Bega v Lauvan Pty Ltd

The appeal concerned a dispute between Bega (the appellant) and Lauvan Pty Ltd (the respondent) arising from a facility agreement. The central issue was whether Lauvan was obliged to advance funds under the agreement, despite the borrower not having provided a formal drawdown notice as stipulated. The appeal was heard by Meagher, Leeming, and White JJA in the Court of Appeal of New South Wales.

The court was required to determine two primary legal issues. First, whether the borrower's husband possessed actual authority to request a drawdown of funds under the facility agreement. Second, whether the husband's associate held ostensible authority to request the advance, notwithstanding the agreement's requirement for written authorisation. Additionally, the court considered whether the lenders (Bega) could waive the contractual obligation to provide a drawdown notice.

The court reasoned that the facility agreement clearly stipulated that a drawdown notice was a condition precedent to the lenders' obligation to advance funds. There was no evidence that the borrower's husband had actual authority to waive this requirement or to request a drawdown without the requisite notice. Furthermore, the court found no basis for ostensible authority, as there was no conduct by the lenders that would have led a reasonable person to believe the husband's associate had authority to request the advance in the absence of a written notice. The contractual terms were unambiguous, and the lenders were entitled to rely on them.

The appeal was dismissed with costs.