Pico Holdings Inc v Wave Vistas Pty Ltd & Anor [2004] HCATrans 382 (8 October 2004)

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Pico Holdings Inc v Wave Vistas Pty Ltd & Anor [2004] HCATrans 382 (8 October 2004)

Last Updated: 12 October 2004

[2004] HCATrans 382

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B47 of 2003

B e t w e e n -

PICO HOLDINGS INC

Applicant

and

WAVE VISTAS PTY LTD

First Respondent

NATIONAL AUSTRALIA BANK LTD

Second Respondent

Application for special leave to appeal

McHUGH J
GUMMOW J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 8 OCTOBER 2004, AT 10.27 AM

Copyright in the High Court of Australia

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

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

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

McHUGH J: Both parties are aware that I hold shares in National Australia Bank Ltd and my understanding is that that has been communicated to the parties and there is no objection to me sitting.

CALLINAN J: And I should say that I have some shares in the National Australia Bank too. Is there any problem about that?

McHUGH J: Yes, Mr Walker.

MR WALKER: Your Honours, at page 180 of the application there is conveniently set out one of the most important pieces of evidence which, alas, is not otherwise actually in the book. There is there printed out the content, leaving out the evocative letterhead, of the letter of 4 May 2001 which lies at the heart of the factual matters underlying the, we say, interesting legal questions of considerable importance to the law of contract which were raised by this case. Your Honours will have noticed in a form of colloquial language entirely common in business - - -

GUMMOW J: Just before you get into that, there is a fund of money, is there? The property has been sold?

MR WALKER: Yes, and there is a priorities question - - -

GUMMOW J: Exactly.

MR WALKER: - - - which is raised in our application - - -

McHUGH J: We do not reach that, do we?

MR WALKER: - - - and, I am about to say, is entirely dependent upon the contract point first.

GUMMOW J: It is not a contract point. It is a question of whether there was a security, is it not?

MR WALKER: Yes. It is a contract point in the sense that if there is an agreement to provide security.

GUMMOW J: The question is whether it was provided, is it not? It is not an executory contract. If it is a contract, it is a contract which was performed by the provision of the equitable mortgage. It is not a specific performance case.

MR WALKER: No, it is not a specific performance case. The question is, according to the issues - - -

GUMMOW J: These parties did not part after this letter and nothing else happened.

MR WALKER: No. Indeed, the very next paragraph shows that something else happened and there was a provision and there was the extension of credit and there was ultimately the caveats in the sequence which are relevant, arguably, to the priorities question which is subsequent and which on no view should this Court deal with bearing in mind there are no final findings of fact and, indeed, no holdings of law at all about priorities. Both courts below simply note that that did not arise. We have been denied the opportunity to compete on the priorities, and that is the important commercial matter for us.

CALLINAN J: Mr Walker, have you given any consideration to section 55 of the Property Law Act (Qld)?

MR WALKER: No.

GUMMOW J: That is the privity provision up there.

MR WALKER: Yes.

CALLINAN J: You should, I think.

MR WALKER: Privity will not arise unless and until the question of parties is sorted out. First work out who are the parties to the contract.

CALLINAN J: It may be right. I do not know whether that is necessarily so. It depends upon the construction of section 55.

MR WALKER: Yes.

McHUGH J: And section 54 to some extent because of - - -

MR WALKER: Then there is the anterior question of whether it is made by two or more persons.

McHUGH J: Yes.

GUMMOW J: Yes.

MR WALKER: That is the anterior question to which the circumstances, we submit, neatly for this Court purpose is thrown up by the transaction of a conversation in April, a letter on 4 May – they throw up neatly the facts which would give rise to the important issues of - - -

CALLINAN J: And what the photocopy certificate of title showed on its face.

MR WALKER: Exactly. At the foot of paragraph [27] in the Court of Appeal’s reasons on page 180 of the application book the most important lines are the lines that say the copy of the certificate of title showing the first respondent as proprietor was attached. In that letter there was the language of a natural person writing the letter:

I will provide additional substitute collateral . . .

My solicitors will immediately provide a letter confirming that the deed is held in trust –

et cetera.

GUMMOW J: The certificate of title appears at page 47, does it?

MR WALKER: Yes, your Honour. That is part of the dealing – I am sorry, your Honour - - -

GUMMOW J: We live in an age of modern but incompetent technology, I am afraid.

MR WALKER: Yes. I just stopped and froze lest it was me that was making that noise. I am sorry, it is not. Your Honours - - -

CALLINAN J: It was too perfect a copy.

MR WALKER: Yes. Below the approach taken was an approach which, in our submission, gave lip service – I do not say that disrespectfully – but recited the references to this Court’s generalised references to the objective theory of contract in Taylor v Johnson but did not, when analysing the facts before them, in our submission, give full weight to the high importance of the circumstances which are neatly thrown up by that letter of 4 May plus its annexed copy certificate of title in relation to the dealings between these people on the all important question of what parties were the parties to the transaction being made by the dealings between people.

This was a case where there are none of the difficulties of the impersonation or impostor cases which dominate this field of discourse, which are relevant to this field of discourse but do not apply in this particular case. This was a case when a man uses the personal pronoun “I”, the possessive adjective “my”, where it is clear to demonstration that he could not thereby be referring to the company at the top of the letterhead and that he could not, by those words, possibly intend to be suggesting, nor could the promisee, viewed objectively, be thought reasonably capable of understanding him to mean that he considered he owned the property; rather, he considered that he utterly controlled, as he did, the company of which he was the sole director, which was the registered proprietor.

In our submission, the error below and in the Court of Appeal is thrown up by their insistence that one can look at part of the objective material, of all things the letterhead, that is, the stationery to hand, to be used by a man who then speaks personally in the text of the letter and referring to the subjective ignorance of those representing my client of the ownership apart from what was shown on the certificate of title.

McHUGH J: Does your argument break new ground? The cases you rely on do not really support you, do they? GR Securities was really a case of extrinsic evidence of mutually known facts at the time of the - - -

MR WALKER: The answer to your Honour’s question is yes. There is no precedent – this is observed in the Court of Appeal as if it were against my learned junior’s argument there. In our submission, we were putting an argument on facts which had to be dealt with where there was no authority against us and that what was to be gathered as a matter of principle or approach from, in particular, the impersonation cases but also the extrinsic evidence cases to establish the identity of a party, all went in one direction, namely that when one applied the appropriately objective view to the uncontested evidence in this case – that is why it is a good vehicle; there is no difficulty about the facts – it conduced to success for my client.

McHUGH J: Does your argument cut across the undisclosed principle rule, Mr Walker, the cases? What I should say is it consistent with it?

MR WALKER: There will be no incoherence with any doctrine of undisclosed principle. We are talking about an area where agency can be a misleading expression, namely, the human agency on behalf of artificial corporations. In our submission, there will be no jarring comparison set up
between what we propose in relation to properly applying whatever form of objectivity be in vogue, be it - - -

McHUGH J: Yes, I think we might call on your opponents, Mr Walker.

MR WALKER: If it please your Honours.

McHUGH J: Yes, Mr Sheahan.

MR SHEAHAN: Thank you, your Honours. Your Honours, special leave should be refused as the case was determined solely on its facts and by resort to established legal principle. There was no controversy - - -

GUMMOW J: Wait a minute. What established legal principle?

MR SHEAHAN: That of the objective theory of contract was the appropriate test to be applied in ascertaining intentions of the parties and on the broader question of whether my client was, in fact, a party to the contract.

GUMMOW J: But this is not a case of damages for breach of contract, is it?

MR SHEAHAN: No, it is not, your Honour. It was simply a case whereby there was a principle - - -

GUMMOW J: It is a question of whether there was created an interest in land.

MR SHEAHAN: Yes, that flows from whether or not my client was, in fact, a party - - -

GUMMOW J: In performance of this alleged contract.

MR SHEAHAN: Yes. This contract was, if one views it - - -

GUMMOW J: If there was created this interest in land, does it matter whether it was or was not in performance of a contract?

MR SHEAHAN: I do not think so, your Honour.

GUMMOW J: No.

MR SHEAHAN: I say that for this reason, that what was relevant in the learned trial judge’s assessment of the facts and that before the Court of Appeal was to ascertain whether, in fact, my client was a party to the contract before ascertaining whether or not an interest in land arose. That is my principal submission in response to your Honour’s query. Now, that fact or that finding failed at the outset. It failed at the outset by pure examination of the oral evidence between - - -

GUMMOW J: Why was there created an equitable mortgage?

MR SHEAHAN: Because, your Honour, there would need to be some evidence of consent on the part of Turf Club for the provision of security over its property.

McHUGH J: But their agent handed it over, did it not?

MR SHEAHAN: I do not think the title deeds were ever provided, your Honour, if that is what your Honour is referring to. There was no doubt an agreement - - -

GUMMOW J: The duplicate certificate of title was with the solicitors, was it not?

CALLINAN J: They had a lien on it, did they not?

GUMMOW J: Yes.

MR SHEAHAN: That is correct, your Honour. Dominion Capital, who was the principal debtor, the solicitors for Dominion Capital held possession of the original form of title deed. What Mr Voss did when he communicated with Mr Hart by facsimile on 4 May was attach a photocopy, and that was as good as it got in terms of provision of any actual title. But what the learned trial judge and the Court of Appeal were interested in was whether or not my client – notwithstanding the communications by Mr Voss and his, if one could call it an undertaking to provide security – was whether or not, in fact, my client gave any consent to that by reference to it being a separate entity and which owned the property itself which was being, in effect, pledged by Mr Voss.

CALLINAN J: Mr Voss was a director of both companies, was he not?

MR SHEAHAN: Yes, that is correct, your Honour. He was chairman and CEO – and this is important – of Dominion Capital which was the principal debtor. Now, in the context of these communications there was an oral conversation by telephone on 25 April between Mr Hart on behalf of the applicant, Pico, who was the lender, and Mr Voss on behalf of Dominion Capital, which was the borrower. Now, there was no discussion at this point of the existence of Turf Club nor was there anything referred to in either communication, that is, 25 April or 4 May - - -

GUMMOW J: Turf Club is your client under an earlier name, is it?

MR SHEAHAN: That is correct, your Honour. I should have made that clear. It is the same company; it simply changed name a year or so ago. But in the context there was no reference whatsoever to the existence of Turf Club Australia Pty Limited as being the owner of the particular property in the course of the conversation or the communication with Mr Hart, save in respect of the attached - - -

GUMMOW J: The question becomes whether there was sufficient manifestation of intention by the third party provider of the security to provide that security.

MR SHEAHAN: Precisely, your Honour.

GUMMOW J: Then we are back where we were with discussions with Mr Walker. Now, the trouble with saying the Court should always construe arrangements in a business-like fashion is that businessmen can be pretty sloppy, but that does not necessarily get you home, I think.

MR SHEAHAN: They may be sloppy, your Honour. In this case the use of the - - -

GUMMOW J: Sloppy in the sense of appreciation of distinct corporate entities when the relevant businessman has an important connection with all of them.

MR SHEAHAN: That is correct, your Honour. In fact, once the applicant’s solicitors discovered, subsequent to Mr Hart’s further - - -

GUMMOW J: But the fact is, looking at it broadly, this group, to use that expression, got the benefit of the extension of the time and now they do not want the burden.

MR SHEAHAN: Well, they got the extension of the time, your Honour. There is no controversy that, in fact, the security was not provided. That was the subject of this proceeding at first instance, effectively an application brought for foreclosure, and the court ordered sale of the property. That failed obviously. Subsequent proceedings were brought by the applicant against Dominion Capital, the principal debtor, in the Supreme Court of Victoria. But in respect of the security as against my client as being a separate entity from the borrowing, there has been obviously no finding that it, in fact, gave that security. The land has been sold and the proceeds have been deposited with the National Australia Bank in satisfaction of indebtedness between - - -

GUMMOW J: Yes, we understand that. At that stage there was a priorities dispute.

MR SHEAHAN: Yes.

GUMMOW J: But the case is really all about getting into that fund or whether there is the fund which has any interest in the applicant.

MR SHEAHAN: Well, your Honour, I do not think there is any suggestion that, in fact, the fund has been kept separate or that certainly the NAB would not be right for the disgorging of the funds if it was not found to - - -

GUMMOW J: No, but it brings us back to where Mr Walker was taking us earlier today, what was this arrangement that was being made in that page of the application book with the accompanying certificate of title. You can talk about objective or subjective theories of contract but there has to be some commonsense about it all.

MR SHEAHAN: Yes, your Honour, we would accept that, but there would need to be – and this case, in my respectful submission, turns simply on the fact that there was an absence of clear evidence that Turf Club, in fact, gave any consent to the provision of its property as security. Without that evidence, the case falls at the outset. What the applicant is seeking to do is to propound an alternative legal theory by special leave question No 1 to effect account for the absence of that evidence.

What was required here was, of course, some document from Turf Club or document from Mr Voss unequivocally asserting that, in fact, he had the authority to provide the security on behalf of Turf Club or something from Turf Club itself. That was missing.

CALLINAN J: Why should not the court infer that from what appears at page 32? Now, I know that that is a document that signed by Mr Voss and passing from Mr Voss to the second respondent, but it was in evidence and it does show effectively that Mr Voss was able to speak on behalf of, and did speak from time to time on behalf of, both companies.

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

CALLINAN J: It was before the court, was it not?

MR SHEAHAN: Yes, it was. My understanding was it was, your Honour, but that is a representation with respect to obviously the National Australia Bank.

CALLINAN J: Yes, but it was in evidence.

MR SHEAHAN: Yes, your Honour.

GUMMOW J: It can be an admission, can it not?

CALLINAN J: Exactly. I am not saying it necessarily does show that, but it seems to me that it at least arguably does. It provides the document which you say is missing.

MR SHEAHAN: Yes, your Honour. Again we would resort to the fact that the way it was properly disposed of at first instance and on appeal was from the perspective of Mr Hart and dealings that Mr Voss may have had with the National Australia Bank are not relevant to that inquiry in ascertaining, in fact, whether or not Turf Club had agreed to provide its security for the advance to the applicant.

CALLINAN J: But one is talking about competing equities. It may also be relevant that the National Australia Bank knew from what appears at page 32 of the close relationship between the companies and Mr Voss’ power to speak or authority to speak for both of them. It may be relevant to a question of competing equity.

MR SHEAHAN: Yes, I would concede that, your Honour, if it, in fact, got to that point. Of course it was not dealt with below, the question of competing authorities at all. We would say that militates against certainly that point of special leave being successful. Your Honours, may I state that there was no legal principle which was sufficiently in controversy or in controversy at all before any of the judges, either at first instance or in the intermediate Court of Appeal, to warrant this Court granting special leave, in my respectful submission.

GUMMOW J: Well, there was no reference to sections 55 and 54 of the Property Law Act, was there?

MR SHEAHAN: No, your Honour. It was not run on that basis. On that section 55 point, I have not been in a position to consider it in detail obviously, but - - -

GUMMOW J: We thought Queenslanders understood the prominent provisions in their statute law - - -

MR SHEAHAN: Yes, thank you, your Honour.

GUMMOW J: - - - but we have had some doubt thrown on that twice in the last hour.

MR SHEAHAN: But I may say this about section 55, it is, of course - - -

GUMMOW J: It is a very distinctive provision.

MR SHEAHAN: Yes, your Honour, and it deals with the provision of benefits in respect of third parties. In that respect we are not only talking about the conferring of benefits on third parties, we are talking about imposing obligations on third parties. The point may be distinguished on that basis. What is effectively being sought to be done here is to impose on Turf Club the obligation of providing security where there is not the necessary evidential - - -

GUMMOW J: No, the question is, has it provided? It either has or it has not. It is too late for it to do it now because NAB is..... The question is, had it done so?

MR SHEAHAN: Yes, I appreciate the point, your Honour, and my response to that issue would be this. It has not provided it because if one person who may or may not have authority to deal with another’s property suggests in the course of communication that it will provide security but it has not done so by mere fact of saying that. The applicant’s position on that respect was that, in fact, the communications gave rise to an agreement to confer the security and not gave rise to an equitable mortgage in itself. Thus there is the argument being raised about whether or not section 11 and/or section 59 apply.

GUMMOW J: How would section 11 apply? Section 11 causes problems when there is some gratuitous arrangement. If you have value in equity, the wheels turn, hence the reservation in 11(2) for constructive trusts. That is another thing I do not understand about what happened below either. This is all law school stuff really.

MR SHEAHAN: In respect of the position taken by the applicant, initially it was a case of the 4 May facsimile being relied upon as an equitable mortgage. That position was developed to be exclusively limited to the relevant communications giving rise to an agreement and as such there was not a sufficient evidence in writing as between Dominion and Pico to give rise to that equitable mortgage by mere attachment of the photocopy of the certificate of title.

McHUGH J: That point does not arise here. Sections 11 and 59 and the issue of priorities were run at the trial – I am sorry, they were not pursued at
the trial, were they, and the Court of Appeal refused to allow them to be raised on appeal?

MR SHEAHAN: No, the learned trial judge dealt with them but in the hypothetical. He said at page 145 of the book at line 50, after dealing with his findings in respect of my client not being a party to the agreement – his Honour found that had it been the case then sections 59 and 11 would not have been met by reason of the absence of the relevant note in writing evidencing some consent of my client.

GUMMOW J: I do not think that sentence is correct.

MR SHEAHAN: Or lawful authorisation I should say, your Honour.

GUMMOW J: Insofar as the section 59 point there was bucket loads of part performance; insofar as it is a section 11 point equity will regard as done that which ought to be done because of the presence of the value, namely, the extending of the forbearance. But, anyhow, there are other questions you have to cope with, I think.

MR SHEAHAN: In respect of forbearance may I just simply say this, that there was never any threat to sue; there was simply the extension of time. There was the evidence that, in fact, Mr Hart, his principal concern was his auditors and that he would have to write off the debt rather than pursue Dominion Capital for it. That gave rise to the findings in the Court of Appeal that, in fact, there was no forbearance to sue and thereby no consideration, and certainly nothing bargained for by Turf Club, if I may say that in respect of that point.

McHUGH J: Yes, Mr Sheahan.

MR SHEAHAN: I have no further submissions to make. May it please the Court.

McHUGH J: Thank you. Yes, Mr Fraser.

MR FRASER: Your Honours, I understand that the proposition that special leave should be granted to deal with the priorities point is not pressed and the question then is whether there is a special leave point in relation to the question of the parties to the contract. As to that, it is my submission that this is not an appropriate vehicle to deal with the question.

Can I say firstly about that that, in my respectful submission, each of the judges below who dealt with the point applied a conventional approach to it. His Honour Justice Helman at page 145 of the book referred to the test of a person’s intention not being the subjective but the objective one, citing a passage from Anson’s Law of Contract, 27^th edition – page 145 at about line 10. His Honour came to the conclusion as a matter of fact that applying that approach there was not a contract to which Turf Club Australia Pty Limited was a party.

The President in the Court of Appeal adopted the same sort of approach at page 174 of the record. Her Honour said in paragraph [4] at page 174 that - - -

GUMMOW J: Is this an action to enforce that contract?

MR FRASER: No, your Honour. This is an action claiming that the applicant has an interest in land said to be the subject of a contract to which the Turf Club company was a party. I might say that is a bit of a departure. In the Court of Appeal it was made clear that the claim by the applicant was that this was an agreement to provide the security and it was that reason they postulated - - -

GUMMOW J: And the security had been provided.

MR FRASER: Well, your Honour, that was a necessary component of it, but the way they put it was that it was an agreement.

GUMMOW J: Yes.

MR FRASER: What was, in fact, said to be was that it was an agreement to provide the certificate of title. Of course the certificate of title never was provided. My client obtained the certificate of title. What was provided was a photocopy of a duplicate certificate of title. If I can just continue. That is at page 174 where the President refers to those well-known authorities and her Honour Justice Mullins at page 187 of the record referred to the same cases. Her Honour did describe the judgment of Justice Blackburn in Smith v Hughes as a class formulation of the objective theory of contract. What her Honour meant is plainly clear from her Honour’s reference to Taylor v Johnson at paragraph [59].

GUMMOW J: Taylor v Johnson is the beginning and end of it for the Queensland courts.

MR FRASER: Exactly, your Honour.

GUMMOW J: It is a decision of this Court. You do not need to ruminate about Smith v Hughes any more. You just read Taylor v Johnson and get on with it.

MR FRASER: Exactly, your Honour, and that is really our point. In our respectful submission, each of their Honours did apply Taylor v Johnson. Now, the question raised, in our respectful submission, by this application is merely whether it was applied correctly or not. We have here a short conversation followed by a confirming letter. Perhaps the question could have gone either way but, in my respectful submission, it just raises a question of fact.

Beyond that, numerous cases have been put in the applicant’s written submissions apparently with the aim of demonstrating some other theory such as that it should be presumed that Turf Club Australia Pty Limited was a party to the contract because otherwise it would not be effective to provide security. Now, in my submission, there is nothing that can support such a proposition as a proposition of law and no attempt has been made to support it in this application for special leave. It would be difficult to reconcile, one would think, with the doctrine of undisclosed principle. This is a case where on the findings the principle was not disclosed.

GUMMOW J: The real question in this case, Mr Fraser, was whether as between these parties there was an equitable mortgage created by what is now Wave Vistas Pty Ltd as a third party security. Equity regarding as done which ought to be done, it ought to be done – and this is the question – because there was an obligation for value binding Wave Vistas to do so. That is the relevant legal framework.

MR FRASER: Yes, we accept that, your Honour. That is one of the reasons the way it was put below was that the equitable mortgage was created by the fact that the Turf Club company was a party to this contract. That was the way it as put in the Court of Appeal.

GUMMOW J: Yes.

MR FRASER: And the Court of Appeal responded to that and, in my submission, they did so - - -

GUMMOW J: The question is put through rather fogged spectacles.

MR FRASER: It was, your Honour, but they were not my spectacles, your Honour, they were - - -

GUMMOW J: That is not the court’s fault.

MR FRASER: No, and, your Honour, it was the way the case was run by the applicant in the court below. We responded to their case, as the court did. Can I say in relation to section 55 of the Property Law Act that the applicant placed no reliance upon it at any point. It does involve the
pleading of material facts. In our submission, it would have no application to this case because it concerns contracts for the benefit of third parties, to put it in a nutshell, and here it was suggested that this was a contract which bound a party who was not named in it.

I did not bring the Property Law Act with me but I do recall what the provisions provide. Nor was section 54 relied upon in the case below. In my submission, this is not an appropriate vehicle for special leave. It is simply a case in which the court applied conventional principles to deal with the case as it was put to the court below. Those are my submissions, may it please the Court.

McHUGH J: Yes, thank you. Anything in reply, Mr Walker?

MR WALKER: May it please your Honours, in answer to my learned friend, Mr Sheahan, there was never a question of a consent by Turf Club. To introduce the concept of consent would muddy the waters even further. It was simply a question on the issues as pleaded, with great respect, correctly encapsulated by your Honour Justice Gummow just a moment ago, whether or not the Turf Club company was party to an arrangement, contractual in effect so as to be binding, so as to carry in its train the creation of an equitable mortgage by familiar principles.

Now, that does not involve consent as such. However, contrary to what may have been understood by your Honours from something that fell from my friend, Mr Sheahan, there was undoubted authority to deal with the company’s land reposed in the speaker, reposed in the writer of the letter of 4 May, undoubted – extracted by evidence, consistent with the other material to which your Honour Justice Callinan has referred in relation to other dealings with the Bank.

One starts with the proposition then that the objective facts which, by application of the well-known principles to which, as I said in opening, something in the nature of lip service must have been given. The objective facts started with the authorised agent of the landowner speaking in the first person as a human being, “I will provide collateral security” and in a document which is the section 59 memorandum of the agreement in a document showing who the owner is, he also being objectively the sole director. So there is no question of any expectation objectively, that is, measured by the reasonable promisee, no expectation that this was an agency about to be yanked back by a rebellious board of directors, for example.

For those reasons, in our submission, this case does raise a question which was, in fact, left open in Taylor v Johnson. I do not mean apropos an observation by your Honour Justice Gummow this morning; I do not mean that there is anything in Taylor v Johnson that we would seek to challenge. However awkward that is for me as an applicant for special leave, we do not claim that anything in Taylor v Johnson which needs, as it were, renovating attention. Far from it. But Taylor v Johnson itself notes that the question of how that approach ought to be applied in the case of mistakes or other potentially vitiating features in relation to the parties to a contract was not being dealt with in Taylor v Johnson, there being no difficulty about parties in Taylor v Johnson at all, but simply about price, one of the principal terms.

Now, in our submission, this case does provide the opportunity to make it crystal clear that in applying what I will call Taylor v Johnson approach to the objective rather than subjective approach one takes into account features with an ordinary commonsense approach to the inferences that ought to be drawn as to the effect that would be had upon, as I say, the objective promisee or, taking a broader view, as the conclusion to which the court would come overall objectively.

That is what is simply not done in any of the reasons to which my learned friends have referred. In particular, Justice Helman’s passage at page 145 in the application book, the three paragraphs on that page do not explain how it is, having passed over correctly what might have been uncommunicated and secret and subjective in Mr Voss’ mind, his Honour simply does not explain how it is that with the undoubted authority referred to in that very paragraph, with the facsimile attached, there was not here an engagement in contract by the company for whom he was speaking with its authority to deal with its land.

For those reasons, in our submission, this does provide an ideal vehicle to do something that this Court has said in Taylor v Johnson it had not hitherto done and has not done since then and, in our submission, particularly with the inveterate, almost certainly incorrigible and understandable informality of speech by which the human agents of companies, particularly with the multifarious small, tightly-controlled companies of which the companies before this Court would be a good example, there is a point of general - - -

McHUGH J: Your notice of appeal hardly seems apt to deal with the legal framework to which you assented to earlier.

MR WALKER: We would need to amend, not least, of course - - -

GUMMOW J: At the moment you seek a declaration also on page 199 that you get the money.

MR WALKER: I was about to say we would need not least to amend to remove that issue which is completely inapt and would - - -

GUMMOW J: It would have to go back, would it not?

MR WALKER: This has to go back.

McHUGH J: If you succeed, it has to go back.

MR WALKER: We complained that we were denied the opportunity to have the benefit of the security that we got before the Bank got its. We were denied the opportunity to have the priorities fight. We accept it is unthinkable this Court should - - -

GUMMOW J: What you need is declaratory relief from us that you have a security. Its priority will be another question.

MR WALKER: That we have something to state in a fight about priorities.

GUMMOW J: Yes.

MR WALKER: That is what it is about. The notice of appeal would need attention both to remove extraneous material and to make the point in the fashion I have made it today.

McHUGH J: Yes, there will be a grant of special leave in this matter upon Mr Walker’s undertaking to regularise his notice of appeal.

The Court will not adjourn to reconstitute.

AT 11.06 AM THE MATTER WAS CONCLUDED