Walker v Munnecke
[2025] VCC 267
•20 March 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-23-02172
| CASSANDRA MARY WALKER | First plaintiff |
| & | |
| KYALL ANTHONY WALKER | Second plaintiff |
| v | |
| BARBARA ELIZABETH MUNNECKE | Defendant |
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JUDGE: | JUDICIAL REGISTRAR BENNETT | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17-18, 23 September 2024 and 24 October 2024; written submissions dated 30 September 2024, 7 and 17 October 2024, and 4 and 8 November 2024 | |
DATE OF JUDGMENT: | 20 March 2025 | |
CASE MAY BE CITED AS: | Walker v Munnecke | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 267 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT
Catchwords: Contract – sale of real estate – “subject to finance” clause – validity of termination by purchaser where loan not approved – entitlement to return of deposit – whether purchaser applied for loan – whether purchaser did everything reasonably required to obtain loan approval – whether purchaser gave notice of termination together with evidence of non-approval – whether notice and evidence given within prescribed time or prematurely
Cases Cited:Westpac Banking Corporation v Forum Finance Pty Ltd (in liq) [2024] FCA 1176; Jones v Dunkel (1959) 101 CLR 298; Stoilas v Mazzocchetti [2013] SADC 74; Sentinel Property Group Pty Ltd v ABH Hotel Pty Ltd [2024] QCA 14; Zieme v Gregory [1963] VR 214; Piva v Sportiva Macchina [2006] VSC 321; Joseph Street Pty Ltd v Tan (2012) 38 VR 241; Altis PropCo2 Pty Ltd v Majors Bay Development Pty Ltd [2022] NSWSC 403; Hong v Tsambikos [2015] VCC 1401; Simcevski v Dixon [2017] VSC 197; Hera Project v Bisognin (No 3) [2017] VSC 268; Al Achrafi v Topic [2016] NSWSC 1807; Putt v Perfect BuildersPty Ltd [2013] VSC 442; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; Clay v Pesch [2009] SADC 124; Vision Eye Institute Ltd v Kitchen [2014] QSC 260; Attorney-General (ex rel Bailey) and Bailey v Mayor etc of the City of Sandringham [1927] VLR 283; In the matter of the City Area Leases Act 1936 [1990] ACTSC 151; Winkler v DPP (1990) 94 ALR 361; Truman v Truman [2008] FamCAFC 4; Earl of Morton’s Trustees; Douglas v Macdougall [1944] SC 410
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | C Truong KC with C Jones, counsel | Robert James Lawyers |
| For the Defendant | S Freire, counsel | Kalus Kenny Intelex |
TABLE OF CONTENTS
A. The Contract
B. The issues for determination
C. Witnesses – overview
D. Factual background
D.1 The Walkers’ CBA Private finance prior to 2022
D.2 Purchase of the Property and entry into the Contract
D.3 Post-Contract events
D.4 Sale of the Busana Property
D.5 The Walkers’ attempts to recover the deposit
E. Approach to the evidence
E.1 Significance of documents and objective material
E.2 Credit of witnesses
E.2.1 Mrs Walker
E.2.2 Mr Walker
E.2.3 Mr Musgrove
E.2.4 Mr Broadbent
E.3 Absent witnesses
F. Issue 1: Was GC 20.2(a) fulfilled?
F.1 Plaintiffs’ contentions
F.2 Defendant’s contentions
F.3 Plaintiffs’ responsive contentions
F.4 Consideration
G. Issue 2: A preliminary question
G.1 Plaintiffs’ contentions
G.2 Defendant’s contentions
G.3 Consideration
H. Issue 2: Did the plaintiffs do everything reasonably required?
H.1 Approach and principles
H.2 The matters in issue
H.3 First sub-issue: Provision of documents and information
H.3.1 Threshold question: Was there a request?
H.3.2 Plaintiffs’ contentions
H.3.3 Defendant’s contentions
H.3.4 Plaintiffs’ responsive contentions
H.3.5 Consideration: Was the request withdrawn?
H.4 Second sub-issue: Entitlement to send the 10 September Email
H.4.1 Plaintiffs’ contentions
H.4.2 Defendant’s contentions
H.4.3 Plaintiffs’ responsive contentions
H.4.4 Consideration
I. Issue 3: Was GC 20.2(c) fulfilled?
I.1 Plaintiffs’ contentions
I.2 Defendant’s contentions
I.3 Plaintiffs’ responsive contentions
I.4 Consideration
J. Issue 4: Interest
K. Conclusion
JUDICIAL REGISTRAR:
1On 17 August 2022, the plaintiffs as purchasers and the defendant as vendor entered into a contract (the “Contract”) for the sale of the property known as 131-133 Park Road, Donvale, Victoria (the “Property”), for a purchase price of $2,620,000. The plaintiffs paid a deposit of $262,000 on 23 August 2022. General condition (“GC”) 20 of the Contract contained what might loosely be described as a “subject to finance” clause. It permitted the purchasers to bring the Contract to an end if a loan had not been approved for their acquisition of the Property by a certain date, provided they had complied with the 4 requirements specified in GC 20.2(a), (b), (c) and (d).
2It is not in dispute that no loan was approved. The plaintiffs allege in this proceeding that they fulfilled all 4 requirements and validly ended the Contract pursuant to GC 20.2, with the consequence that the defendant is required to repay them the deposit plus interest thereon. The defendant contends that 3 of the 4 requirements were not fulfilled, that the plaintiffs therefore were not entitled to end the Contract, and that she accordingly is entitled to retain the deposit.
3The principal issue in this proceeding is whether or not the plaintiffs fulfilled each of the 3 disputed requirements, being those in GC 20.2(a), (b) and (c). The defendant accepted that, if the plaintiffs established that all 3 disputed requirements had been fulfilled, it would follow that the plaintiffs were entitled to end the Contract pursuant to GC 20.2 and that the defendant is in breach of GC 20.3 for failing to refund the deposit. The plaintiffs accepted that, if they failed to establish the fulfilment of any one of the 3 disputed requirements, it would follow that the defendant is entitled to retain the deposit.
A. The Contract
4The form and content of the Contract was not in dispute. It was in writing and executed on 17 August 2022.
5The particulars of sale identified the plaintiffs, Cassandra Mary Walker and Kyall Anthony Walker, as the purchasers and identified Grice Legal as their legal practitioner or conveyancer. The defendant, Barbara Elizabeth Munnecke, was identified as the vendor and Bayside Law Co was identified as her legal practitioner or conveyancer. The particulars specified a purchase price of $2,620,000, with $262,000 payable as a deposit and the balance due on the settlement date of 12 December 2022.
6In the section of the particulars of sale headed “Loan (general condition 20)”, there was a check mark in the box beside the text “This contract is subject to a loan being approved and the following details apply if the box is checked:”. Those details identified the “Lender” as “CBA”, the “Loan amount” as “no more than $1,800,000”, and the “Approval date” as “31/08/2022”. It was common ground that “CBA” meant the Commonwealth Bank of Australia (“CBA”).
7GC 20 is of central relevance to this proceeding. It provided:
“20.1If the particulars of sale specify that this contract is subject to a loan being approved, this contract is subject to the lender approving the loan on the security of the property by the approval date or any later date allowed by the vendor.
20.2The purchaser may end the contract if the loan is not approved by the approval date, but only if the purchaser:
(a)immediately applied for the loan; and
(b)did everything reasonably required to obtain approval of the loan; and
(c)serves written notice ending the contract, together with written evidence of rejection or non-approval of the loan, on the vendor within 2 clear business days after the approval date or any later date allowed by the vendor; and
(d)is not in default under any other condition of this contract when the notice is given.
20.3All money must be immediately refunded to the purchaser if the contract is ended.”
8While GC 20.1 stated that “this contract is subject to” approval of the loan, the parties agreed that it was the obligation to perform the later steps contemplated by the Contract, rather than the formation and existence of the Contract, which was conditional upon that approval.[1] It was also not in dispute that the original “approval date” of 31 August 2022 specified in the particulars of sale was later extended by the defendant at the plaintiffs’ request to 14 September 2022.
[1]See eg Seddon and Bigwood, Cheshire & Fifoot Law of Contract, 12th Australian edition, at [20.3].
B. The issues for determination
9Three of the four issues identified by the parties in their agreed statement of issues reflect GC 20.2 of the Contract. Those issues are:
(a) Issue 1: “Did the plaintiffs comply with general condition 20.2(a) of the Contract … in respect of the Property … by immediately applying for a loan of $1.8mil with the … CBA (‘Loan’)?”
(b) Issue 2: “Did the plaintiffs comply with general condition 20.2(b) of the Contract by doing everything reasonably required to obtain approval of the Loan?”
(c) Issue 3: “Did the plaintiffs comply with general condition 20.2(c) of the Contract by serving written notice ending the Contract, together with written evidence of rejection or non-approval of the Loan, on the defendant within two clear business days after the approval date or any later date allowed by the defendant (ie within 2 clear business days after 14 September 2022)?”
10It was common ground that the plaintiffs, as the party seeking to exercise the termination right, bore the onus of establishing that GC 20.2 had been satisfied. Thus, it was necessary for them to establish that the answer to each of these 3 issues was in the affirmative.
11As I have indicated, the parties were largely in agreement about the consequences which would flow from the Court’s conclusions regarding satisfaction of GC 20.2(a), (b) and (c). The only exception was in respect of interest on the deposit, as to which the parties identified the following Issue 4:
“If the answers to 1, 2 and 3 above are yes, are the plaintiffs entitled to interest on the Deposit from 16 September 2022 to the date of judgment at the rate of 2% per annum plus the rate for the time being fixed by section 2 of the Penalty Interest Rates Act 1983 (Vic), alternatively, interest according to statute?”
C. Witnesses – overview
12In accordance with orders made by Judicial Registrar Muller at the pre-trial directions hearing, each witness gave their evidence in chief by witness statement. Supplementary evidence in chief was also led orally from the plaintiffs’ witnesses. All witnesses were cross-examined.
13Three witnesses gave evidence for the plaintiffs: Mrs Cassandra Walker, Mr Kyall Walker, and Mr Brent Musgrove.
14Mrs Walker, the first plaintiff, is an interior designer with her own business, Cassandra Walker Design Pty Ltd (“CWD”). She is married to Mr Walker, the second plaintiff. Together, they have 3 young children. Mrs Walker had the majority of the relevant dealings on behalf of the Walkers with CBA. Many of her communications with CBA were from a Gmail address which was shared by the Walkers, but which Mr Walker accessed relatively infrequently. On occasion, Mrs Walker also communicated with CBA from her CWD email address, to which Mr Walker did not have access.
15Mr Walker is the Head of Ecosystems at Hansa, which he described as “our family office”. Although Mrs Walker handled the majority of the communications with CBA, Mr Walker’s evidence was that he was copied into a number of emails, provided certain information directly to CBA, and had “regular discussions with Cassie about the applications we had made”.
16Mr Musgrove has occupied the role of Executive Manager with CBA Private, which is part of CBA, for the past six years. He was previously a senior manager with National Australia Bank and, before that, an accountant with Ferrier Hodgson. In his current role with CBA Private, he manages approximately ten private bankers. Ms Yen (also known as “Yenny”) Vu and Ms Anna Sculthorpe were private bankers in his team before their departure from CBA.
17The only witness called by the defendant was Mr Daniel Broadbent. Mr Broadbent is a real estate agent, and a director and auctioneer of Jellis Craig’s Ringwood and Doncaster offices. Mr Broadbent was the agent engaged by the defendant to sell the Property.
18Later in these reasons, I discuss the credit of the 4 witnesses and the absence of Ms Vu and Ms Sculthorpe as witnesses.
D. Factual background
19The chronological factual background which follows is drawn from the documents in evidence and from the uncontroversial witness evidence. It also contains references to some of the controversial witness evidence to show where that evidence sits in context. Absent an indication that a particular matter set out below is disputed or in doubt, the matters set out in this section constitute findings of fact.
D.1 The Walkers’ CBA Private finance prior to 2022
20In September 2020, the Walkers decided to refinance their family home, a townhouse in Busana Way, Nunawading (the “Busana Property”). It was around this time that the Walkers started utilising CBA Private’s “private banker concierge service”. As part of this service, they were assigned two private bankers, Ms Sculthorpe and Ms Vu. The concierge service involved the Walkers liaising directly with Ms Sculthorpe and Ms Vu, who in turn liaised with relevant departments within CBA on behalf of the Walkers. Ms Sculthorpe and Ms Vu job-shared, which meant that they worked alternate days.
21With a view to arranging the refinancing of the Busana Property, Mrs Walker telephoned Ms Sculthorpe on around 29 September 2020. Ms Sculthorpe then sent an email to Mrs Walker on 30 September 2020 which, amongst other things, identified information and documentation which CBA “require[d] to proceed with the loan application”. This included payslips, tax returns, ATO notices of assessment, identification documents, completion of a template “statement of assets and liabilities”, and completion of a “monthly living expenses calculation template”. The Walkers were not required to fill out or sign any written loan application form.
22On 11 October 2020, Mr Walker sent an email attaching certain documents in response. Further emails concerning provision of documents passed between the Walkers and Ms Sculthorpe over the course of the following week.
23The refinance was approved by Mr Musgrove’s CBA Private team in around mid November 2020. Mrs Walker was notified of the approval by Ms Sculthorpe in a telephone call, whereafter a formal loan agreement was posted to the Walkers for their execution.
24Mrs Walker also used CBA Private’s concierge service to obtain a company car lease for CWD in around November 2021. She gave evidence in paragraph 15 of her witness statement that she did not recall having to fill in any lease forms or provide any documents or information when the lease was obtained; rather, she had a telephone call with Ms Sculthorpe and CBA approved the lease. I note, however, that paragraph 62 of her statement records that the Walkers’ accountant, Daniel Westell, sent an email (which was also in evidence) attaching a number of financial and tax documents to CBA on 17 November 2021 for the purpose of the vehicle financing.
D.2 Purchase of the Property and entry into the Contract
25In June 2022, Mrs Munnecke retained Jellis Craig Doncaster to sell the Property on her behalf.
26In July 2022, the Walkers decided to look for a new family home as they had outgrown the Busana Property. They viewed the Property in early August 2022 and decided to contact CBA Private to see if they could obtain finance for it. Mrs Walker was interested in the Property because “it was designed by a mid-century architect that I have always admired and we wanted to buy a home with a big backyard in Donvale”.
27Mrs Walker attended the auction of a property in Tunstall Road, Donvale on 6 August 2022 because she believed it to be comparable to the Busana Property. The Tunstall Road property sold for $1,735,000 at auction. Mrs Walker was therefore hopeful that the Busana Property would achieve a similar sale price.
28On 7 August 2022, Mrs Walker emailed Ms Sculthorpe and Ms Vu, relevantly stating: “We have found a property we would like to put an offer on and our Busana way home should go online for sale this week. We would really like to organise pre approval to make sure the bank will loan us the funds. Please advise what documents you require asap.”
29Ms Sculthorpe responded on 8 August 2022 at 9.37am stating, relevantly:
“I will have a look this morning as to what we need to assist you both with your pre approval and have this sent to you in an email as soon as possible.
Is there then a suitable time this afternoon we could have a chat around the application and update all your income and details at the same time?”
30Ms Sculthorpe sent a further email on 8 August 2022 at 1.04pm thanking the Walkers for “the opportunity to assist you both in arranging a pre-approval for your new home”. The email foreshadowed a discussion that afternoon with Mrs Walker but in the meantime identified the information and documents which CBA “will require to update in order to arrange an application for you”. This included business, trust and personal tax returns for the last 2 years, the most recent ATO notice of assessment, identification documents, updating the previous “statement of assets and liabilities”, and updating the previous “monthly living expenses calculation template”.
31Mrs Walker and Ms Sculthorpe also had a number of telephone conversations at around this time in relation to the proposed borrowing.
32On 8 August 2022 at 3.58pm, Mrs Walker responded to Ms Sculthorpe’s 1.04pm email. Her response included confirmation that the Walkers’ monthly living expenses would be as stated in the template which they had completed in 2020. At 4.02pm, Ms Sculthorpe responded, requesting draft tax returns “for 2021” and seeking “confirmation of Kyall’s share holding in Upside and that as you advised, he is not responsible for any commitments of the business”. Given the timing of this email, I infer that Ms Sculthorpe’s reference to draft tax returns “for 2021” was a reference to returns for the 2021-2022 financial year.
33On 8 August 2022 at 8.57pm, Mr Walker emailed Ms Sculthorpe, attaching a unit holder register for the “Upside Dao Trust” and an annual statement for his superannuation account. At 9.34pm that evening, Ms Sculthorpe thanked Mr Walker for those documents and stated: “I’m working on things for you but will still require the following to be able to finalise the application for submission”. Her email then set out 6 required items, including “tax returns for Cassie, Kyall and the company Cassandra Walker Designs for 2021 (appreciate these might be drafts but if the accountant can send them tomorrow to me that would be great)”, a rental appraisal for the Busana Property, the insurance policy for the Busana Property, and an updated balance sheet. Again, the timing suggests that Ms Sculthorpe’s reference to tax returns “for 2021” was to returns for the 2021-2022 financial year.
34On 9 August 2022, a number of emails passed between Ms Sculthorpe and CBA’s “Home Loan Product and Process” team. In one of those emails, Ms Sculthorpe sought approval to waive the need for an in-person face to face interview for Mrs Walker’s parents as guarantors. The email stated amongst other things that “We are looking at a new birding [scil: bridging] finance application for Cassie and Kyall”.
35Ms Sculthorpe made an entry in CBA’s “CommSee” system at 3.52pm on 9 August 2022 stating: “Left a message for Cassie to discuss her loan options and estimate in borrowing capacity”. I interpolate here that Mr Musgrove gave evidence[2] that the CommSee system is “a foundation database that houses client information”, that “it would generally capture the majority of interactions between a bank and its customers”, but that “There are instances, phone conversations and other meetings which for one reason or another a banker or a bank employee may not record it [sic]”.
[2]T299.
36According to paragraph 27 of Mrs Walker’s witness statement, she had a telephone conversation with Ms Sculthorpe on 9 August 2022, during which they discussed whether the Busana Property would need to be sold “or whether a rental appraisal was sufficient”, and Ms Sculthorpe said that “CBA could not provide [the Walkers] with pre-approval before selling the Busana Property”. Mrs Walker’s evidence of this conversation was not challenged and it is broadly consistent with the contemporaneous documents. I therefore accept it.
37Also on 9 August 2022, the Walkers entered into an exclusive auction authority with RT Edgar (Toorak) to sell the Busana Property at auction on 10 September 2022. The responsible agent was Ms Rachael Fabbro. The authority recorded the “Agent’s estimate of selling price” as between $1.3 million and $1.4 million.
38On 11 August 2022 at 3.16pm, Mrs Walker emailed Ms Sculthorpe and Ms Vu stating:
“The park rd property is now likely to be sold in the next few days. We would still like to ensure we have done everything we can to have tried to secure it. We have been advised by another bank we potentially could obtain finance if we were to lease out Busana Way with a rental return (I enquired about this after talking with a friend who has more debt and a lower income than us). Is this something that is an absolute no with Comm bank? We are extremely confident our house will sell however we would not want to buy without pre approval.
My other question is can we receive in writing from CBA that if Busana Way sells we would be pre approved for x amount of finance? That way we know exactly what we are looking at.”
39Ms Vu responded to Mrs Walker at 3.39pm on 11 August 2022:
“I spoke to Anna regarding this yesterday and she did advise me that she looked at servicing for you and Kyall at both Bridging as well as if you were to rent out Busana Way and both options were not possible and the only way would be subject to the sale of Busana Way.
When we submit the application for you for pre approval we will definitely provide you a pre approval letter which confirms how much you are pre approved for subject to the sale of Busana Way so you will receive that. The conditions would be that once you sell Busana Way you provide us the signed contract of sale for it and if you are also successful on a purchase we will also complete valuation on the purchased property (along with the signed contract of sale).
The earliest you are able to settle would be on the same day for both purchase and property sold.”
40At 10.49pm on 11 August 2022, Mrs Walker responded to Ms Vu, stating: “Can we please organise a submission for our pre approval? Please let me know what else you require to finalise this.”
41On 12 August 2022 at 11.38am, Ms Vu responded, stating:
“I just called and left you a long voicemail so apologies in advanced [sic]. Wanted to explain to you as due to the current market conditions hence the risk to the bank is high if we do not have a signed contract of sale for Busana Way hence I believe as you discussed with Anna we will need to wait to submit the application once you have sold Busana Way. I would suggest posing [sic] a longer settlement date so that this allows you to buy and then ensure you can match the dates aligned correctly to suit you. Then if need be you can bring settlement forward if you purchase also. At this point Anna has completed your borrowing capacity so if you were to put in any offers ensure that it is subject to bank finance approval. We have all the information for your application so we can submit this asap once you confirm the property Busana Way has sold.
Have you already put it on the market?”
42Consistent with her 11.38am email, Ms Vu made an entry on the CommSee system at 11.39am on 12 August 2022 stating:
“called and left Cassie a detailed message and email sent. Unable to submit pre approval at this stage as servicing not evident for bridging nor if she was to turn to investment and Anna had advised she would need to sell Busana Way first so once they have sold we can put through the application for purchase. Due to current climate conditions and risk.”
43It appears that Ms Vu spoke to Mrs Walker on the phone a short time thereafter, as recorded in Ms Vu’s CommSee entry at 12.40pm on 12 August 2022:
“Spoke to Cassie and she has confirmed their home will be on the market as of next week potentially Monday. A valuer had completed their valuation today so we may receive the report early next week. Once we receive the report will then circle back as she would feel peace of mind if she was able to potentially send the application for pre approval knowing the price although aware of the risk she is hoping to sell their home asap but they also would like opportunity to purchase. Will discuss with Anna once valuation returns if we may be able to send to risk on this basis with report as evidence to improve the case. She really appreciated the help to date.”
44Also on 12 August 2022, Christiaan Domini of Herron Todd White (“HTW”) attended the Busana Property and prepared a valuation for CBA. The valuation ascribed a value of $1.4 million to the Property and was emailed initially to Leonardo Theiler of CBA Private. In his covering email, Mr Domini stated that he had met Mrs Walker that morning and that she “is aware the market is softening largely due to rapid interest rate rises”. Mr Theiler forwarded the email and valuation to Ms Sculthorpe and Ms Vu at 1.12pm the same day.
45Later on 12 August 2022, at 7.16pm, Ms Vu forwarded the HTW valuation to Ms Sculthorpe under cover of an email stating:
“The valuation report came back and I have uploaded to Q drive as well. Looks like it came back pretty conversative at 1.4mil so perhaps if we were able to use this figure would their servicing still work ok? Cassie mentioned that you had advised her of borrowing capacity of $1.8mil if you double check servicing if ok and you speak to Cassie and Coaches whether we could attempt to submit to risk on the basis we use CBA valuation if they would potentially allow us subject to condition of sale of Busana Way?
Hopefully once it hits market that she can sell pretty soon. As if we are not willing to do the app on those conditions then she has no choice but to purchase as I suggested subject to finance approval and push out settlements to ensure she keeps options open. Though worse case she could potentially get assistance from family too I would assume.”
46Mrs Walker had a number of telephone conversations with Mr Broadbent on 15 August 2022 about the Property and the price which the Walkers might need to offer to secure it on a “subject to finance” basis. It is unnecessary to refer to the content of those discussions.
47According to paragraph 29 of Mrs Walker’s witness statement, she also had a telephone conversation with Ms Sculthorpe on 15 August 2022, during which:
“(a)I said words to the effect that the Busana Property had been listed on the market and that we had been informed by our selling agent that we would achieve a sale price of at least $1.4 million;
(b)we discussed what our borrowing capacity would be based [sic] the expected sale price for the Busana Property, our financial circumstances and the CBA’s current lending criteria;
(c)Anna said words to the effect to me that if the Busana Property sold for at least $1.4 million we would receive finance for the Property;
(d)Anna also said words to the effect that any further interest rate rises would effect [sic] our borrowing capacity; and
(e)I told Anna that I would make a conditional offer on the Property.”
48Mrs Walker’s evidence of this conversation is contested and I will discuss it later in these reasons. I have set it out here so that the evidence may be seen in its temporal context.
49Ms Sculthorpe made an entry on the CommSee system at 3.30pm on 15 August 2022, which the plaintiffs’ closing submissions described as a file note of the conversation referred to in paragraph 47 above, stating:
“Spoke with Cassie and talked through again the banks position in regards to them being required to sell their existing home at Busana Rd frist [sic] prior to us being able to look at an approval for their maximum borrowing capacity. Cassie understood this and also felt that they would not want to place themselves in a position of any risk whereby they were unable to sell or unable to sell for the right amount that would that woudl [sic] be required to assist them settling a new home Busana rd is being listed tonight.”
50The Busana Property was listed for sale on about 15 August 2022.
51From 5.35pm on 15 August 2022, Mr Broadbent emailed Mrs Walker a number of drafts of the proposed contract of sale for the Property. Those drafts were unsuitable because they were expressed as conditional upon a finance amount lower than $1.8 million and a lender other than CBA. These communications culminated in an email from Mr Broadbent to Mrs Walker at 3.17pm on 17 August 2022 attaching a further proposed contract of sale. That version of the contract was executed the same day and is the Contract upon which the plaintiffs sue in this proceeding.
D.3 Post-Contract events
52Having executed the Contract earlier that day, Mrs Walker sent an email to Ms Sculthorpe and Ms Vu on 17 August 2022 at 8.22pm. Her email attached the Contract and stated:
“I am emailing to advise we have secured 131-133 Park Rd Donvale subject to finance. This is currently a 2 week period of which we either hope to have sold and obtained finance approval by that stage or we may be required to request an extension of the sale contract. Please see attached for your reference.
We have been advised that if we can not obtain finance from Commbank we will be able to exit the contract with all deposit monies returned.
I will keep you posted.”
53On 18 August 2022 at 10.53am, Ms Vu responded, stating: “Congratulations that’s amazing news. Now hopefully you can sell Busana Way asap so that we can proceed with this purchase for you. Yes if you place the purchase subject to finance that way it protects you if you pay deposit and can still get it back.”
54At 10.20pm on 18 August 2022, Mrs Walker emailed Ms Rachael Baker of Grice Legal, the Walkers’ conveyancing solicitors, stating:
“I have sent you the contract. All went well now to sell Busana and line up the finance. Busana will need a 60 or 90 day settlement. Ideally 90. We will need to apply for an extension as I doubt there is anyway [sic] we will sell and then have finance approval before the two week period”.
55On 19 August 2022 at 5.09pm, Mrs Walker emailed Ms Vu, asking: “The real estate has said that our bank will need to get a valuer through prior to finalising finance? Is this the case?” Ms Vu responded at 5.12pm: “When we complete formal approval Yes as pre approvals are always subject to satisfactory valuation. If the bank is lending money for a purchase they want to ensure security which we will hold is satisfactory.”
56Although the Contract had been executed on 17 August 2022, the Property was open for inspection again on 20 August 2022. The Walkers took their children and Mrs Walker’s parents to inspect the Property and the children chose their bedrooms. The first open for inspection at the Busana Property also occurred on that day. Mrs Walker emailed Ms Baker at 3.50pm that day stating:
“Park Rd had an open today and there were many people there so we want to do everything we can to keep hold of the property. Todays [sic] inspection at Busana went really well and have had three parties interested in offering prior to auction. …”.
57On 22 or 23 August 2022, the Walkers paid the $262,000 deposit on the Property to Jellis Craig.
58On 23 August 2022, Grice Legal sought an extension of the “approval date” in the Contract from 31 August to 14 September 2022. On 24 August 2022, Bayside Law confirmed that the defendant agreed to the extension. It is common ground that the “approval date” therefore became 14 September 2022.
59Also on 23 August 2022, a building report concerning the Property was sent to Mrs Walker by Dieter Pleuger of All Home Inspection Service.
60On 26 August 2022 at 5.28pm, Ms Vu sent an email to Ms Sculthorpe, copied to Mr Musgrove, containing her handover notes. Under the sub-heading “Currently in progress – Applications”, the email relevantly recorded: “Walker $1,800,000 Home seeker to be submitted upon sale of existing home”.
61On 4 September 2022, Mrs Walker sent an email to Ms Sculthorpe and Ms Vu, stating: “We have until the 14th of September to advise if we will be proceeding with the purchase of Park Rd Donvale. The campaign for Busana has gone really well and we expect to sell mid week. What further information do you require once we can send you this contract to finalise loan approval for Park Rd?”
62Ms Sculthorpe responded on 6 September 2022 at 3.39pm stating, relevantly:
“The outstanding items we still need to arrange a formal application for you are:
1. The 2 most recent payslips for you and Kyall. 2. The last year’s Tax return for yourself, Kyall and Cassandra Walker designs. And the NOA for this year as well. 3. A copy of the contract of sale for Park Rd (you may have sent this – but please fi [scil: if] you can include this again we will obviously need a singed [sic] one once to hand also)
I think that is all at this stage then I can finalise your application for submission.”
63At 4.16pm on 6 September 2022, Mrs Walker responded by asking “Will they require a final tax return notice? We won’t be lodging it for a few months but have a draft ready to go?” Ms Sculthorpe responded at 8.02pm:
“I will need to seek acceptance to use the draft but am happy to obtain the drafts and support this
Is it possible to have your accountant sent [sic] these through to me tomorrow?
With regards to the time frames, I will give you a call tomorrow, but we wont [sic] be in a position to submit the formal application until the sale is confirmed so normally we would need 1-2 weeks to finalise everything. I know you have mentioned you need an answer by next Week 14th. Is there any possibility for this to be extended whilst we finalise things (once Busana has sold that is of course?)
I will touch base with you on the phone tomorrow so we can talk through this then if you like”
64At 4.46pm on 6 September 2022, Mrs Walker sent a text message to Ms Fabbro seeking an update. Ms Fabbro responded at 7.04pm discussing various potential purchasers of the Busana Property.
65On 6 September 2022, the Reserve Bank of Australia announced a 0.5% increase to the cash rate.
66Mrs Walker notes in paragraph 72 of her witness statement that her outgoing call register (which was also in evidence) confirms that she telephoned Ms Sculthorpe at 10.32am and 11.01am on Wednesday 7 September 2022. Mrs Walker says in paragraph 73 of her statement that, during one or more of her phone conversations with Ms Sculthorpe on 7 September 2022, Ms Sculthorpe said:
(a) CBA would be passing on the full interest rate increase of 0.5% that had been announced the previous day by the Reserve Bank;
(b) the increase would likely take effect for CBA customers on 16 September 2022;
(c) based on the revised interest rate and the financial information provided to CBA, the minimum forecast sale price of the Busana Property of $1.4 million “would no longer be sufficient for our loan application to be approved”;
(d) despite Mrs Walker’s previous tax returns being sufficient for finance, the Walkers “should look to include the most recent year’s draft tax return as my business was increasingly profitable and this may now be important to revise our application”;
(e) a sale price greater than $1.4 million for the Busana Property “may now be required to offset the rise in interest rates”;
(f) the Walkers had until 14 September 2022 to provide the vendor of the Property with written notice of the outcome of their application for finance;
(g) if the Busana Property achieved a sale price of at least $1.4 million, Ms Sculthorpe “could rush through an application for finance on Monday, 12 September 2022, at the latest so our application could be assessed prior to the interest rate rise”.
67Mrs Walker’s evidence of this conversation is contested and I will discuss it later in these reasons.
68Mrs Walker sent an email to Ms Sculthorpe and Ms Vu on 7 September 2022 at 11.34am attaching, as had been requested the previous day, the two most recent payslips for each of Mr Walker and Mrs Walker, as well as the Contract.
69Mr Broadbent says in paragraph 5 of his witness statement that he received a telephone call from Mrs Walker on the morning of 7 September 2022, during which Mrs Walker told him that “finance was looking good” and she was “just waiting on the final paperwork”. In cross-examination, Mrs Walker disputed that she said this. I do not consider anything to turn on the disputed content of this conversation.
70At 11.55am on 7 September 2022, Mrs Walker emailed the Walkers’ accountant Daniel Westell, copying in Ms Sculthorpe, stating: “Can you please send the company draft tax return to Anna? She is looking after our finance on the purchase of our property. Ana [sic] please advise Daniel if you require any other documentation.” At 12.39pm, Mr Westell sent an email to Ms Sculthorpe attaching a draft company tax return for CWD for the year ending 30 June 2022 and asking Ms Sculthorpe to “Please let me know if you need anything else”. Amongst other things, that tax return recorded wage and superannuation payments to Mrs Walker and also the payment of franked dividends to the KC Walker Family Trust.
71At 2.37pm on 7 September 2022, Ms Sculthorpe emailed Mr Westell, thanking him for the draft tax return and stating: “Can I please ask you to confirm if there are unlikely to be any material changes to the final submission when lodged? (if this is the case). I am just working through these figures now and will reach out if I have any further queries”. Mr Westell responded at 2.40pm: “I can confirm there will be no changes to the tax return before it is lodged – this is the final version”.
72In evidence was an undated “Commonwealth Private Home Loan Application Comments Guide” (the “Application Guide”). This appears to be an internal CBA document prepared by Ms Sculthorpe which sets out details regarding the Walkers, their financial position, and information provided by them to CBA in connection with a stated loan amount of $1,800,000. Although the document is undated, it is clear that it was prepared, or at least updated, some time after 2.40pm on 7 September 2022, because it sets out verbatim Mr Westell’s 2.40pm email confirmation.
73At 7.53pm on 7 September 2022, apparently after reviewing the contents of the CWD draft tax return received earlier that day, Ms Sculthorpe sent an email to Mr Westell (“7.53pm Email”) stating:
“Do you happen to also have Cassie’s draft for the same year? If you do please could I trouble you for a copy of this to coincide with the business?
I note the trust distribution here as well, if there is a trust involved, can I please also request these so I have a full and clear picture.”
74At 8.59am on Thursday 8 September 2022, Mr Westell responded:
“Cassie’s family trust and personal tax returns are still in progress, I’m just waiting on some extra information before I can prepare drafts for you. I’m hoping to receive the information over the weekend, in which case I will be able to provide the drafts early next week.”
75There is no evidence of any further communication between Ms Sculthorpe and Mr Westell.
76Mrs Walker says at paragraph 61 of her witness statement that she had a number of telephone conversations with Ms Sculthorpe on “about 7 and 8 September 2022” and that, during one such conversation:
(a) Mrs Walker “said that our notices of assessment and tax returns were not yet available for the financial year ending 2022”;
(b) Mrs Walker “said that our accountant had already provided notices of assessment and tax returns for the financial year ending 2021”; and
(c) Ms Sculthorpe said words to the effect that “we were not required to provide the CBA with our notices of assessment and tax returns which were not yet available for the financial year ending 2022”.
77This evidence is also the subject of dispute and will be discussed later in these reasons.
D.4 Sale of the Busana Property
78The auction of the Busana Property occurred on Saturday 10 September 2022. The property was passed in at $1.3 million and ultimately sold to the highest bidder for $1.35 million.
79Mrs Walker says at paragraph 77 of her witness statement that, following the auction, she understood that the Busana Property “had not obtained the minimum sale price of at least $1.4 million required for our loan application to be potentially approved by the CBA”. She goes on to say at paragraph 78 that she and Mr Walker “were devastated that the auction result for the Busana Property meant that we would not be able to obtain approval on our loan application with the CBA to complete the purchase of the Property”. Similarly, Mr Walker says at paragraph 44 of his statement that the Walkers “were devastated because we knew the CBA would not approve our loan and therefore we would not be able to complete the purchase of Park Road”. This evidence is disputed.
80Shortly after the auction, Mr Walker sent a text message in a group chat to members of his extended family, stating: “Accepted $1.35m ($50m [sic] below reserve) which means no park road. We think things will get worse and we’ll make the $50k back on the next one. Thanks for your support xo”.
D.5 The Walkers’ attempts to recover the deposit
81Significantly, Mrs Walker sent an email to Ms Sculthorpe and Ms Vu at 2.14pm on 10 September 2022 (“10 September Email”) following the sale of the Busana Property, relevantly stating:
“We have sold Busana Way this morning for 1.35m. We will send the contract across when we have an electronic copy. 60 Day settlement.
We are now not in a rush to finalise finance for Park Rd. Can we please obtain a letter or email from CBA stating that at this point in time you are unable to loan us 1.8m? This will allow us to exit the contract of Park Rd and we will still seek a formal pre approval for a lesser value which we would be more comfortable with.”
82On Monday 12 September 2022 at 7.01am, Grice Legal sent an email to Bayside Law attaching a letter which stated:
“We refer to the abovementioned matter and regrettably advise that the Purchaser’s finance application has not been approved.
In view of the above, we are instructed to terminate the Contract of Sale and request that all deposit monies paid are returned to our client as soon as possible.
Kindly confirm that the contract is at an end.”
83On 12 September 2022 at 10.17am, Ms Sculthorpe sent an email (“12 September Email”) in response to the 10 September Email, stating:
“A Big congratulations on the sale of Busana!! You must feel a lot of relief, I am so happy for you that it sold :)
I am so sorry for not replying over the weekend, I have been unwell and am only working intermittently today as on top of being unwell I have now caught conjunctivitis from my son and my eyes are very sore. Goodness me!
I can prepare an email to you stating that at this time the bank cannot at this time [sic] assist you in accommodating a borrowing capacity of $1,800,000 and that we would be happy to review this should your circumstances change?
Would that suffice? As I cannot issue a decline letter as the finance has not been declined?
Please let me know and ill [sic] prioritise this today for you before I log off.
Congratulations once again, exciting times ahead for you and your lovely family and we are so happy to be involved in the journey.”
84On 12 September 2022 at 3.09pm, Bayside Law confirmed receipt of Grice Legal’s letter sent earlier that day and requested “written confirmation from the bank that finance was not approved”.
85On 12 September 2022 at 3.35pm, Mrs Walker responded to the 12 September Email, copying in Ms Vu and Ms Baker, stating:
“I believe that would suffice? Rachael, can you please advise? Ann [sic], can you also send this across to Rachael our legal representative.
Rachael, we would be open to re negotiating the sale to fit with it [sic] our borrowing capacity if they are open to this but I am doubting this would be the case”.
86On 12 September 2022 at 5.14pm, Ms Baker responded to Mrs Walker’s 3.35pm email, stating in a request apparently directed at Ms Sculthorpe: “If you could please state that the finance is not approved at this time, together with what you have stated below and pop this on a CBA letterhead – this will suffice and be greatly appreciated.”
87On 13 September 2022 at 2.05pm, Ms Sculthorpe sent an email to Mrs Walker and Ms Baker setting out the proposed wording of a letter which Ms Sculthorpe foreshadowed putting onto CBA letterhead and sending to them the following day. Ms Sculthorpe asked the addressees to “please confirm you are happy with this”. The first sentence of the proposed wording stated: “Thank you for your recent enquiry into acquiring finance for the purchase of a new residential home”. At 2.10pm, Ms Baker responded, stating: “Could I please suggest an edit, if possible, rather than ‘recent enquiry’ could you please amend this to ‘application’ …”. At 2.12pm, Mrs Walker responded to Ms Sculthorpe’s email, stating “Thank you Anna. That is great. We can start with it simply in an email and see if they accept that?”
88On 13 September 2022 at 3.00pm, an entry was recorded by Ms Sculthorpe on the CommSee system, stating: “{hone [scil: Phone] meeting held with Cassie regarding their home seeker application”. There was no other evidence about this phone call.
89As foreshadowed, on 14 September 2022 at 1.01pm, Ms Sculthorpe sent an email to Mrs Walker and Ms Baker attaching a letter on CBA Private letterhead (“First Decline Letter”). The covering email stated amongst other things: “Please find attached to this email our letter advising that finance was not able to be provided to Cassandra and Kyall for their recent offer placed on 131 Park Rd, Donvale”. The First Decline Letter identified its authors as Ms Sculthorpe and Ms Vu, but was unsigned. It also erroneously contained a second page in the form of a template containing the “Lorem ipsum” placeholder text. The First Decline Letter stated:
“Thank you for your recent application into acquiring finance for the purchase of a new residential home at 131 Park Rd Donvale VIC 3111
I am writing to you today to inform you that at this time, the bank cannot assist you in accommodating a borrowing capacity of $1,800,000 to facilitate this purchase and therefore your finance has not been approved.
Please however know that we would be happy to review this should your circumstances change.
Thank you for the opportunity to look [sic] your borrowing needs and we look forward to working with you in the future”
90The wording of the First Decline Letter reflected the wording proposed in Ms Sculthorpe’s 13 September 2022 email, incorporating Ms Baker’s suggested edit.
91The First Decline Letter was sent by Ms Baker to Bayside Law on 14 September 2022 at 1.17pm under cover of an email requesting confirmation that the Contract was at an end.
92Mr Broadbent says at paragraph 7 of his statement that, on the afternoon of 14 September 2022, Mrs Walker phoned him and “offered to purchase the [Property] for $2.4M, unconditional and with a 30-day settlement period”, which Mr Broadbent rejected. Mr Broadbent was not challenged in cross-examination about the content of this conversation.
93Mrs Walker’s witness statement refers at paragraph 101 to telephone discussions between her and Mr Broadbent on around 12 and 14 September 2022. She disputes making an unconditional offer to Mr Broadbent to purchase the Property. Rather, she says she told Mr Broadbent that the Walkers wanted to know whether the vendor would consider an unconditional offer of a lower purchase price around $2.4 million that may be within the Walkers’ borrowing capacity and that, if the vendor was willing to have a discussion, the Walkers would discuss with CBA whether they could accommodate a lower borrowing capacity. I do not consider anything to turn on the disputed contents of this conversation. Whether Mrs Walker was making an offer or merely an enquiry, the relevant point is that the Walkers were interested in acquiring the Property for a price lower than that which was in the Contract. (I note that, in cross-examination, Mrs Walker agreed[3] that she wanted to try to renegotiate with the defendant to buy the Property for a price lower than $2.62 million.)
[3]T204-205.
94On Thursday 15 September 2022, emails passed between Grice Legal and Bayside Law, culminating in an email from Bayside Law at 4.39pm requesting confirmation from CBA that the purchasers immediately applied for the loan and did everything reasonably required to obtain approval of the loan.
95Consequently, Ms Baker emailed Ms Sculthorpe and Ms Vu at 4.48pm on 15 September 2022 advising them of the additional confirmations sought by Bayside Law. Ms Baker went on:
“I am of the opinion that the previous letter provided was sufficient and standard for these circumstances, however, to ensure a swift resolution, could we please kindly request that the letter is redrawn to state that the application was made to finance immediately following the signing of the contract of sale (signed on the 17th August 2022) and that in your opinion the parties have provided all relevant documentation for an application for finance swiftly and did everything reasonable to obtain approval of the loan”.
96By email sent at 5.28pm on 15 September 2022 (“Vu Email”), Ms Vu forwarded Ms Baker’s 4.48pm email to Mr Musgrove, stating:
“Was hoping to get some guidance on this situation. Our client Cassie and Kyall Walker put in an offer for a property and Anna had very thorough discussion regarding the loan and was not able to service on bridging so told them they would need to sell their home first and we had discussed this in our last 1:1 if you may recall. We both kept to this point we would not input an application UNTIL THEY SOLD THEIR FAMILY HOME and client went out on their own risk and purchased and paid a deposit then this last weekend they sold the family home but they are no longer wanting to proceed with their purchase. We have not completed any pre approval as Anna was still awaiting on documents from accountant for this financial year in order to proceed and her discussion this week with client was she would submit the application upon return of her leave once accountant provides this document. This new loan still was in no relation to the purchased property. As they now wish to pull out so asked Anna to prepare a letter in which Anna mentioned she cannot provide a decline letter however completed the attached … .
They have come back today and would like us to amend the letter with the following information below:
the Vendors have requested written confirmation from the bank confirming that the purchaser:
(a) immediately applied for the loan; and
(b) did everything reasonably required to obtain approval of the loan.
I just wanted to reach out to seek your guidance as I am not comfortable in stating this as they have not applied for any loan hence so do I simply revert back to advise this? However require [sic] this letter in order to get their deposit funds back.
Happy to discuss anytime tomorrow if you can with me prior to me contacting Cassie.”
97At 5.56pm on 15 September 2022, Mr Musgrove responded to the Vu Email, stating: “I agree, Anna’s letter covers it all and we can’t provide undertakings around other people’s activities or inactions, that is, point b. We can say something … thank you for all the various information provided, we have undertaken a detailed assessment of all the information provided and …” I infer that, in referring to “Anna’s letter”, Mr Musgrove was referring to the First Decline Letter.
98Mrs Walker, to whom Ms Baker’s 4.48pm email had also been sent, responded on Friday 16 September 2022 at 11.20am, asking Ms Vu: “Is this something that can be done asap please?”. At 11.21am, Ms Baker emailed Ms Vu, stating relevantly: “I understand that Anna is not available on Friday’s [sic]. Given the timeframe of this finance clause, if you could please kindly attend to this request and re-draft the letter as per the below it would be greatly appreciated so that we may satisfy the othersides [sic] request promptly.” At 11.45am, Ms Vu responded to Mrs Walker’s email, stating that she was not in the office that day and was “trying to see if we can make arrangements and also to clarify the wording around what I can and can’t include in the letter”.
99At 12.12pm on 16 September 2022, Ms Vu asked Mr Musgrove to review an attached “slightly updated” letter. Mr Musgrove responded at 12.14pm: “It’s a subtle difference but I think that reads fine! Let them know that’s the best we can do – if they ask”.
100At 12.41pm on 16 September 2022, Ms Vu emailed a further letter to Ms Baker on CBA Private letterhead (“Second Decline Letter”), under cover of an email which stated: “I have attached an updated one in [sic] which has been slightly amended I hope that suffices.” Like the First Decline Letter, the Second Decline Letter bore the date 14 September 2022 (despite being sent on 16 September 2022) and was unsigned. It stated:
“Thank you for all the various information provided, we have undertaken a detailed assessment of all the information in relation to your recent application into acquiring finance loan [sic] for the purchase of a new residential home at 131 Park Rd Donvale VIC 3111.
I am writing to you today to inform you that at this time, the bank cannot assist you in accommodating a borrowing capacity of $1,800,000 to facilitate this purchase and therefore your finance has not been approved.
Please however know that we would be happy to review this should your circumstances change.
Thank you for the opportunity to look [sic] your borrowing needs and we look forward to working with you in the future”
101I note that the Second Decline Letter did not contain the confirmations to satisfy the vendor which Ms Baker had requested in her 15 September 2022 (4.48pm) email.
102A few minutes after her 12.41pm email attaching the Second Decline Letter, Ms Vu again emailed Ms Baker at 12.44pm, stating: “Due to compliance in relation to our letter and wording. [sic] The email I just sent with the attached was the best we are able to provide so I hope that suffices.”
103Ms Baker sent the Second Decline Letter to Bayside Law on 16 September 2022 at 1.47pm under cover of an email which stated:
“We attach our clients [sic] finance decline letter that addresses General Condition 20 of the Contract of Sale. The Purchasers immediately applied for the loan and did everything reasonably required to obtain finance by promptly providing the bank with the relevant documentation to assess the application.
We confirm that the Contract is now at an end in accordance with this condition.
Kindly instruct the Real Estate Agent to release full deposit monies to our client urgently.”
104A letter was sent to Grice Legal on 19 September 2022 by Mr Jonathan Kenny of Kalus Kenny Intelex (“KKI”), who had been engaged by the defendant. This was the first of many communications between KKI and the Walkers’ solicitors (first Grice Legal and later Lawcrest) regarding the question of whether or not GC 20.2 had been satisfied. It is not necessary to refer to all of those communications. They appear to have been borne of a concern on the defendant’s part that the Walkers were not being truthful in maintaining that they had satisfied GC 20.2. This concern seems to have arisen at least in part from deficiencies in the form and content of CBA’s First Decline Letter and Second Decline Letter, which raised questions in the defendant’s mind as to their authenticity.
105A relatively lengthy letter was sent by Grice Legal to KKI on 20 September 2022 setting out the Walkers’ position in relation to the Contract, the Walkers’ finance, and the previous communications between the parties’ solicitors.
106At around this time, the Walkers engaged Lawcrest as their solicitors. The relevant partner at Lawcrest was Richard Pedley. Mr Pedley is now a partner of Robert James Lawyers, the solicitors on the record for the Walkers in this proceeding. On 26 September 2022 at 3.40pm, Mr Pedley sent an email to Ms Sculthorpe and Ms Vu referring to the First Decline Letter and Second Decline Lender and advising them that “Some questions have arisen from the vendor’s lawyer”. His email then set out 5 questions which he asked Ms Sculthorpe and Ms Vu to respond to, noting that he intended to provide their response to the vendor’s lawyer.
107Mr Musgrove responded to Mr Pedley’s 3.40pm email at 5.23pm the same day, relevantly stating: “Anna and Yen are currently on leave, we’ll review the information we have regarding these questions. Noting we have provided correspondence already, and the setting this information is required for; if uncertain on the detail we will revert on 5th October when they return.”
108Mrs Walker responded to Mr Musgrove’s email at 8.22pm that evening:
“I understand Anna and Yen are currently on leave however this matter is extremely urgent. We have sold our home, have three children and need our deposit returned to purchase another. We are settling on our property in 6.5 weeks time with no where to currently move.
The letter provided previously included errors which in turn is what has caused the other side to not accept it thus far. There was an additional template page included at the end of the letter also and it was not signed. The other party have questioned its authenticity due to this.
Please advise how we proceed as it is crucial for us to know where this is at.”
109Mr Musgrove responded to Mrs Walker at 9.41pm that evening, stating amongst other things:
“We’re keen to provide any information we can that will assist and understand the urgency in the circumstances you’ve outlined.
We’ll carefully review the letters again. We can only comment on basic elements of the application process and cannot provide opinions beyond this.”
110On 27 September 2022 at 9.53am, Mr Walker sent an email to Mr Musgrove, in response to Mr Musgrove’s email of 9.41pm the previous evening. His email stated: “Thanks Brent. I spoke to Nada last night and she is going to call with what information is available to share in Anna’s absence. The team from the beginning of this finance application have been fantastic and we do appreciate your ongoing support dealing with the fall-out from our $1.8m loan request not being approved.”
111On 27 September 2022 at 10.54am, Mr Musgrove sent an email to Mr Pedley responding to his 5 questions (the “Q&A Email”). The questions, and Mr Musgrove’s responses (in bold) were as follows:
“1.When did Kyall and Cassandra contact you to commence the process for obtaining finance for the purchase of the Property?
There has been various correspondence regarding the finance application, however I’ll need to wait for Anna and Yen’s return from leave on 5 October to confirm this question.
2.How much was the loan that Kyall and Cassandra applied for?
$1,800,000
3.Did Kyall and Cassandra provide all information and documents that Commonwealth Bank requested in relation to the proposed loan?
Yes
4.Did Commonwealth Bank approve the loan to Kyall and Cassandra?
No
5.Were the two attached letters [the First Decline Letter and Second Decline Letter] sent by you?
I can confirm that these letters (attached) were issued by CBA and are authentic. I note that the original letter issued contained an error with page 2 not being removed by CBA prior to issuing. I can verbally confirm the authenticity of these letters to any third party who the Walkers provide consent to.”
112The Q&A Email was sent to Mr Kenny by Mr Pedley under cover of a letter dated 27 September 2022.
113Mr Kenny responded to that letter the following day. He identified a number of concerns still held by the defendant, including that the Walkers had not provided the defendant with the emails (and associated email chains) under cover of which CBA had sent the First Decline Letter and Second Decline Letter. Mr Kenny’s letter made a number of requests and asked a number of questions.
114Mr Pedley responded by email on 6 October 2022 at 12.03pm. Amongst other things, he stated that “the driver behind why the full record of correspondence is not being shared with you” was that “much of the correspondence between our clients and their banker contains sensitive financial and other information about our clients and their affairs”. Mr Pedley also set out the draft wording of an email which he proposed to send to Mr Musgrove containing 5 “follow-up questions”.
115Mr Kenny responded by email on 7 October 2022. After commenting on the draft wording of the proposed email to Mr Musgrove, Mr Kenny reiterated his request to be provided with the CBA emails which attached the First Decline Letter and Second Decline Letter. He stated that if the emails contained a chain which “includes financial information provided by your clients to the bank”, then “that can be redacted”.
116On 18 October 2022, Mr Pedley sent an email in response, which commenced by stating:
“Our clients maintain that providing the original emails is simply not necessary, particularly given the email from Mr Musgrove.
Nevertheless, those emails, with confidential information redacted, are attached. The content of emails from our clients to me, at the beginning of each email, has also been redacted. There is no need for the further email to Mr Musgrove in addition to those emails.”
117One of the email chains attached to Mr Pedley’s 18 October 2022 email commenced with the 10 September Email, followed by the 12 September Email, followed by further emails culminating in Ms Sculthorpe’s 14 September 2022 (1.01pm) email attaching the First Decline Letter. The 10 September Email had been redacted as follows (the text struck through below is the text which was fully redacted and unable to be read at all in the attachment):
“Hi Anna
I hope you are having a lovely week end.
We have sold Busana Way this morning
for 1.35m. We will send the contract across when we have an electronic copy. 60 Day settlement.
We are now not in a rush to finalise finance for Park Rd. Can we please obtain a letter or email from CBA stating that at this point in time you are unable to loan us 1.8m? This will allow us to exit the contract of Park Rd and we will still seek a formal pre approval for a lesser value which we would be more comfortable with.Thank you
Cassie”
118Similarly, the 12 September Email had been redacted as follows:
“Hi Cassie
A Big congratulations on the sale of Busana!! You must feel a lot of relief, I am so happy for you that it sold :)I am so sorry for not replying over the weekend, I have been unwell and am only working intermittently today as on top of being unwell I have now caught conjunctivitis from my son and my eyes are very sore. Goodness me!
I can prepare an email to you stating that at this time the bank cannot at this time [sic] assist you in accommodating a borrowing capacity of $1,800,000 and that we would be happy to review this should your circumstances change?
Would that suffice? As I cannot issue a decline letter as the finance has not been declined?Please let me know and ill [sic] prioritise this today for you before I log off.
Congratulations once again, exciting times ahead for you and your lovely family and we are so happy to be involved in the journey.
Kind regards
Anna”
119I will return to the topic of the redactions later in these reasons.
120On 21 October 2022 at 2.43pm, Mr Kenny responded to Mr Pedley’s 18 October 2022 email, requesting unredacted copies of the abovementioned emails. It was not in dispute that the unredacted emails were not provided to the defendant prior to the commencement of this proceeding in May 2023.
E. Approach to the evidence
E.1 Significance of documents and objective material
121The defendant submitted that, as has been observed in many commercial cases,[4] the contemporaneous written records created before the threat of litigation are likely to be a more reliable indicator of what occurred than the oral evidence. (I interpolate here that this observation might be said to apply a fortiori in cases, such as the present, where witnesses give their evidence in chief by witness statement.) She submitted that this was particularly so in the present case because the narrative which emerged from the contemporaneous documents “does not support, or is incompatible with, the witnesses’ version of events”.
[4]The defendant cited Long Forest Estate Pty Ltd v Singh [2020] VSC 604 at [25] and the authorities referred to therein by John Dixon J.
122Accordingly, the defendant urged the Court to place primary reliance on the contemporaneous documents, objective factual surrounding material, and inherent commercial probabilities, together with inferences drawn from the same.[5] She relied in particular upon observations recently made by Cheeseman J in Westpac Banking Corporation v Forum Finance Pty Ltd (in liq),[6] including in particular the following paragraph[7] of her Honour’s reasons:
“Primary recourse must be had to documentary evidence, where it is available, in order to make findings of fact. Contemporaneous documents often serve as the most reliable source of what in fact occurred untouched by the potential distortion that may attend on the examination of the relevant events through the lens of the litigation. Accordingly, contemporaneous documents may be a sound basis against which to assess the reliability of witness testimony. Oral evidence often serves a limited purpose and may best be utilised to determine the personality, motivations and working practices of a witness.”
[5]The defendant cited Resources Capital Ltd v Giovinazzo [2024] VSC 548 at [20]-[21]; 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd [2023] VSC 21 at [144]; Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at [15]-[23].
[6][2024] FCA 1176 at [283]-[289].
[7][2024] FCA 1176 at [288].
123The plaintiffs contended that the three issues for determination in this proceeding are “answered by the contemporaneous documentary evidence and supported by the independent evidence of Mr Musgrove”. I note that this submission was made notwithstanding that the plaintiffs’ case in relation to Issue 2 depends heavily upon the evidence of Mrs Walker, and to an extent also Mr Walker, in relation to key factual matters.
124The defendant’s submissions have considerable force in my view. As will be seen later, much of the witness evidence was unsatisfactory, and the absence of Ms Sculthorpe and Ms Vu as witnesses was significant. Moreover, I accept that there was a divergence between the witness evidence and contemporaneous documents. Accordingly, in addressing the issues in this proceeding, I consider it appropriate to ascribe primary weight to the contemporaneous documents and objective material and probabilities.
E.2 Credit of witnesses
125In short, the position of the plaintiffs was that their 3 witnesses were all creditworthy and that I should accept their evidence. The position of the defendant was that the evidence of those 3 witnesses should be treated with caution and that their evidence as to critical issues should not be accepted unless corroborated by a contemporaneous document or other objective and reliable evidence.
E.2.1 Mrs Walker
126The plaintiffs submitted that Mrs Walker gave credible and generally consistent evidence, and that she was at times a little nervous in answering questions but did her best to recall the events in question.
127The defendant submitted that Mrs Walker was an unduly defensive and ultimately unsatisfactory witness, who frequently resorted to vague or obfuscating answers when asked straightforward questions. The defendant cited a number of instances of such answers.[8] Having considered these passages of Mrs Walker’s evidence, I consider the defendant’s submission to have force.
[8]T155.1-158.21; 169.13-170.28; 180.16-.22; 185.12-186.2; 197.8-.30; 198.17-203.17.
128The defendant contended that there were two topics in particular which militated against the Court accepting Mrs Walker as a credible or reliable witness. The first such topic was the 7.53pm Email, including the plaintiffs’ failure to discover it. Aside from the general issue of Mrs Walker’s credit, this topic is relevant to Issue 2 and I deal with it later in that context. It will be seen that, in addressing that topic, I formed the view that there were a number of unsatisfactory aspects of Mrs Walker’s evidence. That view is relevant to Mrs Walker’s overall credit and my preparedness to accept her evidence more generally.
129The second topic relied upon by the defendant to impugn the credit of Mrs Walker (and also Mr Walker) was what the defendant described as the withholding of unredacted versions of the emails referred to in paragraphs 117 and 118 above, coupled with the propounding of a false basis for the redactions. The defendant submitted that there was never a legitimate basis for withholding the unredacted emails. Her key submission was that the asserted basis for the redactions was demonstrably false and that the Court could infer that the redacted material was withheld because it was perceived to be harmful to the Walkers’ attempts to recover the deposit. The defendant in effect contended that the redaction episode reflected poorly on Mrs Walker’s credit in two respects: first, the occurrence of the redactions; and secondly, Mrs Walker’s attempts in her evidence to justify and explain the redactions.
130The plaintiffs contended in reply that the allegation that the Walkers had participated in a strategy of redaction and concealment was a very serious allegation and “completely baseless”. They described the nature of the redactions as “peripheral … to the issues in dispute”. They referred to their evidence about the involvement of their lawyer in the redactions and having been guided by his advice. They also submitted that they had made appropriate concessions in cross-examination that the redactions were in hindsight inappropriate.
131The genesis of the redactions appears to have been Mr Kenny’s suggestion (paragraph 115 above) that, if any email chains to be provided by the Walkers in response to KKI’s request contained “financial information provided by your clients to the bank”, that information could be redacted. This suggestion appears to have been precipitated by Mr Pedley’s statement (paragraph 114 above) that the reason for the Walkers not sharing all of the correspondence with KKI was that “much of the correspondence between our clients and their banker contains sensitive financial and other information about our clients and their affairs”.
132Mr Kenny’s suggestion was followed by Mr Pedley’s email (paragraph 116 above) attaching the redacted email chains under cover of a statement that, although “our clients maintain that providing the original emails is simply not necessary, … [n]evertheless, those emails, with confidential information redacted, are attached” (emphasis added). This led to Mr Kenny’s request (paragraph 120 above) for unredacted versions of the emails, which went unfulfilled.
133I will begin with Mrs Walker’s evidence concerning the redactions. She said at paragraph 109 of her witness statement that the redactions were undertaken by Lawcrest and were not suggested by her or Mr Walker. She maintained this position in cross-examination. In paragraph 72 of her affidavit[9], she had stated that Lawcrest “complied with the Defendant’s request to provide copies of all relevant correspondence [sic] the CBA, appropriately redacted. The redactions were undertaken by Lawcrest and were not suggested by Kyall or myself” (emphasis added).
[9]Mrs Walker swore an affidavit on 21 August 2023 for the purpose of resisting the defendant’s summary judgment application.
134Parts of Mrs Walker’s evidence regarding the production of documents to KKI, and the redactions, were inconsistent or nonsensical. I will provide some examples. First, as to the provision of documents to the defendant, Mrs Walker was asked whether she discussed with Mr Pedley “what documents to or not to provide to” the defendant.[10] She answered “No”. However, shortly thereafter she gave inconsistent evidence that she did discuss with Mr Pedley whether or not it was in her interests to produce a copy of the 10 September Email to the defendant, in that “we discussed whether or not it was required and they had been issued a letter from the bank, and to whether it was unreasonable to provide further information”.[11]
[10]T114.
[11]T115.
135Secondly, after Mrs Walker was taken to the statement in Mr Pedley’s 6 October 2022 email that sensitive financial information was the driver behind documents not being provided (paragraph 114 above), the following exchange occurred:[12]
“Did you have a discussion with Mr Pedley about this being the basis upon which you would not be producing correspondence between you and the CBA? --- Many of our emails did contain personal information and financial information so, yes, we did”.
[12]T122
136Upon being taken to the 10 September Email, Mrs Walker accepted that that email did not contain any sensitive financial information about her and her affairs, and further accepted that Mr Pedley was wrong when he said that was a basis for not producing that email. She also accepted that it should have been produced in unredacted form.[13] However, after then being shown the reference in her affidavit to the appropriateness of the redactions (paragraph 133 above), her evidence shifted:[14]
“That was your opinion, that the redactions were appropriate, isn’t it? --- After being guided by our lawyer at the time.
Do you now accept that those redactions were not appropriate? --- I’m not sure.”
[13]T123-124.
[14]T124.
137Thirdly, when asked to compare the redacted and unredacted text of the 10 September Email in the court book, Mrs Walker’s evidence was that she did not think it was appropriate to redact “We are now not in a rush to finalise finance for Park Road”.[15] The following unsatisfactory exchange then occurred:[16]
“Do you understand that redacting this looks bad, don’t you? --- Yes.
You understand it looks like you were trying to hide the redacted contents from my client, don’t you? --- No.
You don’t understand that? --- Not entirely, no.
Tell the court why you don’t understand that? --- Because in my mind it’s relevant but not relevant.
How is it not relevant that you have said to the bank you are not in a rush to finalise finance for Park Road? How is that not a relevant matter to disclose? --- Because there was no context to that.
I am not talking about context. That’s something you said. Why was that something not relevant to disclose to my client? --- Why that in particular?
Yes? --- There were lots of emails. Why that one in particular?
Because you understand that this was an important email, don’t you, Mrs Walker? --- I do and I don’t. There were lots of important emails.”
[15]T125. See also the evidence to the same effect at T127.
[16]T125.
138Fourthly, Mrs Walker was asked about the final redacted sentence in the 10 September Email, which read: “This will allow us to exit the contract of Park Rd and we will still seek a formal pre approval for a lesser value which we would be more comfortable with.” She denied, implausibly, that this was the reason she wanted the requested letter from CBA. She said instead that the reason she wanted the letter was “Because we required the letter to get [sic] the vendor”. The following exchange then occurred:[17]
“Do you accept that that last sentence was something that was appropriate to redact? --- Yes and no.
I want to suggest to you, Mrs Walker, that someone in your position who had nothing to hide would have produced this unredacted? --- Not after we had already received the questioning and the refusal that we already had received.
Is that serious evidence to this court, Mrs Walker? Are you saying that because of the questioning, that you in your own mind could decide what you would and wouldn’t hand over? Is that your evidence? --- No. I was guided by our lawyer”.
[17]T128-129.
139Fifthly, it is curious that Mrs Walker’s evidence regarding her knowledge of the content of the redactions differed as between the 10 September Email and the 12 September Email. In respect of the 10 September Email, her evidence was that she was aware that it was being produced in redacted form to the defendant, that the Walkers’ lawyer had suggested that they redact it, that she knew the content that was being redacted, and that she was “guided by our lawyer”.[18] In respect of the 12 September Email, after stating that “I didn’t choose what was and wasn’t being redacted, or redact these emails” and that she relied on her solicitor’s advice,[19] the following exchange occurred:[20]
“Did you see the redactions before they went to my client’s lawyers? --- I don’t recall.
Is it possible that you did? --- I don’t recall.
I am asking is it possible that you did? --- Anything is possible but I don’t recall.”
[18]T126-127.
[19]T131-132.
[20]T134.
140Aside from the unsatisfactory aspects of Mrs Walker’s evidence about the redactions, the proffering of the redacted material to KKI, and the asserted basis for the redactions, is troubling. I reject the plaintiffs’ contention that the redactions were peripheral to the issues in dispute. Various parts of the redacted material are relevant – and some significantly so – to the question of whether the plaintiffs complied with GC 20.2. Furthermore, I agree with the defendant’s submission that the asserted basis given for the redactions – that the redacted material was “confidential information” – was demonstrably false. It is difficult to see how the redacted material could on any view be said to be confidential. A particularly stark example is the redaction of the words: “A Big congratulations on the sale of Busana!! You must feel a lot of relief, I am so happy for you that it sold :)”
[178]T107-108.
365Fourthly, I also have doubts about Mrs Walker’s account of the alleged conversation on 7 September 2022 in relation to the CBA Requirement. The evidence in paragraph 73 of her witness statement – which I have set out in paragraph 66 above – in relation to the content of that account is inherently implausible. Mrs Walker says in that evidence that Ms Sculthorpe told her that, due to the interest rate rise, “the minimum forecast sale price of Busana Way of $1.4 million would no longer be sufficient for our loan application to be approved”. The clear import of this statement is that a sale price of $1.4 million would result in the application being rejected. However, her evidence is that Ms Sculthorpe also said that “a sale price greater than $1.4 million for the Busana Property may now be required to offset the rise in interest rates” (my emphasis) and that “[if] the Busana Property sale achieved a sale price of at least $1.4 million, she could rush through an application for finance”. (I also note that the “may now be required” language was that which was pleaded in the amended statement of claim: see paragraph 253 above.) These positions are inherently inconsistent. On the one hand (according to Mrs Walker), Ms Sculthorpe was saying that a sale price of $1.4 million would result in the application failing. On the other hand, she was saying that a sale price of $1.4 million might result in the application failing or succeeding. Further, it is curious that Ms Sculthorpe gave no indication of the amount by which the sale would, or might, need to exceed $1.4 million. Would $1,400,100 have been sufficient? Would $1.5 million have been sufficient? Even if Ms Sculthorpe had not volunteered such a figure, it is curious that Mrs Walker did not ask for it in the circumstances.
366Further, Mrs Walker’s evidence was that Ms Sculthorpe also told her in the conversation that it may now be important to include the most recent year’s draft tax return to revise the application, due to the increasing profitability of CWD. This also seems to me to be inherently implausible, given that Ms Sculthorpe had previously asked for draft tax returns on 8 August 2022 (paragraphs 32 and 33 above) and on 6 September 2022 (paragraphs 62 and 63 above). They were not something which arose for the first time on 7 September 2022 as a consequence of the interest rate rise, which is the clear import of Mrs Walker’s evidence about what Ms Sculthorpe conveyed to her.
367Fifthly, as I have said in paragraph 309 above, I consider it significant that there was no evidence before the Court to suggest that a CommSee entry had been made in relation to the 7 September 2022 conversation.
368I turn now to the evidence of Mr Walker. I have already discussed in paragraph 302 above Mr Walker’s evidence of the conversation which Mrs Walker says she had with Ms Sculthorpe on 7 September 2022 in relation to the “CBA Requirement”. At paragraphs 306 to 309 above, I set out the concerns which I have in relation to Mr Walker’s evidence about that conversation. Further, as I stated in paragraph 163 above, I am not prepared to accept Mr Walker’s evidence on contentious issues unless it is corroborated by contemporaneous documents or the evidence of another witness (other than Mrs Walker) or is otherwise inherently objectively probable. As with Mrs Walker’s evidence on the topic, Mr Walker’s evidence in relation to the CBA Requirement is at odds with the contemporaneous documents and the evidence of Mr Musgrove.
369Finally in relation to the evidence regarding this issue, I accept the defendant’s submission that the Court can infer, based on what I have concluded in section E.3 above in relation to the rule in Jones v Dunkel, that the evidence which might have been given by Ms Sculthorpe and Ms Vu would not have assisted the Walkers. In saying that, I note that I would have reached the same conclusion in relation to the second sub-issue even in the absence of such an inference.
370Having regard to the matters discussed above, I am not satisfied on the balance of probabilities that the so-called “CBA Requirement” existed or was conveyed to Mrs Walker. That is to say, I am not satisfied that Ms Sculthorpe told Mrs Walker that the loan would not be approved unless the Busana Property sold for at least $1.4 million.
371In those circumstances, I accept the defendant’s submission that, by sending the 10 September Email, the plaintiffs unilaterally withdrew from the application process and that they were not contractually entitled to do so. A person bona fide concerned to take the sale to completion would not have taken that step in the circumstances. I also accept the defendant’s submission that the plaintiffs’ conduct in sending the 10 September Email was similar to that of the borrower in Clay v Pesch. Accordingly, by sending the 10 September Email in the circumstances, the Walkers failed to comply with the GC 20.2(b) obligation.
372Therefore, in light of my answers to the first sub-issue and the second sub-issue, GC 20.2(b) was not fulfilled by the Walkers. The answer to Issue 2 is “no”.
I. Issue 3: Was GC 20.2(c) fulfilled?
373Having regard to my conclusion in relation to Issue 2, it is strictly speaking unnecessary to address Issue 3. For completeness, I will nonetheless do so. For this purpose, I will proceed upon the hypothetical assumption that the answer to Issue 2 was “yes”. I will assume that the “CBA Requirement” did exist and was conveyed to the Walkers, so that, following the sale of the Busana Property for $1.35 million, they were not obliged to take any further steps because it was reasonable for them to judge in the circumstances that any further steps would have been wasted or futile.
I.1 Plaintiffs’ contentions
374The plaintiffs contend that their fulfilment of GC 20.2(c) occurred by two communications. The first is the letter dated 12 September 2022 from Grice Legal to Bayside Law (paragraph 82 above). The second is the email sent by Grice Legal to Bayside Law on 14 September 2022 attaching the First Decline Letter (paragraph 91 above). The plaintiffs contend that those communications were provided “within two clear business days after the Extended Approval Date of 14 September 2024 [scil: 2022]”.
I.2 Defendant’s contentions
375The defendant contends that GC 20.2(c) was not satisfied, for two reasons. The first reason is that the written evidence of rejection or non-approval did not accompany the notice ending the Contract. That is to say, the evidence constituted by the First Decline Letter was served on 14 September 2022, two days after the notice constituted by the 12 September 2022 letter, rather than “together with” the 12 September 2022 letter.
376The second reason is that the notice was given prematurely, because it was not given within two clear business days after the approval date of 14 September 2022, namely, in the period between 14 and 16 September 2022. The defendant contended that, where a right to terminate is expressly granted by a contract, strict compliance with its terms is required. She submitted that “[t]he right to give notice of termination under such a clause must not be anticipated, and where such notice is given even slightly prematurely, it is of no effect”, citing Vision Eye Institute Ltd v Kitchen.[179]
[179][2014] QSC 260 at [236].
I.3 Plaintiffs’ responsive contentions
377In response to the defendant’s first reason, the plaintiffs disputed that GC 20.2(c) required the notice to be given simultaneously with the evidence. They submitted that the defendant’s construction of GC 20.2(c) was commercially nonsensical. They contended that, properly construed, GC 20.2(c) only required that the notice and evidence both be given within two clear business days after 14 September 2022, and that this occurred in the present case. Alternatively, if the Court were to accept the defendant’s construction, the 14 September 2022 email and attached First Decline Letter constituted simultaneous notice and evidence and therefore satisfied GC 20.2(c).
378As to the defendant’s second reason, the plaintiffs responded that Vision Eye Institute was distinguishable and did not support the proposition contended for by the defendant. They further relied upon their position in relation to Issue 2, contending that they had exhausted all reasonable steps to obtain loan approval and that any further steps would have been futile because there was no prospect of CBA approving the loan at any material time. I understood this to amount, in effect, to a submission that in circumstances such as those referred to, there would be no reason to require a purchaser to wait for the approval date to arrive before they could give the notice.
I.4 Consideration
379The defendant’s first reason involves the question of whether, on its proper construction, GC 20.2(c) requires that the evidence be given simultaneously with the notice (as the defendant says), or whether it is sufficient that the evidence and the notice are both given within the relevant time period (as the plaintiffs say). That question seems to me to turn substantially on the meaning of the words “together with” in GC 20.2(c).
380Neither party cited any authority in support of their position as to the relative timing of the notice and the evidence. My own researches indicate that the meaning of the phrase “together with”, insofar as it imports a temporal connection, has been considered in a number of cases. Whilst these cases involved statutory, rather than contractual, interpretation, I consider them to assist in the resolution of the present issue.
381In Attorney-General (ex rel Bailey) and Bailey v Mayor etc of the City of Sandringham,[180] the Full Court of the Supreme Court of Victoria was required to construe certain sections of the Rating on Unimproved Values Act 1922 (Vic). The Act contained provisions for its adoption in any municipality by a process which commenced with a proposal for its adoption. The Act provided that one tenth of a municipality’s ratepayers may deliver to the council office a written demand that a proposal to adopt the Act be submitted to a poll of ratepayers. Relevantly for present purposes, s 14(2) provided that, “together with the delivery of the demand”, there shall be deposited at the council office a sum of 20 pounds. Omitting certain complications which are for present purposes irrelevant, a demand was delivered on Saturday 30 January 1926. A portion of the sum of 20 pounds was deposited at the council office on that date, and the balance was deposited on Monday 1 February 1926, the depositor having been told by the Town Clerk on 30 January that the deposit would be accepted if lodged on 1 February. The plaintiff contended that the demand was invalid on a number of grounds including, relevantly, that the 20 pounds had not been lodged “together with” the delivery of the demand. However, the Court was not satisfied that the relevant sum of money had not been lodged “together with” the demand. In reaching this conclusion, the Court observed[181] that “[t]he words ‘together with’ may sometimes be read as meaning ‘in addition to’ rather than 'at the precise moment of’”, and that, if those words were read with the first meaning, there would have been compliance in the case before them.
[180][1927] VLR 283.
[181][1927] VLR 283 at 290.
382In the matter of the City Area Leases Act 1936[182] concerned an application to vary covenants of lease under the City Area Leases Act 1936 (ACT). The objectors raised a number of preliminary matters challenging the competency of the application. One such matter was the applicants’ alleged non-compliance with s 11A(4) of the Act, which required that the applicants “file with the Registrar of the Court a notice of motion together with the affidavit in support”. Section 11A(4) also required that the notice of motion and affidavit be served on the Minister at least 30 days before the day named for hearing the motion. The objectors relied upon the fact that the affidavit was filed 14 days after the notice of motion, contending that the affidavit therefore was not filed “together with” the notice. Higgins J began by observing that “[t]he phrase ‘together with’, according to [counsel’s] submission and the Oxford English Dictionary, can mean either simultaneous filing or merely that both documents are required to have been filed and be ‘together’ before the matter can further proceed”.[183] His Honour then went on to discuss a number of authorities in which the phrase “together with”, and the analogous phrase “accompanied by”, had been considered, before concluding[184] that the meaning of “together with” in s 11A(4) must be governed by the purpose of the provision in its context.
[182][1990] ACTSC 151.
[183][1990] ACTSC 151 at [31].
[184][1990] ACTSC 151 at [35]-[37].
383One of the authorities discussed by Higgins J was Winkler v DPP.[185] That case involved the phrase “accompanied by”, which Higgins J considered to be “indistinguishable in meaning” from the phrase “together with”. As Higgins J observed,[186] the Full Court of the Federal Court in Winkler was required to address a submission “concerning the lack of simultaneity of receipt of the request for extradition and the necessary ancillary documents”. Wilcox and O’Loughlin JJ in Winkler relevantly stated[187] in relation to this submission:
“… we have no difficulty with the proposition that the phrase ‘accompanied by’ is sufficiently elastic to include all material submitted at about the time of the request and before the expiration of any relevant cut-off date; for example, a date by which, in the absence of the documents, the fugitive must be set at liberty. If it should happen, in a particular case, that some of the relevant documents have already been submitted to the requested State, there is no difficulty in saying that the request is ‘accompanied by’ those documents. The purpose of [the relevant provision] is to ensure that the requested State has all of the information which it needs in order to determine the request.”
[185](1990) 94 ALR 361.
[186][1990] ACTSC 151 at [34].
[187](1990) 94 ALR 361 at 378-379.
384These authorities[188] demonstrate that the phrase “together with” does not necessarily require simultaneity, and that the precise content of the requirement imposed by that phrase may differ depending upon the context and purpose of the provision in question.
[188]For completeness, I note that the phrase “together with” was also considered, again in a statutory context, in Owners of Strata Plan 36131 v Dimitriou [2009] NSWCA 27. However, that case was not concerned with simultaneity of provision of documents and I do not consider it to be of assistance.
385Context and purpose are similarly relevant in seeking to construe a contractual provision.[189] Further, as I have discussed in paragraph 211 above, the commerciality and sense of competing constructions is also a relevant matter.
[189]See, generally, Babicka v ASD Corporation Aust Pty Ltd [2024] VSC 587 at [32]-[36].
386It may be inferred that the purpose of GC 20.2(c) requiring the provision of evidence is to ensure that the vendor has sufficient information to be satisfied that the loan was indeed rejected or not approved, such that there was a proper basis for the notice ending the contract. Having regard to that purpose, there is no commercial reason (and none was suggested by the defendant) to construe GC 20.2(c) as requiring the evidence to be provided simultaneously with the notice. As long as both are received prior to the “cut-off date” – to use the language employed in Winkler – prescribed by GC 20.2(c), the aforementioned purpose is fulfilled. I also note, again adopting the language of the Full Court in Winkler, that the evidence in the present case was submitted “at about the time of” the notice.
387Further, it seems to me that it would be an uncommercial and unreasonable consequence for a purchaser to lose their right to end the contract and recover the deposit simply because they served the notice a short time prior to the evidence, even though both were provided within the time prescribed by GC 20.2(c). (On the defendant’s construction, that right would be lost if the notice and the evidence were sent by separate emails only a matter of minutes apart.) This is particularly so where the contract is for the sale of a residential property by one homeowner to another, which may very well involve persons who are relatively inexperienced in such transactions and/or lacking legal sophistication.
388Accordingly, I reject the first reason relied upon by the defendant in contending that GC 20.2(c) was not satisfied.
389I turn now to the second reason relied upon by the defendant, namely, that the notice was given prematurely.
390I agree with the plaintiffs’ submission that Vision Eye Institute is distinguishable and does not assist in the resolution of the present issue. That case concerned the very different situation of one party serving a default notice giving the other party a certain period of time within which to remedy that latter party’s default before the first party terminated the contract. In such a situation it is obvious why the first party cannot give a notice of termination even slightly prematurely.
391Further, it seems to me that the submissions made by the defendant in reliance upon Vision Eye Institute contain an implicit assumption that GC 20.2(c) provides that the time for giving notice is the time contended for by the defendant, namely, the period between 14 and 16 September 2022. However, rather than assuming that that is so, this in my view is the first matter which the Court has to determine – namely, what does GC 20.2(c) prescribe as the relevant time for giving notice. It is only once that question is answered that it would become relevant to consider whether the plaintiffs gave notice outside the prescribed time and, if so, whether strict compliance with the prescribed time is required.
392Apart from their competing contentions as to the applicability of Vision Eye Institute, the parties said little in their submissions about what I have called the defendant’s second reason. No other authorities were cited by them. Aside from her reliance on Vision Eye Institute, the defendant simply relied upon the fact that GC 20.2(c) contains the phrase “within 2 clear business days after”, as though the use of this phrase in and of itself dictated that the defendant’s position must prevail. However, my own researches indicate that the strong weight of judicial authority points toward the opposite conclusion where such a phrase is used.
393In Truman v Truman,[190] the Full Court of the Family Court was required to construe a rule of court which provided that an appeal may only be lodged against an order made in or arising out of a certain type of trial “if the appeal is lodged within 28 days after the last order … is made in the trial”. The mother contended that the rule precluded any appeal from being filed in relation to orders made during the proceeding until such time as the last order in the entire proceeding had been made. Her position was thus analogous to that advanced by the defendant in the present case. Conversely, the father contended that the rule permitted the filing of an appeal in relation to an order made during the proceeding from any time after the making of the order until the expiration of 28 days from the date on which the last order in the entire proceeding had been made. His position, like that of the plaintiffs in the present case, was that the rule prescribed an end date by which an appeal had to be made, rather than prescribing a temporal window within which an appeal had to be made.
[190][2008] FamCAFC 4.
394The Full Court considered[191] it to be of “critical importance” first to consider the meaning of the word “within”. Truman is of assistance for present purposes because the Court went on to undertake an extensive review of authority dealing with that question, in the contexts of both statutory and contractual interpretation. By way of introduction to that review, the Court observed:[192]
“Reference to authority on the proper interpretation of the word (when used in its temporal context), supports the construction of the Rule urged by counsel for the father, namely that it permits the filing of an appeal from any time after the order impugned was made until the expiration of 28 days from the date on which the final order in the proceedings is made”.
[191][2008] FamCAFC 4 at [37].
[192][2008] FamCAFC 4 at [37].
395Similarly, at the conclusion of its review, the Full Court noted[193] that it must “turn [its] attention now to contextual considerations in order to determine whether there is reason to depart from what we perceive to be the strong preponderance of judicial authority, which treats ‘within’ as meaning ‘before the end of’”. Ultimately, those contextual considerations – which involved other provisions of the court rules – led the Court to accept the mother’s construction of the rule, being a conclusion which departed from the weight of authority to which the Court had referred.
[193][2008] FamCAFC 4 at [76].
396One of the authorities discussed in Truman, and which the Full Court described as having formed the basis for many subsequent decisions about the meaning of “within”, was Earl of Morton’s Trustees; Douglas v Macdougall.[194] The provision there in question, contained in the Agricultural Holdings (Scotland) Act 1923 (UK), stated that compensation for damage done by game to a tenant’s crops was not recoverable from the tenant’s landlord “unless notice in writing of the claim, together with the particulars thereof, is given to the landlord within one month after the expiration of the calendar year … in respect of which the claim is made”. The plaintiff tenant gave his landlord notice on 16 December 1942, seeking compensation for damage sustained on 2 December 1942. The landlord argued, similarly to the defendant in the present case, that the notice was premature and hence invalid, since it had not been sent during January 1943. The Scottish Court of Session rejected this argument, holding instead that the provision prescribed a time limit by which the claim and particulars had to be given, that is, that the provision meant that they had to be given not later than the expiration of one month after the end of the year.
[194][1944] SC 410.
397Similar conclusions have been reached in a number of cases[195] decided after Truman, adding to the “strong preponderance of judicial authority” to which the Full Court referred.
[195]Dowsley v Westpac Life Insurance Services Ltd [2013] NSWSC 1208; St John of God Health Care Inc v Austin (2014) 46 WAR 208; Woodside Energy Ltd v Zaghloul (2015) 234 FCR 198.
398The fact that a particular conclusion as to the construction of a certain statutory or contractual provision has been reached in one case, does not mean that that conclusion will automatically apply to similarly worded provisions in other statutes or contracts. As was recognised in many of the authorities referred to above, it is relevant to consider such matters as context and purpose, which will vary from one statute or contract to another. That said, those authorities are significant because they show that, contrary to the approach implicit in the defendant’s submissions, language of the kind contained in GC 20.2(c) is not only capable of having the meaning contended for by the plaintiffs, but has in a significant majority of cases been held to have that meaning.
399Construed objectively, it may be inferred that the reason for GC 20.2(c) requiring notice to be given, and prescribing a time for such notice, is to ensure that the purchaser elects to end the contract on a timely basis and similarly that the vendor is made aware of that election on a timely basis. Once notice is validly given, the contract will come to an end, the parties will know where they stand, and the parties will be able to order their future affairs accordingly. A valid termination will result in the purchaser being repaid the deposit and the vendor most likely attempting to re-sell the property. It is therefore understandable why contracting parties would see fit to specify a relatively brief time for the giving of notice. In this regard, the position is broadly similar to statutes considered in a number of the abovementioned authorities which had as their objectives “promptitude” in the taking of certain action by the notifying party.[196]
[196]See St John of God Health Care Inc v Austin (2014) 46 WAR 208 at 211 [9].
400Permitting the purchaser to give notice prior to the approval date is in my view consistent with the abovementioned purpose of the notice provision. As suggested in the plaintiffs’ reply submissions, if circumstances at a time prior to the approval date entitled the purchaser reasonably to judge that nothing further could be done to obtain the loan, there would be little point in requiring a purchaser to sit by and wait for the approval date to arrive before giving notice. (The defendant accepted that, once a purchaser reasonably judged that any further efforts to obtain finance would have such remote prospects of success that they were likely to be wasted, the obligation to continue making such efforts would not endure: see paragraph 247 above.) Rather, it would be consistent with the abovementioned purpose for the purchaser to be able to give notice at the earlier time.
401Further, construing GC 20.2(c) as requiring a purchaser to wait for the approval date before giving notice, regardless of the obvious futility of any steps which might be taken in the remaining time up to the approval date, is not consistent with commercial sense. It would involve time being lost for no practical reason, in circumstances where the purchaser during that time would be deprived of the return of their deposit (and the ability to use it to seek to purchase an alternative property) and the vendor during that time would be deprived of the ability to re-sell the property.
402It is difficult to see how the vendor could be disadvantaged by notice being given prior to the approval date. In contradistinction to cases such as Vision Eye Institute, the vendor, as the party receiving the notice, is not required to do anything during the period prior to the approval date; rather, it is for the purchaser during that time to fulfil their obligations in relation to finance. Thus, by giving notice prior to the approval date, the purchaser could not be said to be depriving the vendor of the opportunity to take any relevant step between the time of the notice and the approval date. The purchaser could only be depriving themselves of the opportunity to take further steps in relation to obtaining finance. If the purchaser does so wrongfully, they will put themselves at risk of an allegation and finding that they did not comply with GC 20.2(b).
403For these reasons, I do not consider GC 20.2(c), properly construed in light of the authorities to which I have referred, to have the effect contended for by the defendant. Rather than prescribing a window within which notice must be given, GC 20.2(c) prescribes a “deadline” by which notice must be given. In the present case, that deadline was 16 September 2022. The requisite notice was given before that date. Accordingly, I reject the second reason relied upon by the defendant in contending that GC 20.2(c) was not fulfilled.
404As I said earlier, Issue 3 did not fall for determination because of my answer to Issue 2. If my answer to Issue 2 had been “yes” rather than “no”, I would have answered “yes” to Issue 3.
J. Issue 4: Interest
405It follows from my answer to Issue 2, and from the parties’ positions as recorded in paragraph 3 above, that the defendant is entitled to retain the deposit. Accordingly, no question arises as to the payment of interest on the deposit and Issue 4 does not fall to be determined.
K. Conclusion
406For the reasons given above, the plaintiffs did not comply with GC 20.2(b). They were therefore not entitled to end the Contract under GC 20.2 and, accordingly, GC 20.3 does not require the deposit to be refunded to them. It follows from the parties’ positions as recorded in paragraph 3 above that the defendant is entitled to retain the deposit.
407I propose to give judgment for the defendant and order that the plaintiffs pay the defendant’s costs of the proceeding on the standard basis, unless either party has a basis for seeking to contend that I should do otherwise. Within 14 days of these reasons being handed down, the parties should confer and furnish my associate with an agreed minute of order to give effect to these reasons and, if there is any disagreement as to the appropriate form of order, short written submissions limited to 3 A4 pages on the points of disagreement.
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Certificate
I certify that these 128 pages are a true copy of the judgment of Judicial Registrar Bennett delivered on 20 March 2025.
Dated: 20 March 2025
Tae Fabricato
Associate to Judicial Registrar Bennett
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