Netglory Pty Ltd v Caratti - [2013] WASC 364

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: NETGLORY PTY LTD -v- CARATTI [2013] WASC 364

CORAM: EDELMAN J

HEARD: 12 - 16, 19 & 22 AUGUST 2013

DELIVERED : 9 OCTOBER 2013

FILE NO/S: CIV 2917 of 2010

BETWEEN: NETGLORY PTY LTD
Plaintiff
AND
ALLEN BRUCE CARATTI
First Defendant
HOCKING LAND COMPANY PTY LTD
Second Defendant
JOANNE DE HOLLANDER
Third Party

Catchwords:

Deeds - Formalities - Execution - Property Law Act 1969 (WA) s 9(1) - Meaning of 'shall be attested' - Whether attestation requires signature - Whether attestation must be contemporaneous - Whether a witness can subsequently attest the signature of the party to be bound - Requirement of delivery of deed - Whether deed can be delivered if party to be bound evinces an intention not to be bound at the time of subsequent purported attestation

Deeds - Parties to a purported deed of guarantee - Where purported deed is executed only by obligees and not by obligor - Parties to the purported deed to be determined by objective construction of the deed as a whole including the principal (purported) loan agreement to which the deed of guarantee is supplementary

Deeds - Action for debt - Whether specific performance at common law - Whether deed enforceable in absence of consideration

Contract - Construction of written contract - Whether ambiguity exists - Whether alleged earlier oral agreement in terms which contradict the terms of written agreement can be used to construe the written agreement

Company law - Equity - Fiduciary duties - Duty to act in good faith and for proper purposes - Duty to avoid conflicts of interest - Failure to give independent consideration to the interests of the company - Rescission of transaction

Limitation of actions - Limitation Act 1935 s 38 (1)(e) - Meaning of 'action of covenant or of debt upon any bond or other specialty' - Whether action for enforcement of a debt is an 'action of covenant' - Meaning of 'specialty' - Whether action is an action upon a specialty

Limitation of actions - Limitation Act 1935 s 38 (1)(c)(v) - When cause of action accrues for a debt which is repayable on demand - Effect of a term in purported loan agreement creating a repayment date but providing that the debt is repayable on demand if any breach occurs before repayment date - When loan repayable under a contract of guarantee - Whether statute barred loan is 'due and payable' for the purposes of purported contract of guarantee

Evidence - Alleged iterative oral agreement in 2002 and 2003 - Inconsistency in evidence about oral agreement between principal witnesses for the plaintiff - Dangers in relying upon oral evidence of transactions occurring years ago

Legislation:

Bills of Sale Act 1878
Chattels Transfer Act 1930 (Kenya)
Civil Procedure Act 1833 3 & 4 Wm IV c 42
Conveyancing Act 1919 (NSW)
Evidence Act 1906 (WA)
Informal Attestation Act 1814 59 Geo 3 c 168
Limitation Act 1623 21 Jac 1 c 16
Limitation Act 1935 (WA)
Limitation Act 2005 (WA)
Property Law Act 1969 (WA)
Statute of Frauds 1677 29 Car 2 c 3
Statutes of Mortmain
Wills Act 1837 c 26, 7 Will 4 & 1 Vict

Result:

Claim dismissed
Counterclaim upheld

Category: A

Representation:

Counsel:

Plaintiff:     Mr P G McGowan
First Defendant              :     Dr J Schoombee
Second Defendant         :     Dr J Schoombee
Third Party  :     No appearance

Solicitors:

Plaintiff:     Chris Stokes & Associates
First Defendant              :     Torrens Legal
Second Defendant         :     Torrens Legal
Third Party  :     No appearance

Cases referred to in judgment:

A & K Holdings; Sunderland Marine Insurance Co v Kearney 117 ER 1136; [1851] 16 QB 925
ACN 096 278 483 Pty Ltd v Vercorp Pty Ltd [2011] QCA 189
Actionstrength Ltd v International Glass Engineering IN GL EN SpA [2003] UKHL 17; [2003] 2 AC 541
Alexander v Ajax Insurance Co Ltd [1956] VLR 436
Aloha Shangri-La Atlas Cruises Pty Ltd v Gaven [1970] Qd R 438
Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30; (2012) 290 ALR 595
ASIC v Adler [2002] NSWSC 171; (2002) 41 ACSR 72
Atwell & Atwell v Roberts (No 3) [2009] WASC 96
Atwell & Atwell v Roberts (No 3) [2013] WASCA 37
Bell Brothers Pty Ltd & Stewart v Sarich [1971] WAR 157
Berry v Wong [2000] NSWSC 1002
Beswick v Beswick [1968] AC 58
Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384
Blackwell v Moray (1991) 5 ACSR 255
Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269
Bradford Old Bank Ltd v Sutcliffe [1918] 2 KB 833
Breen v Williams [1996] HCA 57; (1996) 186 CLR 71
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Bryan v White (1850) 2 Rob Ecc 315; 163 ER 1330
Bugg v Day (1949) 79 CLR 442
Burdett v Spilsbury (1843) 10 C & F 340; 8 ER 772
Burns v Lorac (1985) 4 FCR 301
Caboche v Ramsay [1993] FCA 611; (1993) 119 ALR 215
Cannon v Hartley [1949] Ch 213
Central City Pty Ltd v Montevento Pty Ltd [2011] WASCA 5
Chameleon Mining NL v Murchison Metals Ltd [2010] FCA 1129
Church v Lever & Kitchen Pty Ltd [1970] 3 NSWR 566
Clyde Industries Ltd v Dittes (Unreported, NSWSC, 5 June 1992)
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Commissioner of State Revenue v Politis [2004] VSC 126; [2004] ANZ ConvR 286
Commonwealth Bank of Australia v Poynten (Unreported, NSWSC, 4 March 1996)
Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Cousens v Grayridge Pty Ltd; Hillside Way Pty Ltd v Grayridge Pty Ltd [2000] VSCA 96
Curwen v Milburn (1889) 42 Ch D 424
Davis v Goodman (1880) 5 CPD 128
Doe on the Demise of Mansfield v Peach (1814) 2 M & S 576; 105 ER 496
Dong v Monkiro [2005] NSWSC 749
Edwards v Skilled Engineering Pty Ltd (Unreported, NSWCA, 14 March 1989)
Elder, Smith & Co Ltd v McKellar (1895) 21 VLR 664
Ellison v Vukicevic (1986) 7 NSWLR 104
Falzon v Adelaide Development Co Ltd [1936] SASR 93
Fazio v Fazio [2012] WASCA 72
Federal Commissioner of Taxation v Taylor [1929] HCA 13; (1929) 42 CLR 80
Fodare Pty Ltd v Shearn [2011] NSWSC 479
Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129
Furs Ltd v Tomkies [1936] HCA 3; (1936) 54 CLR 583
Greer v Kettle [1938] AC 156
Grimaldi v Chameleon Mining NL [2012] FCAFC 6; (2012) 287 ALR 22
Haller v Ayre [2005] QCA 224; [2005] Qd R 410
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 294 ALR 550
HCK China Investments Ltd v Solar Honest Ltd [1999] FCA 1156; (1999) 165 ALR 680
Helton v Allen [1940] HCA 20; (1940) 63 CLR 691
Hemp v Garland (1843) 4 QB 519; 114 ER 994
Hewlett‑Packard Australia Pty Ltd v Exeed Pty Ltd [2004] FCA 135; (2004) 48 ACSR 670
Houston v Crannage (1990) WAR 11
Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810
In re Carile [1920] Vic Law Rp 86; [1920] VLR 427
In re J Brown's Estate Brown v Brown [1893] 2 Ch 300
In the matter of Auzhair Supplies Pty Ltd (a deregistered company) and Auzhair 1 Pty Ltd; Greenaway v Auzhair 1 Pty Ltd [2010] NSWSC 1339; (2010) 80 ACSR 538
Iven v Elwes (1854) 3 Drew 25; 61 ER 810
Johnson v American Home Assurance Company [1998] HCA 14; 192 CLR 266
Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166
Kingston v Ambrian Investment Co Ltd [1975] 1 WLR 161
Labracon Pty Ltd v Cuturich [2013] NSWSC 97
Lady Naas v Westminster Bank Ltd [1940] AC 366
Lawless v Mackendrick [No 4] [2013] WASC 272
Liff v Peasley [1980] 1 WLR 781
Lincolnshire Sugar Co Ltd v Smart [1937] AC 697
Lonsdale Sand and Metal Pty Ltd v Commissioner of Taxation [1998] FCA 155
Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449
Manks v Whiteley [1912] 1 Ch 735
Matthew v Osborne (1853) 13 CB 919; 138 ER 1465
McCourt v Cranston [2012] WASCA 60
McKay v National Australia Bank [1998] 1 VR 173
Mills v Mills [1938] HCA 4; (1938) 60 CLR 150
Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296
Monarch Petroleum NL v Citco Petroleum Ltd [1986] WAR 310
Moodie v Reid (1816) 1 Madd 516; 56 ER 189
Morgan v Banning (1999) 20 WAR 474
Morgan v Pike (1854) 14 CB 473;139 ER 195
Mortimer v Shortall (1842) 2 Dr & War 363
Mostyn v Mostyn (1989) 16 NSWLR 635
N Joachimson v Swiss Bank Corporation [1921] 3 KB 110
National and Grindlay's Bank Ltd v Dharamshi Vallabhji [1967] 1 AC 207
Ngurli Ltd v McCann [1953] HCA 39; (1953) 90 CLR 425
Norton v Ellam (1837) 2 M & W 461; 150 ER 839
Ogilvie v Adams [1981] VR 1041
Palindrome Holdings Pty Ltd v Wass [2009] NSWSC 797
Parker, In the matter of Purcom No 34 Pty Ltd (In Liq) [2010] FCA 263; (2010) 77 ACSR 525
Penrith Whitewater Stadium Ltd v Lesvos Pty Ltd [2007] NSWCA 176
Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187
Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91
Pilmer v Duke Group Ltd (In liq) [2001] HCA 31; (2001) 207 CLR 165
Powercell Pty Ltd v Cuzeno Pty Ltd [2004] NSWCA 51
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R v Aldridge (1990) 20 NSWLR 737
R v Byrnes [1995] HCA 1; (1995) 183 CLR 501
R v Williams [1942] AC 541
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Roscorla v Thomas [1842] 3 QB 234; (1842) 114 ER 496
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Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603
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The Bell Group Ltd (In Liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488
Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463
United Dominions Corporations Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR 1
Wakeford v Bishop of Lincoln (1921) 90 LJPC 174
Watson v Foxman (1995) 29 NSWLR 315
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Whitehouse v Carlton Hotel Pty Ltd [1987] HCA 11; (1987) 162 CLR 285
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Wickham v Marquis of Bath (1865) LR 1 Eq 17
Wilderness Society of WA (Inc) v Minister for the Environment [2013] WASC 307
Wright v Commonwealth [2005] VSC 200
Wright v Wakeford (1811) 4 Ves Jun 455; 34 ER 176
Young v Queensland Trustees Ltd (1956) 99 CLR 560

Texts referred to in judgment:

Baker J, An Introduction to English Legal History (4^th ed, 2002)

Chitty on Pleading (5^th ed, vol 1, 1831)

Dworkin, G Odgers' Construction of Deeds and Statutes (5^th ed, 1967)

Handford P, Limitation of Actions: The Laws of Australia (3^rd ed 2009)

Heydon, JD 'Are the duties of company directors to exercise care and skill fiduciary?' in Degeling and Edelman (eds) Equity in Commercial Law (Lawbook, 2005)

Ibbetson D, A Historical Introduction to the Law of Obligations (1999)

Lobban M, 'Contract' in The Oxford History of the Laws of England (vol XII, 2010)

Mansel G, A Treatise on the Law of Limitation (1839)

Martin K, 'Contractual construction: Surrounding circumstances and the ambiguity gateway' (2013) 37 Australian Bar Review (forthcoming)
Morrison, JA and Goolden, H A Treatise on Deeds by Robert Norton (2^nd ed 1928)

Peel E, Treitel: The Law of Contract (13^th ed revised, 2011)
Simpson AWB, A History of the Common Law of Contract (1975)

Table of Contents

Introduction

1. The pleaded cases

1.1 Netglory's case

1.2 Mr Caratti's and Hocking Land Company's defence and counterclaim

2. The relevant written terms of the Loan Agreement

3. The relevant written terms of the Guarantee

4. Matters which were not in issue or were abandoned

4.1 Estoppel by deed

4.2 Rectification

4.3 Misleading or deceptive conduct, unconscionable conduct and mistake

5. The formal requirements for a deed of Hocking Land Company and Mr Caratti were not satisfied

5.1 Non‑compliance with s 9(1)(b) of the Property Law Act 1969 prevents the documents being deeds of the Hocking Land Company or Mr Caratti

5.2 Attestation requires a written signature

5.3 Attestation must be contemporaneous with the signature witnessed

5.4 Even if attestation need not be contemporaneous, there was no delivery

5.5 Netglory's estoppel argument must be rejected

6. The first reason why Netglory's claims fail: no money was lent

6.1 Netglory's construction of the Loan Agreement

6.2 There is no relevant ambiguity in the Loan Agreement

6.3 The alleged oral agreement cannot contradict the written terms of the Loan Agreement

7. The second reason why Netglory's claims fail against the Hocking Land Company: time bar

7.1 The relevant Limitation Act is the 1935 Act

7.2 The limitation period for a specialty does not apply

7.2.1      Netglory's action is in debt
7.2.2      A contract under seal is a specialty but the Loan Agreement and Guarantee were not deeds
7.2.3      The action is not 'upon' the Loan Agreement and Guarantee even if they were specialties.

7.3 The limitation period for the Loan Agreement expired prior to the action

7.3.1 The action under the Loan Agreement was commenced after expiry of the limitation period
7.3.2 Netglory's plea of estoppel must be rejected

7.4 The limitation period did not expire for the Guarantee

7.4.1 The expiry of the Loan Agreement limitation does not bar the Guarantee
7.4.2 The sums guaranteed were not due until demanded

8. The third reason why Netglory's claims fail: The Loan Agreement and Guarantee were not supported by consideration

8.1 There was no consideration from the Hocking Land Company

8.2 There was no consideration for entry into the Guarantee by Mr Caratti

9. The fourth reason why Netglory's claims fail: The Loan Agreement was voidable and has been avoided

10. A related concern about Netglory's claim

11. The fifth reason why Netglory's claims fail: there was no oral agreement

11.1 Assessment of the credibility and reliability of the witnesses

11.2 Did Mr Caratti sign the Loan Agreement and the Guarantee?

11.2.1     The preparation and retention of the Loan Agreement and Guarantee
11.2.2     The absence of an attesting signature from Mr Pollock
11.2.3     Mr Caratti's signature

11.3 Findings of fact concerning the alleged oral agreements

11.3.1     Mr Pollock was not a truthful or reliable witness
11.3.2     Ms de Hollander did not give independent consideration to the affairs of the Hocking Land Company and was not a reliable witness
11.3.3     Mr Pollock's evidence concerning the basis for the alleged oral agreements was inconsistent and contradictory
11.3.4     The alleged oral agreements are inherently incredible
11.3.5     The documentary support for the alleged oral agreements is, at best, equivocal
11.3.6     Mr Caratti's account of the joint venture is far more plausible

12. Other witnesses

12.1 Mr John Caratti

12.2 Mr Murphy

12.3 Mr Masel

13. Other submissions by the Hocking Land Company

13.1 The submission that deeds require consideration to be enforced

13.2 The submission that Netglory was not a party to the Guarantee

13.3 The submission concerning the intention of the draftsman of the deeds

14. Conclusions on the claim and on the counterclaim

EDELMAN J:

Introduction

The essence of this trial is a claim by Netglory for 'repayment' of a 'loan'. Netglory seeks 'repayment' from the Hocking Land Company even though Netglory admits that no money was ever paid by it to the Hocking Land Company.
Netglory's action is based on an undated written document bearing the description 'Loan Agreement' and said by Netglory to have been made on 21 February 2003. Netglory relies on that document and seeks repayment from the Hocking Land Company of $800,000 and interest at 20% compounding monthly.
The case began as a simple statement of claim by Netglory in 2010 seeking repayment of the loan under this Loan Agreement. But the case became a little more complex once it was common ground that the Loan Agreement on its literal terms is a fiction.
Netglory's case, as opened,[1] was that the meaning of 'advance' in the Loan Agreement is a promise by Netglory to abstain from demanding money which was somehow due from the Hocking Land Company to Netglory. That money was said to be due as a result of an antecedent oral agreement to which the Hocking Land Company was not a party.
[1] ts 123.
Netglory also sues Mr Caratti under a February 2003 alleged guarantee of the repayment by Hocking Land Company (the Guarantee). Mr Caratti was said to have guaranteed repayment of money which was never paid to the Hocking Land Company. The first demand was made under the Guarantee in November 2010,[2] more than seven years after the alleged default under the Loan Agreement.
[2] Exhibit A (witness statement of Mr Pollock 28 September 2012) [278]; Exhibit 1/132.
Netglory's case ultimately fails for four legal reasons. These are as follows:
(1)The Loan Agreement contains no relevant ambiguity and is dependent upon a loan being made for any obligation to repay to arise: [203] ‑ [249].
(2)The Loan Agreement is not a specialty and it is unenforceable due to the Limitation Act 1935 (WA): [250] ‑ [307].
(3)Neither the Loan Agreement nor the Guarantee is a deed due to the absence of attestation ([78] ‑ [202]) and neither is supported by consideration: [308] ‑ [337].
(4)The Loan Agreement involves a breach of duty by its sole director, Ms de Hollander, and it would be rescinded if it were valid: [338] ‑ [392].
Some of these legal issues involved are not simple. In particular, the requirements for attestation of a deed are matters which have divided courts for more than two hundred years. Other peripheral, but no less difficult, issues such as the nature of directors' fiduciary duties or rules of construction are matters of more recent dispute.
The issue concerning attestation in this case is whether the requirement for an attesting signature is met. A purported attesting signature was affixed by Mr Pollock while in jail nearly eight years after his alleged witnessing (but using his previous address and occupation).
Apart from these four legal reasons, the claim must fail in any event because I reject the evidence of Mr Pollock, upon which the pleaded oral agreement was based.
Netglory's action was orchestrated and controlled by Mr Pollock. Mr Pollock described his position with Netglory as a 'consultant'. In fact he asserted complete influence and control over the director of the company.
Mr Pollock's evidence was untruthful, contrived and wholly unreliable. I am not prepared to accept his evidence of oral agreements without clear documentary evidence to support such an agreement. The documentary evidence in this case is, at best, equivocal. And there are numerous circumstances which support the conclusion that the alleged oral agreements are simply incredible: [553] – [616].

The pleaded cases

1.1 Netglory's case

The initial case for Netglory, as set out in the letter from its solicitors to the solicitor for Mr Caratti, was as follows:[3]
The Loan Amount was advanced by way of transfer by Netglory to Hocking Land Company of the benefit of Contracts of Sale dated 23 April 2002 held by Netglory Pty Ltd with [the Abbonizios]. The Contracts of Sale had a net equity value of $800,000. The transfers of land were dated and registered on 6 January 2003, being the date the consideration of $800,000 was agreed by the Loan Agreement to have been advanced.
[3] Exhibit 1/224.

Although this case was more coherent than the amended pleading ultimately advanced by Netglory, there are serious errors in these allegations.
First, Netglory did not hold the benefit of the contracts of sale with the Abbonizios. Those contracts were with the Hocking Land Company.
Secondly, the two contracts of sale did not have a net equity value of $800,000. As the case developed at trial, Mr Caratti said that the contracts were worth approximately what the Hocking Land Company agreed to pay for them in April 2002. Mr Pollock's evidence was that he believed that the two lots were valued at $2.2 million, which was $800,000 more than the price which the Hocking Land Company had agreed to pay. But his case at trial focused on value of Lot 81 as well as Lots 82 and 83.
Netglory's later pleaded case in its statement of claim, reply, and defence to counterclaim was as follows.
At relevant times until 15 November 2010, Ms de Hollander was the sole appointed director, the secretary, and a shareholder of half of Netglory.[4]
[4] Further Re‑amended Defence and Counterclaim of Hocking Land Company 16 August 2013 [1.3(a) - 1.3 (c)]; Netglory’s Amended Reply and Defence to Counterclaim of Hocking Land Company 25 March 2013 [1(a)].
Around July 2002, Ms de Hollander (the third party in this action, acting through her agent, Mr Pollock), entered an agreement with the first defendant, Mr Caratti.
The terms of the July 2002 Agreement were as follows:
(a)Ms de Hollander and Mr Caratti would jointly carry out a sub‑divisional development of the properties at Lots 81, 82 and 83 Nicholas Road, Hocking.
(b)The second defendant, Hocking Land Company, would be used to carry out this Hocking development. The Hocking Land Company carried on business involving holding and developing land. Mr Caratti was a director of Hocking Land Company and Ms de Hollander was the sole shareholder.
(c)The Hocking development would be funded externally with any internal funding by a shareholder to accrue interest at a rate of 20% per month until repayment.
(d)At that time the net tangible asset value of the Hocking Land Company was $800,000.
(e)Ms de Hollander would transfer half of the issued shares in the Hocking Land Company (50 shares) to Mr Caratti for nominal consideration.
(f)Ms de Hollander and Mr Caratti would cause each other to be appointed as directors of Hocking Land Company.
(g)Ms de Hollander would be paid out the $800,000 net tangible asset value to enable the Hocking development to be funded entirely from external funding.
This July 2002 Agreement is said to be 'evidenced' by a Substituted Shareholders' Agreement executed in October 2002 by Ms de Hollander and Mr Caratti.
Netglory also pleads two events which occurred pursuant to the terms of the July 2002 Agreement. The first is that Mr Caratti became a director of Hocking Land Company. The second is that Ms de Hollander transferred to Mr Caratti half of the shares in the Hocking Land Company (50 shares) for nominal consideration.
Netglory says that around early 2003, Ms de Hollander (again by her agent Mr Pollock) and Mr Caratti agreed to provide for the extraction of the net tangible asset value of the Hocking Land Company. They agreed that this would be accomplished in the following way.
(a)They would cause Hocking Land Company to enter a deed with Netglory (Ms de Hollander's nominee) in which Hocking Land Company would pay $800,000 to Netglory with interest at 20% per annum as long as the principal sum remained outstanding; and
(b)Hocking Land Company would mortgage land to Netglory to secure the $800,000 and interest; and
(c)Mr Caratti and Ms de Hollander would guarantee Hocking Land Company's performance of its obligations under the 'Loan Agreement'.
Netglory says that 'pursuant to the [July 2002 Agreement]' the following events occurred:
(a)Hocking Land Company entered a deed with Netglory 'whereby it agreed to pay to [Netglory] upon demand any time after 31 December 2004' $800,000 and interest at a rate of 20% per annum, capitalised monthly. For the sake of clarity, I will use the abbreviation Loan Agreement to describe this deed upon which Netglory sues.
(b)Hocking Land Company mortgaged land to Netglory to secure its payment of the $800,000 and interest (the Mortgage).
(c)Mr Caratti and Ms de Hollander executed a Deed of Guarantee whereby they undertook to indemnify Netglory in respect of any default by the Hocking Land Company in respect of its repayment of the $800,000 and interest.
In reply, Netglory pleaded that Netglory (by Mr Pollock) and the Hocking Land Company (by Mr Caratti) agreed to vary the Loan Agreement so that the Hocking Land Company would pay the Loan Amount from the proceeds of sale of the subdivided lots created from Lots 81, 82 and 83 Nicholas Road immediately after the repayment by the Hocking joint venture of its external financiers.[5]
[5] Netglory's Amended Reply and Defence to Counterclaim of Hocking Land Company 25 March 2013 [14(b)(ii)(B)].
On 23 November 2010, Netglory made a statutory demand of the Hocking Land Company for $3,050,794.89. This was the amount said to be owing under the Loan Agreement.
The Hocking Land Company did not pay any of the sum demanded. Netglory now claims $3,050,794.89 in a common law action for debt under the Loan Agreement. The Hocking Land Company also claims the same amount against Mr Caratti under the Guarantee. A separate claim is also brought for interest at the rate of 20%, compounded monthly.

1.2 Mr Caratti's and Hocking Land Company's defence and counterclaim

The Hocking Land Company and Mr Caratti raise various defences to Netglory's claim. In summary, the defences which were maintained by the defendants, and the paragraphs below where I address each defence, are as follows.
(1)On its proper construction, the Loan Agreement contains no relevant ambiguity and was dependent upon a loan being made for any obligation to repay to arise: [217] ‑ [233].
(2)Both the Loan Agreement and the Guarantee are unenforceable due to the Limitation Act 1935 (WA): [250] ‑ [307].
(3)Neither the Loan Agreement nor the Guarantee is a deed due to the absence of attestation ([78] ‑ [202]) and neither is supported by consideration: [308] ‑ [337].
(4)The Loan Agreement involves a breach of Ms de Hollander's director's duties and it should be avoided: [338] ‑ [392].
(5)Netglory's claim is for specific performance and a deed cannot be specifically enforced by a volunteer: [728] ‑ [736].
(6)Netglory was not a party to the Guarantee: [737] – [752].
(7)Mr Caratti did not sign the Loan Agreement, the Mortgage, or the Guarantee either in his personal capacity or as a director of the Hocking Land Company. Nor did he authorise anyone to do so: [438] ‑ [484].
Defences (1), (2) (in part), (3), and (4) all succeed. Each is a reason why Netglory's claims must fail and why the counterclaim must be allowed.
In any event, Netglory's case also fails on the factual basis that I do not accept that any of the alleged oral agreements were ever made in the terms Mr Pollock asserted.
I find Mr Pollock's evidence to be so lacking in any honesty or credibility that I am not prepared to accept any of his evidence. The documents upon which he relied to establish the alleged oral agreement do not unequivocally point to an agreement in the terms he alleged or any clear terms, referable to any oral agreement for a loan.

The relevant written terms of the Loan Agreement[6]
[6] Exhibit 1/ 79; Exhibit 1/85.

The Loan Agreement is undated, although it provides for a blank day and month in 2003.
The parties to the Loan Agreement are Netglory (as Lender), the Hocking Land Company (as Borrower) and Mr Caratti and Ms de Hollander (as Additional Covenantor).
Matters are slightly confused by defined term 'Covenantor' which means Hocking Land Company (as Borrower) and the Additional Covenantor (Mr Caratti and Ms de Hollander).
The first part of the Loan Agreement falls under the heading 'Schedule'.
After the Schedule, the Loan Agreement then contains recitals. The two recitals are as follows:
This Loan Agreement is made between the Lender [Netglory] and the Covenantor [Hocking Land Company, Mr Caratti, and Ms de Hollander] in the following circumstances:
A.The Lender [Netglory] has or has agreed to advance the Loan Amount to the Borrower [the Hocking Land Company] at the request of the Additional Covenantor [Mr Caratti and Ms de Hollander].
B.The terms of the agreement between the Lender [Netglory] and the Covenantor [Hocking Land Company, Mr Caratti, and Ms de Hollander] are set out below.
Recital A, in its literal meaning, is false. At the time of the Loan Agreement, Netglory had not agreed to advance, nor had advanced, the Loan Amount to the Hocking Land Company at the request of Mr Caratti or Ms de Hollander.
The Loan Agreement then sets out an 'Operative Part'. Clauses 1 to 25 of the Operative Part are prefaced by the words:
The Lender [Netglory] has advanced or agrees to advance the Loan Amount to [the Hocking Land Company] on the following terms ...
The Interpretation section of the Loan Agreement (clause 24) defines 'Loan Amount' as follows:
the amount due by [the Hocking Land Company] to [Netglory] under this agreement and includes the amount specified in the Schedule as the Loan Amount.
The amount specified in the Schedule as the Loan Amount is $800,000. The Schedule also provides that this amount 'was advanced to the Borrower on 6 January, 2003'.
After having provided that Netglory has advanced or agrees to advance the Loan Amount to Hocking Land Company on the following terms, the Operative Part of the Loan Agreement provides for terms as follows.
Clause 1 provides for 'Conditions precedent to Advance'. It provides that Netglory's 'obligation to advance the Loan Amount' or make any further advance to the Hocking Land Company is conditional upon execution of 'securities for repayment of the Loan Amount' (defined as the Securities) which are an unregistered mortgage from the Hocking Land Company and a guarantee from Mr Caratti and Ms de Hollander.
The conditions precedent also require Netglory to be satisfied that
(i)the Securities have been properly signed;
(ii)they are capable of registration with relevant authorities; and
(iii)Netglory's enquiries regarding the Securities have not disclosed any material adverse facts which would render the Securities unsatisfactory to Netglory.
Finally, there is also a condition precedent that Netglory is satisfied that the Hocking Land Company has paid all costs, fees and charges required by Netglory 'in connection with the matters contemplated by this agreement'.
Clauses 2 and 3 provide for the Hocking Land Company to pay interest.
Clause 2 provides for interest to be payable on the balance of the 'Loan Amount outstanding from day to day' at the Higher Rate (20% per annum). An exception is made for interest payable at a Lower Rate (also 20% per annum) while Hocking Land Company is not in default.
Clause 3 provides for interest to be paid by the seventh day of the following month. Interest which is not paid will be capitalised and will accrue interest as if it were part of the Loan Amount.
Clause 4 provides that the Loan Amount and all other money due by Hocking Land Company to Netglory under the Loan Agreement are payable on demand provided that Netglory agrees not to make demand before the Repayment Date as long as there is no breach of Hocking Land Company's covenants.
Clause 24 provides that the Repayment Date is the date specified in the Schedule. The Schedule provides for the Repayment Date of the 31^st of December 2004.
Clause 5 provides for an obligation of the Hocking Land Company to pay all Netglory's reasonable costs in relation to a number of matters including (5.1) preparation, execution, stamping and registration of the Loan Agreement, the Securities and any discharge; (5.2) any exercise or attempted exercise of Netglory's powers; and (5.3) any breach of the Hocking Land Company's covenants.
Clauses 7 and 8 provide for the payment of the Loan Amount to be secured by Securities.
The Securities must be signed and delivered by the Hocking Land Company to Netglory contemporaneously with the Loan Agreement.
Clause 24 defines Securities as 'securities for repayment of the Loan Amount, details of which are specified in the Schedule'. The Schedule provides that the Securities are an unregistered mortgage granted by the Hocking Land Company over all the land in Certificates of Title volume 2530 folio 695 and volume 2530 folio 696 (Lots 81 and 82) and a guarantee granted by Ms de Hollander and Mr Caratti to Netglory.
Clause 10 provides for default in various circumstances by Hocking Land Company. These circumstances include if Hocking Land Company breaches a term of the Loan Agreement (10.1.1); or Hocking Land Company fails to pay any money due to Netglory on the due date (10.1.3); or there is a change in the ownership or control of Hocking Land Company (10.6.2).
Clause 11 provides that if a default occurs then Netglory may, at any time, demand immediate payment of the outstanding balance of the Loan Amount and any other money payable to Netglory under the Loan Agreement or any Security.

The relevant written terms of the Guarantee

The Guarantee is also undated. It provides in the opening line for dates to be inserted for a day and month in 1996. Mr Britten's evidence, in cross‑examination, was that the reference to 1996 was an error by him when he drafted the Guarantee.[7]
[7] ts 377 (Mr Britten).
The Guarantee is between Netglory (as Lender) and Ms de Hollander and Mr Caratti (as Guarantors). It cross‑refers to the Loan Agreement and describes the Loan Agreement as dated '21 day [sic] of February, 2003 made between the [Hocking Land Company] as borrower and [Netglory] as lender'.
By a definition section, clause 27, and the Schedule, the term Collateral Security is defined as the Loan Agreement and the Mortgage between Netglory and the Hocking Land Company dated 21 February 2003.
The recitals to the Guarantee are as follows:
This Deed of Guarantee is made between [Netglory] and [Mr Caratti and Ms de Hollander] in the following circumstances:
A.At the request of [Mr Caratti and Ms de Hollander], [Netglory] has agreed to continue to provide financial accommodation to [the Hocking Land Company] subject to [Mr Caratti and Ms de Hollander] executing this Deed of Guarantee.
B.[Mr Caratti and Ms de Hollander have] agreed to be surety for the obligations of [the Hocking Land Company] under the [Loan Agreement].
Following the recitals, the operative part of the Guarantee provides as follows.
Clause 1 provides that in consideration of Netglory at the request of Mr Caratti and Ms de Hollander either (i) executing the Loan Agreement or (ii) forbearing from enforcing immediately Netglory's powers in the Guarantee, Loan Agreement or Mortgage, Mr Caratti and Ms de Hollander guarantee the payment to Netglory of all money now or in the future due and payable to Netglory under the Mortgage and the observance and performance of the Hocking Land Company's Covenants.
Clause 2 provides that if there is any default in payment of any money due to Netglory under the terms of the Mortgage, Mr Caratti and Ms de Hollander agree to pay to Netglory the amount then due.
Clause 3 provides that if there is any breach of the Hocking Land Company's Covenants in the Guarantee, Loan Agreement, or Mortgage then, upon notice from Netglory, Mr Caratti and Ms de Hollander are required immediately to remedy that breach.
Clause 5 provides that the Guarantee and the liability of Mr Caratti and Ms de Hollander under the deed will not be affected by a number of matters. Those matters include Netglory failing or neglecting to recover any money owing to it under any Mortgage or otherwise (clause 5.4); and Netglory failing or neglecting to exercise any of Netglory's Powers under the Guarantee, Loan Agreement, or Mortgage (clause 5.5).
Clause 11 provides that
If any claim is upheld, conceded or compromised that any transaction affecting in any way any money payable to the lender under any Collateral Security [Loan Agreement or Mortgage] or the observance and performance of the Borrower's Covenants [under Guarantee, Loan Agreement, or Mortgage] is void or voidable then:‑
11.1[Netglory] will become entitled against [Mr Caratti and Ms de Hollander] to all rights and respect of any money payable under any Collateral Security [Loan Agreement or Mortgage] or the observance and performance of the other Borrower's Covenants [under the Guarantee, Loan Agreement, or Mortgage] as if that transaction had not taken place.

Matters which were not in issue or were abandoned

4.1 Estoppel by deed

In written opening submissions counsel for Netglory initially made submissions concerning estoppel by deed. Subsequently, at a directions hearing,[8] and then by email to the Court,[9] and again in opening,[10] counsel for Netglory abandoned any claim based on estoppel by deed.
[8] Directions hearing 9 August 2013.
[9] Email sent 8 August 2013.
[10] ts 123.
In Matthew v Osborne,[11] Williams J explained that '[i]t is fully established, with respect to estoppels by deed and estoppels in pais, that they must be pleaded if the party has the opportunity, or the estoppel is waived'.
[11] Matthew v Osborne (1853) 13 CB 919, 944; 138 ER 1465, 1475.
More recently, in Berry v Wong,[12] Young J explained that
whether estoppel by deed is a rule of evidence or something more, if the point is not taken as soon as practicable after it is raised, it is waived. The Court now having in evidence what the true position was and the point only being taken in closing addresses must mean that if there was any estoppel it has been waived.
[12] Berry v Wong [2000] NSWSC 1002 [23].
In the absence of a claim of estoppel by deed, no defence to an estoppel by deed needed to be raised. Nor was there any submission made concerning whether the words in the recital were 'certain, precise and unambiguous'.[13] In particular, if the recital were relied upon to support an estoppel based upon an allegation that money had been lent then questions would arise concerning whether the meaning of 'had advanced or has agreed to advance' was sufficiently precise to support an estoppel. Nor was there any necessity to rely upon or consider the extent of the rule deriving from Chancery that a receipt clause in a deed does not permit an estoppel if the money had not been paid.[14]

4.2 Rectification

[13] Caboche v Ramsay [1993] FCA 611; (1993) 119 ALR 215, 237 (Gummow J); Shanemist Pty Ltd v Denmac Nominees Pty Ltd [2003] QSC 373 [24] (Chesterman J).

[14] Cousens v Grayridge Pty Ltd; Hillside Way Pty Ltd v Grayridge Pty Ltd [2000] VSCA 96 [58] (Batt JA); Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91, 100 (the Court); Labracon Pty Ltd v Cuturich [2013] NSWSC 97 [163] (Lindsay J).

At no stage in the pleadings or during the hearing did Netglory advance any claim for rectification of the Loan Agreement and Guarantee.
Although the draftsman of the documents, Mr Britten, was called, the absence of a plea of rectification meant that he was not asked about his instructions in relation to drafting the Loan Agreement and the Guarantee. He did not say 'what his… instructions were, and that particular words were included in the document by mistake'.[15]
[15] Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603, 657 [270] (Campbell JA); Mortimer v Shortall (1842) 2 Dr & War 363, 370 (Sir Edward Sugden).
In the absence of a pleaded or expressed claim for rectification, none of the possible defences to any claim for rectification of the Loan Agreement was raised.[16]

4.3 Misleading or deceptive conduct, unconscionable conduct and mistake

[16] Greer v Kettle [1938] AC 156, 171 (Lord Maugham); Dong v Monkiro [2005] NSWSC 749 [68] (Hall J).

In oral closing submissions, counsel for the Hocking Land Company and Mr Caratti abandoned any reliance on the pleaded counterclaims for misleading or deceptive conduct[17] and unconscionable conduct.[18]
[17] ts 601.
[18] ts 602.
Shortly after closing submissions, counsel for the Hocking Land Company emailed the other parties and the Court and abandoned any reliance upon mistake.[19]
[19] Email sent 23 August 2013.
These claims were understandably abandoned. Mr Caratti's defence that he had not signed the Loan Agreement or Guarantee was, at least, in significant tension with his alternative defence that his signature had been procured by trickery or mistake.
There were also evidentiary difficulties with the conclusion that Mr Pollock could have tricked Mr Caratti into signing the Loan Agreement and Guarantee.
In 2005 Mr Caratti had four accountants.[20] He also relied heavily on lawyers. And at the time he was said to have signed the Loan Agreement and Guarantee his lawyers were sending him bills of $30,000 to $40,000 a month.[21]
[20] ts 486 (Mr Caratti).
[21] ts 469 (Mr Caratti).
The legal difficulties with the pleas of misleading or deceptive conduct and unconscionable conduct also included the absence of any substantial evidence that Mr Caratti, in signing the Loan Agreement and Guarantee, relied on any material matter which could amount to misleading or deceptive conduct or unconscionable conduct.

The formal requirements for a deed of Hocking Land Company and Mr Caratti were not satisfied

A deed can be unilateral (including by deed poll) or it can be inter partes (between the parties, historically often by indenture).
As to a unilateral deed by deed poll, it can be sued upon by any person for whose benefit a covenant in a deed poll is expressed to be made, if named or sufficiently identified in it.[22]
[22] Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166, 206 [141] (Gummow & Hayne JJ) citing Norton, R A Treatise on Deeds, (2nd ed, 1928) 28 - 29; Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488, 542 [253] (McLure JA); A & K Holdings; Sunderland Marine Insurance Co v Kearney 117 ER 1136; [1851] 16 QB 925, 938 (Sholl J).
As to a deed between parties, the 'ancient [common] law' was that in a deed made between parties only a party could enforce the covenants in the deed.[23]
[23] Beswick v Beswick [1968] AC 58,102 (Lord Upjohn); Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166, 213 [141] (Gummow & Hayne JJ)
On their proper construction, both the Loan Agreement and the Guarantee purported to be deeds between the parties. Neither was unilateral. The Loan Agreement and Guarantee were bilateral agreements purportedly in the form of deeds. They were not deed polls, although there is one peculiarity in this respect about the Guarantee.
The peculiarity of the Guarantee is that its execution section provides that it is 'signed as a deed by the parties' but provides only for a place for execution by the guarantors. There is no place for execution by the lender.
In Mr Pollock's witness statement, he said that he witnessed Mr Caratti's signature on the Loan Agreement and on the Guarantee.[24] But then he said: 'I didn't sign as a witness to the deed of guarantee or the loan agreement as a witness until January 2011. For some reason I simply overlooked signing my copy of the documents at the time'.[25] Mr Pollock later explained in cross‑examination that he was not sure of the date when he had signed as a witness.[26]
[24] Exhibit A (witness statement of Mr Pollock 28 September 2012) [229].
[25] Exhibit A (witness statement of Mr Pollock 28 September 2012) [230].
[26] ts 237 (Mr Pollock)
It would be sufficient for these reasons for decision to say that the documents are not deeds, and cannot be enforced as deeds at common law, because Mr Caratti's signature was not witnessed. On the balance of probabilities, I am not prepared to accept Mr Pollock's evidence that he was present and observed Mr Caratti's act of signing. But, in deference to the substantial legal arguments about attestation, I explain below the other reasons why the Loan Agreement and Guarantee were not deeds even if Mr Pollock had witnessed Mr Caratti's signature.
Mr Pollock said that he signed the documents after his lawyer, Mr Birman, advised him that provided Mr Pollock had, in fact, witnessed Mr Caratti's signature on that occasion nine years ago then there was no difficulty with Mr Pollock subsequently signing as a witness.[27]
[27] Exhibit A (witness statement of Mr Pollock 28 September 2012) [231] - [232].
As I explain below, Mr Pollock signed the two originals of the Loan Agreement and the Guarantee after the statement of claim had been filed. He signed them at a time when it had been made manifest to him that Hocking Land Company and Mr Caratti would deny that they were bound by the Loan Agreement and the Guarantee.[28]
[28] Defence of Mr Caratti, 16 December 2010 [3], [4.4], [5], [6.2].
The first issue is whether the Loan Agreement and Guarantee are deeds of the Hocking Land Company and Mr Caratti in circumstances in which the signature of a witness is inserted years after the witness claims to have been present and observed the signing.
The answer to this question depends upon the meaning of the words in s 9 of the Property Law Act 1969 (WA). That Act implemented dramatic reforms to the law of property. Section 9 provides as follows:
9.Formalities of deed
(1)Every deed, whether or not affecting property ‑
(a)shall be signed by the party to be bound thereby; and
(b)shall be attested by at least one witness not being a party to the deed but no particular form of words is required for the attestation.
(2)It is not necessary to seal any deed except in the case of a deed executed by a corporation under its common or official seal.
(3)Formal delivery and indenting are not necessary in any case.
(4)Every instrument expressed or purporting to be an indenture or a deed or an agreement under seal and which is executed as required by this section has the same effect as a deed duly executed in accordance with the law in force immediately prior to the coming into operation of this Act.
Netglory made four submissions concerning the requirement in s 9(1)(b).
The first submission was that non‑compliance with s 9(1)(b) does not prevent the document from having effect as a deed between the parties.
The second submission was that the word 'attest' means that the witness must be present at the signature of the party to be bound but does not require that the witness sign to signify that presence.[29]
[29] ts 130 - 131.
The third submission was that attestation is satisfied provided that the witness is present at the signature and subsequently, even years later, subscribes his or her signature as an attesting witness.
The fourth submission was that the defendants are estopped from denying that the Loan Agreement and Guarantee took effect as deeds.
In this section of my reasons I deal with each of these submissions in turn.

5.1 Non‑compliance with s 9(1)(b) of the Property Law Act 1969 prevents the documents being deeds of the Hocking Land Company or Mr Caratti

Netglory submitted that the Loan Agreement and Guarantee could still be deeds of Hocking Land Company or Mr Caratti even if they did not satisfy the requirement of attestation in s 9(1)(b). This submission should be rejected for three reasons.
First, the legislative intention, revealed by the language of the provision and its history, purpose and context, is that non‑compliance with the requirements of s 9 should prevent the document becoming a deed.
In Project Blue Sky Inc v Australian Broadcasting Authority,[30] the majority observed that an act which is done in breach of a condition which regulates the exercise of a statutory power will not necessarily be invalid. Invalidity will depend upon a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.
[30] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 388 - 389 [91] (McHugh, Gummow, Kirby & Hayne JJ). See also Wilderness Society of WA (Inc) v Minister for the Environment [2013] WASC 307 [199] - [202] (Martin CJ).
The same reasoning applies to legislation that regulates the manner in which a private person is required to exercise a power to affect legal relations. As the majority explained in Project Blue Sky, the 'real issue is whether an act done in breach of the legislative provision is invalid' having regard to the language of the provision and the scope and operation of the statute.[31]
[31] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 390 - 391 [93] (McHugh, Gummow, Kirby & Hayne JJ).
The language of s 9 of the Property Law Act is in mandatory terms. The section requires that deeds shall be attested. The exception in the proviso to s 9 emphasises that no particular form of words is required which suggests that the other elements are required.
Further, s 9(1)(b) cannot be read independently of s 9(1)(a). If a deed were capable of having valid effect between the parties despite non‑compliance with s 9(1)(b) then it would also need to have valid effect between the parties despite non‑compliance with s 9(1)(a). There is no basis for treating the legislative intention in relation to each limb differently. This would mean that the deed could be valid despite not having been 'signed by the party to be bound thereby'. Netglory properly did not suggest this absurd consequence.
Further still, the history against which Australian legislative provisions such as s 9 were enacted also emphasises the legislative intention to prescribe essential requirements for the validity of a deed.
As I explain below at [122] ‑ [158], this history involved centuries of protracted litigation at common law involving invalidity of deeds, particularly those which breached requirements of form existing in statutes or powers. The Property Law Act reduced those formal requirements and created a single, unitary regime containing the mandatory minimum requirements for a deed. The explanatory memorandum to the Property Law Bill 1969 described clause 9 as serving the goal of providing 'a simple and uniform method for execution of a deed and dispens[ing] with the necessity for sealing, indenting and formal delivery'.[32]
[32] Explanatory Memorandum, Property Law Bill 1969 (WA) 3.
Secondly, judicial decisions on s 9 as well as those in relation to s 38(1) of the Conveyancing Act 1919 (NSW) recognise s 9 as imposing requirements for validity.
In Atwell & Atwell v Roberts (No 3),[33] E M Heenan J explained that '[w]itnessing of a deed was not essential for formal execution at common law but it is under s 9 of the Property Law Act'.
[33] Atwell & Atwell v Roberts (No 3) [2009] WASC 96 [155]. On appeal: Atwell & Atwell v Roberts (No 3) [2013] WASCA 37 [185] - [186]; (2013) 43 WAR 507, 547 - 548 (Buss JA).
There have also been decisions in relation to s 38(1) of the Conveyancing Act 1919 (NSW) which have reached this conclusion. That provision adopts a very similar form of words to those in Western Australia: 'Every deed, whether or not affecting property, shall be signed as well as sealed, and shall be attested by at least one witness not being a party to the deed; but no particular form of words shall be requisite for the attestation'.
Decisions on the New South Wales equivalent provision are pertinent for interpretation of s 9. The Western Australian Property Law Bill was authored by Mr Adams QC, lecturer in Real Property and Conveyancing at the University of Western Australia. Mr Adams drafted the Bill based upon innovations in overseas jurisdictions and other Australian States including New South Wales.[34]
[34] Explanatory Memorandum, Property Law Bill 1969 (WA) 1.
In Mostyn v Mostyn,[35] Young J explained that in s 38(1) of the Conveyancing Act 1919 (NSW):
the legislature was endeavouring to introduce as a statutory requirement what had been in fact done for many years previously, that is, to ensure that with respect to each person signing the document, there would be some independent person who saw the party execute the deed and who himself signed the deed to witness that fact. (Emphasis added).
[35] Mostyn v Mostyn (1989) 16 NSWLR 635, 639.
In Mostyn, Young J held that the document could not take effect as a deed because the signatures of seven of the eight witnesses to the deed were not the signatures of independent witnesses.
Similarly, in Burns v Lorac[36] Beaumont J considered the meaning and effect of s 216(2) of the Bankruptcy Act 1966 (Cth) which provides that '[t]he execution of the deed by the debtor and by the trustee shall be attested by a witness'. His Honour held that the consequence of failure to comply with the requirement for attestation meant that the deed was invalid:[37]
[W]e are concerned with the initial stage of the valid execution of the deed itself. For the reasons I have given, that execution was defective and it is not possible to regard the defect as merely formal or as not substantial (cf s 222(3)).
[36] Burns v Lorac (1985) 4 FCR 301.
[37] Burns v Lorac (1985) 4 FCR 301, 304.
In Burns, Beaumont J also rejected an argument that the deed could operate independently in equity inter partes notwithstanding its failure to comply with s 216(2).[38]
[38] Burns v Lorac (1985) 4 FCR 301, 304.
Thirdly¸ properly understood, the cases relied upon by Netglory do not support its submission. Rather, they provide a useful contrast with s 9(1) of the Property Law Act.
Netglory relied upon two cases which were cited by Odgers' Construction of Deeds and Statutes[39] for the proposition that '[e]ven where a statute requires attestation, an unattested instrument may, on the true construction of the statute, in some cases be valid between the parties to it, even though it is ineffective as against third parties'.[40]
[39] Dworkin, G Odgers' Construction of Deeds and Statutes (5^th ed, 1967)14.
[40] Netglory's closing submissions further annotated 29 August 2013 [241].
The two cases cited in Odgers are Davis v Goodman[41] and National and Grindlay's Bank Ltd v Dharamshi Vallabhji.[42] Both concern legislation with critically different language and structure from s 9 of the Property Law Act. The first is a 19^th century decision concerning English legislation. The second is a decision concerning Kenyan legislation.
[41] Davis v Goodman (1880) 5 CPD 128.
[42] National and Grindlay's Bank Ltd v Dharamshi Vallabhji [1967] 1 AC 207.
The decision in Davis concerned s 8 and s 10 of the Bills of Sale Act 1878 41 & 42 Vict c 31. The English Court of Appeal held that a Bill of Sale was not void between the grantor and grantee even if it violated the provisions of the Bills of Sale Act. In that case, a deed was not explained to the grantor and also was not attested by a solicitor as required by the Bills of Sale Act.
Section 8 required that every bill of sale shall be attested and registered and 'shall set forth the consideration for which such bill of sale was given'. The section then provided that the failure to do so meant that the bill of sale 'shall be deemed fraudulent and void' against various classes of persons such as 'all trustees or assignees of the estate of the person whose chattels, or any of them, [as] are comprised in such bill of sale ...'.
Section 10 provided for the mode of attestation and registration of Bills of Sale including (in s 10(1)) that
[t]he execution of every bill of sale shall be attested by a solicitor of the Supreme Court, and the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting solicitor.
As Thesiger LJ explained, 'the sole result of not performing the directions contained in [s 8] is to avoid the [bill of sale] against certain specified persons, of whom the grantor is not one'.[43] Further, as Bramwell LJ explained, the provisions in s 10 were inserted for the benefit of the general creditors.[44] Both of these matters, which were essential for the decision in Davis, are critically different from the language and purpose of s 9 of the Property Law Act.
[43] Davis v Goodman (1880) 5 CPD 128, 129.
[44] Davis v Goodman (1880) 5 CPD 128, 128.
There are also critical differences in legislative language and structure that can be seen in relation to the legislation considered in the decision in National and Grindlay's Bank.
In National and Grindlay's Bank, the respondents gave a letter of hypothecation to the appellant bank. The letter was neither attested nor registered. Section 15 of the Chattels Transfer Act 1930 (Kenya) required that '[s]ealing shall not be essential to the validity of any instrument but every execution of an instrument shall be attested by at least one witness who shall add to his signature his residence and occupation'.
The decision of the majority of the Privy Council was delivered by Lord Pearson, with a powerful dissent by Lord Morris. Lord Pearson emphasised that '[t]he express provisions of the section, its context and the scheme of the Act have to be considered'.[45] An important factor in his Lordship's reasoning was a similar matter to that in Davis: by s 13 and s 14, '[r]egistration is needed in order to make the instrument effective against persons who are not parties to it'[46] and all the surrounding sections to s 15 'show that the absence of registration affects only relations with persons who are not parties to the instrument and does not affect the relations between the parties to the instrument'.[47] Again, this is a basic difference in structure and language from the Property Law Act.
[45] National and Grindlay's Bank Ltd v Dharamshi Vallabhji [1967] 1 AC 207, 208.
[46] National and Grindlay's Bank Ltd v Dharamshi Vallabhji [1967] 1 AC 207, 224.
[47] National and Grindlay's Bank Ltd v Dharamshi Vallabhji [1967] 1 AC 207, 224.
For these reasons, any failure to comply with the requirements of s 9(1)(b) of the Property Law Act has the effect that the Loan Agreement and Guarantee are not deeds.

5.2 Attestation requires a written signature

The second submission by Netglory was that attestation is effectively a synonym for 'witnessing'. It was submitted that no written signature is required of the attesting witness.
The use of 'attested' in s 9(1)(b) is not defined. It is a word with a long history.
At common law there was no particular requirement for attestation. But attestation could be required by statute or by a power of appointment. The history and interpretation of the requirement of attestation by statute in cases involving powers of appointment was beset by technical argument. The arguments often involved circumstances in which the words of an attestation clause were not sufficient to cover all of the matters required to be attested.
Some technical objections to attestation were ameliorated by legislation in 1814.[48] But that legislation was only retrospective, not prospective.[49]
[48] Informal Attestation of Certain Deeds Act 1814 54 Geo 3 c168.
[49] See Moodie v Reid (1816) 1 Madd 516, 525; 56 ER 189, 192 ‑ 193 (Sir Thomas Plumer VC).
Section 9(1)(b) of the Property Law Act is the Western Australian equivalent of the modern legislation which partly remediated the technical objections concerning the formulation of attestation clauses. But nothing in s 9 of the Property Law Act suggested any deviation from the meaning and timing of an 'attestation' previously required by other statutes and instruments creating powers.

This history of litigation concerning attestation clauses remains directly relevant to the issue in this case concerning the meaning and timing of a required 'attestation'.
The leading case on attestation at the start of the 19th century was Wright v Wakeford.[50] In that case, a trust power for the sale of lands was required to be executed by being 'attested by two or more credible witnesses'. The trust power was ultimately held to be invalid. It was held that the attestation failed because it was only extended to the sealing and delivery of the deed, not the signature. Twenty years later the witnesses added a fresh attestation to the deed which also attested the signature, but a majority of the Court held that this subsequent attestation could not cure the defect.
[50] Wright v Wakeford (1811) 4 Ves Jun 455, 458; 34 ER 176, 177.
At first instance in Wright, the Lord Chancellor explained that for an attestation '[t]wo acts are therefore required: one, that he [the obligor] shall subscribe in their [the witnesses'] presence; the other, that they shall attest, that he has done so'.
The Lord Chancellor in Wright then directed the case for the opinion of the Court of Common Pleas.[51] In that court, the majority held that the subsequent attestation did not cure the defect. Even the dissentient, Sir James Mansfield CJ (dissenting only on the point concerning timing, addressed below), said that 'in the ordinary use of the word "attest", as applied to the execution of deeds, it is understood that witnesses should attest in writing; the principal end of which seems to be, to preserve evidence of the instruments being executed in the presence of the witnesses required'.[52]
[51] Wright v Wakeford (1812) 4 Taunt 213; 128 ER 310.
[52] Wright v Wakeford (1812) 4 Taunt 213, 223; 128 ER 310, 314.
In Burdett v Spilsbury,[53] the House of Lords was called upon to consider the decision in Wright. The issue in Burdett concerned the meaning of a phrase in a power of appointment. The phrase was 'in the presence of, and attested by, three credible witnesses'. A writ of error was brought to the House of Lords from the Court of Error which had applied Wright.
[53] Burdett v Spilsbury (1843) 10 C & F 340, 363; 8 ER 772, 781.
The House of Lords called upon the Queen's judges for their opinion. The House was comprised of a current, a former, and a future Lord Chancellor. After taking the advice of the Queen's judges, they agreed with the majority of the Queen's judges.
Lord Campbell began his speech in Burdett with the unfeigned respect and civility that powerfully marked 19th century English appellate discourse. Although explaining that the House was not bound to follow the opinion of the majority, his Lordship explained his pleasure in reaching agreement with the proffered opinions of the majority of the learned judges: 'it is always a very painful thing to differ from those venerable magistrates, who are always to be looked to with so much reverence and respect'.[54]
[54] Burdett v Spilsbury (1843) 10 C & F 340, 415; 8 ER 772, 800.
One of the judges in the majority to which Lord Campbell referred who delivered an opinion to the House in favour of the Plaintiffs in Error was Erskine J. His Lordship spoke of the meaning of the word 'attestation', 'when taken in its ordinary sense, both as applicable to deeds and wills, under the Statute of Frauds'. His Lordship said that the term is 'fully satisfied by the witnesses affixing their signature to the word "witness".' He explained that the object of attestation was 'that the persons whose interests may be affected by the will should have the means of knowing who the parties present were, and of ascertaining, through them' whether there had been compliance with the formal statutory requirements or requirements for the exercise of the power.[55]
[55] Burdett v Spilsbury (1843) 10 C & F 340, 363 - 364; 8 ER 772, 781.
The House of Lords took a similar approach. Lord Campbell spoke of the requirement of attestation under the power as well as under the Statute of Frauds. His Lordship spoke of the 'simple attestation by witnesses, that is, the subscription of their names'.[56]
[56] Burdett v Spilsbury (1843) 10 C & F 340, 416; 8 ER 772, 800.
The Lord Chancellor also said in his opinion upholding the majority view of the Queen's judges that '[t]he party who sees the will executed is in fact a witness to it; if he subscribes as a witness, he is then an attesting witness'.[57]
[57] Burdett v Spilsbury (1843) 10 C & F 340, 417; 8 ER 772, 801.
Seven years after the decision in Burdett, in Bryan v White[58] the question which arose concerned the meaning of the words 'shall attest and shall subscribe' in the Wills Act 1837 c 26, 7 Will 4 & 1 Vict.In an ex tempore decision, Dr Lushington said:
It was asked, what is the meaning of 'shall attest?' I feel under no difficulty in answering that question. 'Attest' means the persons shall be present and see what passes, and shall, when required, bear witness to the facts.
[58] Bryan v White (1850) 2 Rob Ecc 315, 317; 163 ER 1330.
The principle for which Bryan stands is that an attesting witness need not use any particular form of words. That principle is embodied in the formulation of s 9(1)(b) of the Property Law Act.
However, Bryandoes not stand for the proposition that signature by an attesting witness is not required. Indeed, in the Wills Act, the word 'attest' was used in addition to 'subscribe'. Nor does Bryan stand for a proposition that a signature subsequent to witnessing is sufficient. The issue in Bryanwas whether there had been a failure to comply with the Wills Act because the signature of the two witnesses did not contain words of attestation. If Bryanhad stood for these propositions it would have been inconsistent with the explanation of attestation given by the Lord Chancellor five years later in Roberts v Phillips.[59]
[59] Roberts v Phillips (1855) 4 El & Bl 450; 119 ER 162.
In Roberts v Phillips, one objection that was taken to the signature of an attesting witness was that there was nothing on the face of the will which could designate him as a witness. The Lord Chancellor said that[60]
[n]othing more is required than that the will should be attested by the witnesses; ie that they should be present as witnesses and see it signed by the testator, and that it should be subscribed by the witnesses in the presence of the testator; ie that they should subscribe their names upon the will in his presence.
[60] Roberts v Phillips (1855) 4 El & Bl 450, 453; 119 ER 162, 164.
In Shamu Patter v Abdul Kadir Ravuthan,[61] Lord Shaw, delivering the advice of the Privy Council, said that the interpretation of the words 'attest' and 'attestation' in Roberts v Phillips and in Bryan v White 'had invariably been followed'.[62]
[61] Shamu Patter v Abdul Kadir Ravuthan [1912] UKPC 66, 6.
[62] Shamu Patter v Abdul Kadir Ravuthan [1912] UKPC 66, 6.
In Wickham v Marquis of Bath,[63] Romilly MR discussed the effect of attestation in the context of the Statute of Mortmain which required the deed to be 'sealed and delivered in the presence of two or more credible witnesses'. The Master of the Rolls said:[64]
What is meant by attesting a will or a deed? It means, as I understand it, that one or more persons are present at the time of the execution for that purpose, and that as evidence thereof they sign the attestation clause, stating such execution.
[63] Wickham v Marquis of Bath (1865) LR 1 Eq 17.
[64] Wickham v Marquis of Bath (1865) LR 1 Eq 17, 24.
In that case, the omission of attestation by the second witness was a violation of the provisions of the Statute of Mortmain which had the effect that the deed was void.[65]
[65] Wickham v Marquis of Bath (1865) LR 1 Eq 17, 25.
In light of these authorities, the 'meaning of attestation' which is offered in Norton on Deeds[66] ought today to be uncontroversial. The editors, after citation of copious authority, explain:
Attestation means "that one or more persons are present at the time of the execution for that purpose" (i.e. for the purpose of attesting the execution) "and that as evidence thereof they sign the attestation clause, stating such execution" ... The witness must sign as witness and for the purpose of attesting the execution ... and consequently a party to the deed cannot be a witness. (Original emphasis.)
[66] Morrison, JA and Goolden, H A Treatise on Deeds by Robert Norton (2^nd ed 1928) 24.
If more modern authority is required then in HCK China Investments Ltd v Solar Honest Ltd,[67] Hely J said that '[a]ttestation ordinarily requires that a person is present at the time of execution of a document for the purpose of attesting the execution, and as evidence thereof signs the document'.
[67] HCK China Investments Ltd v Solar Honest Ltd [1999] FCA 1156; (1999) 165 ALR 680, 714 [181].
Another modern example is Ellison v Vukicevic.[68] Mrs Ellison entered into a written agreement with a quarrying firm which purported to be a deed. The solicitor who was the purported witness to Mrs Ellison's signature on the deed was not present when the document was executed by Mrs Ellison. The document was, therefore, not a deed. Young J adopted the statement above at [142] from the Master of the Rolls in Wickham v Marquis of Bath that attestation requires that one or more persons are present at the time of attestation and, as evidence thereof, they sign the attestation clause.
[68] Ellison v Vukicevic (1986) 7 NSWLR 104, 112 (Young J). See also Mostyn v Mostyn (1989) 16 NSWLR 635, 638 (Young J).
For these reasons, I reject the submission by Netglory that the attestation does not require the witness' presence to be recorded on the deed as an attesting witness.

5.3 Attestation must be contemporaneous with the signature witnessed

The next submission by Netglory was that s 9(1)(b) does not require 'as part of the act of attestation, that the witness signed the document at the time of execution of the document'.[69]Netglory relied upon Mr Pollock's signature on the deed from jail. I consider Mr Pollock's evidence in relation to his purported attestation below at [425] ‑ [437]. My conclusion is that Mr Pollock signed each of the documents before the Court, purportedly as an attesting witness, at some time in December 2010.
[69] Netglory's opening outline of submissions 31 July 2013 [16].
Netglory submitted that the deed became valid when Mr Pollock signed, purportedly as an attesting witness, more than seven years later than the signature which he said (but I reject) that he witnessed.
Whether attestation is required at the time of signature is an issue which divided early courts.
As I explained above, in Wright v Wakeford[70] one question was the effect of subsequent attestation of a deed purportedly made under a trust power for the sale of land. That trust power required attestation by two or more credible witnesses. At first instance, the Lord Chancellor considered 'the question, whether an attestation, not contemporaneous, but subsequent, would do'. He said that he had 'a very strong opinion, that a subsequent attestation would not do'.[71] The reason for this was that the execution of the power, by deed, was a limitation upon the use so that unless the limitation arose at the time of the use then it could not arise at all. In other words, if the limitation were not valid at the time, it could not subsequently become valid.
[70] Wright v Wakeford (1811) 4 Ves Jun 455; 34 ER 176.
[71] Wright v Wakeford (1811) 4 Ves Jun 455, 457; 34 ER 176, 177.
The Lord Chancellor then directed a case for the Court of Common Pleas, where a majority of the Court (Sir James Mansfield CJ dissenting) held that the attestation was required to be contemporaneous.[72]
[72] Wright v Wakeford (1812) 4 Taunt 213; 128 ER 310.
In a joint judgment, Heath, Lawrence and Chambre JJ held that 'the attestation required to constitute a due and effectual execution of the power, ought to make a part of the same transaction with the signing and sealing ... such being the usual and common way of attesting the execution of all instruments requiring attestation'.[73] Their Lordships did not confine themselves to the circumstance that the party to be bound had died at the time of subsequent attestation.
[73]Wright v Wakeford (1812) 4 Taunt 213, 225 - 226; 128 ER 310, 315.
This decision was followed two years later by Lord Ellenborough CJ in Doe v Peach.[74] In that case, the attestation was invalid because it was not expressed to extend to the act of signature. The Chief Justice confined his remarks to the circumstance in which the subsequent attestation by the witness sought to cure the defect in circumstances in which the party had died. Delivering the opinion of the Court, the Chief Justice said:
We think that [the defect in attestation] is not cured by the second attestation made after the death of one of the parties. It is not necessary to enter into the question at what precise time an attestation must be made; but it seems difficult, if not impossible, to say, that an attestation subsequent to the death of one of the parties should give an operation to their act, which it had not during the life of the parties. And upon this point also the case of Wright v Wakeford is an authority.[75]
[74] Doe on the Demise of Mansfield v Peach (1814) 2 M & S 576; 105 ER 496.
[75] Doe on the Demise of Mansfield v Peach (1814) 2 M & S 576, 582; 105 ER 496, 498.
Again, in Doe v Pearce,[76] a power was found to be invalid because the attesting witness did not attest the sealing as well as the signing. Serjeant Copley argued that a subsequent oral attestation by the witness was competent. But Gibbs CJ held that it was impossible to distinguish the case from Wright v Wakeford.The power was held to be invalid.
[76] Doe on the demises of John Hotchkiss and his wife Mary v Pearce (1815) 6 Taunt 402; 128 ER 1090.
My research suggests that modern authority concerning the timing of the statutory requirement of attestation is very limited. However, as a matter of principle, the approach of the majority in Wright should be preferred in the interpretation of s 9 of the Property Law Act for five reasons.
First, this interpretation is consistent with the authority which preceded s 9 in cases which involved a requirement of attestation under other statutes and powers, including the leading case of Wright. As I have explained above, the decision in Wright was approved by the House of Lords in the watershed case of Burdett v Spilsbury,[77] which considered the requirement for written signature of an attesting witness.
[77] Burdett v Spilsbury (1843) 10 C & F 340, 363; 8 ER 772, 781.
The assumption of contemporaneous attestation is also embodied in Roberts v Phillips,[78] (which was described by the Privy Council as having 'invariably been followed'[79]): 'it should be subscribed by the witnesses in the presence of the testator; ie that they should subscribe their names upon the will in his presence'.
[78] Roberts v Phillips (1855) 4 El & Bl 450, 453; 119 ER 162, 164.
[79] Shamu Patter v Abdul Kadir Ravuthan [1912] UKPC 66.
The passage on attestation in the leading work, Norton on Deeds, is also premised upon the assumption that attestation (including signature) is contemporaneous with witnessing: 'Attestation means that one or more persons are present at the time of the execution for that purpose (ie for the purpose of attesting the execution) and that as evidence thereof they sign the attestation clause ... .'[80] (Emphasis in original).
[80] Morrison JA and Goolden H, A Treatise on Deeds by Robert Norton (2^nd ed 1928) 24.
Section 9 was enacted against, and ought to be interpreted as incorporating, this historical understanding of the meaning of attestation.
Secondly, there is little reason to deny validity to a purported deed where the attesting witness signs after the party who was witnessed has died, as in Doe v Peach, but, at the same time, to permit the attesting witness to sign at any time, possibly many years later, when the party whose signature was witnessed is still alive. Many years after the event the living party might have little or no memory of the event.
Thirdly, s 9 of the Property Law Act sought to create uniformity of the requirements for creation of a deed. Parliament cannot have intended to do so in a manner which would undermine the purposes of attestation. If subsequent signature by an attesting witness were permitted then at least one of the purposes of the formality of written signature could be easily defeated.
One purpose of the attestation requirement in s 5 of the Statute of Frauds 1677 29 Car 2 was the goal of avoidance of fraud including by a written signature from an attesting witness. This purpose would be undermined if an alleged witness could simply sign the deed, many years later, even immediately before litigation or possibly even in the witness box.
Fourthly, s 9 of the Property Law Act was introduced to provide 'a simple and uniform method for execution of a deed and [to] dispense with the necessity for sealing, indenting and formal delivery'.[81]
[81] Explanatory Memorandum, Property Law Bill 1969 (WA) 3.
The intended simplicity of the formality in s 9 would be significantly undermined if the signature of an attesting witness were required (as explained above) but that signature could be affixed at any time after the transaction.
The consequent complications undermining the intended simplicity of s 9 might be expressed as a series of questions. How could a person wishing to rely upon the deed recall if the deed had been witnessed, especially after the passage of many years? How could any suspected witness be located without any subscription of his or her name? What would be the status of the purported deed which had not satisfied the requirement of signature but might do so in the future? Could a purported deed be invalid due to the absence of an attesting signature (as explained above) but subsequently become valid at an unknown point in time when the attesting witness signs? If so, would the cause of action accrue only when the deed became valid? Would the limitation period run only from that point in time so that the running of time might be indefinitely postponed? How could that point in time be determined if the attesting witness did not date his or her signature?
Fifthly, although contemporary authority on this point is slim, one modern reference touching on the issue of timing occurred in Edwards v Skilled Engineering Pty Ltd.[82] In that case, Priestley JA (with whom Kirby P and Meagher JA agreed) considered whether initials or 'a very stylized signature' was sufficient attestation. In finding that it was, Priestley JA said that the 'formalities necessary for the execution of the deed are, on the face of the deed, complied with'.
[82] Edwards v Skilled Engineering Pty Ltd (Unreported, NSWCA, 14 March 1989). See also Mostyn v Mostyn (1989) 16 NSWLR 635, 639 (Young J).
Netglory relied upon the decision in Reid Murray Holdings Ltd (in liq) v David Murray Holdings Pty Ltd.[83] That decision does not support Netglory's submission.
[83] Reid Murray Holdings Ltd (in liq) v David Murray Holdings Pty Ltd (1972) 5 SASR 386.
In that case, the affixing of the corporate seal of the company to be bound by the deed was not within the express authority of the directors. But the affixing of the seal was subsequently ratified by the directors. The issue was whether there had been proper delivery of the deed. Mitchell J held that there had been proper delivery.[84] There was no issue concerning attestation. No submission was made concerning whether the corporate seal had been properly attested. There was no discussion in the judgment about the requirements of attestation.

5.4 Even if attestation need not be contemporaneous, there was no delivery

[84] Reid Murray Holdings Ltd (in liq) v David Murray Holdings Pty Ltd (1972) 5 SASR 386, 393.

Netglory observed that the rate of interest disclosed by a loan of $800,000 at $13,000 per month is almost 20%. At 20% interest the monthly interest would be $13,333.[425] This is very close to the figure of $13,000 in the diary entry.
[425] ts 474 (Mr Caratti); Exhibit 1/43A.
Netglory submitted that this entry could only be an acknowledgement of the Loan Agreement. The reason why was said to be because
(i)the RAC Finance loan of $800,000 in relation to Lot 81 had been discharged and replaced with the Reliance Finance loan for $2.3 million in relation to Lots 81, 82 and 83. This had been arranged on 2 August 2002;[426] and
(ii)the interest payable under the RAC loan was substantially less than $13,000 a month.
[426] ts 498 (Mr Caratti).
Mr Caratti provided an explanation for this document which was consistent with the evidence he gave in his witness statement.
In his witness statement, Mr Caratti said that Mr Pollock told him that the RAC mortgage over Lot 81 was approximately $800,000 with monthly repayments of $13,000 per month. Mr Caratti said that he 'learned from company documentation that this was correct'.[427]
[427] Exhibit H (witness statement of Mr Caratti 7 May 2013) [178].
During their negotiations for a joint venture, Mr Caratti was provided with the note from Mr Pollock which set out an alleged debt of $537,333 to Mr Pollock/Ms de Hollander. One component of that debt was 'Interest. RAC $239,833.'
The implication which Mr Pollock must have intended Mr Caratti to draw was that Mr Pollock or Ms de Hollander had paid $239,833 in interest to the RAC (which they had not), and that the Hocking Land Company should recognise this debt to her, as it initially did.
I also accept Mr Caratti's evidence that Mr Pollock showed him an RAC interest statement dated 4 June 2002, a date which preceded Mr Caratti's entry into the Hocking Land Company as a shareholder and director. That statement provided as follows:[428]
[428] Exhibit 1/192.
Account Number
Lot 81 Nicholas Road Hocking
Current Principal Balance $800, 919.77
Interest Charged for
Month ending 31/5/02 $ 6,972.39
Total due$ 13,580.53
Mr Caratti said that this was what he was shown during a conversation with Mr Pollock. Mr Caratti said that he just looked at the bottom line.[429] Although the total interest on the statement is for two months, not one month, I accept that this is a reasonable error that could be made in the context of being shown a document as part of a conversation or negotiation.
[429] ts 514 (Mr Caratti).
In light of (i) the RAC interest statement which refers to an amount of $13,000; (ii) the note of the alleged debt to Mr Pollock/Ms de Hollander including RAC interest; and (iii) Mr Caratti's consistent evidence on this subject, I accept, on the balance of probabilities, his explanation for the entry in his spiral notepad that 'it refers to the 800,000 and it refers to the interest that RAC have charged him'.[430]
[430] ts 478, 479, 513, 514 (Mr Caratti).
As I explain below, I do not accept that in the 2002 joint venture discussions, Mr Pollock and Mr Caratti agreed that there would be no charge by Mr Pollock/Ms de Hollander for interest paid on the RAC loan. But I accept that this was the subject of negotiations and that Mr Caratti came to maintain, as he had entered in his diary, that Mr Pollock would not charge the Hocking Land Company for the interest payments alleged to have been made on the $800,000 RAC loan.
In this light, a further matter which also supports Mr Caratti's explanation is the reversal, at his direction in 2005, of the amount in the Hocking Land Company's accounts of the $239,833 which was initially posted as due to Ms de Hollander for her payment of interest on the RAC loan for Lot 81. That reversal is discussed above at [574] ‑ [589].
Fifthly, Netglory also relied upon several contracts of loan from, effectively, the 'Caratti side' to the 'Pollock side'.[431] Each loan was for more than a million dollars. Each was for 20% interest. The loan documents were described as the 'Lakeview Rise loan',[432] the 'Boban/Pineview loan' (or 'Bazzo loan'),[433] and the 'Cityzone loan'.[434]
[431] Exhibits 1/74, 1/88, 1/91; ts 507 (Mr Caratti).
[432] Exhibit 1/91.
[433] Exhibit 1/74.
[434] Exhibit 1/88.
Mr Pollock gave evidence that he had insisted upon the Loan Agreement to be documented in writing because he was 'quite angry' after Mr Caratti presented him, at the same time, with these three loan agreements to be signed.
Mr Pollock said that he told Mr Caratti that 'when he was owed money he wanted documentation and security but that when the Pollock family were owed money he didn't want any documents'.[435]
[435] Exhibit A (witness statement of Mr Pollock 28 September 2012) [212].
Mr Pollock said that the Loan Agreement was drafted by his solicitors as a consequence of that discussion with Mr Caratti. The Loan Agreement was said by Mr Pollock to have been signed on 21 February 2003.
Mr Pollock relied on a note which he made, and which Mr Caratti said was in Mr Pollock's handwriting,[436] on one of those three agreements, the Boban/Pineview Agreement.[437]
[436] ts 509 (Mr Caratti).
[437] Exhibit 1/74.
The handwritten note on the front of the Boban/Pineview agreement reads as follows:
Lender: Netglory P/L
Amount:$800,000
Start Date:Settlement 82 & 83 Nichol. Rd
Land Security: 81-82-83
Hocking Land Company: Borrower
G/Tor:A Caratti & JDH
I find that two agreements were provided to Mr Pollock in early February 2003. As Netglory's counsel put to Mr Caratti in cross‑examination, and Mr Caratti accepted, these were the Boban/Pineview (Bazzo) loan agreement and the Cityzone loan agreement.[438]
[438] ts 507 (Mr Caratti).
But the Lakeview Rise loan agreement involved an offer which was dated 21 February 2003[439] in Mr Caratti's handwriting.[440] I do not accept that this was presented to Mr Pollock before 21 February 2003.
[439] Exhibit 1/91.
[440] ts 463 (Mr Caratti).
I also find that at the time after the Boban/Pineview loan agreement was presented to Mr Pollock he made the note on the cover page and sent that page to Mr Britten.
Mr Britten's evidence, which I accept, was that he prepared the Loan Agreement from instructions which were provided by the cover sheet of that Boban/Pineview agreement which was faxed to him on 6 February 2003.[441]
[441] Exhibit G1 (supplementary witness statement of Mr Britten) [3] - [4].
But the handwritten note by Mr Pollock on the front of the Boban/Pineview agreement does not assist Mr Pollock's case in relation to the alleged oral agreements.
The handwritten note does no more than confirm that Mr Pollock gave instructions to Mr Britten to prepare the Loan Agreement and Guarantee, and that those instructions were given shortly prior to other agreements being signed with Mr Caratti.

11.3.6 Mr Caratti's account of the joint venture is far more plausible

In contrast with Mr Pollock's alleged July 2002 and 2003 oral agreements, Mr Caratti posited a different oral joint venture agreement. Mr Caratti's allegations of the oral agreement was far more plausible, particularly in light of the matters of inherent incredibility of Mr Pollock's alleged oral agreements discussed above at 11.3.4.
Although I consider that important parts of his evidence were either untruthful or unreliable, Mr Caratti's evidence on this issue was much more convincing than Mr Pollock's account of the joint venture including the alleged July 2002 and 2003 oral agreements.
Except where I indicate below, I accept Mr Caratti's account of the joint venture agreement.
Mr Caratti met Mr Pollock in 2000 at an auction.[442]
[442] Exhibit H (witness statement of Mr Caratti 7 May 2013) [13].
By early 2002, Mr Caratti and Mr Pollock had engaged in various business enterprises together. Their joint ventures involved (i) them being joint shareholders; (ii) a Carratti family company, Mammoth Investments, generally managing the development; and (iii) Mr Caratti's companies providing all the finance needed above bank finance, at 20% interest.[443]
[443] Exhibit H (witness statement of Mr Caratti 7 May 2013) [174].
In early to mid‑2002, Mr Pollock told Mr Caratti that the Hocking area was ripe for development. Mr Pollock said that the Hocking Land Company owned Lot 81, Nicholas Road and that there was a lot of nearby land that could be purchased and developed, including Lots 82 and 83. Mr Pollock explained that he was unable to fund the development and wanted to undertake a joint venture with Mr Caratti.[444]
[444] Exhibit H (witness statement of Mr Caratti 7 May 2013) [172].
Mr Caratti discussed the Hocking joint venture with Mr Pollock in the context of a wider development of a subdivision which would be called the Belvedere Hills Estate.[445]
[445] Exhibit H (witness statement of Mr Caratti 7 May 2013) [176].
Mr Caratti and Mr Pollock discussed using the Hocking Land Company as a vehicle for the Hocking joint venture.
One difficulty if a different company were used was that double stamp duty would be paid on any properties which had been acquired by Hocking which were then transferred to the new company.[446]
[446] ts 501 (Mr Caratti).
Mr Caratti and Mr Pollock orally agreed that they would undertake the Hocking Joint Venture on terms including as follows: [447]
[447] Exhibit H (witness statement of Mr Caratti 7 May 2013) [177].
(i)each of them would own 50% of the Hocking Land Company;
(ii)each of them would have a director appointed;
(iii)Mr Caratti would manage the development;
(iv)Mr Caratti would arrange the finance from a financier;
(v)if funding from a financier were not available, Mr Caratti or one of his companies would lend the money to the joint venture at 20% interest to be repaid after bank finance;
(vi)Mammoth Investments would undertake the construction and earth works at commercial rates with any costs carried by Mammoth to form part of the Hocking Land Company loan account at 20% interest;
(vii)the profits of the Hocking joint venture would be split 50/50 after payment of the loan account and external financiers;
(viii)Lot 81, and any other lot acquired by the Hocking Land Company, would be reflected in the books at acquisition cost;
(ix)funds that had been contributed to acquisition of Lot 81, such as deposit and stamp duty, would be an unsecured loan to the Hocking Land Company in the name of Ms de Hollander;[448]
(x)the unsecured loan for the cost of acquisition of Lot 81 would be interest free because Mr Caratti considered that the cost of Lot 81 exceeded its market value; and
(xii)the existing mortgage for Lot 81 would be refinanced.
[448] Exhibit H (witness statement of Mr Caratti 7 May 2013) [177.10], [193].
Mr Caratti also said that during discussions he agreed with Mr Pollock that no prior interest or holding costs by Mr Pollock would be recognised,[449] and that in relation to the holding costs of Lot 81 he only agreed to recognise a loan of $167,500 to Ms de Hollander.[450] I reject his evidence on this point.
[449] Exhibit H (witness statement of Mr Caratti 7 May 2013) [177].
[450] Exhibit H (witness statement of Mr Caratti 7 May 2013) [194].
Mr Pollock had prepared a note summarising the costs incurred in relation to Lot 81. He had given that to Mr Caratti and Mr Caratti later provided Mr Metcalf with that note. That note, inaccurately, described the amounts owing as $537,333. At least in respect of the interest under the RAC loan, this was a substantial overstatement. But I do not accept that Mr Caratti was aware at the time that the amount had been overstated.
Mr Caratti said that Mr Pollock told him that the RAC mortgage over lot 81 was approximately $800,000 with monthly repayments of $13,000 per month. Mr Caratti said that he 'learned from company documentation that this was correct'.[451] As I have explained above, it was not correct. Mr Caratti had misunderstood a letter from the RAC which Mr Pollock had shown him.
[451] Exhibit H (witness statement of Mr Caratti 7 May 2013) [178].
Mr Caratti said that he told Mr Pollock that since the loan balance was increasing (it was $821,227.65 at 31 May 2002) Mr Pollock must repay the arrears and reduce the loan to $800,000 before Mr Caratti became a shareholder in the Hocking Land Company.[452]
[452] Exhibit H (witness statement of Mr Caratti 7 May 2013) [178].
Mr Caratti said, and I accept, that he considered that there was no equity in the Hocking Land Company at this time with the RAC loan at $821,000. Mr Caratti said that he was aware, as was the case, that[453]
(i)at this time the Hocking Land Company only owned Lot 81 Nicholas Road;
(ii)the Hocking Land Company was struggling to pay interest on the RAC loan for Lot 81; and
(iii)the previous offers which Mr Pollock had made on Lots 82 and 83 had lapsed because Mr Pollock was unable to settle on those lots.
[453] Exhibit H (witness statement of Mr Caratti 7 May 2013) [189].
Mr Caratti also considered that the market value for Lot 81 was lower than its purchase cost.[454]
[454] Exhibit H (witness statement of Mr Caratti 7 May 2013) [194].
After Mr Pollock secured the contracts over Lots 82 and 83 Nicholas Road on 23 April 2002,[455] Mr Pollock asked Mr Caratti to pay the deposits on those lots. Mr Caratti refused because he was not yet a shareholder.
[455] Exhibit 1/247.
Subsequently, Mr Caratti and Mr Pollock arranged for the Hocking Land Company to enter contracts over other properties including:[456]
(i)Lots 15, 16, 17 and 51 Wyatt Road from Mr Monte, offer made and accepted, dated 6 June 2002 and signed by Mr Pollock;
(ii)Lot 20 Avery Road from Mr Monte, offer dated 6 June 2002 and signed by Mr Pollock;
(iii)Lot 53 Wyatt Road from Osborne Cold Stores (WA) Ltd, offer dated 29 June 2002 and signed by Mr Pollock;[457]
(iv)Lot 138 Nicholas Road from Rymon Pty Ltd, offer dated 29 June 2002 and signed by Mr Pollock;
(v)Lot 130 Elliot Road from Mr and Mrs D'Alonzo, offer dated 29 June 2002 and signed by Mr Pollock;[458]
(vi)Lot 148 Nicholas Road from Mr and Mrs Kirby, offer dated 29 June 2002 and signed by Mr Pollock.
[456] Exhibit H (witness statement of Mr Caratti 7 May 2013) [181].
[457] Exhibit 1/41.
[458] Exhibit 1/40.
Lots 81, 82 and 83 Nicholas Road were to be the first stage of the Belvedere Hills Estate. They were the entrance for future stages. But some of the other properties above which were acquired by the Hocking Land Company were essential to the development of Lots 81, 82 and 83 and the wider Belvedere Hills Estate.
One example of the importance of other lots is that the physical development of Lots 81, 82 and 83 required the sewer outfall through Lot 15 Wyatt Road, and the owner of that lot, Mr Monte, required the Hocking Land Company to purchase the neighbouring lots because he did not want the run through his properties.[459]
[459] Exhibit H (witness statement of Mr Caratti 7 May 2013) [190.1].
Another example of the importance of other lots is that Lots 81, 82, and 83 were across the road from a turkey farm at Lot 53 Wyatt Road. Lot 53 had an odour buffer of 400 m extending around its boundaries. It needed to be purchased so that the turkey farm could be closed, the turkey farm licence surrendered, and the odour buffer removed.[460]
[460] Exhibit H (witness statement of Mr Caratti 7 May 2013) [190.2].
The payments for many of the properties above were essential in order for the Hocking joint venture to proceed.
Mr Caratti refused to pay the deposits for these contracts until the shares in the Hocking Land Company were transferred to him.
Mr Caratti was provided with a share transfer on 7 July 2002.[461]
[461] Exhibit H (witness statement of Mr Caratti 7 May 2013) [183]; Exhibit 1/39.
On 8 July 2002 and 24 September 2002, Mr Caratti paid deposits of $150,000 and $100,000 for numerous properties.[462]
[462] Exhibit H (witness statement of Mr Caratti 7 May 2013) [184] - [185].
On 12 July 2002, Mr Caratti was appointed as a director of the Hocking Land Company.[463]
[463] Exhibit 1/38.
On 28 October 2002, Mr Caratti entered the Substituted Shareholders' Agreement.
This account by Mr Caratti of the Hocking joint venture is consistent with the documentary evidence. Save where I have indicated otherwise, the evidence was also plausibly given, and was reliable.

Other witnesses

I have dealt with the evidence of most of the witnesses during the course of these reasons and, in particular, in the course of setting out my findings of fact. For completeness, I record below my findings in relation to other witnesses at the trial.

12.1 Mr John Caratti

Mr John Caratti gave evidence which was designed to assist Mr Pollock. For instance, in evidence provided without any warning to the defence, Mr John Caratti said that 'Pollock wanted ‑ I think he started off ‑ he wanted about 1.1 million to put in these blocks into the Hocking deal'.[464] In cross‑examination he elaborated on this:[465]
There was three blocks that adjoined the existing subdivision, I think it was Stocklands were doing it and Pollock didn't want to put those three blocks into the Hocking joint venture and there was a discussion between Pollock and Allen but Pollock wanted about 1.1 million to put them in and I think Allen negotiated it down to 800,000 and the bargain they reached was that the joint venture of Hocking would have to pay back to this other structure $800,000.
[464] ts 400 (Mr John Caratti).
[465] ts 418 (Mr John Caratti).
In closing written submissions, counsel for Netglory properly conceded that[466]
it might be said that Mr John Caratti's evidence was influenced by the proceedings in which he is doubtless involved with his brother. There can be no doubt that there is a degree of enmity between them and there can be no doubt that whilst those proceedings remain unresolved it may be difficult to objectively assess the evidence he gave.
[466] Netglory's closing written submissions further annotated 29 August 2013 [153].
Although Mr John Caratti denied that relations with his brother Mr Caratti were bitter and acrimonious,[467] the significant animosity between him and his brother was palpable in his demeanour and in his evidence.
[467] ts 406 (Mr John Caratti).
I do not consider that any of the evidence given by Mr John Caratti in support of Mr Pollock was reliable. My assessment is motivated only in small part by Mr John Caratti's prior criminal convictions for dishonesty. More significant is my assessment of his extremely hostile demeanour in court and the degree of enmity and anger between him and his brother.
Mr John Caratti has been, and is, involved in substantial litigation with his brother. He said that he had sued his brother, Mr Caratti, fewer times than his brother Mr Caratti had sued him.[468]
[468] ts 406 (Mr John Caratti).
Mr John Caratti said that Mr Caratti had sued their mother and Mr John Caratti's son.[469] Mr John Caratti said that this action had been settled but was now being re-litigated.[470]
[469] ts 407 (Mr John Caratti).
[470] ts 408 (Mr John Caratti).
Mr John Caratti accused Mr Caratti of 'terribly fraudulent' actions.[471]
[471] ts 407 (Mr John Caratti).
Mr John Caratti's evidence in support of Netglory cannot be given any weight.

12.2 Mr Murphy

Mr Murphy gave evidence concerning the valuation to be placed on Lots 81, 82 and 83 in July 2002 and again in February 2003.
I do not consider that any reliance can be placed on the evidence of Mr Murphy for five reasons.
First, in an appendix to his valuation,[472] Mr Murphy made an 'expert opinion statement'. That statement was six paragraphs. It was signed by Mr Murphy. Paragraph 5 read:
I have no prior dealings with the parties to these proceedings.
[472] Exhibit I (Expert report of Peter Murphy 15 October 2012), 42.
In cross‑examination, Mr Murphy admitted that:[473]
(i)he had performed 'possibly 100' valuations for Mr Caratti and his companies; and
(ii)he dealt directly with Mr Caratti to take instructions for the preparation of his report.
[473] ts 531 - 534 (Mr Murphy).

Mr Murphy said in cross‑examination that the statement that he had no prior dealings with the parties to the proceedings was an oversight and that he had used a pro‑forma document to prepare the report.[474] He did not explain why he chose not to disclose his relationship with Mr Caratti in his report. At the least, it shows that he was very careless about the contents of his report.
[474] ts 540 (Mr Murphy).
Secondly, Mr Murphy's report did not identify any of the comparative sales upon which he relied.
Mr Murphy accepted that the comparative sales methodology has, at its heart, the identification of a basket of sales and that this requires identification of the sales in the basket. But he accepted that in his 'Direct Market Comparison' he did not identify the relevant comparative sales.[475]
[475] ts 537 (Mr Murphy).
Thirdly, Mr Murphy accepted that the comparative sales method required identification of adjustment for matters such as variations in area, zoning, location and shape. But there was nothing in his report which showed what adjustments he had made.[476]
[476] ts 537 (Mr Murphy).
Fourthly, one of the sales referred to by Mr Murphy in the section on market evidence did not have a sale date. Mr Murphy said that he didn't use that sale. But he accepted that there was nothing in his report which indicated that the sale had not been used.[477]
[477] ts 538 (Mr Murphy).
Fifthly, a valuation exercise performed to assess the value of properties at a date a decade earlier is inherently inaccurate. Mr Murphy properly, and frankly, accepted this point.[478]
[478] ts 539 (Mr Murphy).
If Mr Murphy's evidence had been extremely reliable then it might have been of some assistance in the exercise of assessing whether Mr Pollock genuinely held the belief that Lots 81, 82 and 83 were all valued at $1.1 million each, or whether Mr Caratti genuinely held the belief that the lots were valued at $750,000 each.
Any assistance gained from Mr Murphy's evidence would have been limited. In the circumstances of this report there is no assistance to be gained from it at all.

12.3 Mr Masel

Mr Masel's evidence was also peripheral to the proceedings.
Mr Masel was the financier who procured from Reliance Finance the refinance of Lot 81, and the funding for Lots 82 and 83 Nicholas Road.[479]
[479] Exhibit I (witness statement of Mr Masel 12 October 2012).
There is one aspect upon which Mr Masel might have given useful evidence.
Mr Pollock said that he had encountered problems in securing funding to pay out the alleged $800,000 that he said was owed by the Hocking Land Company to Netglory.
Mr Pollock's evidence was that, at Mr Caratti's suggestion, Mr Pollock approached Mr Masel at Reliance Finance to procure the refinance of Lot 81, the financing of Lots 82 and 83 and the payout of $800,000 from the Hocking Land Company.[480]
[480] Exhibit A (witness statement of Mr Pollock 28 September 2012) [160] - [161].
Mr Pollock said,[481] and the documentary evidence establishes,[482] that Reliance Finance lent the Hocking Land Company money for the refinance of Lot 81 and the financing of Lots 82 and 83.
[481] Exhibit A (witness statement of Mr Pollock 28 September 2012) [166].
[482] Exhibit 1/59.
But Mr Pollock said that funds had also been sought for the payout of $800,000 from the Hocking Land Company. He said Reliance Finance was only prepared to offer funds for the financing and refinancing of Lots 81, 82 and 83.[483]
[483] Exhibit A (witness statement of Mr Pollock 28 September 2012) [166].
Mr Masel gave no evidence that these additional funds were sought from him. He was asked no questions concerning whether these additional funds had been sought from him.[484]
[484] ts 522 - 526 (Mr Masel).

Other submissions by the Hocking Land Company

For completeness, I should explain why I reject additional arguments of the Hocking Land Company and Mr Caratti.

13.1 The submission that deeds require consideration to be enforced

Counsel submitted that even if the deeds were valid, an additional reason why Netglory's action on the Loan Agreement and Guarantee should fail was due to the following reasoning:
(i)the deeds were unsupported by consideration;
(ii)specific performance in equity will not be ordered of a deed which is unsupported by consideration; and
(iii)an action for a liquidated sum is an action for specific performance and will only be enforced if supported by consideration.
Propositions (i) and (ii) are correct.[485] Proposition (iii) is not.
[485] Cannon v Hartley [1949] Ch 213; Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; 208 CLR 516, 556 [103] (Gummow J).
An action in equity for specific performance of an obligation to pay a liquidated sum can be brought in instances where the other party was entitled to specific performance of another obligation.[486] Each of the actions in equity for specific performance, or the action formerly in indebitatus assumpsit (now usually an action for restitution of unjust enrichment), is not necessarily barred even if an action on the agreement is prohibited by statute. So, in Turner v Bladin,[487] the action for specific performance was not barred by the modern successor to s 4 of the Statute of Frauds.
[486] Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463, 473 (the Court).
[487] Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463.
The Hocking Land Company argued that these are the only instances in which an action for a liquidated sum will be directly enforced, and that consideration is required before enforcement will be ordered. This is not correct.
Even putting aside the absence of any historical requirement of consideration in the form of action based upon indebitatus assumpsit, an action demanding payment of a liquidated sum is not confined to equity or unjust enrichment. As thirteen editions of Treitel on Contract have explained, in a position maintained by the current editor, Professor Peel, '[t]he common law did not specifically enforce contractual obligations except those to pay money' (italics added).[488]
[488] Peel E, Treitel: The Law of Contract (13^th ed revised, 2011) 1099 [21 - 016].
At common law one prolific example of enforcement of an obligation to pay money was the action of covenant. And, after the decline of the action of covenant, the most common action for a liquidated sum at common law became the action for debt. The writ of debt was at least as old as a writ of covenant, dating earlier than the 13^th century. Neither the action of covenant nor the action of debt on a bond required consideration, although both required the obligation to be under seal.[489]
[489] Lobban M, 'Contract' in The Oxford History of the Laws of England (vol XII, 2010) 316; Holmes OW, The Common Law (1881) 273.
A common example of an action in debt at common law was for the sum due on a bond. Until the 19^th century, the use of the action of debt to recover a sum due on a bond was very common. The action was brought upon a deed which commonly recited, in Latin, 'Know all men etc., that I, AB, am firmly bound to CD in £n to be paid at Michaelmas next following'.[490] The High Court of Australia recently observed that this action for enforcement of the bond was received from Roman law.[491] In Roman law the basis for the enforcement of the unilateral contract of stipulatio was its form. A stipulatio involved no quid pro quo. It required no consideration.
[490] Baker J, An Introduction to English Legal History (4^th ed, 2002) 323.
[491] And see Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30; (2012) 290 ALR 595, 606 [43] (the Court).
As Sholl J explained in Alexander v Ajax Insurance Co Ltd,[492] by reference to Chitty on Pleading,[493] by the middle of the 19^th century the common law action for debt had come to cover numerous different claims for money due including
upon legal liabilities, or upon simple contracts, express or implied, whether verbal or written, and upon contracts under seal, or of record ... whenever the demand is for a sum certain, or is capable of being readily reduced to a certainty.
[492] Alexander v Ajax Insurance Co Ltd [1956] VLR 436, 445.
[493] Chitty on Pleading (5^th ed, vol 1,1831) 123 - 124.
This short excursus is sufficient to reject the proposition, put several times by the Hocking Land Company, that the common law did not recognise an action for enforcement of a promise to pay money, under seal, which was not supported by consideration. The action to obtain 'specific performance' of the obligation to pay money at common law, when embodied in a deed, does not require consideration.

13.2 The submission that Netglory was not a party to the Guarantee

Counsel for Mr Caratti submitted that Netglory was not a party to the Guarantee and therefore could not enforce it. A non‑party to a multi‑lateral deed made between parties cannot enforce the deed unless a statutory exception applies.[494] There was no reliance by Netglory on s 11(2) of the Property Law Act 1969 (WA).
[494] Aloha Shangri-La Atlas Cruises Pty Ltd v Gaven [1970] Qd R 438, 448 (Wanstall J; W B Campbell & Matthews JJ agreeing).
Counsel for Mr Caratti relied upon the attestation clauses on the final page of the Guarantee. Those clauses provide for execution by the 'parties' of the document 'as a deed'. But they make provision only for the signature of Mr Caratti and Ms de Hollander.
This submission must be rejected.
On their proper construction, both the Loan Agreement and the Guarantee purported to be deeds between the parties. Neither was unilateral. This is so for four reasons.
First, s 16 of the Property Law Act provides as follows:
16Construction of supplemental or annexed instrument
Any instrument expressed to be supplemental to a previous instrument, or directed to be read as an annexure thereto, shall, as far as may be, be read and have effect, as if the instrument so expressed or directed were made by way of endorsement on the previous instrument, or contained a full recital thereof.
The Guarantee recites that it is 'made between the Lender and the Guarantor'. It provides that it is 'Supplemental to the Principal Document [the Loan Agreement]' to which Netglory and Mr Caratti are parties.
Secondly, and related to the first point, as Fletcher Moulton LJ explained in a judgment which was approved on appeal to the House of Lords,[495] there is an old rule of construction that
where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising from the transaction as a whole.
[495] Manks v Whiteley [1912] 1 Ch 735, 754; Whiteley v Delaney [1914] AC 132.
Although the absence of attestation means that the Loan Agreement and Guarantee are not deeds, the point of construction also applies to the two instruments, dependent upon each other.
Thirdly, on its face, the Guarantee purports to be inter partes. It provides that the 'Guarantor covenants and agrees with the Lender'. It refers to consideration from the Lender. On its proper construction the Guarantee is inter partes. There is simply an omission to provide for a place for execution by Netglory.
In Morgan v Pike,[496] the Court of Common Pleas considered a motion for a new trial on the basis that the trial judge had erred by allowing admission of a deed into evidence when the party seeking to enforce the deed had not executed the deed and the deed contained cross‑covenants by the party seeking to enforce it. Jervis CJ held that[497]
a covenantee in an ordinary indenture, who is a party to it, may sue the covenantor who executed it, although he himself never did; for, he is a party, although he did not execute, and parties to an indenture may sue, though strangers cannot; and it makes no difference that the covenants of the defendant are therein stated to be those of the covenantee. Of this there is no doubt, nor that a covenant binds without consideration.
[496] Morgan v Pike (1854) 14 CB 473; 139 ER 195.
[497] Morgan v Pike (1854) 14 CB 473; 139 ER 195, 200 .
Creswell and Williams JJ agreed. Williams J explained, by reference to Sir John Comyn's Digest, that 'if one party executes his part of the indenture, it shall be his deed, though the other does not execute his part'.[498]
[498] Morgan v Pike (1854) 14 CB 473; 139 ER 195, 201.
This decision was quoted with approval by Lord Romer in Lady Naas v Westminster Bank Ltd[499] and by the New South Wales Court of Appeal in Mirzikinian v Tom & Bill Waterhouse Pty Ltd.[500]
[499] Lady Naas v Westminster Bank Ltd[1940] AC 366, 409.
[500] Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 [50] (Ipp JA, Tobias & McColl JJA agreeing).
As Lord Wright observed in Lady Naas v Westminster Bank Ltd,[501] one situation in which the execution by a party to the deed will be necessary is where the deed is expressly or impliedly conditional upon execution by the defendant. But there is nothing in the Guarantee which suggests that it is conditional upon execution by Netglory. To the contrary, no execution of the Guarantee by Netglory is contemplated.
[501] Lady Naas v Westminster Bank Ltd[1940] AC 366, 403.
Fourthly, clause 25 of the Guarantee contemplates that parties to the Guarantee might not execute it. Clause 25 provides as follows:
25EFFECT OF EXECUTION This deed shall be binding on each person who has executed it notwithstanding :‑
The failure of any other person named as a party to execute it
As Lindgren J recognised in Hewlett‑Packard Australia Pty Ltd v Exeed Pty Ltd,[502] there is a long line of authority which recognises that an instrument executed by the obligor for the benefit of an identified obligee who has not executed it will be binding. Those cases cited include instances of an agreement inter partes as well as unilateral deeds poll.
[502] Hewlett‑Packard Australia Pty Ltd v Exeed Pty Ltd [2004] FCA 135; (2004) 48 ACSR 670, 675 [35].
I reject the submission by Netglory that the absence of execution by Netglory means that the Guarantee is not binding or that it cannot be a deed.

13.3 The submission concerning the intention of the draftsman of the deeds

The Hocking Land Company relied upon evidence from Mr Britten in which Mr Britten said that he had not prepared the Loan Agreement document as a deed because he changed the word 'deed' at one place in the Loan Agreement to 'agreement'.[503] The submission was that this intention of Mr Britten militated against the Loan Agreement being a deed.
[503] ts 376; ts 377 (Mr Britten).
I do not accept this submission. Mr Britten's evidence about his subjective intentions in drafting the deed is irrelevant to the question of whether the document is a deed.
In any event, the Loan Agreement is signed as a deed. Section 10 of the Property Law Act 1969 (WA) provides as follows:
Any deed, whether or not it is an indenture, may be described (at the commencement thereof or otherwise) as a deed simply or as an agreement under seal, or as a conveyance, deed of exchange, settlement, mortgage, charge, transfer of mortgage, appointment, lease or otherwise according to the nature of the transaction intended to be effected.

Conclusions on the claim and on the counterclaim

Netglory's claim must be dismissed, and the counterclaims of Mr Caratti and the Hocking Land Company allowed, for the following reasons:
(1)The Loan Agreement contains no relevant ambiguity and is dependent upon a loan being made for any obligation to repay to arise. Since, on the proper construction of the Loan Agreement no loan was made, there is no obligation to repay and no obligation secured by the Guarantee.
(2)The Loan Agreement is not a specialty and it is unenforceable due to the Limitation Act 1935 (WA).
(3)Neither the Loan Agreement nor the Guarantee is a deed due to the absence of attestation and neither is supported by consideration. Both are therefore null and void.
Even apart from these legal conclusions, which require the claim to be dismissed and the counterclaim to be allowed, Netglory has also failed to prove the existence of any antecedent oral agreement.
Although I find, on the balance of probabilities, that Mr Caratti signed the Loan Agreement and the Guarantee, I do not accept Ms de Hollander's or Mr Pollock's evidence that any oral agreement was reached between Mr Caratti and either or both of Ms de Hollander or Mr Pollock.
The effect of these reasons means that it is unnecessary to make any orders to give effect to the conclusion that the Loan Agreement, if it had been valid, would have been entered into in breach of duty by Ms de Hollander, and should be set aside.
Nor is it necessary to make any orders in relation to the third party notice which was issued to Ms de Hollander for contribution as a co‑guarantor. No submissions were made in relation to this third party notice and no issue arises in relation to it.
I will hear from the parties concerning the form of orders to be made consequent upon these reasons.