csc jon waldron keith hunter:

7/26/2019 CSC Jon Waldron Keith Hunter:

1/29

The Australian

12:00AM April 2, 2016

Save

Print

Leo Shanahan

Reporter

Sydney

https://plus.google.com/101002780902845862590

Keith Hunter, centre, a former CBA IT executive was arrested and charged in March 2015 for allegedly

accepting part of $2.9 million worth of bribes. Picture: Phillip Rogers

Keith Hunter, centre, a former CBA IT executive was arrested and charged in March 2015 for allegedly
https://plus.google.com/101002780902845862590https://plus.google.com/101002780902845862590https://plus.google.com/101002780902845862590


2/29

accepting part of $2.9 million worth of bribes. Picture: Phillip Rogers

12

Images

A Commonwealth Bank software contract with Silicon Valley-based ServiceMesh in late 2013 had a bad

smell about it from the outset.

When it came across the desk of Marcus Nicholson in early December he couldnt understand why his

bosses desperately wanted the deal with a software provider to proceed.

Then CBAs manager of software asset management tasked with acquisition and negotiation was

asked by his superiors Jon Waldron and Keith Hunter to sign off on a $10.5 million deal with

ServiceMesh in the space of the two weeks before the Christmas rush.

None of the usual steps prior to signing off on a deal of this size had been taken; no commercial, legal,

or risk review had been completed. Plus, CBA was not even buying ServiceMesh software; it was -

software by another provider, McAfee, that was being sold by ServiceMesh but with a $3.3m

mark-up.

In a series of emails obtained by The Weekend Australian, Nicholson was explicit in his warnings in

mid-December 2013: This will only hurt the bank ... I dont feel this TD (transaction document) is in a

state to proceed ... Im becoming increasingly uncomfortable with this. Still, Nicholsons super iors were

adamant on December 17, it had to go through:

Both Keith and I want this deal done ASAP. Within the next 48 hours.

More: CBA ignored warnings


3/29

That email was sent by Waldron, then CBA general manager of IT engineering, and he is referring to

Hunter, who was then executive general manager of IT engineering at CBA and both mens ultimate

boss.

Almost a year to the day after the December 2013 ServiceMesh deal was signed, Waldron and Hunter

were sacked from CBA after millions of dollars in unexplained payments had shown up in their bank

accounts.

In March last year, they were arrested and charged by NSW police for allegedly accepting $2.9m worth

of bribes in a deal they claim was orchestrated through ServiceMeshs founder the American tech

entrepreneur Eric Pulier.

Amid all this, Nicholson, who initially raised the red flag, would also find himself sacked by the bank.

The December 2013 deal was allegedly central to the pay-off and it went to the purchase of Ser-

viceMesh by US software giant Computer Sciences Corporation in October of that year.

The $US260m ($339m) takeover of ServiceMesh by CSC in October 2013 was supposed to be a boon to

the dusty old CSC a software company of the old school increasingly left behind by the cloud-based

revolution.

Central to the buyout was the lucrative CBA umbrella deal signed with ServiceMesh in 2011 under the

stewardship of the banks top technology boss Michael Harte and his second-in-charge Hunter.

The Weekend Australian understands the CBA deal was worth at least $40m to ServiceMesh in the first

two years.

The ServiceMesh Agility Platform is a foundational element of our cloud-operating model, CBAs chief

information officer Harte was quoted in a ServiceMesh/CSC press release endorsing the takeover deal

the day it was announced.


4/29

Since the bribery scandal broke, CSC has filed a lawsuit against Pulier suing for the return of the

$US260m takeover price, explicitly stating the importance of the CBA contracts completed by the end of

2013.

Without this revenue from CBA, the $US20m floor for the earnout would not have been met, and

ServiceMesh equity holders including Pulier would have received no earnout payment at all, CSC

said its claim in the Delaware court.

With the CBA revenue, however, the $US20m floor was exceeded by $US9,659,265 resulting in an

earnout payment of $US98,034,058 to ServiceMesh equity holders as a whole, and $25,309,113 to

Pulier individually.

Rewind to December 2013, and the importance of CBA approving the $10.5m contract becomes

paramount for ServiceMesh.

Police will allege that it was this $10.5m contract that was central to the alleged bribes paid to Waldron

and Hunter effectively a cut of Puliers $25m earnout payment from CSC once the deal had gone

through.

Prelude to concerns

The first Marcus Nicholson heard of the $10.5m ServiceMesh/McAfee deal was on the December 2,

2013.

His request was polite and simple enough: Jon, Tom has asked my team to review this MSA, can you

please forward the most recent copy to me, Nicholson said in an email obtained by The Weekend

Australian.

Also, can you let me know (who) from CBA Legal has been handling this matter for you? Cheers,

Marcus.


5/29

In reply, Waldron was hesitant about the need to engage lawyers to look at the deal.

Not working with anyone in legal at the moment. Would look for you to engage them if need be, but

not sure its needed.

On December 11, Waldron sent Nicholson the transaction document for the deal asking him to come

back to me if any concerns or questions.

The next day Nicholson suggested the document be split between software and services to better

understand what CBA was paying for.

On December 12, Waldron told Nicholson theres no need to split the document, and that even though

they were only buying McAfee software becoming a reseller is all part of ServiceMesh growing up and

becoming a real company! :) and assured him CSCs fingerprints are all over this.

Nicholson made it clear his concerns remained, saying he was uncomfortable breaking down the

components of a deal that made little sense.

Im becoming increasingly uncomfortable with this, he wrote on back December 12.

The pricingworks out to be $1.84m p.a. for the license (sic) then we are paying $1.45m p.a. in support!

And then we are paying an additional $204k p.a. for someone to tell us now to maximise the usage.

At this point colleagues start to echo Nicholsons line of questioning. Why was the CBA paying a mark up

to ServiceMesh for software they could buy from McAfee directly?

Is it a good deal in comparison to what we pay now? asked one inquisitive colleague.


6/29

Waldron who was in New York with ServiceMesh at the time began to become riled at the

roadblocks around the deal. It was time to bring out the big guns.

Only the banks CIO Michael Harte was more senior than Hunter and Waldron in tech at the bank, and

Waldron made it clear he had Hartes imprimatur.

Keith is over it and I discussed with Michael last week. So the groundwork has been done, Waldron

wrote in another email on December 16.

In the same email he makes it clear he wants Nicholson to put together a cover letter on the deal for the

banks chief executive Ian Narev. Marcus/Tom we need a cover letter as is normal practice, because

this will be going to Ian for signing.

CBA was unable to tell The Weekend Australian whether Narev had received the cover letter on the

ServiceMesh deal.

Nicholson then began to inquire about the splitting components of the deal with Brad Twynham from

ServiceMesh in New York.

Twynhams reply was indignant: What do you mean by split? We cannot split out the cost from a

revenue recognition perspective. Can you please be more specific as to exactly what you are after and

why?

Waldron makes it clear that Nicholson should stop asking too many questions.

No, you dont need to. Commercial sense has already been verified ... Keith and I want this sorted ASAP

within the next 48 hrs. Dont worry about steps that have already been done.

The mood between Waldron and anyone else questioning the deal, especially Nicholson, had become

tense.


7/29

He sent Nicholson a passive-aggressive email copying and forwarding messages from Hunter saying:

We need to bring this to a closure before year end and signing off: Just so you too can feel Keiths

vibe :)

As Nicholson refused to budge on getting a risk assessment for the deal Waldron, with the backing of

Hunter, became more strident that it needed to go through.

Both Keith and I want this deal done ASAP. Within the next 48 hours max, Waldron wrote to the group

on December 17.

Secondly, were just buying software! Its a McAfee ELA. Why are we even doing a risk assessment?

Since when do we do a RA when buying software? Lets not do stuff we dont need to do!

By the morning of December 18 the mood had become incredibly tense, forcing Nicholson to pen an

email pointing to the myriad of problems with the deal to his immediate superior Tom Richardson. It is

telling in its detailed breakdown of the extensive problems with this deal.

I dont have all the facts, and as youve seen Ive been clearly told I dont need all the facts. From the

information I do have, there is my assessment of the deal, Nicholson wrote.

When I received it none of the following had occurred; No commercial review; No legal review; No risk

review; The documents received were, in my opinion, not a standard to proceed, so I marked them up

with my areas of concern. Shortly after the dollar values were included, which raised further concerns

for me.

Nicholson goes on to point out the ServiceMesh/McAfee is $3.3m more than the deal with McAfee

rejected the previous year. The best way to assess this offer is to compare it to the 2012 offer from

McAfee, which was $7.2m over three years.

We are being asked to pay an addition $3.3m from last year (a deal that was rejected for being too


8/29

expensive) and Ive not been able to see the true value the bank will receive for those additional funds.

Nicholsons conclusion is emphatic: he wont give the Waldrons ServiceMesh deal his sign off. Tom, I

dont want to unnecessarily delay this deal, or cause issue, but I believe as part of effective due diligence

I need to be comfortable with the deal.

I dont have an agenda other than doing the best for the bank. If Im instructed to make this deal

happen no matter what, I will do so, but it wont come through with my endorsement based on the

current comfort I have.

Nicholson goes on to call out Waldrons behaviour as unprofessional.

Hes spoken to you regarding me, without checking facts; Hes been communicating directly (sic) the

vendor, behind our backs, as we try to finalise a negotiation, then tries to push past processes.

The emails hes sent mentioning that Keith and he just want it done, could be constructed as

intimidation. Ive never experienced this from any GM previously in the bank. I hope this gives you a

clearer view, happy to discuss at 9am.

Nicholsons concerns were sidelined and the deal was finalised through Waldron in New York by

December 20.

Hunter wrote to the group congratulating them on their effort and saying he would inform Harte ASAP.

I cannot have a delay with starting these initiatives. Jon will let MH (Michael Harte) know if now lookslike it wont be ready today but we should have it all together tomorrow.

Waldron finalised the deal from New York and asked the team to get a note ready for Ian Narev to sign.


9/29

Agree with Keith. Thank you all for getting us to this point.

Tom and team Can you also provide the cover note for Ian for our review.

Made redundant

About eight weeks later, in early March, Nicholsons team were informed there would be a reshuffle at

the bank and the group would need to reapply for their jobs.

Among those who interviewed Nicholson for his new role was Keith Hunter.

Despite having consistently high performance appraisals throughout his career at the CBA Marcus

Nicholson was informed that his position would not be maintained. He was made redundant.

From when an internal investigation was launched into Waldron and Hunter in October that year till

after their arrest by police in March 2015, the CBA had not provided details of Nicholsons concerns with

ServiceMesh, Jon Waldron and Keith Hunter.

A spokesman for CBA confirmed to The Weekend Australian an employee had raised issues about the

ServiceMesh contract and Waldron.

A former employee raised different concerns, only with his direct manager, about the quality and

structure of the contract and the unprofessional behaviour of Mr Waldron many months prior to the

bank discovering other evidence of alleged criminal behaviour and reporting it to the police, the CBA

spokesman said.

His concerns were reviewed and it was determined there was no need to change the contract.

MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM


10/29

Subject:Re Waldon/Sgargetta/NAB/Gadens; Report to the US SEC on the LSCB disclosures and other

matters:

LEGAL PROFESSION ACT 2004 - SECT 7.2.9

Secrecy(1) An investigator must not disclose information acquired in the course of an

investigation under this Division except

(a) as is necessary for the purpose ofconductingthe investigation and making the

report of the investigation; or

(b) as is permitted by subsection (2); or(c) with the consent of the person to whom the information relates.

Penalty: 60 penalty units.

(2) An investigator may disclose information acquired in the course of an investigation

s. 7.2.9S. 7.2.9(2)(a)amendedby No. 37/2014 s. 10(Sch. item 94.5).

(a) to apolice officer,if the investigator reasonably suspects that an offence has beencommitted;

(b) to theBoard,in connection with any proceedings arising out of the investigation or

concerning a person who was the subject of the investigation;

(c) to theCommissioner,in connection with anyfunctionof theCommissionerarising

out of the investigation or concerning a person who was the subject of the investigation;(d) to an external administrator of a person who was the subject of the investigation;

(e) to any officer, employee, agent or delegate of a person referred to in paragraph (b),

(c) or (d);(f) to a court ortribunal;

(g) to theAustralianSecurities and Investments Commission.

(3) In addition to any penalty and any civil liability to alaw practice,anAustralianlegalpractitioner or anAustralian-registered foreign lawyer,an investigator who contravenes

subsection (1) is liable to aclientof the practice, practitioner or lawyer to the same extent (if

any) that the practice, practitioner or lawyer, would have been liable had they disclosed the

information.

MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM

Deed of Settlement
http://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s3.5.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s3.5.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s3.5.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s3.5.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s2.8.2.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.htmlhttp://www5.austlii.edu.au/au/legis/vic/consol_act/lpa2004179/s1.2.1.html


11/29

National Australia Bank Limited

ACN 004 044 937

Elliot Daniel Sgargetta

77 Castlereagh StreetSydney NSW 2000 AustraliaT +61 2 9931 4999F +61 2 9931 4888Ref 31606290/nba/kzp

Contents

1. Defined meanings 3

2. Mr SgargettasObligations 3

3. Mrs SgargettasObligations 5

4. NABs Obligations 5


12/29

5. Consequence of any default 6

6. Legal advice warranty 6

7. Confidentiality 7

8. Non-disparagement 7

9. General provisions 7

10. Interpretation 9

Annexure AFirst VCAT Proceeding Orders 11

Annexure BSecond VCAT Proceeding Orders 13

Annexure CSgargetta Acknowledgement 15

Annexure DWithdrawal of Caveat and Statutory Declaration 16

Deed of Settlement

Dated February 2015

Parties

1. National Australia Bank Limited ACN 004 044 937 of 800 Bourke Street, Docklands in theState of Victoria 3008 (NAB); and

2. Elliot Daniel Sgargetta, of 1 Driffield Crescent, Sassafras VIC 3787 (Mr Sgargetta).

Background

A. On or about 10 December 2007, NAB agreed to provide a home loan facility (no. 75 1289802) to Mr Sgargetta for $300,000, with a fixed interest rate period of 5 years (Home LoanFacility). The Home Loan Facility is a regulated loan under the Uniform Consumer Credit

Code and the National Consumer Credit Protection Act.

B. The Home Loan Facility was secured by a first registered mortgage, registered dealingnumber AE912489 (Mortgage), over the property situated and known as 92 Old CoachRoad, Kalorama, in the State of Victoria (volume 04244 folio 765) (Property), which issolely owned by Mr Sgargetta.

C. Sometime in mid-2008, Mr Sgargetta sought the advice of his NAB personal and businessbanker, Damien Collella, about purchasing a new home. Mr Colella advised Mr Sgargettathat the bank would accept a security swap under the Home Loan Facility, i.e. NAB to accept


13/29

the new property as security and discharge the Mortgage. NAB, through Mr Colellasubsequently provided Mr Sgargetta with a pre-approval and a purchase price range MrSgargetta could reference.

D. Relying on NABs pre-approval and advice, Mr Sgargetta: (i) on 30 June 2008, entered into acontract of sale for the purchase of the property located at 1 Driffield Cres, Sassafras

(Sassafras); and (ii) on 8 October 2008, entered into a contract of sale to sell the Property toMrs Sgargetta. The settlement dates for the purchase of Sassafras and the sale of theProperty were both scheduled to occur on 1 December 2008 (before the expiry of the fixedinterest rate period of 5 years).

E. Sometime after entering into the contract to purchase Sassafras, NAB, through MrColella, advised Mr Sgargetta that NAB could no longer extend the additional fundsrequired to pay for Sassafras. Hence, Mr Sgargetta sourced alternative financingfrom Suncorp (Suncorp Loan).

F. In or about October 2008, to comply with Suncorp Loan requirements, Mr Sgargettasought a discharge of the Mortgage and requested a payout figure figure. NAB,through Mr Colella, gave Mr Sgargetta a written pay-out notice with a pay-out figure of

$299,000. Mr Colella provided the same notice to Mr Sgargettas conveyancer.

G. In the afternoon of 28 November 2008, NAB called Mr Sgargetta to advise that NAB madean error in the payout notice and required an additional $24,000 to payout the Home LoanFacility. Mr Sgargetta complained about the late notice and the substantial difference in thepayout figures and the lack of details relating to such additional funds required ( PayoutDispute).

H. The settlement of the sale of the Property did not occur on 1 December 2008..

I. On or about 4 December 2008, Mrs Sgargetta lodged a caveat over the Property, noting herinterest as purchaser, being caveat number AG229854R (Caveat).

J. On 5 December 2008, Mr Sgargetta notified the bank in writing that he could not sustain twomortgages and asked that NAB action the Payout Dispute urgently. NAB advised MrSgargetta to lodge a complaint with the Financial Ombudsman which advise Mr Sgargettafollowed.

K. On 7 June 2012, NAB began enforcement action in relation to the Home Loan Facility andMortgage, including commencing proceedings in the County Court of Victoria, proceedingsnumber CI- 12/02770 (County Court Proceedings).

L. Mr Sgargetta filed a defence and counter claim in the County Court Proceedings based on thePayout Dispute (First Counter Claim).

M. The County Court ordered the parties to enter into a mediations. Consequently, NAB andMr Sgargetta entered into a Deed of Settlement dated 5 February 2013 (2013 Deed ofSettlement), which sought to resolve the Payout Dispute and the First Counter Claim.

N. The 2013 Deed of Settlement required Mr Sgargetta to, among other things, provide to NAB aconditional letter of approval for finance, on terms satisfactory to NAB, by 5.00pm on 25February 2013 and subsequently pay NAB $299,000 by 5.00pm on 15 April 2013. The 2013Deed of Settlement was drafted in its entirety by Gadens and Mr Sgargetta was not advisedthen of the finance terms satisfactory to NAB.


14/29

O. From 25 February 2013 to 1 March 2012, Mr Sgargetta presented three loan offers and/orproposals and a payment guarantee from Mr. Dennis Sgargetta to Gadens Lawyers SydneyPty Ltd (Gadens), the solicitors for NAB. Gadens rejected all of Mr Sgargettas submissionsstating that none of the proffered offers, proposals or guarantee were acceptable to NAB .

P. On 20 March 2013, Mr Sgargetta provided NAB a bank cheque for $299,000 (Bank

Cheque) to Gadens, solicitors for NAB.

Q. NAB did not accept the Bank Cheque.

R. Since at least 20 March 2013, Mr Sgargetta has maintained that he complied with the terms ofthe 2013 Deed of Settlement and contended that clause 2.1(a) was unfair and uncertain, whichNAB disputes (Deed of Settlement Dispute).

S. On or about 20 March 2013, Mr Sgargetta filed an amended defence and counter claim in theCounty Court Proceedings, claiming, among other things, that NAB had breached the UniformConsumer Credit Code (as it was then) and the Trade Practices Act 1974 and Mr Sgargettahad complied with the 2013 Deed of Settlement (Second Counter Claim).

T. The County Court Proceedings, including the First Counter Claim and Second CounterClaim, went to trial from 26 to 29 August 2013, inclusive (County Court Trial).

U. On 17 February 2014, the County Court of Victoria ordered judgment in favour of NAB forpossession of the Property and for the amount then owing under the Home Loan facility,$440,441.19, and dismissed the First Counter Claim and Second Counter Claim (CountyCourt Judgment).

V. On or about 20 March 2014, Mr Sgargetta filed with the Victorian Court of Appeal, anappeal against the County Court Judgment, proceedings number S APCI 2014/0029(Appeal).

W. On 30 July 2014, the Victorian Court of Appeal dismissed the Appeal (Appeal Judgment).

X. On 11 August 2014, Mr Sgargetta filed an application for special leave, to appeal to theHigh Court of Australia (Application for Special Leave).

Y. On or about 29 August 2014, Mr Sgargetta filed a claim with the Victorian Civil andAdministrative Tribunal (VCAT) against NAB, Melissa Thomas, the Head of Recoveries in NABAssist and Damien Colella, a former NAB employee, seeking over $3 million in damages,being proceeding number C5125/2014 (First VCAT Proceeding).

Z. In September 2014, Mr Sgargetta attempted to file a writ in the County Court of Victoriaagainst NAB and its officers, claiming over $3 million in damages. The County CourtRegistry declined to issue Mr Sgargettaswrit.

AA. Mr Sgargetta appealed the County Court of Victoriasdecision refusing to file his writ in theCounty Court Proceedings and on 11 December 2014, the County Court of Victoria dismissedMr Sgargettasappeal (County Court Writ Judgment).

BB. On 25 November 2014, NAB took possession of the Property and has since removed andplaced all personal items and belongings, which had been left at the Property, into storage(NABsPossession).

CC. On 11 December 2014, the High Court of Australia dismissed Mr SgargettasApplication for


15/29

Special Leave (High Court Judgment).

AA. On or about 11 December 2014, Mr Sgargetta lodged a second claim with VCAT againstNAB, Melissa Thomas, Adam Segal, counsel acting for NAB, Gadens, Kevin Pringle, apartner of Gadens and Peter Fieldhouse, Senior Legal Counsel at NAB, being proceedingnumber C6955/2014 (Second VCAT Proceeding).

BB. NAB has brought an application to summarily dismiss the First VCAT Proceeding, whichhas been adjourned to 4 March 2015 (VCAT Summary Dismissal Application).

CC. Since 2008, Mr Sgargetta and/or related entities or persons on his behalf, have madenumerous complaints against NAB, its current or former officers and agents and NABslegal representatives, including NABscounsel, including (but not limited to) complaintsmade to the Legal Services Commissioner, the Victorian Police and the Department ofPublic Prosecutions (Sgargetta Complaints).

DD. The Parties have agreed to resolve all outstanding disputes, issues and Claims between them,including but not limited to, the Payout Dispute, the Deed of Settlement Dispute, the CountyCourt Trial, the County Court Judgment, the Appeal Judgment, the High Court Judgment, the

County Court Writ Judgment, the First VCAT Proceeding, the Second VCAT Proceeding,NABsPossession of the Property and the Sgargetta Complaints, subject tothe terms andconditions of this Deed.

Operative provisions

1. Defined meanings

The definitions and interpretation clause at the back of this document sets out and explains thedefined terms used in this document and the rules of interpretation that apply.

2. Mr Sgargettas Obligations

2.1 At the time of execution of this Deed, Mr Sgargetta must provide to Gadens:

(a) original signed orders dismissing the complaint against NAB in the First VCATProceeding, in the form annexed to this Deed and marked A(First VCATProceeding Orders); and

(b) original signed orders dismissing the complaint against NAB in the Second VCATProceeding, in the form annexed to this Deed and marked B(Second VCATProceeding Orders); and

(c) an original signed acknowledgment in the form annexed to this Deed and marked C(Sgargetta Acknowledgment); and

(d) the original signed withdrawal of Caveat and Statutory Declaration signed by his


16/29

wife Cybil Nickett Sgargetta (Mrs Sgargetta), in the form annexed to this Deed and

marked D(Withdrawal of Caveat and Statutory Declaration).

2.2 At the time of execution of this Deed, Mr Sgargetta desists from pursuing any and all ClaimsthatMr Sgargetta has or may have against the NAB, arising from or in connection with any of thematters raised in the following:

(a) the Home Loan Facility;

(b) the Mortgage;

(c) the Payout Dispute;

(d) the Deed of Settlement Dispute;

(e) the Caveat;

(f) the County Court Trial and the County Court Proceedings, including the FirstCounter Claim and Second Counter Claim;

(g) the County Court Judgment;

(h) the County Court Writ Judgment;

(i) the Appeal Judgment;

(j) The High Court Judgment;

(k) The First VCAT Proceeding;

(l) The Second VCAT Proceeding;

(m) NABsPossession of the Property;

(n) NAB placing items remaining at the Property into storage;

(o) NAB exercising its power of sale and conducting a mortgagee sale of the Property; and

(p) any other matter referred to in the Background section of this Deed.

2.3 Upon settlement of any mortgagee sale of the Property pursuant to clause 3.4 and providedthat all of the conditions of this Deed are complied with, Mr Sgargetta irrevocably and


17/29

unconditionally releases NAB from any and all Claims arising from or in connection with thematters specified in clause 2.2. For clarity, this release excludes the Sgargetta Complaintsand any and all Claims which have been or may be brought at any time by or on behalf MrSgargetta against Ms Melissa Thomas, Mr Adam Segal, Mr Peter Fieldhouse, Mr KevinPringle and Gadens (all hereafter referred to as the Excluded Matters).

2.4 This Deed may be raised or pleaded as a complete defence to:

(a) the continuance of any Claim other than an Excluded Matter; or

(b) the commencement of any proceedings or Claim other than an Excluded Matter,which have been or may be brought at any time by or on behalf of Mr Sgargetta.

Mr Sgargetta has a continuing obligation to do all things necessary to withdraw and not proceed with any

of the Claims including complying with reasonable requests made, in writing by or on behalf of NAB, to

take certain actions or steps in relation to any such complaints or disputes.2.5 By 5.00pm on 15 March 2015,Mr Sgargetta must remove all belongings and items that were

removed from the Property by NAB and placed into storage with DawsonsMoving.

2.6 If Mr Sgargetta fails to remove all belongings and items held in storage with DawsonsMovingby 5.00pm on 15 March 2015,any belongings and items remaining in storage will be deemedabandoned and can be disposed of by NAB, in any manner it sees fit.

2.7 Mr Sgargetta acknowledges and agrees that NAB is entitled to proceed to sell the Property asmortgagee and retain the full proceeds of sale.

2.8 Mr Sgargetta agrees that he will not lodge any caveats over the title of the Property and willnot, in any way, either directly or indirectly, seek to prevent, delay or interfere with, anymortgagee sale of the Property by NAB.

2.9 Mr Sgargetta must otherwise comply with the terms and conditions of this Deed.

2.10 This clause does not release NAB from its obligations arising under this Deed.

2.11

3. NABsObligations

3.1 At the time of execution of this Deed, NAB:

(a) Desists from further enforcing the County Court Judgment against Mr Sgargetta andfrom making any Claims or demands and from bringing all actions, suits,

proceedings and from enforcing all rights, verdicts and judgments of whatsoever kindor nature and whether at law, or in equity, that NAB has or may have in connectionwith the Home Loan Facility, the Mortgage, the Property, or any of the mattersrecited above, against Mr Sgargetta and/or Mrs Sgargetta, or either of them; and

(b) must provide to Mr Sgargetta the original signed application, in the form annexed tothis Deed and marked E (County Court Application), seeking the County Courtsapproval of the executed Deed in lieu of the County Court Judgment.

3.2 NAB will within 14 days of receiving the original signed First VCAT Proceeding Orders and


18/29

Second VCAT Proceeding Orders, file the orders with VCAT, with the intention to bring anend to the complaints against NAB under the First VCAT Proceeding and Second VCATProceeding.

3.3 NAB will, as mortgagee in possession, immediately proceed to market and sell theProperty.

3.4 Upon settlement of any mortgagee sale of the Property and provided that all of theconditions of this Deed are complied with, NAB will apply the full net proceeds fromthe sale to the amount owing under the Home Loan Facility

3.5 NAB has a continuing obligation to do all things necessary to desist from further enforcingthe County Court Judgment against Mr Sgargetta and from making any Claims or demandsand from bringing all actions, suits, proceedings and from enforcing all rights, verdicts andjudgments of whatsoever kind or nature and whether at law, or in equity, that NAB has ormay have in connection with the Home Loan Facility, the Mortgage, the Property, or any ofthe matters recited above, against Mr Sgargetta and/or Mrs Sgargetta, or either of them.

3.6 This Deed may be raised or pleaded as a complete defence to:

(a) the continuance of the enforcement of the County Court Judgment or the continuanceany Claim; or

(b) the commencement of any proceedings or Claim which have been or may bebrought at any time by or on behalf of NAB.

3.7 This clause does not release Mr Sgargetta from his obligations arising under this Deed.

4. Consequence of any default

4.1 If Mr Sgargetta defaults under any terms of this Deed, time being of the essence, NAB willimmediately be entitled, as it sees fit, to:

(a) enforce the County Court Judgment, the Appeal Judgment, the County Court WritJudgment and the High Court Judgment, in any manner NAB sees fit (includingproceeding to sell the Property and taking steps to recover the balance of themonetary judgment, including all enforcement costs payable under the Mortgage andunder the County Court Judgment, the Appeal Judgment, the County Court WritJudgment and the High Court Judgment;

(b) bring any Claim, including a claim for damages, against Mr Sgargetta arising from

any default under this Deed.

4.2 If NAB defaults under any terms of this Deed, time being of the essence, Mr Sgargetta willbe immediately entitled to, as he sees fit, to continue and/or pursue any of the mattersspecified in clause 2.2 and to bring any Claim including a Claim of damages against NAB,its employees, officers, agents, Gadens and legal representatives arising from any defaultunder this Deed.


19/29

5. Legal advice warranty

5.1 Mr Sgargetta warrants to NAB that he has separately obtained independent legal advice inrelation to the terms of this Deed, prior to entering into this Deed by the person namedbelow.

Mr Sgargetta

Name of legal advisor:

Name of firm:

Contact email:

Contact telephone:

Date advice provided:

5.2 Mr Sgargetta acknowledges that NAB has relied on this warranty in entering into this Deed.

6. NAB Warranty

6.1 NAB warrants that that it is fully authorised and empowered to enter into and perform itsobligations under this Deed.

6.2 NAB warrants that it has duly authorized Gadens to act on its behalf in all matters relating tothis Deed.

6.3 NAB acknowledges that Mr Sgargetta has relied on these warranties in entering into thisDeed.

7. Confidentiality

7.1 This Deed and all matters relating to this Deed are and shall remain strictly confidential andmust not be disclosed to any person, whether directly or indirectly, in any manner whatsoeverwithout prior written consent of the other parties to this Deed, except:

(a) as required by law; or

(b) where disclosure is necessary for the purpose of enforcing any obligation arisingunder this Deed; or

(c) where disclosure is made on a confidential basis to a partysofficers, employees,agents, professional advisers or appointees.

7.2 For clarity. Gadens must not make reference to any of the matters covered by this Deed in itswebsite, brochure, papers, marketing material or any type of media or publication.

8. Non-disparagement


20/29

8.1 Mr Sgargetta agrees not to make any disparaging remarks, publicly or otherwise, about NAB.

9. General provisions

9.1 Costs

Each party must pay its own costs in relation to:

(a) the negotiation, preparation, execution, performance, amendment or registration of, orany consent given or made; and

(b) that party performing any action in complying with any liability arising,

under this document, or any agreement or document executed or effected under this

document, unless this document provides otherwise.

9.2 Governing law and jurisdiction

(a) This document is governed by and construed under the law in the State of Victoria.

(b) Any legal action in relation to this document against any party or its property may bebrought in any court of competent jurisdiction in the State of Victoria.

(c) Each party by execution of this document irrevocably, generally and unconditionallysubmits to the non-exclusive jurisdiction of any court specified in this provision inrelation to both itself and its property.

9.3 Amendments

Any amendment to this document has no force or effect, unless effected by a documentexecuted by the parties.

9.4 Third parties

This document confers rights only on a person expressed to be a party to it, and not on anyother person.

9.5 Pre-contractual negotiation

This document:

(a) expresses and incorporates the entire agreement between the parties concerning itssubject matter, and all the terms of that agreement; and

(b) supersedes and excludes any prior or collateral negotiation, understanding,communication or agreement by or between the parties concerning that subjectmatter or any term of that agreement.

9.6 Further assurances


21/29

Each party must execute any document and perform any action necessary to give full effect tothis document, whether before or after performance of this document.

9.7 Continuing performance

(a) The provisions of this document do not merge with any action performed or

document executed by any party for the purposes of performing this document.

(b) Any representation in this document survives the execution of any document for thepurposes of, and continues after, performance of this document.

(c) Any indemnity agreed by any party under this document:

(i) constitutes a liability of that party separate and independent from any otherliability of that party under this document or any other agreement; and

(ii) survives and continues after performance of this document.

9.8 Waivers

Any failure by a party to exercise any right under this document does not operate as a waiver.The single or partial exercise of any right by that party does not preclude any other or furtherexercise of that or any other right by that party.

9.9 Remedies

The rights of a party under this document are cumulative and not exclusive of any rightsprovided by law.

9.10 Severability

Any clause of this document which is invalid in any jurisdiction is invalid in that jurisdiction to that

extent, without invalidating or affecting the remaining clauses of this document or the validity ofthat clause in any other jurisdiction.

9.11 Counterparts

This document may be executed in any number of counterparts, all of which taken together aredeemed to constitute the same document.

10. Interpretation

10.1 Definitions

In this deed unless the context otherwise requires:

Claims means any demand, notice, statutory notice, action, complaint, objection, submission,legal or enforcement proceedings, litigation, investigation, cross-claim or claim for or in respectof any payment, damages, compensation, judgment, loss, cost, expenses, liability, set-off orany cause of action, whatsoever arising at law, in equity or under statute, whether known orunknown, certain or contingent, past, present or at any time in the future. Claim also includesany claim or complaint to the Financial Ombudsman Services or any similar dispute resolutionscheme.


22/29

Parties means the parties to this Deed.

10.2 Interpretation

In this document, unless the context requires otherwise:

(a) clause and subclause headings are for reference purposes only;

(b) the singular includes the plural and vice versa;

(c) words denoting any gender include all genders;

(d) a reference to a person includes any other entity recognised by law and vice versa;

(e) where a word or phrase is defined, its other grammatical forms have acorresponding meaning;

(f) any reference to a party to this document includes its successors and permitted

assigns;

(g) any reference to any agreement or document includes that agreement or document asamended at any time;

(h) the use of the word includes or including is not to be taken as limiting themeaning of the words preceding it;

(i) the expression at any time includes reference to past, present and future time andperforming any action from time to time;

(j) an agreement, representation or warranty by two or more persons binds themjointly and severally and is for the benefit of them jointly and severally.

Executed as a deed.

Executed on behalf of National AustraliaBank Limited ACN 004 044 937 by itsAttorney

who holds the position of Level Attorney under Power of Attorney dated 1March 2007 before.

Signature of witness

Print name

Print address


23/29

Signed sealed and delivered by Elliot DanielSgargetta in the presence of:

Signature of witness Elliot Daniel Sgargetta

Print name

Print address

Annexure AFirst VCAT Proceeding Orders

Victorian Civil and Administrative Tribunal Civil

Division

Civil Claims List

VCAT Reference: C5125/2014

Applicant: Elliot Sgargetta

First Respondent: Melissa Thomas

Second Respondent: Damien Colella

Third Respondent: National Australia Bank Limited ACN 004 044 937

Date of Order:

Orders

1. The proceeding be dismissed as against the Third Respondent NationalAustralia Bank Limited.

2. No order as to costs.


24/29

Signed by Elliot Sgargetta Signed by Kevin Pringle, solicitor forRespondents

Annexure BSecond VCAT Proceeding Orders

Victorian Civil and Administrative Tribunal Civil

Division

Civil Claims List

VCAT Reference: C6955/2014

Applicant: Elliot Sgargetta

Respondents: Melissa Thomas, Adam Segal, Peter Fieldhouse, Kevin

Pringle, National Australia Bank Limited ACN 004 044937, Gadens Lawyers Sydney Pty Ltd ACN 100 963308

Date of Order:

Orders

1. The proceeding be dismissed against respondent National Australia BankLimited.

2. No order as to costs.


25/29

Signed by Elliot Sgargetta Signed by Kevin Pringle, solicitor forRespondents

Annexure CSgargetta Acknowledgement

To Whom it May Concern,

I Elliot Daniel Sgargetta, provide notice that:

February 2015

1. I wish to immediately withdraw the existing dispute/complaint relating to National AustraliaBank Limited.

Please ensure that any outstanding dispute/complaint is closed as soon as possible.

Yours sincerely,

Signed by Elliot Daniel Sgargetta

Annexure DWithdrawal of Caveat and Statutory Declaration

Privac.y Colleaion Staternent The information from thisformis coOea.dby


26/29

Name: Phone: Address:

GADENS lAWYERS039252 2555

Level25,BourkePlace,600 BourkeSb-.et Melboume VIC3000Reference: RTH:LXR:21404570

Code!5228H

Thecaveatorwithdrawsthecave


27/29

1958 in respect of Certificate of Title Volume04244 Folio 765

STATUTORY DECLARATION

I, CYBIL NICKETT WALDRON of 1 Driffield Crescent, Sassafras in the State of Victoria, dosolemnly and sincerely declare that:-

1. I am the Caveator stated in Caveat No. AG229854R.

2. The Caveat was lodged on 4 December 2008.

3. I signed the Withdrawal of Caveat in my capacity as Caveator.

I acknowledge that this Declaration is true and correct and I make it in the belief that a personmaking a false declaration is liable to the penalties of perjury.

DECLAREDat

in the State of Victoria this ..day of ... 2015

)) ....................................................................) (Signature of Declarant)Before me:

............................................................................

Signature of Authorised Witness

............................................................................Name of Authorised Witness(Block Letters)

............................................................................

............................................................................

Address of Authorised Witness

(Block Letters)

............................................................................

Qualification of Authorised Witness(Block Letters)

*See annexed list of authorised witnesses*


28/29

Persons who can witness statutory declarations

Section I 07A of the Ev;dence (1\tl;scellaneous Provisions) Act 1958 (as of 24 August 201 1),(previously Evidence Act 1958), reads:

(1) Any of the following persons may witness the signing of a statutory declaration:(a) a justice of the peace or a bail justice;

(b) a publ ic notary;

(c) an Australian lawyer (within the meaning of theLegal Profession Act 2004)(d) a clerk to an Australian lawyer;

(e) theprothonotary or a deputy prothonotary of the Supreme Court, the registrar or a

deputy registrar of the County Coutt, the principal registrar of the Magistrates'

Court or a registrar or deputy registrar of the Magistrates' Court;

(f) the registrar of probates or an assistant registrar of probates;

(g) the associate to ajudge of the Supreme Court or of the County Court;

(h) the the associate of an Associate Judge of the Supreme Court or of an associate

judge of the County Court;

(i) aperson registered as a patent attorney under Chapter 20 of the Patents Act1990 of the Commonwealth;

U) a member of the police force;(k) the sheriff or a deputy sheriff;

(I) a member or former member of either House of the Parliament of Victoria;(m) a member or former member of either House of the Parliament of the

Commonwealth;

(n) a councillor of a mun icipality;

(o) a senior officer of a Council as defined in theLocal Government Act 1989;

(p) aperson registered under the Health Practitioner Regu lation National Law to

practise in the medical profession (other than as a student);

(q) a person registered under the Health Practitioner Regulation National Law-

(i) topractise i n the dental profession as a dentist (other than as a student); and

(ii) in the dentists division of that profession;(r) a veterinary practitioner;

(s) aperson registered under the Health Practitioner Regu lation National Law to

practise in the pharmacy profession (other than as a student);

(t) aprincipal in the teaching service;

(u) the manager of an authorised deposit-taking institution;

(v) a member of the Institute of Chartered Accountant s in Australia or the

Australian Society of Accountants or the Institute of Public Accountants;

(w) the secretary of a building society;

(x) a min ister ofreligion authorised to celebrate marriages;

(y) a person employed under Part 3 of the Public Administration Act 2004 with aclassification that is prescribed as a classification to which this section applies or

who holds office in a statutory authority with such a classification;

(z) a fellow of the Institute of Legal Executives (Victoria).

(2) Despite anything to the contrary in any Act, aperson referred to in paragraph (c) or (d) of

subsection (1) is not prevented from witnessing the signing of a statutory declaration only

because he or she is-

(a) acting for any of theparties to theproceeding or matter in respect of which the

declaration is made; or

(b) a clerk to a person so acting.


29/29

--(3) - If-the signing of a statutory declaration purports to havebeen witnessedby a person

referred to in subsection (1),all persons to whom that declaration comes must take------ ------of:fiCiariiotlceof"if-iaTdeclaration-arid of the qualification s oftheperson referred to in

that subsection to witness that signing.

csc jon waldron keith hunter:

Documents