Pico Holdings Inc v Wave Vistas Pty Ltd (Formerly Turf Club Australia Pty Ltd) & Anor

[2005] HCATrans 33

[2005] HCATrans 033

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B60 of 2004

B e t w e e n -

PICO HOLDINGS INC

Appellant

and

WAVE VISTAS PTY LTD (FORMERLY TURF CLUB AUSTRALIA PTY LTD)

First Respondent

NATIONAL AUSTRALIA BANK LTD

Second Respondent

GLEESON CJ
McHUGH J
GUMMOW J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 9 FEBRUARY 2005, AT 10.21 AM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR M.R. PEARCE, for the appellant.  (instructed by Gilbert & Tobin)

MR G.D. SHEAHAN:   May it please the Court, I appear for the first respondent.  (instructed by Mallesons Stephen Jaques)

MR H.B. FRASER, QC:  May it please the Court, I appear with my learned friend, MR B.T. PORTER, for the second respondent.  (instructed by Thynne & Macartney)

GLEESON CJ:   Yes, Mr Walker.

McHUGH J:   The parties are aware that I hold shares in National Australia Bank, the second respondent, and there is no objection to me sitting.

GLEESON CJ:   I understand the same applies in my case.

HAYNE J:   And mine, I think.

MR WALKER:    Thank you, your Honours.  Your Honours, can I go directly to the trial finding at 427 in the appeal book where the finding reproducing and partly paraphrasing and explaining and interpolating into the evidence, to which I will go in a moment, has the following important aspects for the present relatively narrow issue.  At 427 just after line 35, having narrated a conversation between two men, two natural persons, Mr Hart for my client, his Honour holds:

Mr Voss then offered the first respondent’s land as security.

Now, that is a finding as to the identification of that which was offered.  Then after line 45:

Mr Voss then offered to provide the land as security saying it was unencumbered.

Again, a finding as to the identification of the land in question.

He said that he would give a recent valuation report . . . He said he would get the money to the applicant shortly – 

I am now at 428 line 15.  Line 20:

Mr Voss agreed to that.

That is a reference to so‑called:

“additional compensation” . . . in the form of marketing rights in North America and Mexico to certain waste‑water treatment technology.

GLEESON CJ:   Mr Walker, these findings presumably summarised a conversation that was proved in an affidavit.

MR WALKER:   Yes, to which I am about to go.

GLEESON CJ:   And I gather there was no cross‑examination on the affidavit.

MR WALKER:   None that challenges any of these aspects of it.  It is not true to say that the conversation was not the subject of questions in cross‑examination.  It was, but  ‑ ‑ ‑

GLEESON CJ:   Where can we find the original version of the conversation?

MR WALKER:   It starts, as your Honours will have seen, at 136, but the supposedly verbatim recollection is at the top of page 137, and the particular passages that one can see as the derivation of the findings start just after line 10:  

Voss:  “Why don’t I give you my Turf Club property at the Gold Coast.  It’s unencumbered.  I will give you a recent valuation report” – 

et cetera –

Hart:   “In addition to the property collateral Dominion Capital is going to have to give Pico additional compensation if it extends the due date . . . We want the North American and Mexican BioModule waste water treatment technology marketing rights for our water company Vidler Water” –

the pronouns, the possessive adjectives, are of some significance in all of this –

Voss:  “Okay”.
Hart:   “I’ll need the title deeds to the property and a recent valuation report on the property for our auditors”.
Voss:  “Okay”.

Now, I have not read all of it there, but  ‑ ‑ ‑

GLEESON CJ:   It is really the words, “I give you my Turf Club property at the Gold Coast”. 

MR WALKER:   Yes, that is right.

GLEESON CJ:   In brackets “as collateral”.

MR WALKER:   Yes, that is right.  The findings about that telephone conversation held on Anzac Day are those that one finds at 427, 428.  They are not subject of challenge.

While in the trial judgment, of course the holding at the foot of 430, the top of 431, just at 430, line 43 the conclusion as to the capacity in which Mr Voss was acting is there found to be:

on behalf of Dominion Capital as recorded in the facsimile transmission of 4 May –

to which I am about to come.  Then, the critical finding against us at 431, line 10:

The first respondent was, however, not a party to the agreement.

Then, dropping down to about line 35:

it did not create an equitable charge over the land.  It was only Dominion Capital that held itself out as doing that.

That is a sentence which, with respect, shows the triumph of corporate artifice because it was Mr Voss who did everything.  He was the human actor for the one or more corporations which were in question on the day.  But the finding, the holding by his Honour at first instance at 431, line 35 clearly, unequivocally, says that the capacity in which he did the relevant matters was for Dominion Capital, not for Turf Club.

At 432, to complete references to matters in the trial findings and to return to a category of uncontested findings, one sees between lines 10 and 20 that in relation to the 4 May letter, the composition and sending of that:

(Mr Voss agreed . . . that when he wrote . . . he was the sole director . . . he had authority as sole director to act on its behalf, and so there is no doubt that he then –

that means 4 May or when he prepared that fax –

had authority to offer the land as security.

That means authority from the first respondent.

GUMMOW J:   It is really the sentence at line 20 on 432.

MR WALKER:   No, quite.  The next sentence ‑ ‑ ‑

GUMMOW J:   Yes, the facsimile itself, however.

MR WALKER:   Yes.  Now we, of course, challenge that for a number of reasons.  There are two textual matters upon which the learned trial judge founded that conclusion and which are repeated against us, or were successfully repeated against us in the Court of Appeal and are repeated here.  They are not the only ones, but there are two clear textual ones.  They are, of course, the letterhead and also the typed designation of Mr Voss, which can readily be argued as being a designation for Dominion Capital.

GLEESON CJ:   Does that sentence treat those two possibilities as strict alternatives?

MR WALKER:   Yes.  That is one of the problems, with respect.

HEYDON J:   So he was not the chairman and management director of the first respondent as well as of Dominion Capital?

MR WALKER:   Well, your Honour, it is quite impossible, however finely one sifts the evidence, for me to say yes to that.  On the other hand, you will have seen some designations, no doubt to impress in trans‑Pacific business, different ones, “Chairman and CEO”, “Chairman and Managing Director”.  If those words are not terms of art, but are rather words that show that you are at the apex of whatever hierarchical triangle is in question, then he was clearly all of those things, bottom, little and top of the triangle in Turf Club.  But that is not really an affirmative answer to your Honour’s question, was he the chairman and CEO of Turf Club?  He was, of course, on the evidence the executive ‑ ‑ ‑

HEYDON J:   He was the sole director.

MR WALKER:   Quite.  He was on the evidence the executive who as a matter of conduct before Anzac Day and on Anzac Day and after Anzac Day, 4 May, was the only person who spoke as if controlled by no one else and certainly the NAB dealt with him on that basis, as you will have seen in relation to some near contemporaneous security offerings.

GLEESON CJ:   When did it become possible for companies to have only one director?  I can tell you that it is some time in the last 16 years.

MR WALKER:   Yes, I think it was the 1990s.  I am not quite sure, your Honour.

GLEESON CJ:   Perhaps you could just check that.  I would just be interested to identify that.

MR WALKER:   And in particular, your Honours, the question is directed to, without being reduced to one director and thereby being sterilised as to all powers on the board except for a new appointment.  I confidently say it was well and truly before the events in question in this case.  I cannot say which of the corporate law reforms it was.  I will have that found.

GUMMOW J:   Where was Dominion Capital incorporated?

MR WALKER:   It is incorporated in ‑ I will have that looked up, your Honour.  It was in 1999.

McHUGH J:   I think it was in Victoria, was it not?

MR WALKER:    Yes, I think it is Victoria.  I am sorry, your Honour.  I think none of the company records is entirely complete in the appeal book.  I will have that looked up.

GUMMOW J:   Page 78 refers to an exhibit C, which is a company search.

HEYDON J:   Page 149, “State of Registration:  Victoria”.

MR WALKER:    No, that is Dominion Capital, and that is registered, yes.

HEYDON J:   Registered office in Victoria at that stage?

MR WALKER:    Yes, your Honour.  I do not think I can, on the evidence, take it further than that.  Now, as to what I might call the other side of the transaction, in terms of the testimony, one sees a fairly bland and consistent statement in an affidavit of Mr Voss himself at 132, about line 39.  Having differed from Mr Hart – and he is obviously not preferred as to the differences – as to certain matters, at line 39 he says:

Mr Hart and I discussed possible alternative security arrangements.  I suggested the Turf Club property.

After the event, in print rather than in conversation, it obviously struck the deponent as appropriate to use the initial capitals.  Now, people do not use initial capitals unless they rather ostentatiously say so in speech, but it is pretty clear from 132 what Mr Voss was recalling. 

The first point we have to make about the narrowness of the issue in this case is that no one at trial, no one in the intermediate appeal and no one in this Court contests that the expression “the Turf Club property” referred to that parcel, the title details of which were quite precisely supplied by the annexure to the 4 May letter.  In other words, there is no contest with the trial finding with which I started my address this morning, namely, that it was that property, the first respondent’s property – “Turf Club” being the obvious name given to ‑ ‑ ‑

GUMMOW J:   I am sorry to interrupt you Mr Walker, but page 150 would suggest that Mrs Voss was a director as well.

MR WALKER:   I am sorry, your Honour?

GUMMOW J:   It would suggest there were two directors

MR WALKER:   No, that is Dominion Capital, 149.  It shows that that is Dominion Capital, your Honour.  I am sorry, there are glazingly similar documents, but 149 shows that the particulars that your Honour is looking at are the particulars of Dominion Capital.

HAYNE J:   And 141 is the search of Turf Club and one director recorded.

MR WALKER:   It is indeed.  One director only.  While there between lines 25 and 30 and at about line 35, one finds that as to the Transatlantic and Intavest shareholdings, which are equal, one each, neither is beneficially owned.  However, no point has been taken.  This is the second matter important to the narrowing of the issues here.  No point has been taken that Mr Voss was not the effective - and I mean that word in the full rather than pallid sense - controller of Turf Club as well as Dominion Capital.  If he was, as the searches show, in control of Intavest, and he clearly was, and Intavest, whether or not he had held its interest in Turf Club on trust - for whom we do not know.  The evidence does not reveal it.  We do not even know that it was a trust, but the “N” suggests it must have been.  Clearly enough, as the controller of Intavest, he controlled at least one half of the voting capital in Turf Club.  We do not know whether the “N” for beneficially owned in Transatlantic conveyed any control in relation to Mr Voss, but we do know that no one could outvote him, and then we know the facts, namely, that he was a man who acted as being in charge.  Finally, as we have observed in paragraph 18 of our written submissions in reply, Voss himself swore two affidavits in which he described Intavest, contrary to what one sees in those particulars lodged with ASIC, as the sole shareholder.  All that of course coincides with the way in which Turf Club obviously decided to put in contest certain matters and not other matters in this litigation, and Mr Voss’s authority to act on behalf of Turf Club has never been contested.  Not surprisingly, the Bank does not take a point about his authority to have done what he has done purportedly in the Bank’s favour on behalf of Turf Club.

So we have two matters with which we can start and appeal in this Court, which, however unsatisfactorily the detailed evidence appears, are the subject of findings with no contest, and no contest throughout this litigation.  The first I stress is that there is no doubt about the identification of the land described by the short colloquial expression, “my Turf Club property of the Gold Coast”.  The second is that Mr Voss had authority on the part of Turf Club.  Now, we can add to that that the evidence showed that he is held to have authority on 4 May, and there is nothing in the facts, nothing of any kind in the facts, to suggest that the state of affairs which produced that capacity on 4 May had changed in some radical fashion between Anzac Day and 4 May.

GLEESON CJ:   Was paragraph 17 on page 133 received without objection?

MR WALKER:   So far as I understand the trial record, yes.

GLEESON CJ:   Mr Voss’ version, as it were, of what happened and did not happen seems to be that the agreement to provide security over the Turf Club property was conditional on a valuation being provided and being accepted.

MR WALKER:   He seems to have been rejected on that by the findings to which I have drawn attention.

GLEESON CJ:   Right.

MR WALKER:   In other words, there was a contest as to whose recollection of the conversation, because on all sides it was said there was an agreement made on 25 April.

GLEESON CJ:   Then what happened about paragraph 2 of the letter of 4 May on page 159?

MR WALKER:   In the event there was no such letter provided, if that is what your Honour is asking me.

GLEESON CJ:   Mr Voss gives an explanation of that on page 133.

MR WALKER:   Yes.

GLEESON CJ:   Was that explanation rejected?

MR WALKER:   There is no finding at all, your Honour, and I think there is nothing implicit that would carry a finding one way or the other on that.  In paragraph 16 there is obviously an intent on either deponent or drafter or both to present a picture of incomplete negotiation.

GLEESON CJ:   Yes.

MR WALKER:   That is clearly implicitly rejected.  I have drawn attention already to the findings which show that his Honour found negotiations had concluded on Anzac Day to produce an agreement.  It is simply not an agreement to which the first respondent was party.

GLEESON CJ:   But was there any finding in the Supreme Court of Queensland about why it was, in the light of paragraph 2 of the letter on page 159, that the matter was just never taken any further?

MR WALKER:   No.  There is evidence, some of which is referred to by his Honour about demands for performance on the part of my client, but nothing beyond that and, in particular, no finding which would cast any light on the reasons why the theory clearly sought to be advanced in paragraph 16 on page 133 was being rejected by his Honour.  So the answer to your Honours question is no, there are no such findings.

GLEESON CJ:   It is odd because the theory being advanced in paragraphs 16 and 17 on 133 seems to be consistent with the fact that nobody ever pursued the matter referred to in paragraph 2 on page 159.

MR WALKER:   There was pursuit.  As I say, there was an insistence on performance, a demand for performance, which was never met.

GLEESON CJ:   Where do we see that demand?

MR WALKER:   There is a string of correspondence, one of which you will find at 163.  This was to the solicitor who was clearly identified on behalf of my client as the relevant solicitors answering the description, “My solicitors” at 159, line 30, because they had apparently had the shareholding certificates being the original security.  At line 40 on 163 there is a reference to the undertaking for solicitors to write to confirm that something was held in trust, an assertion, not to be doubted, that that had not yet occurred, and then a request or demand for it to be done.  There is follow‑up correspondence.  Nothing succeeded in getting that performance.

HEYDON J:   This was preceded by Mr Hart ringing up in May and June, I think, page 138.

MR WALKER:   Yes.

GLEESON CJ:   Well, I suppose ‑ ‑ ‑

MR WALKER:   It is at paragraph 23 on 138.  There was what I might call a fobbing off.  It was not the cheque that was in the mail, but those documents were in the mail.  Now, that is not strictly speaking ‑ ‑ ‑

GLEESON CJ:   Was part of your side’s answer to the proposition that this was all conditional on a satisfactory valuation report that there was a representation about a minimum valuation in the first paragraph of the letter?

MR WALKER:   Yes, for reasons which would be strikingly odd, according to one’s expectations of financiers, but for seeing what the NAB, according to its manager was prepared to do.  It was prepared to advance money on the promise of a mortgage without being successful.  What clearly happened was there was an instant extension of time to the debtor in return for the words “giving security”, and one of the obligations after the security was given, bearing in mind at the pre-existing background of discussion about Pico and its auditors what do you need to have in order to persuade your auditors that the security is worth sufficient, that the loan does not get written off as unrecoverable in your books.  After the security was given by the conversation, then the valuation, as well as the certificate of title with the letter from the solicitor, officer of court confirming they are held on trust, was to be provided.

So that in the contest about incomplete negotiation and/or failure of a condition, it was determined in our favour on the basis of his Honour’s findings to which I have already taken you, which held that the words in conversation were words which there and then did the thing.  Now, when one goes to 159, the first thing to note is, of course, that it comes after the event of the agreement, we now surely being restricted to a case that it was an Anzac Day agreement only.  Much is made and, in our submission, the only real issue in this case revolves around the contention on behalf of the respondents that 4 May comes too late, because it comes after the agreement, to be used in any way for the purposes that we sought to use it below, we will still seek to use it here.

Now, to jump ahead, our answer to that is in two parts.  The first is no, not so.  We can use it in those ways for reasons I will shortly develop and I hope briefly develop.  But the second answer is, in any event, bearing in mind uncontested findings, the Anzac Day conversation does provide everything that is necessary for our success on the issue that divides the parties, namely, did the first respondent agree to give security on Anzac Day, or was it only the second respondent doing something now called, I think, agreeing to procure in relation to the first respondent’s land as security.

HAYNE J:   Where do I find the extension to the promissory note?

MR WALKER:   At ‑ ‑ ‑

HAYNE J:   Is it at 161?

MR WALKER:   I think it is at two places in the book, your Honour, but that is one of them.  Addendum No. 2 is one of them.  You see the date at 162, line 15.

HAYNE J:   And does the evidence tell us anything further than that date about when the document was created or delivered or provided?

MR WALKER:   Yes, I believe it does, in the affidavit, your Honour.  At page 137, paragraph 22, you see that it is in or about early May 2001, hence the significance of it being dated to 25 April.  Now, of course, the extension was, as a benefit, provided at the time of the conversation.  In answer to Justice Hayne’s question, you see it on page 137, 138, in paragraph 22, the dating of the preparation of the document which bears the date, Anzac Day.  The dating of that execution is in or about early May 2001; it obviously was prepared before the execution.  That, I think, is as far as the evidence takes it.

HAYNE J:   While, in fact, there may have been some forbearance in that intervening period between 25 April and the date early in May after receipt of the fax of 4 May ‑ ‑ ‑

MR WALKER:   It is to be recalled that the due date was then 30 April.

HAYNE J:   I understand that, and that there was therefore, in fact, some forbearance.

MR WALKER:   Yes.

HAYNE J:   The recording of the agreement to extend does not occur and is not communicated until after the receipt of the letter of 4 May.

MR WALKER:   It must be so – well, I am sorry, I think that is right in relation to the communication of Addendum No. 2, I think your Honour is asking me about.

HAYNE J:   Yes.

MR WALKER:   From the evidence, it appears that it was the letter of 4 May which was the next event in the relevant dealings after Anzac Day, that is, a mutual dealing to and fro.  That is the next thing that happened, so far as we can see.

HAYNE J:   Insofar as we observe what happened and identify when parties actually documented things, the documentation occurs after the letter of 4 May and is at least consistent with any Masters v Cameron point about documentation in effect being concluded by soon after 4 May, but after receipt of the letter.

MR WALKER:   Yes, your Honour.

HAYNE J:   One may not conclude the point, but it is consistent with it. 

MR WALKER:   Yes.  There is one further evidentiary reference that I think casts no different light on what has been said and that is at 32, about line 25 to 33.  Well, it does not matter where you end, because the second shoe does not drop, about line 20, where there are questions about the preparation of that letter, but no details sought in relation to the sequence of its final completion, compared with the 4 May fax.

GLEESON CJ:   Still on page 161, line 37, where it says:

The real property is described in the attached Certificate of Title – 

Was that a reference to an intention that the certificate of title, a copy of which accompanied the communication of 4 May, would be attached to the promissory note?

MR WALKER:    It must be so, hence the reference to – well, it must be so.  It is artless to talk about the “attached” certificate of title.  The parties clearly did not intend that the original deed would have crossed the Pacific to be physically attached to a document to be executed in California.  The parties had agreed that it would be held on trust by Mr Voss’s solicitors.

Now, I say Mr Voss’s solicitors because his language is “my solicitors” but, naturally, we say in relation to a certificate of title that the owner of the land entitled to possession of the certificate, there being no suggestion Dominion Capital had any right of any kind, hypothecation or otherwise, in relation to those title deeds.  Obviously enough, the solicitors were holding it on trust as against the owner of the land, namely, the Turf Club.

Now, your Honours, completing what I wanted to say about 159, the first thing, of course, is it does come after 25 April.  The second thing, however, is to note that it comes only a short time after.  In terms of any evidentiary effect it may legitimately have, there is nothing in the evidence to suggest that anything of any kind had happened between 25 April and 4 May to alter the cogency of any admissions that might be made by Mr Voss on behalf of anybody for whom he was then acting on 4 May about Anzac Day.  That is the first thing.

GLEESON CJ:   The 25 April is inserted on page 162 as the date of the agreement on 161?

MR WALKER:    Yes, and we know from the evidence to which I have given reference in answer to Justice Hayne that that is a document not completed until after 25 April, but deliberately chosen – the date, 25 April, is deliberately chosen, in our submission, entirely consistently with what the learned trial judge found.  There was an agreement there and then on 25 April, and it was an agreement to accept certain substitute security and not to press for payment from the debtor following 30 April, which was, of course, then eminent. 

The only thing that occurred between 25 April and 4 May was the expiry of the previously limited time for repayment, 30 April, and thereafter the forbearance, which had been sought and which was given, and which had been sought and given pursuant to an arrangement which we say the trial judge has found was the subject of a finally negotiated agreement, the only issue being, who are the parties to that agreement?  We say there were three.  The other side say there were two.

McHUGH J:   I do not follow why it is necessary for you to say there were three.  Why is not one view of the case that there are two separate agreements?

MR WALKER:    I accept that entirely.  There is either one tripartite agreement or two binary agreements.

McHUGH J:   The simple way to put your case – subject to what you say about it – seems to me to be that Voss, on behalf of Turf Club, entered into an agreement, offering a mortgage in consideration of Pico forbearing to enforce this agreement against Dominion.

MR WALKER:    Forbearing to enforce the then due date against the debtor.

McHUGH J:   Then the question arises as to whether that would be enforceable in equity.

MR WALKER:   That question of course turns only on consideration.  I do not wish to add anything really to what we have said in writing about consideration, not because I only faintly press the point - far from it - but because, in our submission, the consideration is as obvious as one could find in a commercial setting of this kind.  There is no doubt about Mr Voss’ deep personal interest in the prosperity of both of these companies, and indeed several others to which I will come in a moment.  There is no doubt about the fact that Pico knew that there was, as it were, a group or network – and I do not have to use the perhaps technical expression “group”.  There was a number of corporations about which Mr Voss spoke and acted as the controller as the person, the natural person, who would either stand to benefit from, or intended to dictate the fortunes of, those companies.  Against that background, in our submission, this is about the most familiar spelling out of consideration by the benefit supposed by the putative surety to follow from its controller’s simultaneously controlled other entity, the debtor being given time.

McHUGH J:   Mr Walker, at page 241 Mr Collins, the NAB Bank manager, gave evidence at line 14 that Mr Voss said to him:

the Property was owned by Turf Club . . . and was, or had been, mortgaged in favour of a third party financier. 

Is there any further evidence indicating who the financier was?

MR WALKER:   No.  That is late 2000.

McHUGH J:   I know, but this agreement was made ‑ ‑ ‑

MR WALKER:   I know, I draw to attention it was late 2000, so there is no connecting of that with Anzac Day.

McHUGH J:   But it was nine months later, is it not?

MR WALKER:   No, it is 2000.

McHUGH J:   I know that is 2000, but was not the agreement in April or May 2000?

HEYDON J:   2001.

MR WALKER:   No, 2001.  Anzac Day 2001.  So when Mr Collins was being told this, I am bound to say the following, whether or not there was any such third party financier, what was being talked about, truthfully or not, was something that long preceded any possibility of me asking for an inference that it was intended to be a reference to Pico.  It clearly could not have been unless it is a lying reference to Pico, but that has never been raised in the case.  There is no evidence about that at all.  So no, I cannot supply any explanation from the evidence as to that question of third party financier.  As you can see, it is pretty nebulous, “was, or had been”, so leaving open whether or not it was still encumbered.  One will see that as at 29 and 30 March 2001 vis-à-vis the Bank, there was something like 15 or so entities within what the Bank regarded as his group.  And then the banking, that wonderful banking expression “viable borrowers” which really I think means people with security, because there does not seem to be much consideration about revenue for repayments.

GLEESON CJ:   The letter on page 151 merely purports to be confirmatory of something that has already been agreed.

MR WALKER:   Yes.  Now, we would rely upon that for the simple proposition that this is an admission and it is an admission on behalf of Turf Club by Mr Voss.  It confirms as done rather than the rejected argument that the Chief Justice has brought to attention, rather than, for example, noting an ongoing either executory, with conditions subsequent, or not yet fully negotiated arrangement, and what it confirms is that the company owning the land, whose copy CT is attached and expressly referred to, by dint of the words of its controller with authority regarded the provision of security as being in consideration for the extension of the maturity date of the loan.

He does that by language which, in our submission, strongly supports the proposition that Justice McHugh has raised with me, namely that here is a person speaking on behalf of those people necessary or appropriate to be inferred as those being spoken on behalf of, in the context of a deal being done as opposed to a farce being performed.  I will provide additional substitute collateral, not the debtor company, not Dominion Capital, the letterhead that he uses indifferently when writing to us or whether he is writing to the Bank on behalf of companies which either do not include Dominion Capital or include them only in a rather larger group.

GUMMOW J:   Well, “I will provide” means “I will cause to be provided”.

MR WALKER:   Yes, there is no question that we are talking about a natural person and no one has ever suggested that this language is the language of engagement personally to procure on the part of Mr Voss.  We knew we were dealing with a man who manipulated and controlled, spun around corporate entities.

GLEESON CJ:   Well, if you wanted to put an old fashioned conveyancing flourish in it, before the word “I”, you would write “pursuant to all the powers thereunto me enabling”.

MR WALKER:   Yes, and that, in our submission, is precisely what the outward manifestation of consensual conduct, the outward manifestation of speech in legal context, conveyed to anyone reasonable, the objective test, in Pico’s position, namely that this natural person was not engaging as a natural person, and it is remarkable the respondents have never raised that, given the principles upon which they say they can found their opposition.

No one says a natural person, everyone understood the natural person to be speaking on behalf of something.  In our submission, when one considers the provision of security for a debt, a debtor unable to pay, one does not immediately think that only the debtor will be providing the security.  Third party securities are the very stuff of financial dealings and they lead to classically, as Justice McHugh has pointed out, very often two parallel - in one sense interdependent - contractual transactions as well as whatever conveyances, creation of estates or covenants may follow from the contract.  In this case, whether one sees it as an agreement in which there were three parties, which could be done, or an agreement for consideration of forbearance under another agreement, which is a classic third party security arrangement, will not matter for the purposes of the analysis that conduces to our success.  It all comes down to:  what did the words, which were first person personal pronoun and the first person possessive adjective, used on Anzac Day mean, taking into account to the extent the law permits what one can gather from 4 May 2001?

In our submission, there is over‑complication in the debate constituted by the written submissions on all sides concerning what 4 May can do forensically.  Now, the first thing to observe is, it is in evidence.  The second thing to observe is that in terms of parol evidence rule, we are not here talking about resisting the adducement of evidence outside the contents of a written agreement.  The very reverse is the case.  We are talking about a Statute of Frauds note and memorandum of a preceding oral agreement, and a Statute of Frauds written memorandum may of course be used as an admission against anybody in a position to make an admission in that note or memorandum. 

However, query what is actually necessary to be gained from that letter for success in our case, because, as I return to it, there is no dispute as to what the words “my Turf Club property” meant.  They did not mean a piece of land owned by Mr Voss upon which horses ran for stakes and the gambling public.  There is no suggestion of a generic or functional description.  Even if that is meant to be excited by the care with which the second respondent’s written submissions note, by the typography in those submissions, that one does not use capital letters in speech – even if one notes that, as a possibility, it remains utterly remote, theoretical, not pursued in evidence and not the subject of any finding, and the findings with which I started this address are, of course, to the contrary.

Those words identified the property.  It is, in our submission, a first step against the respondent’s arguments against us to note that perhaps the most familiar and incontestable context in which so‑called extrinsic evidence – that is, material from outside a written document or outside the contractual speech relied upon to constitute an oral agreement – can be used is when it is to identify specifically something referred to by general terms.  We have drawn to attention in our submissions, for example, the approach taken in Fay v Miller, Wilkins & Company [1941] 1 Ch 360 which happens, at page 365, to refer to one of the familiar examples – and there are hundreds, if not thousands, of such examples – where Lord Cairns in Rossiter v Miller [1878] 3 AC 1124 at 1140 refers to the general description:

“proprietors” or “owners” is sufficient –

and then evidence being allowed, evidence outside that which was commonly held by the parties – evidence allowed to prove who they were. 

Going back to Fay v Miller, Wilkins & Company at page 363, just below the top of the page, Sir Wilfrid Greene says, in a context which is perhaps a little narrower than the present case, but which is directly applicable:

The question is not what the intention was, with which the words were used, but what on a fair construction they mean.

That is clearly the objective theory.  Here the question was whether anything could be done with the words:

will convey . . . as personal representative –

in order to provide the necessary Statute of Frauds identification of one of the parties.  The answer was, yes, no discussion whatever of what the respondents rely upon, namely, that this must be something which really did not need to be proved or discovered because it was already commonly known between the parties.  The law about being able to prove who the proprietors are, even though that discovery may pose its own difficulties, title searches, et cetera, is antithetical to any notion that there is a proposition which is necessary to the respondent’s success here, namely, unless the parties already knew it, together, you cannot prove it later.

They have taken over material which controls the reception of extra contractual text or information for the interpretation of a contract into the quite distinct area well established long before, namely, that you may prove by so‑called extrinsic evidence identification of something which is the subject matter or which is a party.  So you can identify “my land at Strathfield” because you know who the speaker is, and you can eliminate, one hopes, to one lot of land only at Strathfield.  If there is an impossible ambiguity because there are two lots at Strathfield, then that may produce problems, but that is a familiar one. 

As Rossiter points out, if one of the parties is only named as “the proprietors” – in that case, Rossiter, as your Honours will remember, it was a somewhat shadowy syndicate, shadowy in the sense that two only were on title and there was, as it were, an investment club, who were described as “the proprietors”, who had to have a meeting in order that the purchaser be approved and the offer accepted.

All of that was quite unknown to the other party and their Lordships in Rossiter regarded it as unthinkable that one could keep out evidence of who they were.  Now, in our submission, those are authorities which show that there is a familiar use, as simply an admission on the part of Turf Club, clearly authorising Mr Voss annexing a copy of its certificate of title, talking about the fact that the deed is held in trust, something is going to be sent confirming that it is held in trust.  In our submission, there is absolutely nothing in the point that the fact that 4 May comes after the 25 April prevents the Court from using, for obvious purposes, the 4 May letter to show that it is Turf Club, the company, the first respondent in this Court, that was the party to the agreement to grant security. 

Your Honours, we have not given a reference to and have not formally cited – I have informed my friends of this – a decision in the Court of Appeal Beckett v Nurse [1948] 1 KB 535 of which I now hand up copies.

GUMMOW J:   What will that tell us?

MR WALKER:   Simply that, of course, a Statute of Frauds note or memorandum can be used as an admission of critical matters.  Now, in that case it was an admission – not conclusive, of course, only an admission – it was an admission as to the terms of the contract itself.  It was critical because the note or memorandum was said to fail the Statute of Frauds requirement because it did not contain a condition that the vendor insisted was part of the conversation.

GLEESON CJ:   But if this is relevantly an admission, it is an admission by the first respondent.

MR WALKER:   Well, it is certainly an admission by the first respondent but we submit, bearing in mind that it comes as a composite, it has the certificate of title as well, bearing in mind that it speaks “I will provide additional substitute collateral” and no one suggests that that is Voss acting as Voss natural person only, it is also an admission on behalf of the party to the proceedings, namely, Turf Club.

GLEESON CJ:   That is the first respondent.

MR WALKER:   Yes.

GLEESON CJ:   Well, what I wanted to ask you is this.  You are relying on this as an admission by the first respondent, then named Turf Club Pty Limited.

MR WALKER:   Yes.

GLEESON CJ:   The admission can only have been made by Turf Club Pty Limited through the agency of Mr Voss, so you have to say that this is an admission made by Mr Voss on behalf of Turf Club Pty Limited.

MR WALKER:   That is right and one gets that, that is the intention of the company to do so, by the fact that it has permitted through Mr Voss – hence the artificiality – it has permitted the certificate of title; it permits the statement “I will provide additional substitute collateral”; it permits the supply of the title reference; it advances statements about the valuation and his (Mr Voss’s) solicitors will provide a letter confirming a fact, a present fact, the deed is held in trust.

GLEESON CJ:   This is probably a very old‑fashioned question too, but are the articles of association of the first respondent in evidence?

MR WALKER:   No, nor is there a minute book.

GLEESON CJ:   There is a line of authority about whether directors have authority to make admissions on behalf of companies, is there not?

MR WALKER:    There is no rule that directors qua directors may make admissions to the contrary.

GLEESON CJ:   In old-fashioned terms you are going to have to get Mr Voss into the position of a chief executive, that is, a managing director, if you want to rely on admissions.

MR WALKER:    I have to show that he an actor for, he is an executive, a decision‑maker, a speaker for this company, rather than simply holds office.  I accept that entirely.  However, all the material culminating in the conversation in Anzac Day does just that, in our submission.  It shows the only permissible inference is that this is a company who acts as to its property through Mr Voss, and one can and should infer the authority of someone as executive as opposed to the authority of someone as mere officeholder as director from conduct.  There was never any dispute about that, hence the finding about authority on 4 May, hence the fact of no dispute or contest about that.

GLEESON CJ:   If your opponent was appearing for a liquidator of this company, that point might have an edge on it.

MR WALKER:   Yes.  That point would unquestionably - had there been by liquidation the wedge driven between Mr Voss and Turf Club, the trial would have been utterly different without any doubt.  However, that was not the case and the company, without a liquidator and with no change of control so far as the record reveals, runs a case which does not contest authority or executive action by Mr Voss for this company, and that is highly significant in the forensic course that brings this case to this Court.

Your Honours, at 159 still, on 4 May, could I simply draw to attention the last paragraph.  We have not mentioned this in our written submissions.  There is regrettably evidentiary obscurity about that matter.  One thing is clear.  Mr Hart apparently thought that Dominion Capital was going to procure or achieve that licensing - see l37, line 20 - but what is of significance contextually is that the material from affidavits in Victoria tendered in the Queensland proceedings - see 98, lines 35 to 40 and 102, lines 20 to 35 - is that it appears that these marketing rights to the BioModule Waste Water Treatment Technology to be granted to a party other than Pico, namely, Vidler Water Company, were either already or were in the course of being transferred to another of the Voss vehicles, namely, Dominion International Investments Incorporated, sometimes called Dominion International.

Now, as I say, there is finally obscurity about both timing or accomplishment of any of those matters, and we do not have the draft referred to in the last paragraph but, in our submission, if, contrary to my main argument, we were ever driven to rely only on those things which were, as it were, known between the parties as a result of, amongst other things, negotiations and what was made explicit between them, we know from the conversation on Anzac Day that there was discussion between these two men about more than simply the creditor and debtor corporations.  There were other corporations being talked about as part of the overall arrangement on that day.  That, in our submission, is at least a leg‑up to the proposition that the language of 25 April showed that it was Turf Club, the corporation, speaking through Mr Voss in relation to the offering of the security.  May I then complete what I want to say about that proposition.

HAYNE J:   Can I take you back.  We seem to be leading into an over‑elaboration of what seems to me to be a rather simpler point.  The contract alleged was alleged to be partly oral, partly in writing - see the statement of claim.  The writing alleged was the extension document and the letter of 4 May - again, see the statement of claim.  The writing of 4 May is cast in the first person singular.

MR WALKER:   Yes, as by a natural person ‑ ‑ ‑

HAYNE J:   “I will provide additional collateral”.  The collateral - I insert the words “I will provide” - is what appears in the copy CT attached.

MR WALKER:   Yes, your Honour.

HAYNE J:   The copy CT attached reveals the registered proprietor as Turf Club.  This man is the sole director of Turf Club.

MR WALKER:   Yes, and clearly speaks for it.

HAYNE J:   Well, if necessary, Part 2B of the Corporations Law would entitle someone dealing with him not to assume authority.

MR WALKER:   Yes, your Honour.

HAYNE J:   Why is the case more elaborate than those facts reveal?

MR WALKER:   I do not suggest it is.  I am sorry.  That is, your Honour ‑ ‑ ‑

GUMMOW J:   This is not an action on the agreement for damages.

MR WALKER:   No.

GUMMOW J:   You want a declaration that the agreement conferred an equitable mortgage.

MR WALKER:   That is right, hence the consideration ‑ ‑ ‑

GUMMOW J:   How do you get to that conclusion?

MR WALKER:   Well, it was given for consideration.  It was, in our submission, a specifically enforceable undertaking, and there is an equitable mortgage created thereby.  There is no answer to that from the other side.

GUMMOW J:   What significance for reaching that final destination do any of these sections in the Property Law Act have?

MR WALKER:   None.  Your Honours, all I wanted to say finally ‑ ‑ ‑

HEYDON J:   Well, except for section 59 presumably.

MR WALKER:   Yes, but that is ‑ ‑ ‑

HEYDON J:   No other.

MR WALKER:   That significance is simply the note or memorandum point.  Finally ‑ ‑ ‑

GUMMOW J:   What does the note or memorandum have to show for an agreement to create a third party mortgage?

MR WALKER:   It needs to show the parties to the agreement, it needs to show the obligation secured, it needs to show the property hypothecated or otherwise and obviously it will need to record any other terms which are terms of the agreement.  That is the age old problem of perhaps chicken and egg to which this use as a memorandum as an admission casts an interesting light, as to whether the note or memorandum does record all the relevant terms.

Unless there are other terms, then the list I have given your Honour Justice Gummow is the list in question.  No other terms are suggested here in relation to the agreement to create the security, and that is no doubt why there is no point taken about a missing term.  This is not a Beckett v Nurse case.

GUMMOW J:   Yes, all right.  Section 59 of the Queensland Act is not quite the same as 54A of the Conveyancing Act (NSW) which expressly refers to “part performance”.

MR WALKER:   Yes. 

GUMMOW J:   Do we have to get into part performance on that ‑ ‑ ‑

MR WALKER:   No.  For the reasons we have put in chief, no.

GUMMOW J:   Yes, that would follow, I think.

MR WALKER:   Yes. 

GLEESON CJ:   And to satisfy the concluding words of section 59, you need to once again argue that Mr Voss was authorised to sign this.

MR WALKER:   I have two strings to my bow.  Signed by the party to be charged will include a signature for a corporation.

GLEESON CJ:   The corporation here is Turf Club Australia Pty Limited.

MR WALKER:   Yes, that is right.  We say this signature on the letter containing the title deed, and saying I, et cetera, that signed the Turf Club.  It is also signed for Dominion Capital.  So what?  This is not a man who was punctilious about what hat he was wearing.  That is the outward manifestation of his conduct, when speaking, master, as it were, of all he had in his dealings with the lender, talking about other corporations in relation to water rights, talking about other corporations’ land, apart from the debtors, in a way that, after all, is to be recalled, is absolutely stock standard in financing – that someone other than the debtor is found to be the person supplying security in a rescue, and nothing more routine than what I will call a fellow member of a group, however informal that expression should be regarded as in this case.

GLEESON CJ:   Just take a very simple example.  Suppose you have a man who is the sole director of a proprietary company, the proprietary company owns the dwelling house in which the man lives, and the man says to somebody, “I will sell you my house for X dollars”.  The man confirms that by a written document that simply repeats “I will sell you my house for X dollars, signed John Smith”.  All along, the house is owned by the proprietary company, of which the man is the sole director.  Does that give rise to any problems in relation to the bindingness of an agreement for sale or its enforceability?

MR WALKER:   Yes.  It would probably be fairly rapidly overcome in a case of which that example would be one, but the first problem is whether the owner has agreed to sell.  That is  ‑ ‑ ‑

GLEESON CJ:   Suppose the evidence simply shows that the proprietary company was under the control of John Smith.

MR WALKER:   Your Honour, that would probably most easily fall to be dealt with as an undisclosed principal case, but probably would not necessarily require that kind of analysis.  I am not suggesting that is a difficult analysis at all, because in context, particularly bearing in mind the public registered title, “My house” means “The house that my company owns, my company meaning the company for whom I speak and which I control”.

GLEESON CJ:   Would it make any difference to the analysis if, in the example I have given, two days later, John Smith sent a letter to the purchaser saying “I enclose a copy of the certificate of title to my house”, and the certificate of title ‑ ‑ ‑

MR WALKER:   Revealed ‑ ‑ ‑

GLEESON CJ:    ‑ ‑ ‑ revealed that the owner of the land was John Smith Pty Limited.

MR WALKER:   Not to my answer, no.  Your Honours, in relation to capacity of signature for Statute of Frauds purposes, your Honours would be familiar with lots of cases where putative guarantors have signed a subsequent note not as guarantor, probably very deliberately intending not to sign as guarantor, but signing in some other capacity, and yet it being held that, willy nilly, they have provided their relevant signature for the guarantee, Statute of Frauds purposes.  I apologise we do not have them on our list, but I simply hand up the relevant passages from Elpis Maritime v Marti Chartering Co [1992] 1 AC 21, and the passage in question – I do not want to read it – is at 33B to E per Lord Brandon. Your Honours, we rely, of course, on everything else in our written submissions.

GUMMOW J:   Well, just a minute.  How does section 11 of the Property Law Act enter into this case, if at all?

MR WALKER:   It does not.  It has been removed as an issue in the case.

GUMMOW J:   Thank you.

GLEESON CJ:   Thank you, Mr Walker.  Yes, Mr Sheahan.

MR SHEAHAN:   Your Honours, the appellant’s case has been primarily based on agreement, an agreement to provide security, and your Honours would no doubt have already identified that the critical words used by Mr Voss in the conversation of 25 April 2001 which appear at 137 at about line 12 is the reference to “my Turf Club property”.  Now, from that the appellant relies on that as being a sufficient identification for a person in Mr Hart’s position – or a reasonable person in Mr Hart’s position - that a third party was involved, that the third party owned the land for which the title deeds would be provided; that the third party was a corporation necessarily; and that Mr Voss was the sole director of the corporation or otherwise had authority with which to deal with the title deeds of that property.  Now, in my respectful submission, their reference to “my Turf Club property” is ambivalent in the context in which it is used and certainly it is insufficient ‑ ‑ ‑

GUMMOW J:   What do you mean by “ambivalent”?

MR SHEAHAN:   It could mean a number of things.  My learned friend suggested it could only mean an identification of what it must be, identification ‑ ‑ ‑

GUMMOW J:   The certificate of title was attached, was it not, a copy of it?

MR SHEAHAN:   I am talking about the conversation of 25 April before the certificate of title, sorry, your Honour.  I should say the appellant principally relies on the conversation.  Certainly that was his Honour’s finding.  There was an agreement struck on 25 April which was later manifested in both the addendum and the facsimile of 4 May, but at this point in time the appellant contends that in fact, by the use of the words “my Turf Club property”, that conveys a third party interest in the property and thereby that Mr Voss must be deemed to have been speaking on behalf of that third party.

Further, the appellant must rely on that as being sufficient to bind Turf Club Australia, the company, to an arrangement for value creating an equitable mortgage over land.  Alternatively, that because Mr Voss was the sole director of Turf Club, he must have conveyed, by the use of these words, the intention of making the agreement to provide or procure security on behalf of Turf Club Australia.  Now, in my respectful submission, one must only look at the words that were used in the conversation - the evidence has been unchallenged - to appreciate that all of those consequences which are alleged to flow from the bare reference to “my Turf Club property” are, in the first respondent’s respectful submission, untenable.

GUMMOW J:   Untenable?

MR SHEAHAN:   Untenable.  Simply that, your Honour, “my Turf Club property” could mean that he owns a turf club, it could mean a geographical situation of the property near a turf club.  The use of the personal pronoun, despite what my learned friend said, could be that he has some interest in something relating to a turf club.  That is why I say it is ambivalent at this point in time.

What the first respondent relies upon in terms of this conversation is that if this is to give rise to an agreement or this is evidence of the agreement, and an agreement is thereby struck at this point in time, then applying the orthodox test of promisee objectivity the relevant inquiry is what a reasonable person in Mr Hart’s position would have understood those words to mean.

GLEESON CJ:   Well, he would not have known?

MR SHEAHAN:   That would be our contention, your Honour, and the actual knowledge, we would submit, of Mr Hart is relevant, and I explored that with Mr Hart in his evidence.

HAYNE J:   Let all that be assumed.  Let it be assumed that there is this considerable uncertainty about what is conveyed by those words.  The conclusion that follows, is it being too uncertain that there is not yet concluded agreement because the words conveyed nothing sufficiently certain to admit of enforcement.  Assume that to be so – it may be a large assumption, it may be right, it may be wrong – that simply tips you over to what happens with the facts of 4 May.

MR SHEAHAN:   Yes, it does, your Honour.

HAYNE J:   That which was uncertain by 4 May seems to be becoming just a tad more concrete, does it not?

MR SHEAHAN:   Except that the same words, in essence, are used in 4 May facsimile, and I will come to that, but the first respondent’s principal position is that that is insufficient to identify that there was a third party involved to Mr Hart, or a reasonable person in his position.  So that this is insufficient or the evidence is insufficient to get there.

It must also be remembered that by the words used, there was no reference or identification or any preceding evidence led by the appellant at trial that Mr Hart even understood there was another corporation called Turf Club, that it had in any way taken part in any dealings between them, nor that necessarily Mr Voss spoke for or on behalf of a company called Turf Club.  Thereby, no reasonable person in Mr Hart’s position could have been presumed to understand that Mr Voss was communicating on behalf of a third party.

Now, as your Honour Justice Hayne has observed, after this conversation two documents were created.  The first dated document is the addendum No 2 which appears at page 161 – we have gone to that previously.  The evidence is unclear as to precisely when that document was created.  I sought to explore that with Mr Hart in cross‑examination.  However, he was unclear as to precisely when that document may have been created.

GLEESON CJ:   That is the document on page 161?

MR SHEAHAN:   Yes, that is correct, your Honour.

GLEESON CJ:   Can you just give us a page reference to any evidence about how and when that document came into existence?

MR SHEAHAN:   Yes, your Honour.  My learned friend, Mr Walker, took you to ‑ ‑ ‑

GLEESON CJ:   And what was done with it.

MR SHEAHAN:   Yes, your Honour.  It was referred to in an affidavit of Mr Hart ‑ ‑ ‑

HEYDON J:   At 137 and 138?

MR SHEAHAN:   That is correct, your Honour, 137 to 138.  I had sought, though, to explore that with Mr Hart in cross‑examination.  I apologise, your Honours, I am seeking – yes, it appears at ‑ ‑ ‑

HEYDON J:   Page 37?

MR SHEAHAN:   Page 32, your Honour is quite right.

HEYDON J:   Page 32.

MR SHEAHAN:   It starts at the base of page 31.  I asked him whether or not it was done on 25 April – this is about line 10.  He says at line 15: 

I don’t know if it actually was created on that date or not.

I asked him a little more about it ‑ ‑ ‑

GLEESON CJ:   The proposition you put to him, that it should have been created on that date if it bore that date is just not right, is it?

MR SHEAHAN:   The basis for the proposition was that if it was dated that date, so it should have been created that date.  That is correct, your Honour.

GLEESON CJ:   I do not understand that.  If it had been created on 6 May, what would be wrong with dating it 25 April if its purpose is to record or constitute a memorandum of an agreement that was made on 25 April?

MR SHEAHAN:   That was the point I sought to make with him, your Honour, that it should have been dated that date, being the date it bore.  The addendum, as far as I could see, was dated 25 April 2001.  That appears on page 162.

GLEESON CJ:   But was his evidence that it was prepared sometime early in May, after receipt of the communication of 4 May, accepted or rejected?

MR SHEAHAN:   Your Honour, it was left open, there was no finding with respect to it.  It seems to be consistent with the alternative, that in fact it could have been created after receipt of the 4 May facsimile, I would accept that. 

GLEESON CJ:   That was the evidence.

MR SHEAHAN:   Yes, that was the evidence, your Honour.

GLEESON CJ:   And he never went back on that, did he?

MR SHEAHAN:   No.  His evidence, as it ended up, save for what he says at about line 37 on page 32, that was most likely to be the date of the agreement.  So the evidence did not go any further than that.  It could have been created on 4 May – the evidence was uncertain about that – but there was certainly no finding.

GLEESON CJ:   No, no.  I do not think the evidence was uncertain at all.  The evidence in his affidavit is that in or about early May, after receipt of Voss’s 4 May facsimile, he instructed his attorney to draw up this document, and the attorney would do it up and put on it the date of 25 April, which is consistent with being the date of the agreement and the conversation.

MR SHEAHAN:   Yes, your Honour, we accept that.  So accepting that was in fact created after receipt of the 4 May facsimile – and I will return to the 4 May facsimile in a moment – there are one or two important things to note about it.  It refers to, in the second paragraph, particularly in relation to the obligations that are created by reason of this agreement and by reference to the facsimile:

The obligations under this Note shall be secured by a deed for real property, which will constitute at all times a loan to value ratio of 50 per cent.  The real property is described in the attached Certificate of Title. 

Your Honours, I will pause there.  There was a discussion with Mr Walker as to whether or not that was in fact attached to the Addendum No 2 or not.  There was no evidence to that effect.  It may perhaps have been – I put it no higher than that – a reference to the photocopy of the certificate of title which was in fact attached to the 4 May facsimile  Of course, the title deeds or certificates of title were never eventually provided, so it could not have been the actual certificate of title.  But be that as it may, it continues:

Payee shall have a first lien on the real property pledged as collateral for the Note, and no encumbrance or interest senior to Payee’s –

I will pause there.  At page 155, there appears the promissory note.  And the first line:

FOR VALUE RECEIVED, Dominion Capital Pty Ltd, an Australian corporation (“Maker”) –

is defined –

hereby promises to pay to PICO Holdings, Inc a California corporation (the “Payee”) –

So that is the definition provision for those two entities.  Returning to page 161:

interest senior to Payee’s interest in the collateral shall be given or created by Maker.”

Now, “Maker” is defined as Dominion Capital.  As evidence of the agreement which has been forged at this time, in my respectful submission, that evidence ‑ ‑ ‑

MR WALKER:    No, there is doubt about that, and it is shown by what happened.  Maybe before the 4^th, certainly very promptly after the 4^th, the extension was given.  Mr Voss’s company’s counsel cross‑examines on the basis that there was an agreement to extend, and there was an extension.  So while it may have been enough to raise a commercial eyebrow – almost certainly not as much as some of the things the NAB did, if you look at Mr Collins’s affidavit – nonetheless, there it was, Mr Voss had this effect on people.  Clearly enough, he got the benefit, and his company got the benefit, of the extension, notwithstanding there was left outstanding performance of things which we submit were promissory, not conditions of settlement.

GLEESON CJ:   Pico, of course, did not have much choice, did it?  Pico had loaned $1.2 million, it had spent the next several months desperately trying to get its hands on some security for it, and here it had the possibility of some security.

MR WALKER:    Yes.  It is not surprising, in those circumstances, that one would be prepared to extend on a promise which was binding.  It is better to have a binding promise than nothing at all and still no money, because it was not suggested that Mr Voss was somehow going to turn up with the money by way of repayment if there could not be the full settlement, with water treatment rights and everything, signed, sealed and delivered on or shortly after 30 April.  It is clear, in short, that it was in Pico’s interests to treat this as a contractual regime on foot, whereby there was an extension and there was a promise by Mr Voss on behalf of the relevant players to do something. 

Why do I say “the relevant players”?  Because although one see elsewhere in the material – I have drawn attention to it already, I think 137.2 is the most important thing – although one sees material involving Dominion Capital in the grant of exclusive marketing rights, it is clear that that required the agreement of whoever held those rights, and the evidence suggests that was not Dominion Capital.

Certainly, there were other parties involved on the other side as well because it was not just Pico, it was Vidler Water Company, apparently a controlled entity of Pico so that this was, in a way, quite usual to see the way in which NAB and the group operated.  This was getting security, getting value, getting compensation from what could be got in from this person, Mr Voss, through his various entities and, in our submission, it is not a question of still for there to be negotiation, it is rather a question that there is an executory promise, remaining to be performed, but in return for which there is already forbearance given. 

Now, that leaves open the question had it ever been litigated, and between whom would be a nice point, as to whether or not the executory promise in relation to the grant to the Vidler Water Company of those marketing rights was sufficiently certain to be enforced.  It may well be that so long as the document granted exclusive marketing rights to the thing called the Bio Module Waste Water Treatment technology, all the rest was simply a matter for further agreement leaving a solid core, very brief admittedly, leaving a very solid core sufficiently certain of a binding agreement.

HEYDON J:   Do you take a point that the uncertainty associated with the draft agreement that was to be sent shortly for review is not a point pleaded in the defence?

MR WALKER:   Yes, it has never been an issue.  Could I then go to pages 410 to 413 in the same vein.  This is an agreement proposed by way of settling the unhappy state of affairs as they existed in July 2001.  This was sent as a draft, see 407, line 35, to be sent not only to Dominion Capital, not only to Mr and Mrs Voss, but also to Turf Club Australia.  I will not bounce your Honours through the word gulf one needs to at pages 410, 411, 413, but it suffices to say that by clause 3 on 411, line 42, there was a “best endeavours” promise to “execute the Documents”.  Now, those documents, see the top of 410, line 10, included the security, line 40 on page 410, which included the Turf Club mortgage which, at the top of page 411, line 10, is:

the first ranking mortgage over the Turf Club Property –

et cetera.  Then at 413, clause 10, line 25, something in the nature of a homemade hypothecation is also inserted, whereby you have to: 

sell the Turf Club Property . . . and to apply those monies to repayment of the Loan after satisfaction of any prior registered interest. 

One sees a reference to the multiple parties involved, page 413, clause 12(a) – Dominion International is there talked about.  In our submission, there is nothing useful by way of admission to be gained from this in relation to any of the issues before this Court, and, if anything, they are consistent with the position we take about multiple parties being involved when Mr Voss talked about what I will call his things.

There is material at pages 46 to 47 and at 52 in relation to cross‑examination on those documents.  Nothing there suggests that there was any point being taken in relation to any admission contrary to the appellant’s case on that point.  Page 98, lines 35 to 40 – this is apropos the material on page 99 upon which my learned friend, Mr Fraser, relied as showing that the first person singular pronoun used by Mr Voss should in context, in the relevant part, be seen as applying to Dominion Capital.

The difficulty is, of course, when one looks at paragraphs 18 and 19 as they appear on page 98, “I” goes through contextual alterations according to the requirements of, obviously, the instant.  If one looks at all the first person pronouns or possessive adjectives in paragraphs 18 and 19 it is clear that sometimes he is talking about himself as someone to be relied upon:

I won’t let you down.

I think that is a representation that which was disappointed:

I’ll take care of it.

Ditto – through to what his plans are in terms of actions being taken which could only be taken by the decision at board level of various corporations.  There is nothing to be got, in our submission, from “I”, meaning only Dominion Capital, that is, to assume the conclusion being sought to be demonstrated.

GUMMOW J:   Is Turf Club Australia still afloat?  It seems to be – as this first respondent.

MR WALKER:   It is the first – it is before, your Honour.

GUMMOW J:   Yes.

MR WALKER:   Afloat and fighting.  Why, commercially, that is, I do not have an answer.

GUMMOW J:   I do not want to know.

MR WALKER:   No, neither do I, your Honour.  Your Honours, in relation to the pleadings one sees that the particulars, appeal book 3, lines 40 to 45, I have to confess are a little odd.  Particular (A) commencing “To the extent it was oral” then sets out the substance of the conversation which seems to be an accomplished agreement, but leaves open in the way that the Chief Justice has noted, the particulars (B)ii, the letter of 4 May.  That went to trial and was the case understood by the trial judge:  see 428.  So it means that in Suttor v Gundowda terms on appeal to this Court there could be no doubt that the trial was fought on that basis.  There was no withdrawal of matter.

One sees not only the agreement as found at 428, to which I have already drawn attention, but also the formulation of case at 430 between lines 30 to 35:

alternatively, the applicant, the first respondent and Dominion Capital, partly orally and partly in writing -

et cetera, et cetera.  So there can be no Suttor v Gundowda objection to an alternative legal characterisation of the facts proved in a trial which was fought on the basis of partly orally and partly in writing.  Our principal case, however, as my learned friend Mr Fraser has pointed out, we have argued as our sole case, our principal case remains that the Anzac Day conversation suffices.  If it does not, in our submission, justice between the parties would appropriately be done by extending to include 4 May, as was pleaded and argued at trial. 

In relation to the appeal though to the Court of Appeal, I am bound to draw to your Honours’ attention 436 between lines 30 and 35 where the locution adopted is that:

the agreement was made in late April 2001 and recorded in the facsimile of 4 May 2001

And then in paragraphs 2, 26, 37, 39 and 57 of the Court of Appeal it is clear that that is the way in which their Honours proceeded using as their foundation in most of those passages the findings of the judge, and the finding of the judge of course which clearly turned very importantly upon that first half of paragraph 20 in Mr Hart’s affidavit upon which we have relied.  May it please your Honours.

GLEESON CJ:   Thank you Mr Walker.  We will reserve our decision in this matter and we will adjourn until 10 o’clock tomorrow.

AT 3.52 PM THE MATTER WAS ADJOURNED