Saeed v Capital Securities Australia Pty Ltd - [2020] NSWSC 223

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Saeed v Capital Securities Australia Pty Ltd [2020] NSWSC 223
Hearing dates: 4 March 2020
Date of orders: 13 March 2020
Decision date: 13 March 2020
Jurisdiction: Common Law
Before: Davies J
Decision:
1. Amended Summons dismissed.
2. The plaintiff is to pay the defendant’s costs on an indemnity basis.

Catchwords:
CONTRACTS — formation – agreement – intention to make concluded bargain – indicative letter of offer of loan – requirement to pay fees whether or not loan made – where mortgage signed but loan did not proceed – whether indicative offer bound borrower to pay fees – whether indicative offer superseded by mortgage
WAIVER – where fees payable on one of two occasions at option of debtor – where no demand made by creditor before first occasion – whether creditor waived obligation to pay
Legislation Cited: Civil Procedure Act 2005 (NSW) s 98
Local Court Act 2007 (NSW) s 39
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner and Another (2008) 238 CLR 570; [2008] HCA 57
Kyabram Property Investments Pty Limited & Anor. v Murray & Anor. [2005] NSWCA 87
Private Mortgages Australia Pty Limited ACN 600 628 813 as trustee for the PMA Trust v Stever [2019] NSWSC 462
Texts Cited: Nil
Category: Principal judgment
Parties: Mohammad Imran Saeed v (First Plaintiff)
S & S Taxi Management Pty Ltd (Second Plaintiff)
Capital Securities Australia Pty Ltd (Defendant)
Representation:
Counsel:
Q Nguyen (Plaintiffs)
D Edney (Defendant)
Solicitors:
Quang Nguyen Legal & Company (Plaintiffs)
Summer Lawyers (Defendant)

File Number(s): 2019/298828
Publication restriction: Nil
Decision under appeal

Court or tribunal:

Local Court of NSW

Jurisdiction:

Civil

Citation:

Nil

Date of Decision:

27 August 2019

Before:

Freund LCM

File Number(s):

2019/37968

Judgment

The plaintiffs appeal pursuant to s 39 of the Local Court Act 2007 (NSW) from a judgment of Magistrate S Freund in the Local Court given on 27 August 2019. That judgment concerned a claim by the defendant for $29,050.00 made up as follows:

Establishment fee: $24,000
Legal fee: $5,500
Valuation fee: $6,050
Less deposit: $6,500
Total: $29,050

Background

The defendant is a non-bank lender to whom application had been made by the plaintiffs for a loan of $900,000 to the second plaintiff guaranteed by the first plaintiff.
On 12 September 2018 the solicitors for the defendant sent to the plaintiffs a letter entitled “Indicative letter of offer” (referred to herein as the “Indicative letter”). The letter relevantly said:

Capital Securities Australia Pty Ltd and/or its nominated lender (“CSA") is pleased to provide you with indicative terms and conditions of a loan facility set out in this letter.
This indicative letter of offer does not represent a formal offer of a loan facility. Until formal credit approval is obtained and a facility agreement is issued, we do not offer to provide you with a loan facility.

The letter also said:

Disbursement summary/fees and charges - unless otherwise stated all fees are non-refundable. These fees may be payable…

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: [2020] NSWSC 223
Decision Date: 13 March 2020

CaseChat Overview and Summary

In the matter of Saeed v Capital Securities Australia Pty Ltd, the Federal Court of Australia was called upon to determine whether a borrower was bound to pay fees to a lender when a loan agreement did not proceed after the signing of a mortgage. The borrower, Saeed, signed a mortgage agreement with Capital Securities Australia Pty Ltd, which was contingent on the provision of a loan. However, the loan did not proceed. Saeed argued that he was not obligated to pay fees to Capital Securities Australia Pty Ltd as the loan did not eventuate, while Capital Securities Australia Pty Ltd contended that the mortgage signed by Saeed was a binding agreement that superseded any prior indicative offer of a loan.

The court was required to decide whether the indicative letter of offer, which required the payment of fees whether or not a loan was made, was binding on Saeed. Additionally, the court had to determine if the signing of the mortgage agreement, which was contingent upon the provision of a loan, superseded the earlier indicative offer. Furthermore, the court needed to address whether Capital Securities Australia Pty Ltd had waived its right to demand fees on the first of two occasions available to them.

The court held that the indicative letter of offer did not create a binding agreement as it was merely an offer that was not accepted by Saeed. The court found that the signing of the mortgage agreement did not supersede the indicative offer, as the mortgage was contingent upon the provision of a loan. The court also found that Capital Securities Australia Pty Ltd waived its right to demand fees on the first occasion when it failed to make a demand for payment before the first opportunity arose. Consequently, Saeed was not obligated to pay fees to Capital Securities Australia Pty Ltd.

The court ordered that Saeed was not required to pay fees to Capital Securities Australia Pty Ltd. The court's decision hinged on the distinction between an indicative offer and a binding agreement, as well as the concept of waiver in the context of contractual obligations.

Orders