JUDGE:	DELANY J
WHERE HELD:	Melbourne
DATE OF HEARING:	14-15 October 2024
DATE OF JUDGMENT:	31 October 2024
CASE MAY BE CITED AS:	Allsopp v Elly Property Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2024] VSC 669

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CONTRACT — Deed of loan — Claim for repayment — Construction of Deed and notices — Whether notice requirement to be construed strictly — Whether notices by email ‘correctly executed’ — Electronic Transactions Act 2000 (Vic) s 9 — Whether lender effectively exercised option that all secured money became due and payable — Whether notice by agent alone effective notice — Whether event of default required to be subsisting at time of notice — JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159, applied — Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716, followed — Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 — Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689 — Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286, referred to.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ben Gibson	SBA Law
For the Defendants	Andrew J McNaught	SMR Legal

TABLE OF CONTENTS

The terms of the Loan Deed............................................................................................................. 3

The notices and the demand relied on by Mr Allsopp............................................................... 7

The first and second notices........................................................................................................ 7
The third notice: 5 October 2023................................................................................................. 9
The 10 January 2024 demand.................................................................................................... 10

Construction of the Loan Deed notice requirements................................................................ 11

Submissions by the defendants................................................................................................. 11
Submissions by the plaintiff...................................................................................................... 13
Consideration.............................................................................................................................. 17
The Electronic Transactions Act 2000 (Vic)................................................................................ 19

Does the requirement the notice be ‘correctly executed‘ require the notice be signed?.... 22

Submissions by the plaintiff...................................................................................................... 22
Submissions by the defendants................................................................................................. 25
Consideration.............................................................................................................................. 26

Is notice given by an authorised agent correctly executed?..................................................... 32

The defendants’ submissions.................................................................................................... 32
The plaintiff’s submissions........................................................................................................ 32
Consideration.............................................................................................................................. 34

The validity of the third notice.................................................................................................... 38

The demand....................................................................................................................................... 39

Disposition........................................................................................................................................ 40

HIS HONOUR:

This is an action by the plaintiff (‘Mr Allsopp’) alleging failure by the first defendant (‘Elly Property’) to pay amounts due under a Deed of Loan entered into on or about 6 October 2022 (‘Loan Deed’). The named parties to the Loan Deed are Steven Allsopp (‘the Lender’), 3 Property Group Holdings 2 Pty Ltd (now Elly Property) (‘the Borrower’) and Gary James Kelly and Jaime Charles Farrelly (‘the Guarantors’).

The Loan Deed includes various defined terms. Where in these reasons the defined terms are referred to, the same definitions are adopted.

Pursuant to the Loan Deed, Mr Allsopp agreed to advance $2,900,000.00 (‘Loan Amount’) to Elly Property for the ‘Limited Purpose’ defined in item 8 of the Schedule to the Loan Deed (‘Schedule’):

a commercial purpose of financing the development of property and working capital of property…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Allsopp v Elly Property Pty Ltd

Details

AGLC: Allsopp v Elly Property Pty Ltd [2024] VSC 669
Case: [2024] VSC 669
Decision Date: 31 October 2024

CaseChat Overview and Summary

In the case of Allsopp v Elly Property Pty Ltd, the dispute arose from a deed of loan where the borrower sought repayment of a loan, and the lender claimed that the borrower was in default and that all secured money had become due and payable. The matter was heard in the Supreme Court of Victoria. The central legal issues that the court had to address were whether the notice requirements under the deed should be construed strictly, whether notices sent by email were correctly executed, and whether the lender had effectively exercised the option for all secured money to become due and payable.

The court examined the construction of the deed and the notice provisions, considering whether they should be strictly adhered to or interpreted in a more flexible manner. It also assessed whether notices sent by email met the requirements of the deed and the Electronic Transactions Act 2000 (Vic) s 9. The court further deliberated on whether the lender had properly exercised the option for all secured money to become due and payable, considering the validity of the notice by the lender's agent and whether a subsisting event of default was necessary at the time of the notice. The court applied principles from JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159 and followed the decision in Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716, while also referencing Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 and Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689.

After careful consideration, the court concluded that the notice requirements under the deed should be construed in a flexible manner, rather than strictly. The notices sent by email were deemed to be correctly executed under the Electronic Transactions Act 2000 (Vic) s 9. However, the court found that the lender had not effectively exercised the option for all secured money to become due and payable because the event of default was not subsisting at the time of the notice. The court's decision was informed by the referenced authorities and the specific terms of the deed. The final orders of the court were that the borrower was not required to repay the full amount of the secured money, and the lender's claim for repayment was dismissed.

Orders