Lawrence has a counter-claim, set-off, or cross demand, and in particular, whether, as the respondents submit, I am restricted to the affidavit Mr Lawrence filed with his application. The judgment of Hill J in Re James was given in relation to a previous version of s 41(7) of the Act that is not reflected in the current version. For that reason, Re James does not bind me to have regard only to the affidavit Mr Lawrence filed with his application.
It is true that r 3.02 of the Bankruptcy Rules required Mr Lawrence to file an affidavit at the time he filed his application to set aside the bankruptcy notice, and that the affidavit was required to include the matters prescribed by that rule; but any failure by Mr Lawrence to comply with r 3.02 of the Bankruptcy Rules would not deny that which Mr Lawrence did on 5 March 2021, namely, apply to set aside the bankruptcy notice on the ground that he has a counter-claim, set-off, or cross demand and, for that reason, engage the extension provided for by s 41(7) of the Act. I find that by Mr Lawrence filing his application to set aside the bankruptcy notice, s 41(7) of the Act applied to extend the time for compliance with the requirements of the bankruptcy notice.
Further, Mr Lawrence’s not having complied with r 3.02 of the Bankruptcy Rules did not prevent the Court from permitting Mr Lawrence to file any additional evidence. It would have been open to the respondents to oppose my making an order allowing Mr Lawrence to file any additional evidence on the ground that the affidavit he did file did not comply with r 3.02 of the Bankruptcy Rules; but even if the respondents had so objected, it does not necessarily follow I would have prevented Mr Lawrence from filing additional evidence. The likelihood is that, in the absence of prejudice to the respondents (beyond that of permitting Mr Lawrence to file any additional affidavit), I would have permitted Mr Lawrence to file the additional material he filed, and, if it were necessary, I would have made an order under r 1.06 of the FCC Rules relieving Mr Lawrence from having to comply with r 3.02 of the Bankruptcy Rules.

The next question is whether on the material Mr Lawrence relies the Asserted Claim has sufficient substance to make it one which Mr Lawrence should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy.
The Asserted Claim is underpinned by two potential causes of action. One relates to money Mr Lawrence claims he paid at the request of the respondents. A person who pays money at the request of another is entitled to recover from the person making the request judgment for the amount paid.[124] Thus, to the extent Mr Lawrence has identified evidence that is reasonably capable of proving he made payments at the respondents’ request, Mr Lawrence would have available to him a common law action for money paid up to the amounts of such payments. The second potential cause of action relates to work Mr Lawrence claims he performed at the request of the respondents. A person who has performed work at the request of another in circumstances where there is otherwise no contract is entitled to a “quantum meruit”, that is, an amount that reflects the fair value of the work performed.
[124] Vickery v Jjp Custodians [2002] NSWSC 782, at [128], where Austin J said: “The common money count or “indebitatus” count for money paid had by the 19th century become an action for “money paid by the plaintiff to the use of the defendant” . . . The count averred that the defendant was indebted to the plaintiff, pleading the payment of money by the plaintiff to and for the use of the defendant, a request by the defendant that the money be so paid, and breach of a promise by the defendant to repay the plaintiff upon the plaintiff's request for payment.”
The question then becomes whether, on the evidence before me, there is sufficient substance to the two potential causes of action I have identified which Mr Lawrence should, in justice, be permitted to have heard and determined in the usual way, rather than his being forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy. There are a number of difficulties in giving an affirmative answer to this question.
The first, and most significant, difficulty is that I have found that the material on which Mr Lawrence relies for proving the work he performed as project manager, and the value of the work, is incapable of showing there is any substance to the claim that Mr Lawrence performed the work or that the work has the value Mr Lawrence claims it does. Stated another way, there is no material before me that is reasonably capable of sufficiently disclosing the work Mr Lawrence claims he performed, or the value of that work. Second, although there is material that identifies payments Mr Lawrence made in connection with the Property, and documents that support the making of those payments, the payments do not exceed the amount the bankruptcy notice demands, namely, $262,275.71. I identified in paragraph 48 of these reasons the amounts Mr Lawrence claims he spent, and the documents that could reasonably be taken to support the payment of amounts Mr Lawrence claimed he made. I recorded in bold the payments I found those documents could reasonably be taken to show were made. Those amounts total only $207,146.33.[125] Even with the one year’s worth of interest at 9% Mr Lawrence claims ($18,643.17), the total value of his claims would be $225,789.50.
[125] $18,625.65 + $117,363.66 + $350 + $6,435.33+ $6,187.75 + $3,300 + $38,213 + $2,727.61 + $8,723.80 + $5,219.53 = $207,146.33
For these reasons alone, Mr Lawrence’s application to set aside the bankruptcy notice on the ground that he has a counter-claim, set-off, or cross demand equal to or exceeding the amount of the judgment, must fail. Mr Lawrence’s application would fail even if he were to claim such amounts are payable under the Deed of Loan.
A second difficulty is that any attempt by Mr Lawrence to recover by action the amounts he claims to have spent, or an amount for work he claims he performed, in relation to the Property would likely be met with a defence based on the principles associated with the judgments of the High Court in Port of Melbourne Authority v Anshun Pty Ltd.[126] In that case an employee of Anshun Pty Ltd (Anshun) claimed damages from both Anshun and the Port of Melbourne Authority (Authority) for injuries he sustained while operating a crane the Authority had hired to Anshun. Anshun and the Authority each filed claims for contribution against the other. Anshun and the Authority were both found liable to pay damages to the employee, and the Authority was ordered to pay to Anshun contribution of 90% of the amount of the judgment the applicant recovered against the Authority and Anshun. The Authority commenced fresh proceedings against Anshun for the recovery of the amount it had paid to the employee, relying on an indemnity Anshun had given the Authority in relation to the operation of the crane. Anshun submitted the Authority was estopped from maintaining the action because it ought reasonably to have raised the indemnity in the earlier proceeding. The High Court upheld that submission.
[126] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
The plurality formulated the following principle:[127]
In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.
[127] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589, at [37]
I do not propose to rely on Anshun as a ground for concluding that the Asserted Claim does not have sufficient substance to make it one that Mr Lawrence should, in justice, be permitted to have heard and determined in the usual way. I will note, however, that if Mr Lawrence were to attempt to assert by separate action the Asserted Claim, there would be a significant prospect the respondents would succeed in a defence based on Anshun.
A third difficulty relates to Mr Lawrence’s reliance on the Deed of Loan and mortgage. It is true that neither Henry J nor the Court of Appeal set aside those instruments. But this ignores the principal finding Henry J and the Court of Appeal made, namely, that the true contractual relationship between Mr Lawrence and the respondents was not one of lender and borrower, but of builder and client. Henry J and the Court of Appeal held that Mr Lawrence undertook to construct the DA work. That finding affects the legal significance of the Deed of Loan. That is apparent from the following passage from Bathurst CJ’s judgment:[128]
I do not think that the terms of the caveat or the Deed of Loan alters the position. The Deed of Loan was executed in support of the unregistered mortgage referred to in cl 2 of the agreement which, as I have explained, limits the mortgage to the works, implying that it was to secure the value of the works, not any money advanced by the appellant to fund the development. No funds were advanced to the respondents pursuant to the Deed of Loan or otherwise. The caveat was lodged pursuant to cl 3 of the agreement which, as I have indicated, should be construed as relating to monies expended by the appellant, rather than provided by or advanced by him.
[128] Lawrence v Ciantar [2020] NSWCA 89, at [112]
Thus, given the reasons on the basis of which the SC and CA proceedings were disposed, it would not be open to Mr Lawrence to rely on the Deed of Loan or the mortgage as a basis for recovering from the respondents amounts he claims to have paid in connection with the Property.
14 JULY SUBMISSIONS
It is convenient if I consider at this point the matters Mr Lawrence addresses in the 14 July Submissions.
(a)The action or proceeding by reference to which the question whether Mr Lawrence could not have set up the Asserted Claim is the proceeding in which the Certificate for Determination was registered. That is a different proceeding from the SC and CA proceedings. That Mr Lawrence could have set up the Asserted Claim in the SC proceeding, therefore, does not prevent Mr Lawrence from relying on the Asserted Claim as a ground for setting aside the bankruptcy notice. Given this conclusion it is not necessary to consider the submissions Mr Lawrence makes in relation to whether he could have set up the Asserted Claim in the SC proceeding.
(b)That the respondents did not adduce any evidence in the SC proceeding or in this proceeding identifying the work that was performed on the Property, or the person who performed the work, is not relevant to any issue in this proceeding. It was for Mr Lawrence to adduce such evidence in the SC proceeding if he had intended to make a claim based on the work he performed or the money he spent; and it was for Mr Lawrence to adduce such evidence in this proceeding. As I have already noted, Mr Lawrence did adduce such evidence; but I have concluded that the evidence is not reasonably capable of establishing he had spent money and had performed work in an amount, and for a value, that is equal to or exceeds the judgment on the basis of which the bankruptcy notice was issued.
(c)That the respondents may not have accounted for money they spent in completing the subdivision of the Property is not relevant to any claim Mr Lawrence makes in this proceeding. Mr Lawrence has not identified any basis on which he would be entitled to any such accounting, given the findings made in the SC and CA proceedings; and Mr Lawrence has adduced no material on the basis of which it could reasonably be determined whether such accounting would result in the respondents owing Mr Lawrence any money and, if so, the amount they would owe Mr Lawrence.
(d)At the time counsel for the respondents sought to read Ms McLean’s affidavit, Mr Lawrence said he did not have any objection to the affidavit or to the annexures to that affidavit “because I believe it all goes to the background of the whole proceedings”, although Mr Lawrence said he objected to the submissions that would be made in relation to the affidavit.[129]
(e)Mr Lawrence does not identify any grounds on the basis of which he asserts the respondents’ issue of a bankruptcy notice is an abuse of process. I therefore do not accept the respondents have engaged in any abuse of process.
[129] 06.07.2021 T19.30
OTHER MATTERS
The material before me shows Mr Lawrence has filed an appeal in the Supreme Court of New South Wales seeking an order that the Certificate for Determination. I do not understand Mr Lawrence to have submitted the Certificate for Determination is void; but if I have misunderstood Mr Lawrence, and he has so claimed, there is nothing in the material before me that could raise a question or serious question about the validity of the Certificate for Determination.
I should also note that before 9:30 am on 20 August 2021, being the time at which the matter was listed for judgment, Mr Lawrence sent to my associate’s inbox an email containing further submissions. At the time the matter was called for judgment I asked Mr Lawrence what he expected me to do with the submissions he had sent that morning. Mr Lawrence said “nothing”, and that he had sent the submissions as a matter of record. I have read the submissions, but they do not appear to add anything new to the matters Mr Lawrence had already relied on in the proceeding. In light of the discussion I had with Mr Lawrence about his submissions, and Mr Lawrence’s informing me that, should I decide the matter against him, he required seven days to pay the amount demanded in the bankruptcy notice, I decided to adjourn delivery of judgment to 1:00 pm on 20 August 2021.
CONCLUSION AND DISPOSITION
I am not satisfied that Mr Lawrence has “a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt” within the meaning of s 40(1)(g) of the Act. It follows that Mr Lawrence’s application will be dismissed. I do not propose, however, to dismiss the application on the publication of these reasons and, by so doing, determine I am not satisfied Mr Lawrence has a counter-claim, set-off, or cross demand. Mr Lawrence informed me at the hearing on 7 July 2021, and I have no reason not to believe him, that he is in a position to pay the amount demanded by the bankruptcy notice. Mr Lawrence also informed me at the time I had initially listed the matter for judgment that he should be able to pay the amount within seven days. I therefore propose not to make any orders to dismiss the application until 4:00 pm on 27 August 2021 to give Mr Lawrence an opportunity to pay the amount demanded in the bankruptcy notice before I finally determine this application.
Accordingly, I propose to make an order that the matter be listed before me at 4:00 pm on 27 August 2021 for the purpose of my then making the following orders:
(a)The application be dismissed.
(b)The applicant pay the respondents’ costs.
I will grant the parties liberty to apply before 27 August 2021 if any party wishes to apply for a different costs order to the one I propose to make on 27 August 2021. I will also make an order extending the time for compliance with the bankruptcy notice up to and including 27 August 2021.

I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.
Associate:
Dated: 20 August 2021

File number(s):	SYG 346 of 2021
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	20 August 2021
Catchwords:	BANKRUPTCY – application to set aside bankruptcy notice on ground that applicant has counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt – bankruptcy notice based on a judgment entered on the registration of a costs certificate recording the assessment of costs debtor was ordered to pay to the creditors in proceedings in the Supreme Court of New South Wales in which debtor unsuccessfully claimed he had an interest in land – debtor claims he has counter-claim, set-off or cross demand based on money he spent and work performed in relation to the property – whether in determining whether debtor has counter-claim, set-off or cross demand the Court is restricted to considering the affidavit filed when the debtor filed application to set aside bankruptcy notice – Court not so restricted – whether the proceeding in relation to which the debtor could not have set up counter-claim, set-off or cross demand is the proceeding in which the order for costs was made or instead in the proceeding in which the certificate for costs was registered – the latter is the relevant proceeding which means that the counter-claim, set-off or cross demand the debtor claims he has could not have been set up in that proceeding – whether there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy – there is sufficient substance in relation to some amounts but the amounts do not in total exceed the amount of the judgment debt – application adjourned to a date for the purpose of making an order dismissing the application and an order as to costs.
Legislation:	Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(7) Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) r 3.02 Federal Circuit Court Rules 2001 (Cth) r 1.06 Home Building Act 1989 (NSW) ss 4, 5, 6, 7(2)(g), 7BA, 7BB(2), 10(1) Real Property Act 1900 (NSW) s 74K
Cases cited:	Crimmins v Glenview Home Units [1999] FCA 515 Glew v Harrowell, in the matter of Glew [2003] FCA 373 James v Hill [2005] FCA 981 Lawrence v Ciantar [2019] NSWSC 464 Lawrence v Ciantar [2020] NSWCA 89 Massih v Esber [2008] FCA 1452 Port of Melbourne Authority v Anshun Pty Ltd (1981) [1981] HCA 45; (1981) 147 CLR 589 Re Brink; Ex parte The Commercial Banking Company of Sydney Ltd [1980] FCA 78; (1980) 44 FLR 135 Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183 Vickery v Jjp Custodians [2002] NSWSC 782
Number of paragraphs:	85
Date of last submission/s:	20 August 2021
Date of hearing:	6 and 7 July 2021
Place:	Sydney
The Applicant:	Appeared in person, by telephone
Counsel for the Respondents:	Mr A Spencer, by video
Solicitor for the Respondents:	McLean & Associates Solicitors

SYG 346 of 2021
IN THE MATTER OF WAYNE JAMES LAWRENCE
BETWEEN:	WAYNE JAMES LAWRENCE Applicant
AND:	ALICE ALEXANDRIA SAMMUT First Respondent PAUL WILLIAM CIANTAR Second Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	20 AUGUST 2021