Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd (No 6)

[2020] WASC 302

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   WESTGEM INVESTMENTS PTY LTD v COMMONWEALTH BANK OF AUSTRALIA LTD [No 6] [2020] WASC 302

CORAM:   TOTTLE J

HEARD:   3 - 5, 9 - 11, 16, 24, 26 APRIL 2018; 2-4, 7, 9, 16, 22 - 23, 28 - 29, 31 MAY 2018; 5, 7, 11 - 12, 18 - 22, 28 JUNE 2018; 16 - 20, 23 - 27 JULY 2018 & 6 AUGUST 2018

DELIVERED          :   27 AUGUST 2020

FILE NO/S:   CIV 2722 of 2012

BETWEEN:   WESTGEM INVESTMENTS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) in its own right and as trustee for: (1) HOSSEAN POURZAND & JENNY MARIA POURZAND as trustees for THE HELEN TRUST; and (2) PAKWEST PTY LTD (RECEIVERS AND MANAGERS APPOINTED) as trustee for: (A) NEWPORT SECURITIES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) as trustee for THE PAKWEST TRUST; and (B) OAKCURE PTY LTD as trustee for THE PARRY TRUST

First Plaintiff

HOSSEAN POURZAND in his own right and as trustee for THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND FAMILY TRUST

First Named Second Plaintiff

JENNY MARIA POURZAND in her own right and as trustee for THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND FAMILY TRUST

Second Named Second Plaintiff

PAKWEST PTY LTD (RECEIVERS AND MANAGERS APPOINTED) in its own right and as trustee for NEWPORT SECURITIES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) and as trustee for various other companies listed in the statement of claim

Third Plaintiff

NEWPORT SECURITIES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) in its own right and as trustee for THE PAKWEST TRUST & THE NEWPORT FAMILY TRUST & THE LUKE SARACENI FAMILY TRUST

Fourth Plaintiff

OAKCURE PTY LTD in its own right and as trustee for THE PARRY TRUST

Fifth Plaintiff

SEAPORT PTY LTD (RECEIVERS AND MANAGERS APPOINTED) in its own right and as trustee for THE SEAPORT TRUST

Sixth Plaintiff

LUKE SARACENI

Seventh Plaintiff

MAYPORT NOMINEES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) in its own right and as trustee for THE MAYPORT UNIT TRUST

Eighth Plaintiff

QUEEN STREET PROPERTIES PTY LTD in its own right and as trustee for THE QUEEN STREET PROPERTIES TRUST

Ninth Plaintiff

GRAND EDITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) in its own right and as trustee for THE FARAH INVESTMENT TRUST NO 4

Tenth Plaintiff

LMS HOLDINGS PTY LTD as trustee for THE SARACENI FAMILY TRUST

Eleventh Plaintiff

TOKYO CITY PTY LTD as trustee for THE TOKYO CITY TRUST

Twelfth Plaintiff

MAREE SARACENI PTY LTD as trustee for THE TOKYO CITY TRUST & THE LUKE SARACENI FAMILY TRUST

Thirteenth Plaintiff

MAREE ANN SARACENI

Fourteenth Plaintiff

SINGLE HOLDINGS WA PTY LTD as trustee for THE TUART INVESTMENTS UNIT TRUST

Fifteenth Plaintiff

SARACEN PROJECT MANAGEMENT PTY LTD as trustee for THE SARACEN PROJECT MANAGEMENT TRUST

Sixteenth Plaintiff

CARDUP INDUSTRIAL LAND HOLDINGS PTY LTD in its own right and as trustee for THE CARDUP INDUSTRIAL LAND TRUST & THE CARDUP INDUSTRIAL LAND TRUST NO 2

Seventeenth Plaintiff

GOLDCUP NOMINEES PTY LTD as trustee for THE PAKWEST TRUST

Eighteenth Plaintiff

GOLDEN WEST PROPERTIES PTY LTD as trustee for THE POURZAND FAMILY TRUST & THE OZRA TRUST & THE GOLD HOUSE TRUST & JENNY'S TRUST

Nineteenth Plaintiff

AND

COMMONWEALTH BANK OF AUSTRALIA LTD

First Defendant

WESTPAC ADMINISTRATION 2 LTD

Second Defendant

WESTPAC ADMINISTRATION 3 LTD

Third Defendant

FILE NO/S:   COR 77 of 2014

BETWEEN:   BRYAN KEVIN HUGHES as liquidator of WESTGEM INVESTMENTS PTY LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)

Plaintiff

AND

COMMONWEALTH BANK OF AUSTRALIA LTD

First Defendant

WESTPAC ADMINISTRATION 2 LTD

Second Defendant

WESTPAC ADMINISTRATION 3 LTD

Third Defendant

FILE NO/S:   CIV 1596 of 2011

BETWEEN:   COMMONWEALTH BANK OF AUSTRALIA LTD

Plaintiff

AND

LUKE SARACENI

Defendant

FILE NO/S:   CIV 1651 of 2011

BETWEEN:   COMMONWEALTH BANK OF AUSTRALIA LTD

Plaintiff

AND

TOKYO CITY PTY LTD as trustee for THE TOKYO CITY TRUST

Defendant

FILE NO/S:   CIV 1652 of 2011

BETWEEN:   COMMONWEALTH BANK OF AUSTRALIA LTD

Plaintiff

AND

LMS HOLDINGS PTY LTD as trustee for THE SARACENI FAMILY TRUST

Defendant

Catchwords:

Banking - Incorporation of Code of Banking Practice 2004 into commercial finance agreement - Where offer to enter into commercial finance agreement made by two banks only one of which had adopted Code of Banking Practice 2004 - Whether customer accepted an offer by bank to be bound by Code of Banking Practice 2004 - Where obligation to provide finance a joint obligation - Where offer to provide finance on terms inconsistent with Code of Banking Practice 2004 - Code of Banking Practice 2004 not incorporated into financial agreement

Banking - Construction of Code of Banking Practice  2004 - Meaning of customer - Meaning of small business - Meaning of expression '20 full time or equivalent people' - Where customer had one director and no employees - Where customer's business a commercial property development - Where trusts held ownership interests in development - Where consultants and contractors engaged in development - Beneficiaries of trusts and employees of contractors not to be counted as 'people' of the customer - Customer a small business

Contracts - Construction and interpretation of contracts - General principles - Commercial finance agreement - Where agreement contained defined terms - Where defined terms yield to context - Meaning of the terms Cost to Complete and Cost Overrun - Meaning of the term Provisional Sum - Meaning of the term 'certified by Project Certifier' - Whether contractual provisions applied correctly by defendant banks

Contracts - de minimis principle - Where obligation on parties to serve notice in writing - Where notice given orally - Whether de minimis principle engaged - Failure to serve a notice of default in accordance with terms of commercial finance agreement not a de minimis departure

Contracts - Implied terms - Implication of terms as a matter of proper construction - Whether parties must have intended term to apply - Implication of ad hoc terms - Whether terms necessary for business efficacy - Whether terms inconsistent with express terms - Turns on own facts

Contracts - Implied terms - Where contractual discretion or power to exercise rights on event of default - Whether terms to be implied that discretion or power to be exercised only if event established objectively - Term not implied

Contracts - Implied terms - Whether term of reasonableness in relying upon contractual provisions implied into commercial finance agreements - Where term not implied by law in agreement - Where term not capable of being implied by construction - Where term not necessary to give business efficacy - Where term incompatible with express terms of the agreement - Term not implied

Contracts - Implied terms - Whether term to be implied that party to commercial finance agreement unable to rely on counterparty's non-performance or default if party caused or materially contributed to non-performance or default - Ambit of principle of construction that party cannot take advantage of own breach of contract - Term not implied

Corporations - Insolvency - Pt 5.7B Corporations Act 2001 (Cth) - Voidable transactions - Meaning of insolvent transactions - Meaning of uncommercial transactions - Whether transactions uncommercial - Whether reasonable person in company's circumstances would have entered transactions - Turns on own facts

Corporations - Insolvency - Pt 5.7B Corporations Act 2001 (Cth) - Voidable transactions - Meaning of 'transaction' - Where third parties gave guarantees and securities in respect of company's borrowings - Whether third party transactions 'transactions of the company' - Whether statutory intention against setting aside third party agreements - Where no statutory intention present - Third party agreements transactions 'of' the company

Corporations - Insolvency - Pt 5.7B Corporations Act 2001 (Cth) - Voidable transactions - Meaning of unfair loans - Whether loans extortionate as to interest or charges - Where no evidence led as to usual industry practice concerning interest or charges - Where lack of evidence not decisive - Transactions not unfair loans

Corporations - Insolvency - Pt 5.7B Corporations Act 2001 (Cth) - Voidable transactions - Meaning of insolvency - Cash flow test of insolvency - Use of hindsight - Sources of financial support - Whether support from shareholders enabled company to maintain solvency - Whether forbearance from creditors enabled company to maintain solvency - Whether company could sell its major asset to maintain solvency - Essential business asset principle - Where company unable to pay its debts as and when they fell due - Where company in state of endemic illiquidity - Company insolvent

Corporations - Insolvency - Pt 5.7B Corporations Act 2001 (Cth) - Voidable transactions - Statutory defences - Section 588FG(2) Corporations Act 2001 (Cth) - Principles applicable to defences - Where evidence of knowledge of insolvency - Defences not established - Where unnecessary to rely on defences because transactions not uncommercial

Estoppel - Estoppel by deed - Relevant principles - Whether plaintiff is estopped from asserting case inconsistent with admissions in deed - Plaintiff estopped

Misleading or deceptive conduct - Contextual silence - Whether reasonable expectation of financier disclosing borrower's ability to meet payment obligations from finance facilities - Where no reasonable expectation of disclosure - Whether statements made misleading or deceptive in relation to borrower's capacity to meet payment obligations from finance facilities - Where statements did not convey misleading or deceptive connotations - Misleading or deceptive conduct not established

Misleading or deceptive conduct - Loss and damage - Causation - Misrepresentation in respect of control over asset to be given as security - Lack of control over secured asset revealed after agreement entered into - Where agreement would have been entered on the same terms even if true position concerning control of asset was known - Where no loss flowing from misleading conduct

Unconscionable conduct - Statutory unconscionability - Section 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) - Unconscionability in connection with the supply or possible supply of financial services - Where supply as between sophisticated and well advised parties - Where allegation of extreme commercial pressure - Whether terms of supplies unconscionable - Whether conduct departed from community standards such as to warrant the label of unconscionable - Unconscionability not established

Unconscionable conduct - Statutory unconscionability - Section 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) - Unconscionability in connection with the supply or possible supply of financial services - Asset lending - Whether financier required to satisfy itself of borrower's capacity to meet repayments - Whether supply entered into with knowledge that borrower would default - Where financial supply negotiated at arms-length between well-resourced commercial entities - Whether 'asset lending' unconscionable - Unconscionability not established

Unconscionable conduct - Statutory unconscionability - Section 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) - Whether reliance by financiers on contractual rights unconscionable conduct - Unconscionability not established

Legislation:

Acts Interpretation Act 1901 (Cth), s 15AA
Australian Securities and Investments Commission Act 2001 (Cth), s 12BA, s 12BC, s 12CC, s 12DA, s 12GM
Contracts Review Act 1980 (NSW)
Corporations Act 2001 (Cth), s 9, s 91, s 95A, s 439A, s 508, s 513C, s 588E, s 588FB, s 588FC, s 588FD, s 588FE, s 588FF, s 588FG
Fair Trading Act 1987 (WA), s 5(4), s 9(2), s 10, s 11, s 77
Fair Work Act 2009 (Cth), s 23(1)
Property Law Act 1969 (WA), s 11(2)
Trade Practices Act 1974 (Cth), s 4(2), s 51A, s 51AB, s 51AC, s 52
Transfer of Land Act 1958 (Vic)

Result:

CIV 2722 of 2012:
Plaintiffs' action dismissed save as to the rectification claim and other claims to be determined at a later hearing
Defendants' counterclaim allowed in part

COR 77 of 2014:
Liquidator's action dismissed

CIV 1596 of 2011:
Plaintiff's claim allowed

CIV 1651 of 2011:
Plaintiff's claim allowed

CIV 1652 of 2011:
Plaintiff's claim allowed

Category:    A

Representation:

CIV 2722 of 2012

Counsel:

First Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
First Named Second Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Second Named Second Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Third Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Fourth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Fifth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Sixth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Seventh Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Eighth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Ninth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Tenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Eleventh Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Twelfth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Thirteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Fourteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Fifteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Sixteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Seventeenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Eighteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
Nineteenth Plaintiff	:	Mr C R C Newlinds SC, Mr D Miller SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
First Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Second Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Third Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh

Solicitors:

First Plaintiff	:	Jackson McDonald
First Named Second Plaintiff	:	Jackson McDonald
Second Named Second Plaintiff	:	Jackson McDonald
Third Plaintiff	:	Jackson McDonald
Fourth Plaintiff	:	Jackson McDonald
Fifth Plaintiff	:	Jackson McDonald
Sixth Plaintiff	:	Jackson McDonald
Seventh Plaintiff	:	Jackson McDonald
Eighth Plaintiff	:	Jackson McDonald
Ninth Plaintiff	:	Jackson McDonald
Tenth Plaintiff	:	Jackson McDonald
Eleventh Plaintiff	:	Jackson McDonald
Twelfth Plaintiff	:	Jackson McDonald
Thirteenth Plaintiff	:	Jackson McDonald
Fourteenth Plaintiff	:	Jackson McDonald
Fifteenth Plaintiff	:	Jackson McDonald
Sixteenth Plaintiff	:	Jackson McDonald
Seventeenth Plaintiff	:	Jackson McDonald
Eighteenth Plaintiff	:	Jackson McDonald
Nineteenth Plaintiff	:	Jackson McDonald
First Defendant	:	King & Wood Mallesons
Second Defendant	:	King & Wood Mallesons
Third Defendant	:	King & Wood Mallesons

COR 77 of 2014

Counsel:

Plaintiff	:	Mr C R C Newlinds SC, Mr W A D Edwards, Mr R May & Mr D J Pratt
First Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Second Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Third Defendant	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh

Solicitors:

Plaintiff	:	Jackson McDonald
First Defendant	:	King & Wood Mallesons
Second Defendant	:	King & Wood Mallesons
Third Defendant	:	King & Wood Mallesons

CIV 1596 of 2011

Counsel:

Plaintiff	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Defendant	:	Mr C R C Newlinds SC, Mr W A D Edwards, Mr R May & Mr D J Pratt

Solicitors:

Plaintiff	:	King & Wood Mallesons
Defendant	:	Jackson McDonald

CIV 1651 of 2011

Counsel:

Plaintiff	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Defendant	:	Mr C R C Newlinds SC, Mr W A D Edwards, Mr R May & Mr D J Pratt

Solicitors:

Plaintiff	:	King & Wood Mallesons
Defendant	:	Jackson McDonald

CIV 1652 of 2011

Counsel:

Plaintiff	:	Mr P J Jopling QC, Mr J A Thomson SC, Ms S E Russell, Mr E A Gisonda & Mr V Ghosh
Defendant	:	Mr C R C Newlinds SC, Mr W A D Edwards, Mr R May & Mr D J Pratt

Solicitors:

Plaintiff	:	King & Wood Mallesons
Defendant	:	Jackson McDonald

Case(s) referred to in decision(s):

Accom Finance Pty Ltd v Mars Pty Ltd [2007] NSWSC 726

Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349

Ammon v Consolidated Minerals Ltd [No 3] [2007] WASC 232

Androvitsaneas v Members First Broker Network Pty Ltd [2013] VSCA 212

Antclizo Shipping Corporation v Food Corporation of India (The Antclizo) (No 2) [1992] 1 Lloyd's Rep 558

Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68

Arcos Ltd v EA Ronaasen & Son [1933] AC 470

Arida v Arida [2015] NSWCA 170

Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10; [2009] 1 WLR 1988

Australian Securities and Investments Commission v Edwards [2005] NSWSC 831; (2005) 54 ACSR 583

Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 93 ALJR 743

Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd [2015] NSWCA 275; (2015) 90 NSWLR 367

Bank of Australasia v Hall [1907] HCA 78; (1907) 4 CLR 1514

Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30; (2016) 92 NSWLR 639

Barton v Armstrong [1976] AC 104

Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1

BHP Petroleum (Australia) Pty Ltd v Sagasco South East Inc [2001] WASCA 159

Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219

BOS International (Australia) Ltd v Babcock & Brown International Pty Ltd [2011] NSWSC 1382

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Braganza v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661

Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153

Breen v Williams [1996] HCA 57; (1996) 186 CLR 71

Brothers v Park (2004) 12 BPR 22,501

Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558

Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592

Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233; (2010) 238 FLR 384

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304

Canberra Advance Bank Ltd v Benny [1992] FCA 823; (1992) 38 FCR 427

Capital Finance Australia Ltd v Tolcher [2007] FCAFC 185; (2007) 164 FCR 83

Capital Finance Australia Ltd v Tolcher [2008] HCATrans 316

Caratti Holdings Co Pty Ltd v Coventry Group Ltd [2014] WASC 403

Cashflow Finance Pty Ltd v Westpac Banking Corporation [1999] NSWSC 671

Central Exchange Ltd v Anaconda Nickel Ltd [2001] WASC 128; (2001) 24 WAR 382

Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33

Chan v First Strategic Development Corporation Ltd (in liq) [2015] QCA 28

Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180

Clutha Ltd (in liq) v Millar [No 5] [2002] NSWSC 833; (2002) 43 ACSR 295

Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337

Commonwealth Bank of Australia Ltd v Renstel Nominees Pty Ltd [2001] VSC 167

Commonwealth Bank of Australia Ltd v Spira [2002] NSWSC 905; (2002) 174 FLR 274

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169

Commonwealth Bank of Australia v Doggett [2014] VSC 423

Commonwealth Bank of Australia v Starrs [2012] SASC 222

Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394

Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305

Cromwell Property Securities Ltd v Financial Ombudsman Service Ltd [2014] VSCA 179; (2014) 288 FLR 374

Cussen v Commissioner of Taxation [2004] NSWCA 383; (2004) 51 ACSR 530

Cussen v Sultan [2009] NSWSC 1114; (2009) 74 ACSR 496

Dalgety Australia Ltd v Harris [1977] 1 NSWLR 324

Demagogue Pty Ltd v Ramensky [1992] FCA 851; (1992) 39 FCR 31

Demondrille Nominees Pty Ltd v Shirlaw (1997) 25 ACSR 535

Dodds v Kennedy [No 2] [2011] WASCA 131; (2011) 42 WAR 16

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544

Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640

Emanuel Management Pty Ltd (in liq) v Foster's Brewing Group Ltd [2003] QSC 205; (2003) 178 FLR 1

Equitable Life Assurance Society v Hyman [2002] AC 408

Expectation Pty Ltd v Pinnacle VRB Ltd [2004] WASCA 261

Featherstone v Ashala Model Agency Pty Ltd (in liq) [2017] QCA 260; [2018] 3 Qd R 147

Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420

Fraser v NRMA Holdings Ltd [1995] FCA 9; (1995) 55 FCR 452

George v Rockett [1990] HCA 26; (1990) 170 CLR 104

Great Investments Ltd v Warner [2016] FCAFC 85; (2016) 243 FCR 516

Greer v Kettle [1938] AC 156

Guardian Mortgages Pty Ltd v Miller [2004] NSWSC 1236

Halford v Price [1960] HCA 38; (1960) 105 CLR 23

Hampton v BHP Billiton Minerals Pty Ltd [No 2] [2012] WASC 285

Hosking v Extend N Build Pty Ltd [2018] NSWCA 149; (2018) 128 ACSR 555

Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 76 FCR 151

Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (1993) 31 NSWLR 91

Hussain v CSR Building Products Ltd [2016] FCA 392; (2016) 246 FCR 62

Hymix Concrete Pty Ltd v Garritty (1977) 13 ALR 321

I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109

International Cat Manufacturing (in liq) v Rodrick [2013] QCA 372; (2013) 97 ACSR 200

International Skin Care Suppliers Pty Ltd v Commonwealth Bank of Australia [2013] NSWSC 1768

Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15; (2018) 329 FLR 149

Jingellic Minerals NL v Beach Petroleum NL (1991) 56 SASR 532

Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

JTS Property & Investments No 1 Pty Ltd (in liq) v Sadri [2010] NSWSC 1384

Junker v Hepburn [2010] NSWSC 88

Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392

Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191; (2007) 63 ACSR 557

Labracon Pty Ltd v Cuturich [2013] NSWSC 97

Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458

Leadenhall Australia Ltd v Peptech Ltd [2001] NSWCA 272; (2001) 39 ACSR 265

Lee Kong v Pilkington (Australia) Ltd (1997) 25 ACSR 103

Lewis v Doran [2005] NSWCA 243; (2005) 219 ALR 555

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268

Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181

Marcus Clark (Victoria) Ltd v Brown [1928] HCA 12; (1928) 40 CLR 540

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Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2016] AC 742

Mastronardo v Commonwealth Bank of Australia Ltd [2018] NSWCA 136

McDonald v Hanselmann (1998) 144 FLR 463

McMahon v State Bank of NSW (1990) 8 ACLC 315

Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187

Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357

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Minumbra Lancewood Pty Ltd v AM Lancewood Investment Nominees Pty Ltd [2013] NSWSC 1929; (2013) 9 BFRA 130

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Mulherin v Bank of Western Australia Ltd [2006] QCA 175

New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act [2016] HCA 50; (2016) 260 CLR 232

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Pegulan Floor Coverings Pty Ltd v Carter (1997) 24 ACSR 651

Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10; (2010) 41 WAR 353

Perpetual Custodians Ltd v IOOF Investment Management Ltd [2013] NSWCA 231; (2013) 278 FLR 49

Perrine v Carrello [2017] WASCA 151

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PW & Co v Milton Gate Investments Ltd [2004] Ch 142

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Queensland Phosphate Pty Ltd v Korda [No 2] [2019] VSCA 215

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Re Adnot Pty Ltd (1982) 7 ACLR 212

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Re Legend International Holdings Inc (in liq) [2018] VSC 789

Re New World Alliance Pty Ltd; Sycotex Pty Ltd v Baseler [No 2] [1994] FCA 332; (1994) 51 FCR 425

Re Timbatec Pty Ltd [1974] 1 NSWLR 613

Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234

Richo International Ltd v Alfred C Toepfer International Gmbh (The Bonde) [1991] 1 Lloyd's Rep 136

Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45

Ruthol Pty Ltd v Tricon (Australia) Pty Ltd [2005] NSWCA 443; (2005) 12 BPR 23,923

Sam Management Services (Aust) Pty Ltd v Bank of Western Australia Ltd [2009] NSWCA 320

Sandell v Porter [1966] HCA 28; (1966) 115 CLR 666

Saraceni v Jones [2012] WASCA 59; (2012) 42 WAR 518

Seeto v Bank of Western Australia Ltd [2010] NSWSC 922

Segelov v Ernst & Young Services Pty Ltd [2015] NSWCA 156; (2015) 89 NSWLR 431

Servcorp WA Pty Ltd v Perron Investments Pty Ltd [2016] WASCA 79; (2016) 50 WAR 226

Serventy v Commonwealth Bank of Australia [No 2] [2016] WASCA 223

Skanska Rashleigh Weatherfoil Ltd v Somerfield Stores Ltd [2006] EWCA Civ 1732

Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; (2001) 53 NSWLR 213

Specialist Diagnostic Services Pty Ltd v Healthscope Ltd [2012] VSCA 175; (2012) 41 VR 1

Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222; (2010) 41 WAR 318

Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWSC 222

Sydney Attractions Group Pty Ltd v Schulman [2013] NSWSC 858

Takemura v National Australia Bank Ltd [2003] NSWSC 339

Taylor v Carroll (1991) 6 ACSR 255

Taylor Woodrow International Ltd v Minister of Health (1978) 19 SASR 1

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Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; (2011) 15 BPR 29,699

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Tote Tasmania Pty Ltd v Garrott [2008] TASSC 86; (2008) 17 Tas R 320

Trans Petroleum (Australia) Pty Ltd v White Gum Petroleum Pty Ltd [2012] WASCA 165; (2012) 268 FLR 433

Trinick v EM & RM Williams & Sons [2009] WASC 297

Veba Oil Supply & Trading GmbH v Petrotrade Inc [2002] 1 All ER 703

Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 201 ALR 260

Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15

Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310

WFI Insurance Ltd v Manitowoq Platinum Pty Ltd [2018] WASCA 89

White v ACN 153 152 731 Pty Ltd [2018] WASCA 119; (2018) 53 WAR 234

Williams v Scholz [2008] QCA 94

Table of Contents

PART 1 - Introduction

An overview of the facts

An overview of the claims

Cost Overrun claims

Salta Stoppage and Salta Termination claims

The Combination claim and the Restated MOFA claim

The guarantors' claims

The guarantors' rectification claims

The Vasse Newtown counterclaim

The Financiers' money claims

The liquidator's voidable transactions claims

Bankwest's Seaport Guarantor claims

The evidence

Approach to the issues

PART 2 - Cost Overrun claims

Structure of Part 2

Summary of conclusions

The Transaction Documents

The MOFA

The Salta Building Contract

Builder's Side Deed

Agreement for Lease (AFL)

The framework of the Cost Overrun claims

Construction of the Cost Overrun/Cost to Complete provisions

The contractual terms contended for by Westgem

The unconscionable conduct and misleading or deceptive conduct claims

The construction of the Cost Overrun provisions

Structure of this section

The applicable principles

The definition of Cost to Complete and other critical definitions

Context in which the provisions operate

An overview of the parties' principal contentions

Westgem's contentions

Financiers' contentions

Consideration of Cost Overrun construction issue

'Practical Completion'

Building Contracts

The influence of commercial purpose

The relevance of the Builder's Side Deed

The requirement for adherence to the contractual formula and reasonableness

Provisional sums and the tunnel

The tunnel and the definition of the Land

Conclusion on construction of Cost to Complete

The MOFA terms contended for by Westgem

Code Conduct Term

Relevant provisions of the Banking Code

Overview of parties' principal contentions on the Code Conduct Term

Statement of Agreed Facts

Consideration of Code Conduct Term

The Event of Default term

Westgem's contentions

The Financier's contentions

Consideration of the implication of the Event of Default term

The 'reasonable grounds' term

Overview of parties' contentions on reasonable grounds term

Consideration of the reasonable grounds term

The Cost Overrun Consultation Term

No reliance on events caused by own conduct term

First Cost Overrun - factual findings

The dramatis personae

April 2009

May 2009

June 2009

July 2009

August 2009

September 2009

First Cost Overrun contractual claims

Breaches pleaded

Claims as developed in submissions

Breaches involving the construction and application of MOFA terms

Alleged breaches involving the failure to consult and take information into account

Breaches involving the absence of a written notice of demand

Breaches caused by or involving a material contribution by the Financiers

The first Cost Overrun statutory unconscionability claim

The relevant statutory provisions

Applicable principles

The parties' contentions

Westgem's contentions

Financiers' contentions

Consideration

First Cost Overrun misleading or deceptive conduct claim

Financiers' positive defences to the first Cost Overrun claim

Second Cost Overrun - factual findings

September 2009

Mr Sanders' 3 September 'high level calculation'

October 2009

November 2009

December 2009

January 2010

February 2010

Cost to Complete - construction costs

Second Cost Overrun contractual claims

Breaches alleged

Consideration of claims as developed in closing submissions

The second Cost Overrun statutory unconscionability claim

An overview of Westgem's case

Doubts about the occurrence of second Cost Overrun not evidence of unconscionable conduct

'Extreme commercial pressure'

The terms of the 18 November Letter Agreement were not unconscionable

A final point

The second Cost Overrun misleading or deceptive conduct claim

Financiers' positive defences to the second Cost Overrun claims

The estoppel by deed defence

The Financiers' contentions

Westgem's contentions

Applicable principles

Consideration

PART 3 - Salta Stoppage and Salta Termination claims

Introduction

Relevant provisions of the Salta Building Contract and Builder's Side Deed

The facts

October 2008 - July 2009

Salta's 15 July 2009 letter

Westgem's position late July 2009

Salta's delay cost claim

Salta's 4 August 2009 show cause notice

Salta's 12 August 2009 capacity to pay notice

Westgem's response to Salta's capacity to pay notice

Salta's 4 September 2009 capacity to pay show cause notice

Westgem's response to Salta's capacity to pay show cause notice

Payment certificate 27 dispute

Westgem's 24 September 2009 show cause notice

Salta requests a copy of the MOFA - 20 November 2009

Security Trustee responds to Salta's request for a copy of MOFA - 26 November 2009

Salta's 4 December 2009 capacity to pay notice

Salta's internal assessment - 10 December 2009

Salta's 14 December 2009 notices

Westgem's request for letter from Facility Agent

Westgem contends it has capacity to pay - 22 December 2009

Salta rejects Westgem's 22 December 2009 capacity to pay contentions

The Financiers' position - December 2009

Finance Parties and Salta meet

Salta and Westgem exchange correspondence regarding variations

27 January 2010 meeting

Salta's Proposed Way Forward

Westgem's assessment of Salta's position

Westgem provides evidence regarding its capacity to pay

Salta's response to Westgem's evidence of capacity to pay

Salta's notice of suspension

Westgem's show cause notice - 5 February 2010

Financiers' internal deliberations

Salta's response to Westgem's contentions regarding permitted variations

Westgem's assessment of its position

333's assessment of Salta's losses

Salta's response to Westgem's show cause notice - 12 February 2010

Westgem's capacity to pay contentions - 16 February 2010

Superintendent issues Salta negative payment certificate - 16 February 2010

Salta and Westgem - further correspondence

Meeting between representatives of Salta and Financiers - 24 February 2010

Salta serves notice of termination

The pleaded case

The misleading or deceptive conduct - the representations

The true position as alleged by Westgem

The causation plea

Applicable statutory provisions and principles

Consideration

'Primary' and 'alternative' cases

Contextual matters

No reasonable expectation of disclosure

True capacity to pay

No representation as to future matters

Unconscionable conduct and alleged Code Conduct Term breach

Causes of the Salta Stoppage and Salta Termination

Losses allegedly suffered as a consequence of the Salta Stoppage and Salta Termination

PART 4 - MOFA redocumentation claims

Overview

The facts

Vasse Newtown development

5 March 2010 default notice

Negotiations leading to indicative terms sheet - March - June 2010

Mr Saraceni accepts indicative terms

Financiers' approval of further funding

Mr Pourzand's inability to contribute to proposed $23 million repayment

Fourth Deed of Variation

The sale of Mr Saraceni's interests in the Vasse Newtown Project

Discussions between Mr Saraceni, Mr Clohessy and Mr Pourzand

Fifth Deed of Variation

Westgem indicates willingness to execute Restated MOFA

Mr Clohessy explains the Variation Agreement to the VNPL investors

Mr Clohessy explains the Variation Agreement to Mr Pourzand

Mr Clohessy explains the Variation Agreement to the Financiers

Building Contract with Probuild

Mr Saraceni's communications with Mr Griffiths regarding Goldman Sachs

Further communications between Mr Clohessy and Mr Pourzand

Exchanges between Financiers regarding $23 million repayment

Restated MOFA executed

Restated MOFA representations and warranties

Seaport Share Mortgage

The Goldman Sachs proposal

Proposal to defer $23 million repayment to 31 December 2010

Mr Griffiths' knowledge of the possibility of the $23 million repayment not being made on 30 September 2010 and the dilution of Mr Saraceni interest in the Vasse Newtown project

Mr Mahaffy's knowledge of the possibility of the $23 million repayment not being made on 30 September 2010 and the dilution of Mr Saraceni interest in the Vasse Newtown project

The increase in the value of securities provided to the Financiers

Westgem seeks a deferral of $23 million payment

Financiers agree to deferral of $23 million payment

Westgem defaults on $50 million payment due on 31 December 2010

Westgem's pleading regarding the Financiers' knowledge

Consideration

Applicable principles - unconscionable conduct

Asset lending comparison

The relevant circumstances

PART 5 - Vasse Newtown counterclaim

Overview

Applicable legal principles

Consideration

The representation about the availability of funds

The representation about the extent of Mr Saraceni's interest in Vasse Newtown project

Breaches of Restated MOFA warranties and Seaport Share Mortgage warranties

Loss not established

PART 6 - Rectification of the MOFA Share Mortgage

Application of MOFA Default Rate

PART 7 - Financiers' counterclaims for monies due under the MOFA, the Restated MOFA and the securities

PART 8 - Liquidator's voidable transactions claims

Overview

The insolvency issue

The meaning of insolvent transaction

The meaning of insolvency

An overview of the parties' contentions

The liquidator's contentions

The Financiers' contentions

Consideration

25 September 2009

1 December 2009 - 28 January 2010

28 January to 22 September 2010

Uncommercial transactions

Meaning of uncommercial transaction

Relevant principles

The liquidator's pre-action position

The AFL Supplementary Agreement

Terms

The liquidator's contentions

The Financiers' contentions

Consideration

The 18 November Letter Agreement

Terms

Single transaction

Uncommercial transaction

Consideration

Fourth Deed of Variation

Terms      

Liquidator's contentions

Financiers' contentions

Consideration

Fifth Deed of Variation

The Amended AFL Supplementary Agreement

The Second Supplementary Deed

Terms

Liquidator's contentions

The Financiers' contentions

Consideration

The Restated MOFA

Terms

The liquidator's contentions

The Financiers' contentions

Consideration

13 October 2010 Letter Agreement

Unfair loans

Meaning of 'unfair loan'

Authorities

The liquidator's case

The Financiers' contentions

Consideration

Financiers' defences to insolvent and uncommercial transaction claims

Section 588FG(2)

Applicable principles

The Financiers' contentions

The liquidator's contentions

Consideration

PART 9 - Seaport Guarantor proceedings

Introduction

Factual findings

Statement of Agreed facts

Guarantees provided by Luke Saraceni, Tokyo City and LMS Holdings

Guarantee provided by Newport

Seaport Facility Agreement

Security provided by Seaport

Multi Option Facility Agreement

Seaport Guarantees

Default by Westgem

Seaport

Newport

Luke Saraceni

Demands under the Seaport Facility Agreement, Seaport Charge and Seaport Mortgage 2

Seaport Facility Demand

Seaport Charge Demand

Appointment of Receivers

Seaport Mortgage 2 Demand

Expiry of the Seaport Facility Agreement

Section 76 Demand

Demands made of Luke Saraceni, LMS Holdings and Tokyo City

First Demand

Second Demand

Conclusion

PART 10 - Summary and next steps

TOTTLE J:

PART 1 - Introduction

1. Raine Square is a retail and office complex in the centre of Perth.  The development of the complex has given rise to the five actions with which this judgment is concerned.  The primary parties are Westgem Investments Pty Ltd (in liquidation) and its liquidator on one side and the banks who financed the development on the other.

2. This litigation is factually detailed and involves claims measured in the hundreds of millions of dollars.  An exposition of the many issues that this combination of circumstances generated is not presently required because at the heart of the case there was an issue of contractual construction on which the outcome of Westgem's claims largely depended.  That issue concerned the expressions 'Cost to Complete' and 'Cost Overrun' in the principal financing agreement.  Unless Westgem succeeded on the construction issue it was difficult for it to succeed on the majority of its claims.  I have determined the critical issue against Westgem and for that (and other reasons) Westgem's claims have (with a limited exception) failed.  Westgem's failure on the construction issue had an indirect but significant influence on the separate claims made by the liquidator.  The liquidator's claims have also failed.

3. The principals of Westgem were Mr Luke Saraceni and Mr Hossean Pourzand.  They were referred to in many contemporaneous documents as the 'Sponsors'.  Mr Saraceni and Mr Pourzand and a number of entities associated with them were parties to the relevant transactions as guarantors and security providers.  In appendix 1, tables A, B and C I list the capacity in which the parties participated in the various transactions with which the primary action is concerned.  In appendix 1, table D I list the people and entities involved as parties to the primary action and the relief sought by them.  In this judgment (unless the context indicates otherwise) references to Westgem are references to the parties in the Saraceni and Pourzand camps collectively.

4. The defendants are the successors to the banks who financed the development.  They were known at the relevant times as Bank of Western Australia Ltd (Bankwest) and Bank of Scotland International Australia Limited (BOSI), collectively 'the Financiers'.[1]  A company related to BOSI, BOSI Security Services Pty Ltd,[2] was appointed to act as a security trustee (the Security Trustee).  I will follow the practice adopted at the trial of using the former names of the Financiers when referring to them individually.

   [1] Bankwest and BOSI were both owned by HBOS Australia Pty Ltd (HBOSA).  In October 2008 the Commonwealth Bank of Australia Ltd acquired Bankwest and in 2012 it became the successor in law to Bankwest.  In October 2013 HBOSA sold its remaining Australian holdings to Westpac Banking Corporation; BOSI is now known as Westpac Administration 2 Ltd and is the second defendant.

   [2] BOSI Security Services Pty Ltd was originally named BWA Custodians Ltd.  It is now named Westpac Administration 3 Ltd and is the third defendant.

5. In addition to being one of the two Financiers, Bankwest was the Facility Agent with authority to act on behalf of BOSI and itself in the management of the facilities established under the terms of a Multi‑Option Facility Agreement (the MOFA), the primary financing agreement for the development.  In the MOFA the term 'Finance Parties' was defined as, the Facility Agent, the Security Trustee and each Financier.[3]  I will adopt that definition in this judgment.

   [3] RSQ.006.0001.0046, cl 1.1(48). (The number of documents tendered in the course of the trial was such that documents were tendered by tender lists in which each document tendered was identified by a unique document identifier.  Footnoted references to documents use the unique document identifier allocated to each document.  The same system is used for identifying pleadings, submissions and other documents to which reference was made in the course of the trial).

6. In summary the actions involve:

   (a)claims for damages made by Westgem against the Financiers for alleged breach of contract, misleading or deceptive conduct and unconscionable conduct;[4]

   (b)claims by guarantors and security providers to have certain guarantees and securities set aside - these claims arise from the same factual substratum on which the claims for damages are based;[5]

   (c)claims for the rectification of certain securities;[6]

   (d)counterclaims by the Financiers:[7]

   (i)for money due by Westgem and the guarantors;

   (ii)     for damages for misleading or deceptive conduct (also     formulated as breach of contract claims) based on conduct that allegedly occurred in the course of negotiations for additional funding required by Westgem in 2010;

   (e)claims by the liquidator to set aside certain transactions entered into by Westgem after 25 September 2009 as voidable transactions under Part 5.7B of the Corporations Act 2001 (Cth) (Corporations Act);[8]

   (f)claims by Bankwest in what are known as the Seaport Guarantee proceedings to enforce the various guarantees and securities given by Mr Saraceni and entities associated with him.[9]

   [4] The claims are made in the proceedings numbered CIV 2722 of 2012. 

   [5] The claims are made in the proceedings numbered CIV 2722 of 2012.

   [6] The claims are made in the proceedings numbered CIV 2722 of 2012.

   [7] The claims are made in the proceedings numbered CIV 2722 of 2012.

   [8] The claims are made in the proceedings numbered COR 77 of 2014.

   [9] These claims are made in proceedings numbered CIV 1596 of 2011, CIV 1651 of 2011 and CIV 1652 of 2011.

7. This judgment determines issues of liability only.  Directions were made for the determination of issues of quantum and certain other issues at a separate quantum hearing.

8. The liability trial was heard between April and July 2018. On 20 June 2019 I heard an application by Westgem to reopen the trial and to allow Westgem the opportunity to amend its pleadings to withdraw certain admissions and to make submissions concerning the extent of liability under some of the guarantees and securities given. On 29 August 2019 I allowed Westgem's application to reopen,[10] and I subsequently ordered that the hearing of the reopened aspects of the case be deferred until after the delivery of this judgment.

   [10] Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310.

An overview of the facts

1. Mr Saraceni and Mr Pourzand were experienced property developers who had previously worked together on property developments.  In September 2004 they incorporated Westgem as a 'special purpose' joint venture vehicle to develop Raine Square.  They each held one of two shares issued in Westgem on trust for their related entities and trusts - the ultimate beneficial owners of Raine Square.  Mr Saraceni was the sole director of Westgem. 

2. A number of companies related to Mr Saraceni were involved in various managerial capacities in the development.  They were:

   (a)Saracen Project Management Pty Ltd, the sixteenth plaintiff, appointed to manage the development under an agreement with Westgem made in August 2005.

   (b)Saracen Properties Pty Ltd (a company established by Mr Saraceni in 1995 to undertake development projects) was responsible for coordinating and overseeing the financial management and administration of the development.

3. Mr Mark Clohessy assisted Mr Saraceni and Mr Pourzand in their negotiations with the Financiers.  He was closely involved with the financing of the development and played a major role in communicating with the Financiers on behalf of Westgem.  Mr Clohessy's company, Security Capital Corporation Pty Ltd, was a licensed finance broker and was a commission agent of Bankwest until September 2008.

4. Between December 2004 and March 2006 Westgem acquired the Raine Square site with funding from St George Bank Ltd to whom it granted a mortgage over the site.  The site is bounded by Wellington Street to the north, William Street to the east, Murray Street to the south, and Queen Street to the west.

5. In January 2006 Westgem and Bankwest commenced negotiations with a view to Bankwest leasing the office space in the proposed development.  The negotiations culminated in the execution by Westgem and Bankwest of a document entitled 'Heads of Agreement' in October 2006.  This was followed in April 2009 by an 'Agreement for Lease' (AFL).[11] 

   [11] SAR.069.001.076548.

6. In August 2006 Westgem obtained development approval from the City of Perth for a development of 21 levels of office space, three retail levels, three parking levels and a pedestrian tunnel under William Street connecting the William Street underground train station with Raine Square.

7. In 2007 Westgem arranged for demolition, site retention and earthworks to be undertaken on the site at a cost of approximately $8.5 million.

8. In December 2007 Westgem and a building company, Salta Constructions Pty Ltd (Salta), entered into a fixed price building contract for the construction of the development (the Salta Building Contract).[12] 

   [12] RSQ.001.0138.0001; RSQ.001.0138.0003.

9. On 23 April 2008, Westgem and the Financiers entered into the MOFA for the provision of finance up to a limit of $327.2 million.[13] At the same time guarantees and securities were executed in favour of the Security Trustee. Between April 2008 and November 2010 the MOFA was varied on five occasions by deeds of variation,[14] and on a sixth occasion by a deed entitled 'Deed of amendment and restatement' (the Restated MOFA).[15]

   [13] RSQ.006.0001.0030.

   [14] BOS.013.001.1181; RSQ.006.0001.0172; RSQ.006.0001.0188; SAR.115.004.024292; RSQ.007.0095.0001.

   [15] RSQ.006.0002.0001.

10. Work under the Salta Building Contract started in April 2008.  Problems developed between Salta and Westgem.  In December 2008 Salta submitted a revised construction programme that showed a delay of over three months.  Between November 2008 and July 2009, 18 Contract Sum Adjustments were issued that increased the construction costs by nearly $10 million.

11. By July 2009 the relationship between Salta and Westgem had deteriorated to the extent that Salta wanted to negotiate a new contract with a revised and much higher contract price and Westgem wanted to replace Salta with another builder.  Both Salta and Westgem were considering the options open to them to terminate the Salta Building Contract. 

12. In 2009 the Financiers became increasingly concerned about escalating construction costs.  In July and September 2009 the Financiers maintained, but Westgem disputed, that 'Cost Overruns' (as defined in the MOFA) had occurred.  The most significant consequence of the occurrence of a Cost Overrun was that it required Westgem, in reality Mr Saraceni and Mr Pourzand, to contribute equity to the funding of the Project.  The July 2009 Cost Overrun (the first Cost Overrun) was paid and a resolution of the differences arising from the September 2009 Cost Overrun (the second Cost Overrun) was achieved in the form of an agreement (termed the 18 November Letter Agreement - albeit that it was finally executed on 1 December 2009) under which the Financiers extended Westgem's time for payment of the second Cost Overrun and Westgem agreed to provide additional securities having a net equity of $50 million. 

13. Although the Financiers maintained that Westgem was in default under the terms of the MOFA they continued to fund the cost of the building work undertaken by Salta but in October 2009 they refused to fund the ancillary costs of the development, principally, consultants' costs, referred to as 'soft costs'.  In the course of 2010 the Financiers did fund payment of soft costs on an ad hoc basis. 

14. In late 2009 and early 2010 Charter Hall Funds Management Ltd (Charter Hall) expressed an interest in acquiring Mr Pourzand's interest in the development, which was held by his company Oakcure.

15. In February 2010 Salta suspended work (Salta Stoppage) and shortly thereafter terminated the Salta Building Contract (Salta Termination).  Charter Hall lost interest in acquiring Mr Pourzand's interest in the development at that time.  Ultimately, Charter Hall purchased Raine Square when the development was completed. 

16. Between March and September 2010, with very limited exceptions, no building work took place.  Progress was, however, made off-site.  Westgem found a replacement builder and Westgem and the Financiers negotiated the terms upon which the Financiers would fund the increased cost of completing the development.  To facilitate these negotiations the expiry date under the MOFA was extended by deed on 30 June 2010 and again on 31 August 2010.[16]

    [16] The Fourth and Fifth Deeds of Variation dated 30 June 2010 and 31 August 2010 respectively.

17. In September 2010:

    (a)Westgem entered into a building contract with Probuild Constructions (Aust) Pty Ltd (the Probuild Building Contract).[17]  Probuild took possession of the site and started work.

    (b)The Restated MOFA and related securities were prepared and executed between 22 and 24 September 2010.[18]  The Restated MOFA increased the Multi-Option Facility Limit to $446 million.  The Westgem parties were required to provide additional guarantees and securities.  The principal was to be repaid in four tranches.  The first repayment of $23 million was due by 30 September 2010 and the second repayment of $27 million by 31 December 2010.

    [17] RSQ.007.0034.0001.

    [18] RSQ.006.0002.0001.

18. Westgem did not repay $23 million on 30 September 2010 as required by the Restated MOFA.  On 15 October 2010 the parties entered into an agreement by which Westgem's default in making the $23 million payment on 30 September 2010 was remedied, the repayment schedule was revised and Westgem was required to repay $50 million by 31 December 2010 (October 2010 Letter Agreement).

19. Westgem did not make the $50 million payment due on 31 December 2010. 

20. On 11 January 2011 the Financiers appointed Mr Mark Mentha and Mr Clifford Rocke as receivers and managers of the property of Westgem.  On the same day Mr Bryan Hughes was appointed as voluntary administrator of Westgem.  Westgem went into liquidation on 18 October 2012 and Mr Hughes was appointed liquidator.

21. On 27 October 2011 Practical Completion was achieved under the Probuild Building Contract and the AFL.

22. In April 2012 Bankwest took possession of the office premises and started to pay rent.

23. In August 2012 the retail complex was opened.

An overview of the claims

1. While there is some overlap between the claims they may be categorised as follows. 

Cost Overrun claims

1. On 22 July 2009, in its capacity as Facility Agent, Bankwest determined that the first Cost Overrun in the amount of $12,920,000 had occurred and on 18 September 2009 it determined that the second Cost Overrun in the amount of $17 million had occurred.  The Financiers maintained that each Cost Overrun gave rise to an Event of Default under the MOFA. 

2. The first Cost Overrun was paid by a combination of equity contributed on Westgem's behalf and arrangements that were accepted by the Financiers as the equivalent of equity.  The first Cost Overrun did not give rise to a dispute at the time it was determined and paid. 

3. Westgem disputed that the second Cost Overrun had occurred.  Protracted and robust negotiations followed and culminated in the 18 November Letter Agreement. 

4. In broad terms Westgem's case involves the following contentions:

   (a)The Cost Overruns were not determined in accordance with a proper construction of the applicable provisions of the MOFA.  Consequently, they were not validly determined and there were no Events of Default within the meaning of the MOFA.  This critical construction argument turns on the meaning of 'Cost to Complete' in the MOFA.

   (b)The Code of Banking Practice 2004 (the Banking Code) applied to the MOFA and the provisions of the Banking Code required Bankwest to act 'fairly and reasonably' and 'in a consistent and ethical manner' and by determining the Cost Overruns and maintaining that Westgem was in default the Financiers were in breach of the obligations imposed by the Banking Code.

   (c)The assertion by the Financiers of Cost Overruns and defaults constituted breaches of various terms of the MOFA.  Westgem argued the terms in question were either implied as a matter of construction of the MOFA or were implied as ad hoc terms.

   (d)The conduct of the Financiers in alleging Cost Overruns and defaults constituted misleading or deceptive conduct and unconscionable conduct in contravention of the applicable provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) and the Fair Trading Act 1987 (WA) (the FTA).

Salta Stoppage and Salta Termination claims

1. Westgem argues that the Salta Stoppage and Salta Termination claims result from a chain of causation that extends back to the determination of the Cost Overruns.

2. The determination of the first Cost Overrun on 22 July 2009 led to a delay in making a payment due to Salta.  On 12 August 2009 Salta gave notice to Westgem requiring it to provide evidence to demonstrate its capacity to meet its payment obligations under the Salta Building Contract.[19]  By letter dated 21 August 2009 Westgem's solicitors responded to the 12 August 2009 notice and provided Salta with a letter from Bankwest addressed to Westgem containing a statement that:[20]

   [T]he availability of future funding remains subject to compliance with the terms of the Multi Option Facility Agreement and other Transaction Documents.

   [19] BKW.502.003.8616.

   [20] BKW.600.013.4285.  In this judgment, unless otherwise apparent, quoted portions of documents and communications have been reproduced in their original form without correction of errors of spelling or grammar.

3. Between September 2009 and February 2010 Salta sent letters and served various contractual notices on Westgem, on the Financiers and on the Security Trustee.  Ostensibly Salta's object in taking these steps was for Salta to satisfy itself that Westgem had the funds to pay for work under the Salta Building Contract and, if it was not so satisfied, to ensure that it exercised its rights in compliance with the applicable contractual provisions governing suspension and termination of the work. 

4. Westgem contends that in the period between 20 November 2008 and 25 February 2009 the Financiers did not inform Salta of the true funding position under the MOFA.  On Westgem's case the true position was that the Financiers were prepared to allow Westgem to draw on the MOFA irrespective of any subsisting breach, alternatively, Westgem had not committed any breach of the MOFA, or any breach of which the Financiers were aware and were prepared to rely on, which would entitle the Financiers to withhold advances under the MOFA so as to deprive Westgem of its capacity to meet its payment obligations under the Salta Building Contract. 

5. Put shortly, Westgem claims that by not disclosing what it contends was the true position, the Financiers impliedly represented to Salta that Westgem lacked the capacity to meet its payment obligations under the Salta Building Contract by reason of having committed a breach of the MOFA on which it was prepared to rely to withhold drawdowns.  Westgem contended Salta relied on this implied representation in making the decision to suspend and thereafter terminate the Salta Building Contract.

6. Westgem claims that the Financiers' conduct constituted misleading or deceptive conduct and unconscionable conduct in contravention of the applicable statutory provisions.

7. Westgem further claims its loss included losses flowing from the delay in completing the development and the additional costs involved.  This claimed loss gives rise to a substantial subsidiary issue because the Financiers contend that Westgem would not have been able to complete the development in any less time or at any less cost had the impugned conduct not taken place, and thus did not suffer any loss. 

1. Separately Mr Pourzand and his interests claim that if Salta had not suspended and then terminated the Salta Building Contract, Charter Hall would have acquired the Pourzand interest in Raine Square, and it would thereafter have stood behind Westgem and enabled the Project to proceed to Practical Completion.

The Combination claim and the Restated MOFA claim

1. In its written submissions Westgem characterise this claim as one 'to be understood principally as an extension of causation by the [Cost Overrun claims and the Salta Stoppage and Salta Termination claims]'.[21]  The submissions went on to explain that because of the cumulative wrongdoings of the Financiers the Westgem parties were left with no choice but to accede to demands by the Financiers to sign the Restated MOFA and provide the additional guarantees and securities. 

   [21] SUB.101.004.0028, par 116.

2. The Westgem parties contend that the Financiers acted unconscionably in contravention of the ASIC Act and in breach of contract by taking additional guarantees and securities under the Restated MOFA when they knew that it was impossible for Westgem to make the payment of $23 million by 30 September 2010.  The Westgem parties contend that the Restated MOFA lacked 'any shred of commerciality' and was simply a vehicle to prolong Westgem's life long enough for the Financiers to improve their security position.

The guarantors' claims

1. The guarantors apply to set aside the guarantees and securities provided pursuant to the 18 November Letter Agreement and the Restated MOFA.  The success of these claims is dependent on the success of the primary claims by the Westgem parties.

The guarantors' rectification claims

1. The guarantors' rectification claims can be divided into two groups.  First the MOFA Share Mortgage rectification claim and secondly the Second Additional Securities rectification claims.[22]  It is unnecessary to refer to either of these claims in detail.

   [22] The Second Additional Securities were provided pursuant to the Restated MOFA and are listed in appendix 1, table C.

2. The MOFA Share Mortgage was one of several security instruments executed contemporaneously with the MOFA in favour of the Security Trustee.  The MOFA Share Mortgage granted a mortgage to the Security Trustee over the shares held by Mr Saraceni and Mr Pourzand in Westgem.  A number of limited guarantees were also executed at the same time as the MOFA Share Mortgage.  In essence Westgem pleaded that the parties to the MOFA commonly intended the MOFA Share Mortgage to be limited to the same extent of liability as the limited guarantees, namely to limit liability under the MOFA Share Mortgage to $20 million.  The Financiers accept that this was the parties' common intention and accepted that at any hearing as to quantum, liability under the MOFA Share Mortgage would be so limited.

3. The basis of the proposed rectification of the Second Additional Securities is explained in detail in my judgment concerning Westgem's application to reopen the trial.[23]  The hearing of these claims has been deferred until after the delivery of this judgment.

The Vasse Newtown counterclaim

[23] See Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 5] [2019] WASC 310.

1. The Financiers claim that they executed the Restated MOFA on the understanding that Mr Saraceni through companies associated with him owned a 66.67% interest in a land development known as the Vasse Newtown project.  The Financiers contend that in the course of negotiations about the terms upon which they might finance the completion of Raine Square, Mr Saraceni and Mr Clohessy made representations to the effect that Mr Saraceni's interest in the Vasse Newtown project was being marketed for sale and the proceeds of sale would be sufficient to enable Mr Saraceni to apply not less than $17 million in repayment of the principal under the Restated MOFA.  In fact, on 27 August 2010 the companies which held Mr Saraceni's interest in the Vasse Newtown project entered into a transaction reducing their interest to a minority interest of 49% for a consideration that included a cash component of $7,236,591.  Rather than the cash being applied to the repayment of the principal due to the Financiers, Mr Saraceni used the funds for purposes unrelated to Raine Square.  The Financiers contend that Mr Saraceni engaged in misleading or deceptive conduct and had they known the true position in relation to the reduction in Mr Saraceni's interest in Vasse Newtown they would not have entered the Restated MOFA.

The Financiers' money claims

1. The Financiers have claims under the Restated MOFA for the amounts due to them after taking into account the amount recovered from the sale of Raine Square in 2013 and the amounts recovered from the realisation of various securities.  At the commencement of the trial the Financiers stated that the debt due to them stood at over $200 million.

2. The Financiers' money claims include a claim for default interest under the MOFA.  Westgem contends that there was no entitlement to claim default interest. 

The liquidator's voidable transactions claims

1. The liquidator seeks orders setting aside transactions entered into by Westgem after 25 September 2009 on the grounds that they were voidable transactions under Part 5.7B of the Corporations Act.  The primary issues in these proceedings are whether Westgem was insolvent from September 2009 and whether a number of transactions (principally the 18 November Letter Agreement and the Restated MOFA) were uncommercial transactions. 

Bankwest's Seaport Guarantor claims

1. Bankwest has claims based on guarantees and securities given by Mr Saraceni and entities related to him as security for facilities granted by it to Seaport.  The guarantors and security providers have sought to set off their damages claims against Bankwest's claims under the guarantees and securities.  It was agreed that the outcome in these proceedings would be determined by the outcome of Westgem's claims for damages.

The evidence

1. The events with which this litigation is concerned occurred many years before the trial.  In making factual findings I have paid close attention to the record of events found in contemporaneous documents.  As one would expect given the subject matter of the litigation and the length of the period over which events unfolded, the documentary record was extensive.  An indication of the volume of documentary material adduced in evidence is provided by the length of the tender lists.  Westgem's combined tender lists totalled approximately 229 pages, while the Financiers' list of documents referred to in their witness statements alone totalled 267 pages.  The combined Financiers' tender lists, including documents referred to in expert evidence, comprised of over 9,785 documents.  What was termed the 'core bundle' contained in excess of 14,000 pages of material representing approximately 10% of the total trial library. 

2. It is impossible to obtain a complete understanding of events from documents and in this respect the decision of Westgem not to adduce any lay evidence was surprising given the nature of the claims made by it and against it (and related parties) and the fact that before the trial commenced Westgem had foreshadowed calling a number of witnesses, including Mr Saraceni, Mr Pourzand and Mr Clohessy.  The absence of any factual evidence from witnesses called on Westgem's behalf made it difficult to obtain a full appreciation of Westgem's position on various issues.  With justification the Financiers described the absence of any oral evidence on Westgem's part as a 'glaring omission' and invited the court to draw adverse inferences consistent with the principles established in the case of Jones v Dunkel.[24]  For their part, however, the Financiers filed and served witness statements for witnesses involved in important events (Mr Nagle, Mr Nathan and Mr Galbraith) but whom they did not call to give evidence, and the Jones v Dunkel point was raised against them.  In the event, in the course of making factual findings I have not found it necessary to rely on inferences drawn in accordance with the Jones v Dunkel principles.

   [24] DEF.201.041.0016, par 28 - 30; Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

3. Westgem made a limited number of criticisms of the credit and reliability of the Financiers' witnesses.  I have dealt with those criticisms in the course of making factual findings in the context of the evidence to which they related and general observations on the credit and reliability of the witnesses are not required.  I am acutely conscious of the elapse of time between hearing the relevant evidence and the delivery of this judgment and the potential effect of the passage of time on my recollection of the evidence and the witnesses.  This litigation and the preparation of this judgment are matters that have never been far from my mind since the trial concluded.  The limited number of credit issues meant that when they were raised in evidence, they formed an immediate and, I consider, lasting impression, and, of course, I have had the opportunity to refresh my memory by referring to the transcript. 

Approach to the issues

1. In this judgment I have confined myself to determining those issues necessary to dispose of the claims.  In particular (with one exception), I have not dealt with the positive defences raised by the Financiers.  This should not be understood as a criticism of the Financiers for raising those defences, there was a lot at stake in this litigation, and it is understandable that the Financiers should avail themselves of all potential defences.  Rather I have taken the confined approach to keep the preparation of this judgment and its length within manageable proportions.

PART 2 - Cost Overrun claims

Structure of Part 2

1. This part of the reasons comprises:

   (a)a summary of the conclusions in respect of the Cost Overrun claims;

   (b)an overview of the transaction documents;

   (c)the framework of the Cost Overrun claims:

   (i)the construction issue;

   (ii)the implied terms;

   (iii)the unconscionable conduct and misleading or deceptive conduct claims;

   (d)the construction of the Cost Overrun provisions;

   (e)the MOFA terms for which Westgem contends;

   (f)factual findings in relation to the first Cost Overrun;

   (g)the first Cost Overrun contractual claims;

   (h)the first Cost Overrun statutory unconscionability claims;

   (i)factual findings in relation to the second Cost Overrun;

   (j)the second Cost Overrun contractual claims;

   (k)the second Cost Overrun statutory unconscionability claims;

   (l)the misleading or deceptive conduct claims; and

   (m)the Financiers' defences.

Summary of conclusions

1. I have concluded that Westgem's Cost Overrun claims must fail for the following reasons:

   (a)I do not accept Westgem's argument on the construction of the term 'Cost to Complete'.  As defined in the MOFA, Cost to Complete encompassed the construction costs required to achieve Practical Completion of the development and not merely Practical Completion of the Salta Building Contract.

   (b)The Banking Code did not apply to the MOFA.

   (c)The terms Westgem contended were incorporated into the MOFA as a matter of construction or as ad hoc implied terms were not terms of the MOFA.

   (d)If the terms for which Westgem contended were terms of the MOFA the Finance Parties did not breach those terms.

   (e)In particular Bankwest did not unreasonably determine the cost to complete as part of the process of establishing the occurrence of the first and second Cost Overruns.

   (f)The evidence - in particular the contemporaneous construction cost forecasts undertaken on Westgem's behalf - established that the first and second Cost Overruns occurred.  Thus, even if there were breaches by the Finance Parties as alleged by Westgem those breaches were not causative of any loss.

   (g)The Finance Parties did not act unconscionably.

   (h)By maintaining that the first and second Cost Overruns had occurred the Finance Parties did not engage in misleading or deceptive conduct.

The Transaction Documents

The MOFA

1. The MOFA was a financial agreement extending (inclusive of schedules) to 128 pages.  It was a relatively complex commercial agreement that operated in conjunction with the Building Contracts and a deed known as the Builder's Side Deed and the securities held by the Security Trustee.  The MOFA was negotiated between September 2007 and April 2008 following the submission by the Financiers of a 'Financing proposal' to Westgem on 6 September 2007.[25]

   [25] BKW.001.062.0092; Exhibit D8, BKW.999.031.0001, par 29 - 75.

2. The principal parties to the MOFA were Westgem as borrower, the Financiers, Bankwest as Facility Agent and the Security Trustee. 

3. Westgem was a party to the MOFA in its own right and, separately, as the trustee for the trustees of other trusts that held the title to two distinct areas of the Raine Square site referred to in the MOFA as 'Raine Square Area 1'[26] and 'Raine Square Area 2'.[27] 

   [26] Westgem held the title of Raine Square Area 1 on trust for Mr Pourzand and Mrs Pourzand in their capacities as trustees for the Helen Trust (RSQ.006.0001.0061, cl 1.3(1). 

   [27] Westgem held the title of Raine Square Area 2 on trust for Pakwest Pty Ltd as trustee for Newport Securities Pty Ltd in its capacity as trustee for the Pakwest Trust and as trustee for Oakcure Pty Ltd as trustee for the Parry Trust (RSQ.006.0001.0061, cl 1.3(1).

4. A mortgage was granted by Westgem to the Security Trustee over the Raine Square site,[28] along with a fixed and floating charge over Westgem's assets.[29]  As described earlier Mr Saraceni and Mr Pourzand executed the MOFA Share Mortgage as a mortgage over their respective shares in Westgem.

   [28] RSQ.006.0001.0208.

   [29] RSQ.006.0001.0242.

5. Mr Saraceni and Mr Pourzand in their own rights, and the other Transaction Parties listed in appendix 1 and identified as MOFA Guarantors were parties to the MOFA as guarantors.[30]  The liability of the MOFA guarantors was limited to $20 million of the principal debt together with a proportionate amount of interest, costs and other expenses subject to an exception in respect of Cost Overruns and some other presently irrelevant costs.  As I will explain later it was of some significance that the guarantors' liability was unlimited in respect of Cost Overruns.

   [30] RSQ.006.0001.0300; RSQ.006.0001.0370; RSQ.006.0001.0331; RSQ.006.0001.0349.

6. Bankwest's role as Facility Agent and its duties were defined with precision at cl 41 of the MOFA.  Its duties were expressed to be 'solely mechanical and administrative in nature' (cl 41.2(5)).  As I will explain, this description was not entirely accurate.

7. The MOFA included a recital entitled 'Introduction' that read as follows:[31]

   The Borrower has requested the Financiers to provide it with financial accommodation in connection with the Project. 

   [31] RSQ.006.0001.0030, 8.

8. 'Project' was a defined term.  There was some controversy about the definition which I set out later in this judgment.

9. The 'financial accommodation' referred to in the 'Introduction' was a finance facility.  It was defined in cl 1.1(46) of the MOFA as follows:[32]

   Facility means:

   (a)the Multi-Option Facility;

   (b)the Letter of Credit Facility; and

   (c)the Overdraft (GST Float) Facility,

   and Facilities has a corresponding meaning;

   [32] RSQ.006.0001.0030, 15 - 16.

10. Each of the three Facilities had a Facility Limit.  In the case of the Multi‑Option Facility the limit was $316 million, (cl 1.1(77)) and this limit included an amount available for the purpose of funding 'Project contingencies'.  The Facility Limit for the Letter of Credit Facility was $8.2 million, (cl 1.1(70)) and the Facility Limit in respect of the Overdraft (GST Float) Facility was $3 million, (cl 1.1(82)).  Westgem was obliged to ensure that the amount outstanding in respect of each Facility did not exceed the applicable Facility Limit, (cl 5.1).  The Multi-Option Facility and the Letter of Credit Facility were expressed to expire on 30 June 2010, (cl 1.1(45)).

11. The purpose for which the Facilities might be used by Westgem was specified in cl 3 of the MOFA as follows:[33]

    [33] RSQ.006.0001.0030, 34 - 35.

    3.Purpose

    Unless otherwise agreed in writing by the Financiers, the Borrower may only use the Facilities for the following purposes:

    (1)in respect of the Multi-Option Facility:

    (a)to refinance existing liabilities owed by the Borrower:

    (i)in its Raine Square Area 1 Capacity, in favour of St George Bank Limited in the amount $9,690,000; and

    (ii)in its Raine Square Area 2 Capacity, in favour of St George Bank Limited;

    (b)to fund the capitalisation of interest and the line fee and Letter of Credit fee payable under clause 19, in each case in accordance with clause 7.2;

    (c)to meet the Borrower's interest rate hedging obligations under the Multi-Option Facility; and

    (d)to carry out the Project in accordance with the Approved Project Budget;

    (2)in respect of the Letter of Credit Facility, to fund contingent liabilities owed by the Borrower to the Lessee under the terms of the Heads of Agreement; and

    (3)in respect of the Overdraft (GST Float) Facility, to meet the on-going GST obligations for the Project.

12. The Approved Project Budget referred to in cl 3(1)(d) was a defined term, (cl 1.1(8)).  I set out the definition later in this judgment.  Westgem was required to provide to the Facility Agent prior to the commencement of each calendar month or at any other time reasonably requested by the Facility Agent, a certified copy of the Approved Project Budget, updated to take account of the applicable status of the Project, (cl 15.1(1)(g)).

13. Westgem was required to satisfy a number of conditions precedent before it could make the first drawing under a Facility, (cl 13.1) and was required to satisfy a further set of conditions precedent before each successive drawing thereafter, (cl 13.2).

14. Westgem was required to comply with reporting and notification obligations (cl 15.1 and cl 15.3) and comply with 'project undertakings' (cl 15.2).  The evident purpose of the reporting and notification obligations provisions was to ensure that the Facility Agent was kept informed of any matters that might affect the financial stability of Westgem, the financial viability of the Project or the adequacy of the security held by the Security Trustee.  The evident purpose of the 'project undertakings' obligations was to ensure that the Project was undertaken efficiently and in accordance with the Approved Project Budget.  One of the project undertakings required Westgem to conduct Project Control Group meetings no less than once each calendar month and to permit the Facility Agent to participate in those meetings, (cl 15.2(6)).  The Project Control Group was constituted by Westgem, Salta and the Project Certifier, (cl 1(94)).  Another project undertaking required Westgem to co-operate with any Independent Consultant appointed by the Financiers, (cl 15.15). 

15. Westgem was required to observe financial ratios:  a loan to valuation ratio (cl 16.1), a total development costs ratio (cl 16.2) and an interest cover ratio (cl 16.3).  I refer to these ratios in more detail later in this judgment.  As I will explain the requirement on Westgem to observe these ratios was part of the contractual mechanism by which the Financiers were able to control the credit risk.

16. The MOFA provided that certain events were 'Events of Default'.  These included the failure by Westgem to pay a Cost Overrun within five business days of demand being made by the Facility Agent, (cl 17.22).  At any time after the occurrence of an Event of Default the Financiers could, following service of a written notice of demand, take steps to protect their interests including by declaring all moneys due under the Facility to be immediately due and payable and terminating the Financiers' obligations under the MOFA, (cl 18.1(1)).

Table D: Parties - CIV 2722 of 2012

Party	Involvement	Relief Sought
Westgem Investments Pty Ltd (First plaintiff)	Developer	Damages Orders: 1.  declaring the 18 November 2009 Letter Agreement and AFL Supplementary Agreement to be void ab initio; 2.  Order declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 3.  Order that Bankwest and the Finance Parties repay monies payed to them under the above agreements. Declarations: 1.  that the Financiers were not authorised to debit interest at the default rate, or alternatively, the First MOFA Collateral Stipulation and the Second Collateral Stipulation are unenforceable and/or void; 2.  Westgem is entitled to repayment, or alternatively, the amount payed was overpaid.
Hossean Pourzand (personal capacity), Hossean and Jenny Maria Pourzand as trustees for the Helen Trust (Second plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider Guarantor under the AFL	Damages Orders: 1.  declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 2.  declaring the 18 November 2009 Letter Agreement to be void ab initio 3.  declaring the First Additional Securities to be void ab initio; 4.  declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 5.  declaring the Second Additional Securities to be void ab initio. Rectification of the MOFA Share Mortgage such that it does not contain an unlimited obligation to pay. Declaration that the Saraceni/Pourzand Guarantees Collateral Stipulation is unenforceable and/or void as a penalty.
Pakwest Pty Ltd (Third plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider, Guarantor under the AFL	Damages Orders: 1.  declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 2.  declaring the 18 November 2009 Letter Agreement to be void ab initio; 3.  declaring the First Additional Securities to be void ab initio; 4.  Order declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 5.  Order declaring the Second Additional Securities to be void ab initio.
Newport Pty Ltd (Fourth plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider Guarantor under the AFL	Same claim as the third plaintiff
Oakcure Pty Ltd (Fifth plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA Guarantor under the AFL	Damages Orders: 1.  declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 2.  Order declaring the 18 November 2009 Letter Agreement to be void ab initio; 3.  Order declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio.
Seaport Pty Ltd (Sixth plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider Guarantor under the AFL	Same claim as the third Plaintiff
Luck Saraceni (Seventh plaintiff)	Guarantor under the MOFA Guarantor under the Restated MOFA Second Additional Security Provider Guarantor under the AFL pursuant to the AFL Second Supplementary Deed	Damages Orders: 1.  declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 2.  declaring the 18 November 2009 Letter Agreement to be void ab initio; 3.  declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 4.  declaring the Second Additional Securities to be void ab initio; Rectification of the MOFA Share Mortgage such that it does not contain an unlimited obligation to pay. Declaration that the Saraceni/Pourzand Guarantees Collateral Stipulation is unenforceable and/or void as a penalty.
Mayport Nominees Pty Ltd (Eighth  plaintiff)	Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider	Damages Orders: 1.  declaring the First Additional Securities to be void ab initio; 2.  declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 3.  declaring the Second Additional Securities to be void ab initio.
Queen Street Properties Pty Ltd (Ninth plaintiff)	Guarantor under the Restated MOFA First Additional Security Provider Second Additional Security Provider	Same claim as the eighth plaintiff
Grand Edition Pty Ltd (Tenth plaintiff)	Guarantor under the Restated MOFA  Second Additional Security Provider	Orders: 1.  declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 2.  declaring the Second Additional Securities to be void ab initio.
LMS Holdings Pty Ltd (Eleventh plaintiff)	Consequential Loss Plaintiff Guarantor under: the first registered mortgage of Myer Fremantle securing debt to National Mutual; the Seaport Facility; and various loan obligations of Mayport and Newport under loan facilities with Bankwest.	Damages pursuant to s 12GF of the ASIC Act and/or s 79 of the FTA
Tokyo City Pty Ltd (Twelfth plaintiff)	Consequential Loss Plaintiff Trustee for various related entities Guarantor under the first registered mortgage of Myer Fremantle securing debt to National Mutual; Guarantor of Seaport's obligations to Bankwest under the Seaport Facility.	Same claim as the eleventh plaintiff
Maree Saraceni Pty Ltd (Thirteenth plaintiff)	Consequential Loss Plaintiff Trustee for the Tokyo City Trust and the Luke Saraceni Family Trust	Same claim as the eleventh plaintiff
Maree Ann Saraceni (Fourteenth plaintiff)	Consequential Loss Plaintiff Registered proprietor of 72 undivided 250th shares in The Esplanade South Perth	Same claim as the eleventh plaintiff
Single Holdings Pty Ltd    (Fifteenth plaintiff)	Consequential Loss Plaintiff Trustee for the Tuart Investments Unit Trust and formerly registered proprietor of land comprised in Vasse Newtown subject to securities in favour of St George Guarantor under loan facilities relating to Vasse Newtown	Same claim as the eleventh plaintiff
Saracen Project Management Pty Ltd (Sixteenth plaintiff)	Consequential Loss Plaintiff Trustee for the Saracen Project Management Trust and manager of the Raine Square Project under fee income agreement with Westgem	Same claim as the eleventh plaintiff
Cardup Industrial Land Holdings Pty Ltd (Seventeenth plaintiff)	Consequential Loss Plaintiff Trustee and registered proprietor of land subject to a mortgage and charge in favour of St George	Same claim as the eleventh plaintiff
Goldcup Nominees Pty Ltd (Eighteenth plaintiff)	Appointed trustee of Pakwest Trust on 23 November 2011 in lieu of Newport	Damages Orders: 1.  declaring each of the Restated MOFA, Second Additional Securities (and Second DCA) and 13 October 2010 Letter Agreement, Amended AFL Supplementary Agreement and AFL Second Supplementary Deed to be void ab initio; 2.  declaring the 18 November 2009 Letter Agreement to be void ab initio; 3.  declaring the First Additional Securities to be void ab initio; 4.  declaring the Fourth Deed of Variation, Fifth Deed of Variation, Restated MOFA and Second DCA to be void ab initio; 5.  declaring the Second Additional Securities to be void ab initio.
Goldenwest Properties Pty Ltd (Nineteenth plaintiff)	Consequential Loss Plaintiff From 28 May 2010 trustee for the Pourzand Family Trust and from 7 March 2012 the registered proprietor of land subject to a mortgage in favour of St George	Same claim as the eleventh plaintiff

APPENDIX 2

_________________________________________________________________________

Table A: Natural Persons

No	Person	Company	Role
1	Artelaris, Steve	Saracen Properties	Senior Project Manager and Architect (October 2006 - November 2010)
2	Baker, Stephen	Salta Constructions Pty Ltd	Commercial Manager WA (April 2008 - February 2010)
3	Bollig, Edwin	Bollig Design Group	Senior Architect, Managing Director (September 2005 - August 2011)
4	Boyes, Quentin	CBA	Executive General Manager Corporate Services (October 2008 - October 2010)
5	Burton, Dougal	Bankwest	Facility Agent (October 2009 - November 2010) Director, Property Finance Unit (October 2009 - October 2011)
6	Cargill, Brian	Salta Constructions Pty Ltd	Chief Operating Officer (May 2009 -March 2010)
7	Carmichael, Iain	Saracen Properties	External QS working for Luke Saraceni (December 2006 - May 2010)
8	Clohessy, Mark	Structured Property Finance Pty Ltd; Security Capital	Director of Security Capital Australia Pty Ltd (2008) Advisor, consultant and agent for Westgem re: Raine Square (2008 - 2010) Managing Director of Structure Property Finance (2009 - 2017)
9	Codling, Nicholas (Nick)	KordaMentha	Director (February 2011 - June 2013)
10	Crocker, Ray	Bollig Design Group	Senior Architect, Director (July 2007 - August 2011)
11	David Hewitt	David Hewitt & Co	Principal of Davit Hewitt & Co (Westgem's/Luke Saraceni's external accountant)
12	Davis, Tom	KordaMentha, 333	Director
13	Deans, Peter	CBA; Bankwest	Chief Risk Officer of Bankwest (October 2008 - June 2010) Member of Bankwest Executive Credit Committee
14	Desousa, Gus	Salta Constructions Pty Ltd	Contractor's Representative (2006 - October 2010) Senior Project Manager (April 2009 - February 2010)
15	Dower, Greg	Saracen Properties Pty Ltd	CFO from around January 2010 Financial Controller (2010)
16	Ellis, Matthew	MGB Legal	Partner at Hammond Worthington (February 2009) Director of MGB Legal (May 2009 - September 2010)
17	Fitzgerald, Ray	St Ives Group	Director
18	Fleming, Cheryl	Saracen Properties	Executive Assistant (June 2007 - January 2010)
19	Foster-Key, Mark	Savills Valuations Pty Ltd	State Director, Valuation & Advisory
20	Frankl, Alex	CBA	Head of Commercial Property, Design & Delivery (October 2008 - October 2012) Project Manager, Raine Square Development
21	Fyfe, Paul	Jackson McDonald	Partner (August 2007 - December 2013)
22	Galbraith, Donald	Bankwest	Head of Credit Sanctioning for HBOS Australia (June 2004 - 2008) Head of Credit Sanctioning within Risk Management Division (2008 - April 2010) Head of Credit Asset Management Division (April 2010 - 2012)
23	Gerrard, Steve	Salta Constructions Pty Ltd	Commercial Manager
24	Goerke, Graham	Jackson McDonald	Partner (August 2006 - December 2010)
25	Gowdie, John	Gowdie Management Group	Construction and development adviser of 333 Advisory (2008) Director and Principal of GMG (2004 - 2017)
26	Griffiths, Ross	CBA	Head of Credit Management (1995 - 2007) Chief Credit Officer (2007 - March 2014) Active member of Bankwest Executive Credit Committee and CBA Executive Risk Committee (unknown period)
27	Hanson, Geoff	Hanson Property	Managing Director
28	Hughes, Bryan	Pitcher Partners	Managing Director Liquidator of Westgem
29	Hume, Andrew	Salta Constructions Pty Ltd	Cost Planning Manager (February - November 2007) Branch Manager (WA) (November 2007 - March 2010)
30	Huston, Jessica	Deacons, Norton Rose	Lawyer/Associate (May 2009 - September 2010)
31	Ingram, Geoffrey	BOSI Australia	Senior Analyst (prior to March 2009) Manager of Structured Property Finance for Queensland (March 2009 - July 2010)
32	Josland, Stephen	Josland	Barrister & Solicitor (August 2008 - February 2011)
33	Kolagow, Dietrich Wolfgang	DW Kolagow & Associates Pty Ltd	Project Planning Consultant
34	Lafferty, Nigel	Newport Securities Pty Ltd; Grand Edition Pty Ltd	Director of Stevens Lafferty Sellers Pty Ltd (as per emails of March 2009 - December 2010)
35	La Marca, John	Bankwest	Head of Property Finance (August 2005 - June 2009)
36	Langdon, Scott	KordaMentha; 333 Advisory	Associate Director of 333 Real Estate/KordaMentha (December 2008- August 2010) Director of 333 Real Estate/KordaMentha (August 2010 -July 2012)
37	Leber, Troy	Bankwest	State Manager, Property Finance Unit (November 2006 - March 2012)
38	Lowan, Grant	Bankwest	CBA Executive Officer
39	MacLaughlin, Wendy	HKA	Partner Chartered Civil Engineer
40	Mahaffy, Larry	BOSI	Managing Director, Structured Property Financing (Vic) (2006 - 2010) Senior Director, Business Support Unit, Property (Vic and NZ) (Lloyds International) (2010 - 2012)
41	McDonald, Stephen	BOSI; Lloyds Banking Group	Associate Director, Structured Property Finance (BOSI) (January 2006 - November 2007) Director in Structured Property Finance (November 2007 - July 2009) Head of Property Finance for Queensland within the Property Finance Division of Lloyds (August 2009 - January 2012)
42	Mentha, Mark	333 Real Estate	Partner (October 2009 - June 2013) Appointed as one of two Receivers and Managers of Westgem (January 2011)
43	Merson, Robert	Saracen Properties	Quantity Surveyor / Senior Project Manager (April 2009 - January 2011) Superintendents Representative
44	Nagle, Steve	Bankwest	Senior Manager, Property Finance Unit (2006 - September 2008) Facility Agent (April 2008 - October 2009) Director, Property Finance Unit (October 2009 - 2010) Senior Manager, Credit Asset Management Division (secondment) (August 2010 - November 2011)
45	Nathan, Les	Bankwest	Senior Manager, Credit Sanctioning, HBOS Australia (2006 to October 2008) State Manager WA, Credit Asset Management (October 2008 - 2012)
46	Parker, Dennis	Saracen Properties Pty Ltd	Alternative Director for Maree Saraceni (2008 -2010)
47	Pavisich, Alan	Bankwest	Senior Manager in Business Credit team (September 2006 - December 2008) Head of Credit Asset Management Division (Late 2008 - March 2010) Head of Corporate, Specialised & Property Finance (March 2010 - 2013)
48	Pazin, Alen	Deacons, Norton Rose	Partner (October 2007 - January 2011)
49	Peter Byford	E3 Advisory	Principal, Founding Director and Co-Chairman (September 2014 onwards)
50	Potalivo, Jason	Saracen Properties	Executive Director, Development (November 2008 - November 2010)
51	Pourzand, Farah	Grand Edition	Director
52	Pourzand, Hossean	Westgem	·    Shareholder ·    Joint trustee with Jenny Pourzand ·    Married to Jenny Pourzand
53	Pourzand, Jenny Maria	Westgem; Oakcure Pty Ltd; Cityspace Pty Ltd	·    Director ·    Joint trustee with Hossean Pourzand ·    Married to Hossean Pourzand
54	Regan, Andrew	Salta Constructions Pty Ltd	Director  Legal (November 2007 - February 2010) Executive Director - Legal (February - March 2010)
55	Regan, Peter	Bankwest	Chief Manager Property Management Services (September 2005 - May 2009) Bankwest Shared Services/Bankwest Corporate Services (May 2009 - May 2014)
56	Rocke, Clifford	KordaMetha, 333	Partner Receiver
57	Ryan, William (Bill)	Deacons, Norton Rose	Partner (July 2010 - September 2010)
58	Sanders, Trevor	RBB	Director (1986 - June 2016)
59	Saraceni, Frank	Saracen Properties; Saracen Project Engineering; Saracen Project Management Pty Ltd	Executive Director, Projects (May 2006 - December 2010)
60	Saraceni, Joel	Saracen Properties	Project Director (January 2010 - December 2010)
61	Saraceni, Luke	Westgem Saracen Project Management Pty Ltd	·    Director and shareholder ·    Founder
62	Saraceni, Maree Ann	Saracen Properties Pty Ltd; Grand Edition	·    Director ·    Married to Luke Saraceni (1977 to 9 June 2011)
63	Simpson, Paul	Saracen Properties	Project Manager and Quantity Surveyor (June 2007 - January 2011)
64	Stephenson, Andrew	Clayton Utz	Partner
65	Stevens, Geoff	Lavan Legal	Partner
66	Sutton, Jon	Bankwest	CEO / Managing Director of Bankwest (December 2008 - March 2012)
67	Tarascio, Sam	Salta Constructions Pty Ltd	Managing Director (June 2007 - June 2010)
68	Tarascio, Sam Jnr	Salta Constructions Pty Ltd	Director (May 2007 - March 2010)
69	Taveira, Sheldon	BOS Australia	Associate Director, Business Support Unit - Property (October 2008 - December 2010) Manager, Business Support Unit – Property (May 2010- December 2012)
70	Taylor, Steve	Bankwest	Senior Project Manager, Raine Square (leasing) (August 2007 - October 2010)
71	Varsani, Prakash	Currie Brown (renamed Aquenta Consulting in October 2010)	Associate (September 2007 - October 2010)
72	Vinnicombe, Simon	Gowdie Management Group; KordaMentha	Gowdie Management Group (April 2010 - December 2010) Manager at KordaMentha (January 2011 - October 2016)
73	Veevers, Peter Charles	Salta Constructions Pty Ltd	Director
74	Walsh, Simon	Bankwest	Managing Director of Bankwest (December 2007 - October 2008)
75	Wheeler, David	Saracen Properties	Executive Director (June 2010 - March 2011)
76	Wilenski, Richard	Tottle Partners	Partner
77	Wilson, Berrick	KordaMentha	Partner (July 2006 - October 2009) Managing Director 333 Real Estate Appointed by Facility Agent as an independent consultant (25 September 2009)
780	Wlossak, Mark	Bankwest	Head of Credit Asset Management (East)
79	Young, John	Saracen Properties	Property Analyst (March 2008 – August 2008) Development Manager (September 2008 – December 2009)

Table B: Corporate Entities

No	Company	Description
1	333 Advisory Pty Ltd	A company appointed by the Financiers to review the financial position of Luke Saraceni and Hossean Pourzand in November 2009.
2	333 Real Estate Pty Ltd	Consultants engaged by the Financiers in September 2009 to provide consultancy services, in respect of various matters, including a review and comment on the status of the project and cost to complete of the cost to complete.
3	Arccon (WA) Pty Ltd	Alternative builder on the Raine Square Project. Provided a building proposal to Westgem to complete the construction works in February 2010.
4	Bank of Western Australia Ltd (Bankwest)	Joint financier of the Raine Square Project with BOSI and tenant of Raine Square. Bankwest has been a wholly owned subsidiary of CBA (the First Defendant) since October 2008.
5	Bollig Design Group	Architects contracted by Westgem for the base build works and design of the Raine Square Project
6	BOS International (Australia) Ltd (BOSI)	Joint Financier of the Raine Square Project with Bankwest. BOSI: ·    was, at all material times, a wholly owned subsidiary of HBOS Australia Pty Ltd; and ·    from 16 May 2014, has been known as Westpac Administration 2 Limited (the Second Defendant in these proceedings).
7	BOSI Security Services Ltd	Security Trustee under the Multi-Option Facility Agreement
8	Cardup Industrial Land Holdings Pty Ltd	Seventeenth Plaintiff and corporation of which Hossean Pourzand was the sole director. Trustee for: ·    the Cardup Industrial Land Trust; and ·    the Cardup Industrial Land Trust # 2.
9	CB Richard Ellis Pty Ltd (CBRE)	Commercial real estate services and investment firm, engaged by Bankwest to provide services in connection with Bankwest’s proposed tenancy of Raine Square relating to corporate assessment, market evaluation, building assessment, negotiation and lease or equity risk participation. CBRE acquired Swale Hynes in September 2007.
10	Charter Hall Funds Management Ltd	Entered into provisional agreement to purchase Pourzand's 50% share in the Project, however decided not to proceed consequent to the Salta Stoppage.
11	Commonwealth Bank of Australia Ltd (CBA)	First Defendant. Acquired Bankwest in October 2008.
12	D W Kolagow & Associates Pty Ltd	Project planning consultants engaged to review construction programmes and prepare revised construction programmes.
13	David Hewitt & Co	Westgem’s accountants in relation to the Raine Square Project.
14	Deacons / Norton Rose	Solicitors for the Banks in relation to the financing aspects of the Raine Square Project.
15	Diploma Constructions (WA) Pty Ltd	Forward works builder on the Raine Square Project in 2007. Provided a building proposal to Westgem in February 2010 to complete the construction works on the Raine Square Project following Salta’s termination.
16	Forum Partners Asia (HK) Ltd	Provided refinance recapitalisation proposals for the Raine Square Project from approximately September 2010 to January 2011.
17	Gallagher Group Limited	Engaged by Salta as a concrete and structural work subcontractor for the Raine Square Project.
18	Goldman Sachs Group Inc	Provided finance recapitalisation proposals for the Raine Square Project from approximately September 2010 to December 2010.
19	Goldcup Nominees Pty Ltd	Eighteenth Plaintiff in its capacity as trustee for the Pakwest Trust (from 23 November 2011).
20	Golden West Properties Pty Ltd	Nineteenth Plaintiff in its capacity as trustee (from 28 May 2010) for: ·   the Pourzand Family Trust; ·   the Ozra Trust; ·   the Gold House Trust; and ·   Jenny’s Trust.
21	Gowdie Management Group	Programming, project management and construction services consultancy company, engaged by the Financiers in September 2009 to assist 333 to undertake a review of the Raine Square Project and report on certain construction and leasing components of the Project. Later provided assisting in observing the management of the project following Probuild’s appointment.
22	Grand Edition Pty Ltd	Tenth Plaintiff and corporation of which Farah Pourzand was sole director. Plaintiff in its own right and as trustee for the Farah Investment Trust No. 4
23	HBOS Australia Pty Ltd (HBOSA)	Parent company of: ·   Bankwest until approximately 19 December 2008; and ·   BOSI (at all material times).
24	Jackson McDonald	Solicitors for Westgem in relation to various matters relating to the Raine Square Project.
25	JCA Project Planning	Professional project planning and scheduling consultancy company engaged by Bankwest as an independent programming consultant in relation to the fit-out works.
26	JP Morgan Securities (Asia Pacific) Limited	Provided finance recapitalisation proposals for the Raine Square Project from approximately September 2010 to October 2010.
27	Stephen Josland (Barrister)	Barrister engaged by Luke Saraceni / Westgem in relation to various matters.
28	Kann Finch Group Pty Ltd	Architecture and interior design firm engaged by Bankwest to provide services in connection with the construction of the Raine Square Project and the fitout of the building
29	Knight Frank (WA) Pty Ltd	Commercial property consultant and real estate agency, appointed as joint leasing agent with CB Richard Ellis in relation to the office space in Raine Square in approximately April 2005.
30	Lavan Legal	Solicitors engaged by Westgem in relation to various matters related to the Raine Square Project, including in relation to the Cost Overruns.
31	Lincolne Scott Pty Ltd (later known as WSP Lincolne Scott)	Consulting engineering company engaged by Saracen Property Ptd Ltd in relation to the mechanical and fire services work on the Raine Square Project. Lincolne Scott merged with WSP Group in 2007 and was renamed as WSP Lincolne Scott in around 2009.
32	LMS Holdings Pty Ltd	Eleventh plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors. Plaintiff in its capacity as trustee for the Saraceni Family Trust.
33	Mayport Nominees Pty Ltd	Eight plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors at all material times. Plaintiff in its own right and as trustee for the Mayport Unit Trust.
34	MGB Legal	Solicitors engaged by Hossean Pourzand and Westgem on Raine Square Project matters.
36	Newport Securities Pty Ltd	Fourth plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors at all material times. Plaintiff in its own right and as trustee for: ·    the Pakwest Trust; ·    the Newport Family Trust; and ·   the Luke Saraceni Family Trust.
37	NS Projects Pty Ltd	Project manager and superintendent of the Raine Square Project from approximately May 2010.
38	Oakcure Pty Ltd	Fifth plaintiff and corporation of which Hossean Pourzand and Jenny Pourzand were directors at all material times. Plaintiff in its own right and as trustee for the Parry Trust. Also trustee for: ·    the Zahra No. 2 Trust; and ·   the Zahra No. 3 Trust
39	Pakwest Pty Ltd	Third plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors. Plaintiff in its own right and as trustee for: ·    Newport Securities as trustee for the Pakwest Trust; ·    Oakcure Pty Ltd as trustee for the Parry Trust; ·    Westview Asset Ltd as Trustee for the Westview Trust; ·    Oakcure Pty Ltd as trustee for the Zahra No. 2 Trust; ·    the trustees of the Faramaz Trust, being: ·    Hossean Pourzand and Mrs Pourzand, until 11 June 2010; and ·    Cityscape Investments Pty Ltd, after 11 June 2010 (of which Pourzand and Mrs Pourzand were directors) ·    Rangeway Investments Pty Ltd as trustee for Rangeway Investments Trust; ·    Gold Rain Holdings Pty Ltd as Trustee for Gold Rain Family Trust; and ·   Oakcure Pty Ltd as trustee for the Zahra No. 3 Trust
40	Perron Developments Pty Ltd	Property investment company and potential purchaser of Vasse Newtown.
41	Probuild Constructions (Aust) Pty Ltd	Construction company engaged: ·   to complete the forward works on the Raine Square Project in 2007; and ·   as head builder in September 2010 to complete the remaining construction works on the Raine Square Project following Salta’s termination.
42	Ralph Beattie Bosworth Pty Ltd (RBB)	Construction cost consultancy company engaged by the Financiers as quantity surveyor in approximately August 2007 and as Project Certifier under the MOFA around April 2008.
43	Rider Levett Bucknall WA Pty Ltd	Quantity surveying consultants engaged by Westgem to provide consultancy services on the Raine Square Project.
44	Queen Street Properties Pty Ltd	Ninth plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors. Trustee for the Queen Street Properties Trust.
45	Salta Constructions Pty Ltd (Salta)	Engaged by Westgem as head builder in relation to the base build construction works on the Raine Square Project in 2007, until termination of the building contract in February 2010.
46	Salta Properties Pty Ltd	Parent company of Salta Constructions Pty Ltd.
47	Saracen Project Engineering	Corporation of which Frank Saraceni was the sole director, appointed as Superintendent under Westgem’s building contract with Salta for the Raine Square Project.
48	Saracen Project Management Pty Ltd	Sixteenth plaintiff and corporation appointed as manager of the Raine Square Project under agreement with Westgem dated August 2005. Plaintiff in its capacity as trustee for the Saracen Project Management Trust.
49	Saracen Properties Pty Ltd	Project management and construction management company established by Luke Saraceni in 1995 to undertake development projects, responsible for coordinating and overseeing the Raine Square Project, including in relation to financial management and administration.
50	Seaport Pty Ltd	Sixth plaintiff and corporation of which Luke Saraceni was the sole director at all material times. Plaintiff in its own right and as trustee for the Seaport Trust.
51	Security Capital Corporation Pty Ltd	Company of which Mark Clohessy was a director. Licenced finance broker and commission agent for Bankwest until September 2008.
52	Single Holdings WA Pty Ltd	Fifteenth plaintiff and corporation of which Luke Saraceni was a director, and from 14 October 2011, Maree Saraceni was a director. Plaintiff in its capacity as trustee for the Tuart Investments Unit Trust.
53	Structured Property Finance Pty Ltd	Company providing finance for commercial property purchase developments, established by Mark Clohessy in September 2008. Entered into an Origination Agreement with Bankwest in April 2009 as a commission agent.
54	Tokyo City Pty Ltd	Twelfth plaintiff and corporation of which Luke Saraceni and Maree Saraceni were directors. Plaintiff as trustee for the Tokyo City Trust.
55	Westgem Investments Pty Ltd	First plaintiff and special purpose vehicle created with a view to be the purchaser of Raine Square, and of which Luke Saraceni and Hossean Pourzand each held one share. Trustee for: ·   Pourzand and Mrs Pourzand as trustees for the Helen Trust; ·   Pakwest Pty Ltd as trustee for: ·   Newport Securities Pty Ltd as trustee for the Pakwest Trust; and ·   Oakcure Pty Ltd as trustee for the Parry Trust.
56	Westpac Administration 2 Limited	Second Defendant, previously known as BOSI. Acquired BOSI on approximately 16 May 2014.
57	Westpac Administration 3 Limited	Third Defendant, previously known as BOSI Security Services Ltd (BOSIS). Acquired BOSIS on approximately 16 May 2014.
58	Wood & Grieve Engineers Limited	Electrical engineers on the Raine Square Project.

APPENDIX 3
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Ageing Creditor Tables

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AS

Associate to the Honourable Justice Tottle

27 AUGUST 2020