McInnes v DAVIES - [2015] SADC 88

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MCINNES v DAVIES & ANOR
[2015] SADC 88
Judgment of Her Honour Judge Tracey
4 June 2015
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
A contract for the sale of the defendants’ house was subject to a special condition that the purchaser obtain finance by an extended date of 16 May 2014, with either party entitled to terminate if the special condition was not satisfied. Finance was declined and on 26 May 2014 the defendants purported to terminate the contract and entered into a contract for sale of the house to a third party. The plaintiff contended that there was no effective termination and that he had waived the finance condition by his lender emailing his real estate agent on 26 May 2014, informing her that finance had been approved and by his solicitors writing to the defendants by letter dated 5 June 2014 asserting that the contract was still on foot. Alternatively the plaintiff said he had by the time the defendants terminated the contract on 6 June 2014, satisfied the special condition.
Held:
1. The defendants failed to successfully terminate the contract on 26 May 2014.
2. The plaintiff was entitled to waive the finance condition.
3. There was not an effective waiver of the special condition.
4. The plaintiff did not satisfy the special condition prior to 6 June 2014.
The plaintiff’s claim is dismissed.
Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716; Willing v Baker (1992) 58 SASR 357; Clark v Refeld (1980) 25 SASR 357; Amber Holdings Pty Ltd v Polona Pty Ltd [1982] 2 NSWLR 470; Donaldson v Bexton [2006] QCA 559; Cobbold v Barrett [2006] WASC 252; Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650; Meehan v Jones (1982) 149 CLR 571, discussed.

MCINNES v DAVIES & ANOR
[2015] SADC 88
Introduction

These proceedings concern a contract for the sale to the plaintiff of a residential property owned by the defendants. The contract was subject to a special condition namely finance, and required the plaintiff to give written notice to the defendants of a lender agreeing to grant a loan for the purchase. When the plaintiff failed to secure finance, the defendants purported to terminate the contract. The plaintiff says the termination was not effective and the contract remained on foot by virtue of either the plaintiff having waived the special condition or alternatively, by the plaintiff having at a later date, satisfied the condition. He seeks rectification of the special condition, specific performance of the contract and damages by way of remedy.
The defendants say that the special condition, being for the benefit of both parties, could not be unilaterally waived by the plaintiff and that in any event, there was no waiver. Further the defendants say that as the plaintiff failed to satisfy the special condition, they were entitled to terminate the contract and gave proper notice of termination.
Both parties agreed to defer the issue of remedy until after judgment on the plaintiff’s causes of action.
At trial on 20 April 2015, the plaintiff and his partner Ms Sara Fletcher gave evidence primarily in relation to how it was that the funds for the purchase were, and now are to be secured.
Background
The contract,[1] was signed on 3 April 2014 and provided for special conditions in the following terms:
[1]    Exhibit P4.
14.     Special Conditions
14.1This Agreement is subject to the satisfaction of the Special Conditions (if any).
14.2The party required to satisfy a Special Condition must use its best endeavours to do so on or before the date specified in that Special Condition (or if not specified, within twenty one (21) days of the date of this Agreement).
14.3    If a party fails to satisfy a Special Condition then:
14.3.1If the party required to satisfy the Special Condition complies with clause 14.2 and such other terms and conditions as specified in the Special Condition, then either party may terminate this Agreement upon written notice to the other party; or
14.3.2If the party required to satisfy the Special Condition fails to comply with clause 14.2, or is otherwise in breach of such other terms and conditions specified in the Special Condition, then such an event will be deemed a default under this Agreement and:
(a)     If the Purchaser is in default, clauses 15.3 and 15.4 will apply; or
(b)     If the Vendor is in default, clauses 16.1 and 16.2 will apply.
14.4If this Agreement is terminated pursuant to clause 14.3.1, then any monies paid by or on behalf of the relevant party under this Agreement shall be refunded to that party.
14.5If this Agreement is terminated pursuant to, or as a result of clause 14.3.2 then:
14.5.1If the Purchaser is in default, clauses 15.10 and 15.11 will apply; or
14.5.2If the Vendor is in default, clause 16.2 will apply.
…
The contract contained a special condition that was in the following terms:
1.This Agreement is subject to the Lender specified in Item 1 below agreeing by the date described in Item 2 to grant to the Purchaser on or before the Settlement Date a conditional or unconditional loan of not less than the amount described in Item 3 and for the Terms specified in Item 4.
2.The Purchaser will use his best endeavours to apply for and do everything necessary to obtain the loan.
3.If the Lender does not agree by the date specified in Item 2 to grant the loan conditionally or unconditionally to the Purchaser at Settlement then clause 14.3 of this Agreement shall apply.
4.Unless otherwise agreed in writing between the parties, the Purchaser must deliver to the Vendor written notice signed by the Lender that the Lender has agreed to grant the loan conditionally or unconditionally to the Purchaser at Settlement by the date specified in Item 2 below. Upon notification of the approval to the Vendor this conditional provision will be satisfied and notwithstanding that the lender may subsequently withdraw the approval the purchaser will be bound by this Contract.
5.For the avoidance of doubt, if the Purchaser breaches any of the terms and conditions contained in this Special Condition (including but not limited to the obligation to use best endeavours), then clause 14.3.2 of this Agreement will apply.
6.In the event of any inconsistency between this Special Condition and the Agreement, this Special Condition shall apply to the extent of any inconsistency.
The special condition referred to the Lender as ‘Zobel’ and finance was to be approved by 24 April 2014. The minimum amount of the loan was $394,250, the term 30 years and the interest rate at 5.50% per annum.
While approval was to have occurred by 24 April 2014 and settlement was to take place on 15 May 2014, the parties agreed to extend the date for approval to 16 May 2014 and settlement to 29 May 2014.
On 16 May the National Australia Bank (‘NAB’) declined the plaintiff’s application for finance. The defendants refused a request for any further extension.
On 26 May 2014, at 12.19 pm, following what appears to have been a telephone discussion between Ms Sylvia Wimshurst (who was acting as conveyancer for both parties) and one of the defendants, Ms Wimshurst sent an email to the defendants informing them as to how the contract provided for termination.[2] Later that day, at 2.16 pm, the defendants sent an email (‘the email’) to Ms Diana Edwards,[3] who was acting as their estate agent, in the following terms:
Dear Diana,
Please be advised as per previous conversations due to the finance for the purchase of 19 Pine Grove falling through on the 16th of May, we wish to ensure all dealings with this sale are and have been cancelled.
Regards
Brad and Alana Davies
[2] Exhibit P37.
[3] Exhibit P39 and Exhibit D9.
The email was forwarded to Ms Wimshurst, on 26 May 2014 at 3.04 pm, under cover of an email,[4] expressed in the following terms:
Hi Sylvia -wouldn’t they need to both sign an agreement?
Kind regards
Diana Edwards.
[4] Exhibit P19.
Ms Wimshurst responded by email as follows: [5]
Dear Diana,
The contract does say ‘either party may terminate this agreement upon written notice to the other.
I believe they should address it to the plaintiff not you though.
In Law Society contracts in Victoria and South Australia it expressly indicates electronic mail under an Electronic Act is acceptable.
I can’t see in your REISA contracts how it is supposed to be served?
[5] Exhibit P40.
Ms Wimshurst then prepared a document titled ‘TERMINATION NOTICE’ (the ‘first notice’), which she forwarded to Ms Edwards. At 5.03 pm on 26 May 2014, Ms Edwards forwarded the first notice to the defendants by email,[6] advising them that the document needed to be signed by them and emailed to the plaintiff. She informed the defendants through email that the plaintiff:
… is still trying for his finance approval and should be through by lunch time tomorrow. We were hoping to have it earlier today after many phone calls.
[6] Exhibit P20.
On 26 May 2014 the defendants entered into a contract for the sale of the property to Ms Michaela Fuss.
On 27 May 2014 the NAB wrote to the plaintiff advising that ‘finance has been approved to assist with the purchase of the property’ (the ‘NAB letter’),[7] and emailed Ms Edwards at 11.40 am, attaching a ‘finance approval letter for the purchase of 19 Pine Grove Naracoorte’. The defendants did not see a copy of the NAB letter until after proceedings had been issued, however it is agreed that the letter was forwarded to Ms Edwards who telephoned them shortly after receipt and advised them of the content.
[7] Exhibit P24.
The defendants signed the first notice and on 27 May 2014, forwarded the signed copy to Ms Edwards. It is agreed that the signed version was not forwarded on by any means to either the plaintiff or Ms Wimshurst.
On 5 June 2014, solicitors acting on the plaintiff’s behalf wrote to the defendants asserting that the contract was still on foot (the ‘Madsen Rowley letter’).[8]
[8] Exhibit P25.
On 6 June 2014, the defendants emailed an undated letter to the plaintiff referring to ‘some uncertainty whether you received the attached Termination Notice dated 26 May’.[9] The letter enclosed the first notice together with a re-worded document titled ‘NOTICE OF TERMINATION’ and dated 26 May 2014. It is accepted that this notice would, if the vendor was so entitled, amount to effective termination of the contract.
[9] Exhibit P26.
On 6 June 2014, the plaintiff lodged a caveat on the property and on 9 June 2014, the defendants granted Ms Fuss a licence to occupy the property.[10]
[10] Exhibit P29.
On 18 June 2014, the NAB wrote to the plaintiff offering credit by way of a ‘NAB Choice Package Fixed Rate Home Loan for $394,000’.[11] The loan document offered credit in the sum of $394,000 at an interest rate of 5.05% (fixed for three years then at a variable rate), over a term of 25 years. The credit amount was inclusive of $13,267.95 payable to the NAB for their fees and government fees and charges.
[11] Exhibit P30.
On 19 June 2014, the plaintiff signed acceptance of the credit offer in the terms outlined in the loan document.
For the plaintiff to succeed he must show:
·The contract was not terminated by the defendants on 26 May 2014; and
·The contract was merely voidable and not void when he obtained finance; and
Either:
·He was entitled to waive the special condition and did so, making the contract unconditional before any effective termination by the defendants; or
·He satisfied the special condition before termination by the defendants.
Did the Defendants give effective notice of termination?
The contract provided for termination notice to be given as follows:
19.1Notices under this Agreement:
19.1.1must be in writing and signed by the party giving notice, or its authorised agent;
19.1.2may be served:
(a)by being left at the last known residence or place of business of the intended recipient: or
(b)by being sent by ordinary post in a pre-paid envelope to the address of the party set out in this Agreement;
19.1.3will be deemed served if posted in accordance with clause 19.1.2(b), two (2) business days after posting; and
19.1.4will be deemed sufficiently served if served in accordance with this clause on one of several persons comprising the Vendor or the Purchaser.
Clearly the first notice was not effective as the document never made its way to the plaintiff or Ms Wimshurst and while the parties did choose to use the same conveyancer, there is no suggestion of agency between the plaintiff and Ms Edwards.
As regards the defendants’ assertion that the email was effective notice, the plaintiff submits that pursuant to clause 19 of the contract, a notice is required to be signed by the defendants and the email does not comply with that requirement. I accept the defendants’ assertion that the email is ‘signed’ for the purposes of the contract as the email sent to Ms Edwards and then forwarded to Ms Wimshurst, concludes with ‘regards Brad and Alana Davies’.
In Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd,[12] Pembroke J said in relation to the question of whether an email complied with the notice provisions of a lease as follows:
The primary requirement is that the notice be in writing. The email satisfies this requirement… As to the requirement for signing, there are two answers. In my view the inclusion of the sender’s name on the email amounted to “signing” for the purpose of the clause. The requirement for signing is intended to identify the sender and authenticate the communication. That is sufficiently achieved in an email by the setting out of the sender’s name together with the email address from which the email is despatched. The name of the sender and his email address are readily and rapidly verifiable. Any other conclusion would produce a capricious and commercially inconvenient result that might have wide-reaching and unintended consequences in modern day trade and commerce.
[12] [2011] NSWSC 716 [33].
Clause 19 prescribes a way in which a written notice may be given. The language used is ‘may be served’. The defendants say notice is given when it is sent to the party’s authorised agent and that it is a natural consequence of retaining a conveyancer to authorise that agent to give and receive notices.
While Ms Wimshurst was in this case acting for both parties, the plaintiff gave evidence that he engaged her only to act as his conveyancer.[13] I accept that Ms Wimshurst could not be said to have been acting as the plaintiff’s agent for the receipt of notices. Furthermore, I note clause 19 does not prohibit the giving of a notice to an agent, but it does provide for an authorised agent to sign any such notices. In the absence of a specific provision allowing for receipt by an agent, I can only conclude that the contract meant for any notice to be served by some means on the relevant party.
[13] Transcript 21, line 24.
Accordingly the defendants failed to give notice of termination as at 26 May 2014.
Was the plaintiff entitled to unilaterally waive the special condition?
It is clear that failure to satisfy the special condition within time rendered the contract voidable not void,[14] and that failure of the condition being satisfied, either party had the right to terminate.[15]
[14] See Margush v Maddeford [2014] SASFC 129, [36], [70].
[15] See Suttor v GundowdaPty Ltd (1950) 81 CLR 418; Gange v Sullivan (1966) 116 CLR 418.
What remains the subject of debate is the right to waive the benefit of a special condition after the date for fulfilment of the special condition has passed. That is, was the plaintiff entitled to waive the special condition after 16 May 2014?
The plaintiff submits finance conditions are primarily, if not exclusively, for a purchaser’s benefit and accordingly purchasers are entitled to waive such a condition with or without the agreement of the vendor, provided the contract does not expressly vary that right. The defendants argue that the special condition is of benefit to both parties and gives rise to a right to both parties to terminate and as such the plaintiff had no right to unilaterally waive the condition.
The plaintiff relies primarily on two Full Court decisions namely Willing v Baker[16] and Clark v Refeld.[17]
[16] (1992) 58 SASR 357.
[17] (1980) 25 SASR 246.
In Clark a land sale contract was subject to specified bank finance granted to the purchaser (respondent) on or before 17 August 1978. The contract could be terminated by either party if the special condition was not satisfied within time, unless the purchaser had waived the condition. The purchaser had finance available from sources that meant he did not have to secure the contractually specified finance. The vendor (appellant) purported to terminate the contract and sell the property to someone else.
The Full Court found the subject to finance condition was for the benefit of the respondent. Mitchell J,[18] when discussing the flaw in the vendor’s argument that the finance condition was to the benefit of both parties because it was for the benefit of the vendor to know whether the purchaser was able to complete the purchase and to know at the earliest opportunity, said as follows:
… the respondent could, at any time prior to 17th August, 1978, have waived condition 14(1) and then the appellants would have had no knowledge until settlement day, as to how or whether the respondent was to obtain finance. The appellants had no interest in the source of the respondent’s finance and any interest which they might have had as to whether and when bank finance was to be available could readily have been frustrated by the respondent by the simple giving of a notice waiving the condition in clause 14(1). This fact makes it apparent that, notwithstanding that clause 14(5) purports to give both vendors and purchaser a power to cancel the contract if any special condition shall not have been fully satisfied within the time appointed, the cancellation cannot be effected by the vendors against the will of the purchaser because clause 14(1) contains a condition of which the respondent alone is entitled to take the benefit.
[18] At p 274.
In Willing, the condition that the contract was subject to the sale of another property was waived by the plaintiff shortly before settlement. The vendor had contracted to sell the property to a third party at a higher price and did not wish to accept waiver. The Full Court held that the condition was entirely for the benefit of the purchaser. Legoe J,[19] said as follows:
… I am of the opinion that the Special Condition in the Schedule… can have no direct benefit to the Vendor, except in the sense of ‘resolving the uncertainty’. (citations omitted). The fact that the performance of the Contract was made conditional upon the purchasers’ (the respondents on this appeal) house being sold was clearly inserted in the Contract to enable the purchasers to obtain the necessary finance to pay the balance due at settlement on 25 April 1991. As Mason J said in Perri v Coolangatta Investments Pty Ltd at 552:
‘‘Moreover, it is clear enough that the condition was inserted for the protection of the purchasers, to guard against the possibility that they would lack adequate finance.”
…
In my opinion, the question as to whether the Special Condition was for the benefit of the purchasers or solely for the benefit of the purchasers or partially for the benefit of the purchasers is to be determined by reference to the express words of the Special Condition itself.
[19] At p 373.

The defendants rely on Amber Holdings Pty Ltd v Polona Pty Ltd,[20] a decision of a single judge in the NSW Supreme Court which concerned a condition that development approval needed to be granted by a particular time. The court concluded that the condition could not be waived unilaterally. Holland J said:[21]
[20] [1982] 2 NSWLR 470.
[21] At p 475 [F].
It would also appear to be settled that if a condition is inserted entirely for the benefit of one party, that party may (perhaps even if guilty of some default defecting the fulfilment of the condition) waive its fulfilment and require the other party to perform the contract notwithstanding, but not unless the condition is found to be wholly for the benefit of the waiving party. (underlining mine)
In Donaldson v Bexton,[22] the Queensland Full Court considered a contract for the sale of land that was subject to the purchaser selling another property. Either party was entitled to terminate the agreement if the sale of the purchaser’s property did not take place by a given date. After that date, the purchaser waived the condition and said it was ready to settle however the vendor did not want the sale to go through and purported to terminate. The Court of Appeal was divided on the issue of waiver. While all the Judges accepted that the purchaser had a right to waive the benefit of a condition, the issue was the time for waiver. The majority, Keane JA and Jerrard JA, found that the purchaser could not waive after the date for fulfilment, while McMurdo J found otherwise. Jerrard JA expressed some support for the views expressed by McMurdo J and in many of the authorities, but said:[23]
I agree with McMurdo J that most of the dicta in the High Court judgments support the appellants’ position. But I agree with Keane J.A. that upholding the respondents’ right to avoid the contract is the result closest to the position for which the parties bargained or agreed.
[22] [2006] QCA 559.
[23] At p 528 line 48.
Keane JA appears to have placed considerable significance on the particular wording in the special condition which was to the effect that the contract would be at an end failing fulfilment of the condition of sale of the purchaser’s property, concluding that the parties must have intended this right that could not be undermined by a waiver. He said:[24]
…the rules of construction by which the terms of the parties’ bargain are to be understood do not authorise, or proceed by reference to, a judicial assessment of the reasonableness of the parties’ bargain. The language of the special condition was so clear that there can be no doubt that both parties well understood that, in the events which happened in this case, neither party could insist on the completion of the contract against the wish of the other.. In the present case, the terms of the parties’ bargain expressly released the respondents from the binding force of the contract in the events which happened.
As to the issue of who has the benefit of the special condition, McMurdo J said:[25]
It remains a condition which is primarily for the purchaser’s benefit. Each party has a right to terminate for the non-fulfilment of the condition, but it is apparent that those rights serve different interests. The purchaser’s interest is that it might be impossible or too onerous for the purchaser to complete without the benefit of the sale of his own property. The non-fulfilment of the condition does not concern the vendor in the same way, because the vendor’s ability to complete the contract is entirely unaffected by it. The non-fulfilment of the condition concerns the vendor because it permits the purchaser to avoid, and the vendor’s right to terminate is to meet what would otherwise be his predicament that his property would remain subject to a contract which the purchaser could at any time avoid. But if the purchaser can waive the condition and become unconditionally bound, the vendor’s uncertainty is resolved and the purpose for the vendor’s right of termination no longer exists.
[24] At p 551 line 6.
[25] At p 555 line 16.
Then at p 562 line 10:
I return then to what I said earlier about the different interests which courts have identified and sought to protect in the interpretation of these conditions. The relevant interest of the vendor in such cases is in being able to resolve the uncertainty of his position. If that uncertainty can be resolved by a waiver which binds the purchaser to perform unconditionally, then the relevant interest of the vendor is satisfied by the waiver, “for if the purchasers could and did waive it the contract would be unconditional and the defendants concern to have a contract finally binding on the purchasers would have been realised”.[26] The respondents argue that there is no reason for the implication of a right of waiver beyond the period for fulfilment of the condition. In my view, there is such a reason: it is the same for which the purchaser had a right of waiver within that period.
[26] Koikas v Green Park Construction Pty Ltd [1970] VR 142, 149.
Clearly McMurdo J held the view that there is no real difference in the right to waive from before the date for fulfilment and after that date. The reasons the purchaser has the benefit of the condition stay the same, even after the period for fulfilment comes to an end.
The decision in Donaldson serves to illustrate the different views that have been expressed on the issue. See also Cobbold v Barrett,[27] where Jenkins J held that it was arguable that the plaintiff could waive rights under the finance clause after expiry of the time for finance; Gilbert v Healey Investment Pty Ltd[28] where the court held that the special condition requiring the vendor to subdivide land was not solely to the benefit of either party.
[27] [2006] WASC 252.
[28] [1975] 1 NSWLR 650.
I am bound by the South Australian authorities as I consider there is no basis upon which they can be distinguished. I have in any event concluded, with respect, that those decisions and that of McMurdo J in Donaldson present persuasive reasoning and I find that the plaintiff was entitled to unilaterally waive the special condition.
The benefits to a vendor from a subject to finance condition are (1) certainty of time such that they are not waiting for an unlimited period for the purchaser to get finance, and (2) the ability to terminate. Clearly the defendants in this case, once the finance condition was not fulfilled, could, if they wished, get out of the contract simply by properly terminating. I accept the defendants were themselves looking for a new house and wanted certainty before they entered into their own purchase contract, but that is precisely the purpose of the termination provision. The real objective of the special condition is to benefit the purchaser to ensure he is not obliged to complete the contract if he is unable to obtain the finance (see Mason J in Meehan v Jones).[29]
[29] (1982) 149 CLR 571 at 588.
Was there an effective waiver?
The plaintiff claims to have waived his right to rely on the special condition as to finance. The test is an objective one, to determine what an ordinary reasonable person in receipt of certain communications or having observed certain conduct, would consider amounted to a waiver. Waiver must be unequivocal. [30]
… it is submitted that the elements which are common to all form of waiver in the true sense of the word are:
1. an unequivocal representation by X either by words or conduct that it will forgo certain rights;
…
[30] See Wilken and Villiers, The Law of Waiver, Variation and Estoppel (2^nd ed 2002), 68, 4.45.
The plaintiff relies on Ms Edwards informing the defendants by telephone about the NAB letter she received on 27 May 2014 and on the Madsen Rowley letter, sent directly to the defendants by email on 5 June 2014. It is agreed that the NAB letter was not seen by the defendants until after the extension of caveat proceedings had commenced, but were aware of its contents.
The question is whether on receipt of those two communications, the defendants would have understood that the plaintiff was waiving his right to rely on the special condition and now wanted to settle on the contract. The plaintiff says it is not necessary for there to have been a specific reference to waiver given that waiver can be by conduct alone. If the NAB letter is insufficient, the plaintiff says that the addition of the Madsen Rowley letter to the information from the NAB, amounted to waiver. The plaintiff contends the Madsen Rowley letter, which did go directly to the defendants, made it abundantly clear that he now wanted to settle, even accepting the differences between what was said in the letter and what he later says about the operation of the contract.
In essence the plaintiff’s argument is that there is enough between what the defendants were told by Ms Edwards about the NAB’s approval and the letter they received from the plaintiff’s lawyers to know, or at least should know, that as at 5 June, the plaintiff wanted to settle.
The NAB letter is vague. It merely informs Ms Edwards that ‘finance has been approved to assist with the purchase of the property’. The letter gives no details of the extent to which the finance is going to ‘assist’ in the purchase. Leaving aside the question of whether the letter complies with clause 19.1 of the contract, nothing in that letter in my view amounts to a waiver.
Looking objectively at what could be made of the communications, it is relevant to consider what had gone on between the parties before. The defendants had been asked to grant a further extension, which they refused. They were informed that finance had been declined and they attempted, albeit unsuccessfully, to ensure the contract was then at an end. Clearly, subjectively, the defendants believed the plaintiff was unable to settle on the contract and nothing in what is said in the information they received about the NAB letter or the letter from the plaintiff’s lawyers contained or was accompanied by a clear statement that the special condition was no longer to be in effect.
The NAB letter is not a communication from the plaintiff saying something to the effect that he is now in a position to settle. The Madsen Rowley letter asserts the contract remains on foot notwithstanding finance not being obtained in accordance with the special condition because the defendants have failed to comply with the Notice of Default provisions in the contract. There is simply no unequivocal communication of waiver of the special condition that could be gleaned from the information made available to the defendants.
Was the special condition fulfilled?
In the alternative, the plaintiff argues that the special condition was fulfilled on 27 May 2014 by the NAB letter. Pursuant to clause 4 of the special condition, the plaintiff is required to notify the defendants that the ‘Lender has agreed to grant the loan’.
While nothing in my view turns on the special condition nominating ‘Zobel’ as the ‘Lender’, the NAB letter did not disclose any of the details of the finance that was being approved and simply cannot be said to comply with the requirements of the contract regarding obtaining finance.
The ‘loan’ was to be in specified terms, that is, for a minimum of $394,250 for 30 years and the interest rate was to be at a rate not exceeding 5.50%. The NAB letter did not agree to grant finance in the terms specified by the special condition and when the NAB did provide notice to the plaintiff of the precise terms of the loan it was offering, on 18 June 2014, those terms were for $394,000, for 25 years at a rate of 5.05% fixed for three years. Effectively the plaintiff is asking me to accept that the conditions of the NAB loan were ‘close enough’ to the contractual terms and that in any event, he was and is able to secure the funds necessary to complete. Even allowing for the email of the NAB letter to Ms Edwards to qualify as proper notification under the contract, the NAB letter simply does not satisfy the special condition, nor did it even as at 18 June 2014.
Conclusion
Having found that the plaintiff failed to either satisfy or waive the special condition, it was open to the defendants to terminate the contract on 6 June 2014. The plaintiff’s claim is dismissed.
I will hear the parties as to costs and any ancillary orders.