GHM Nominees Pty Ltd v Wallace Jackson Pty Ltd - [2022] VSCA 230

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0080

GHM NOMINEES PTY LTD (AS TRUSTEE OF GREG HERMAN SUPERANNUATION FUND)	Applicant
v
WALLACE JACKSON PTY LTD (AS TRUSTEE OF WALLACE JACKSON UNIT TRUST)	Respondent

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JUDGES:	FERGUSON CJ, SIFRIS and MACAULAY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	21 July 2022
DATE OF JUDGMENT:	26 October 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 230
JUDGMENT APPEALED FROM:	[2021] VCC 733 (Judge Cosgrave)

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CONTRACT – Loans – Terms for repayment – Applicant loaned monies to respondent (as trustee) for property purchase and maintenance – No clear term for repayment – Implication and inference of terms – Property used by parties for joint real estate business venture but use ceased before demand for repayment of loan – Applicant contended loans repayable upon demand after cessation of real estate business’s use of property – Held at trial loans became repayable upon sale of the property or termination of trust neither of which had occurred – Leave to appeal granted but appeal dismissed.

Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, Hawkins v Clayton (1988) 164 CLR 539 considered.

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Counsel
Applicant:		Mr G Griffith KC with Mr CR Northrop
Respondent:		Mr DP Lorbeer
Solicitors
Applicant:	Goldsmiths Lawyers
Respondent:	King & Wood Mallesons

FERGUSON CJ
SIFRIS JA
MACAULAY JA:

Introduction

When A lends money to B with nothing at all said as to repayment, the money is repayable immediately.[1] Where the borrower simply agrees to pay on request, again the money is repayable instantly.[2] To avoid a cause of action for recovery arising in A instantly, thereby commencing the relevant limitation of action period under statute, parties must contract out of that situation. A term that provides for the time for repayment may be inferred or implied, objectively, from relevant communications and the circumstances existing at the time of the loan. Determining when loans were repayable is the issue in this appeal.
[1]Ogilvie v Adams [1981] VR 1041, 1043 (Fullagar J) (‘Ogilvie’); In Re Brookers (Aust) Ltd (1986) 41 SASR 380, 382 (King CJ, Mohr J agreeing) (‘Re Brookers’).
[2]Ogilvie [1981] VR 1041, 1043; Re Brookers (1986) 41 SASR 380, 382
The applicant, GHM Nominees Pty Ltd, lent money to the respondent, Wallace Jackson Pty Ltd, to enable the respondent to purchase and maintain a commercial property on the corner of Wallace Avenue and Jackson Street, Toorak, Victoria (‘the property’).
In total, the applicant lent the respondent $802,769[3] (‘the loan monies’) between 7 September 2012 and 26 February 2016. The first two advances were the largest. A sum of $186,400 was advanced on the day of auction, 7 September 2012, as a contribution towards the deposit. Another $539,900 was advanced on the day of settlement, 6 March 2013, as a contribution to the difference between the amount required for settlement and some money lent by a bank for the purchase. Ten smaller amounts were advanced over a…

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.

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Details

Case: [2022] VSCA 230
Decision Date: 26 October 2022

CaseChat Overview and Summary

The case of GHM Nominees Pty Ltd v Wallace Jackson Pty Ltd involved a dispute over the terms of a loan agreement between the applicant and the respondent, who was acting as a trustee. The applicant loaned a sum of money to the respondent to facilitate the purchase and maintenance of a property. The central issue was whether the loan was repayable upon the cessation of the property's use in a joint real estate business venture or upon the demand of the applicant after this cessation. The matter was heard and determined by the Supreme Court of Western Australia.

The court was required to determine whether the terms of the loan agreement included a clear condition for repayment, and if not, whether the terms could be implied or inferred from the circumstances. Specifically, the court needed to decide whether the cessation of the property's use in the joint venture triggered the repayment of the loan, or if repayment was contingent upon a demand from the applicant or other events such as the sale of the property or the termination of the trust.

In reaching its decision, the court considered the relevant authorities, including Bunbury Foods Pty Ltd v National Bank of Australasia Ltd and Hawkins v Clayton. The court found that the loan agreement did not contain a clear term regarding repayment. Instead, the court held that the loan became repayable upon the sale of the property or the termination of the trust, neither of which had occurred at the time of the trial. Consequently, the court dismissed the appeal and granted leave to appeal was allowed, but the appeal was ultimately dismissed.

The court's final orders affirmed the decision of the trial court, holding that the applicant's claim for repayment of the loan was premature as the conditions for repayment had not been met. The case underscores the importance of clearly defining repayment terms in loan agreements to avoid disputes over the timing and conditions of repayment.

Orders