//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2020] QCA 148
respondent. Appeal dismissed with costs. The District Court's summary judgment for Westpac remained in place.
The Court of Appeal upheld summary judgment for Westpac. Mr Bayly's promissory note did not pay off his loans because Westpac had not agreed to accept it and had expressly rejected it. Westpac could enforce the loans and mortgage as St George's statutory successor after the 2010 business transfer. The evidence, including account records and affidavit evidence, was sufficient for the summary judgment decision. The court also rejected the remaining appeal complaints and ordered Mr Bayly to pay the appeal costs.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,515 words · generated 02/10/2026
The appeal concerned Westpac’s right to recover possession of a unit at First Avenue, Broadbeach, under a mortgage granted by Dallas Henry Bayly. The Court of Appeal, constituted by Sofronoff P, Fraser JA and Bradley J, dismissed the appeal with costs. Sofronoff P and Fraser JA agreed with Bradley J’s reasons. [1]-[3], [79]
No linked legislation citations have been extracted yet.
In 2006, Mr Bayly accepted two loan offers from St George Bank Limited. Each was for $128,400 and secured by a first-priority registered mortgage over the unit. One loan had a variable interest rate described in its offer as 0.7% below the residential investment Low Doc Variable Rate. The other had a fixed rate of 7.19% per annum for three years, then the specified variable rate. Each loan required 360 repayments over 30 years. [5]-[10] St George advanced both amounts on 21 August 2006. [11]
The banking business transfer was central to Mr Bayly’s standing argument. St George and Westpac provided APRA with a statement under s 20 of the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) (Transfer Act). APRA approved the statement and issued a certificate providing for a total transfer of business to take effect on 1 March 2010. [12]-[13] The Court later found that the statutory transfer encompassed the relevant loan and mortgage rights. [50]-[57]
Mr Bayly stopped making repayments from 16 September 2016. By 11 December 2018, the recorded arrears were $21,932 on the first loan and $24,863 on the second. [14]-[15] Westpac’s solicitors issued default and enforcement notices on 12 December 2018. After Mr Bayly did not pay the arrears, Westpac commenced District Court proceedings. [16]-[18]
The District Court granted summary judgment on 29 January 2020 for possession of the unit and ordered that Westpac’s costs of the application and proceeding be treated as reasonable enforcement expenses under the Mortgage. [3], [19] On appeal, Mr Bayly raised two broadly expressed grounds, concerning the District Court’s jurisdiction and alleged errors of law and fact. [20]-[21] His submissions addressed the promissory note, Westpac’s standing, proof of the claim, signatures on the pleadings and alleged obstruction by the primary judge. [26]
The principal argument at the appeal hearing concerned a promissory note for $700,000, which Mr Bayly delivered to Westpac’s solicitors on 23 August 2019. It named a place, the First Avenue Tavern, and a time and date for payment. [27]-[30] Mr Bayly relied on the Bills of Exchange Act 1909 (Cth), including s 93(1), concerning presentment of a note made payable at a particular place. The Court observed that the note had never been presented for payment and concluded that Mr Bayly was never liable to honour it. [29]-[31]
The Court rejected the submission that this meant Mr Bayly’s existing loan liability had been discharged. The statutory definition of a promissory note identifies the character of the instrument, but the relevant question was whether Westpac had agreed to take it instead of payment under the loans. Nothing in either loan agreement or the Mortgage obliged Westpac to accept such a note. No such agreement was alleged in the defences or advanced in submissions. [29], [34]-[36]
The Court also distinguished the passage from Fielding & Platt Ltd v Najjar on which Mr Andrews relied. That case concerned a claim against a maker for failing to honour promissory notes that had been given as the agreed means of payment under a contract. The quoted observation that a note is “to be treated as cash” appeared in that context. It did not establish that a debtor could write a note unilaterally and thereby pay any existing debt. [32]-[33]
Nor did Westpac’s receipt and possession of the note establish agreement to accept it. The Court noted that Westpac had expressly told Mr Bayly it did not accept the note as a method of payment. [37]-[38] Applying the contract principles discussed in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, the Court rejected the idea that an offeror could make silence amount to acceptance simply by declaring that the offer would be accepted unless rejected within 72 hours. The relevant question was whether a reasonable bystander would understand the offeree’s conduct, including silence, as signalling acceptance. Westpac’s conduct did not do so. [38]-[42]
The Court separately dealt with legislation that treated promissory notes as “money” or “Australian currency” for specific statutory purposes, including taxation, banking and criminal law provisions. It found that none of those provisions made a promissory note money for broader general purposes or altered the parties’ rights under these loans. [43]-[45]
Westpac’s standing followed from the statutory transfer, not from a new contract with Mr Bayly. Section 22 of the Transfer Act provided that, when a total transfer certificate came into force, the receiving body became successor in law to the transferring body and the transferred assets and liabilities passed without a separate transfer, conveyance or assignment. The transferred rights and privileges also applied to the receiving body. [50] The approved s 20 statement and APRA certificate established the transfer’s effective date and described the transfer of customer relationships, instruments and interests in land. [52]-[53] The Court concluded that Westpac succeeded to St George’s rights under the loan agreements and Mortgage. [54]-[58]
On proof, the Court considered Ms Payne’s affidavit and its exhibits. They included copies of the loan agreements, Mortgage, account statements and business records. Her evidence described the two advances, arrears and absence of later deposits. The Court held that the evidence was admissible and sufficient to prove the financial accommodation and default for the issue before it. [61]-[63] It also considered the contractual certificate provisions. Those provisions allowed a certificate of the amount payable to serve as sufficient evidence unless shown to be incorrect, and facilitated proof of the existence and amount of the debt. [64]-[65] The absence of original loan documents did not defeat the claim: possession or production of an original was not an element of the cause of action, although the creditor still had to prove the repayment terms relied upon. [55]-[57]
The remaining complaints also failed. Mr Bayly had admitted that the cause of action arose within the District Court’s jurisdiction, and made no appeal submission on the jurisdiction ground. [23]-[25] The amended statement of claim in the appeal record was signed by Westpac’s solicitors. [68]-[72] The hearing transcript did not support the allegation of obstruction: the primary judge addressed the matters raised, invited explanation and considered the relevant denials and responses. [74]-[78]
The judgment did not announce a new statutory regime for negotiable instruments or business transfers. It applied the provisions and authorities before it to the particular arguments raised on appeal.
On promissory notes, Bradley J referred to s 89(1) of the Bills of Exchange Act, which defines a promissory note, and s 93(1), which addresses presentment where the note specifies a place of payment. [29]-[31] The court’s point was that the legal nature of a note and liability on the note are distinct from whether a creditor has agreed to accept it as satisfaction of a separate debt. Here, there was no such agreement. [34]-[37] The judgment also explains that specific statutory definitions treating notes as money for specified purposes do not, without more, determine their treatment in an unrelated private debt dispute. [43]-[45]
On contract formation, the court applied the principles discussed in Empirnall Holdings: silence generally does not create a contract simply because an offeror says it will count as acceptance, and the issue is whether the offeree’s conduct would objectively signal assent. [39]-[42] The decision’s application was fact-specific: Westpac did not present the note for payment and expressly rejected it as a payment method. [37], [42]
On statutory succession, the court applied ss 20 and 22 of the Transfer Act to the approved statement and APRA certificate. Its conclusion was that Westpac became the relevant successor in law and took the rights associated with the transferred loans and mortgage. [50]-[58] The reasoning did not depend on a fresh contract or assignment signed by Mr Bayly. It depended on the statutory transfer and the evidence establishing its scope and effective date. [52]-[57]
For proof of debt, the judgment distinguishes the obligation to establish the terms relied on from a supposed requirement to produce the original agreement. It also considers business records and an agreed certificate mechanism as evidence of the debt and its amount. [56], [61]-[66] These propositions explain why Mr Bayly’s objections did not raise a real prospect of a defence on the evidentiary record in this case.
At [35], Bradley J states: “In the absence of agreement, Westpac did not have to accept Mr Bayly’s promissory note as payment for the outstanding debt.” In plain English, a debtor cannot substitute a form of payment simply by sending it. The creditor must have agreed to that substitution, and the court found no such agreement here.
At [36], the court explains that Mr Bayly could not change existing legal rights “by promising in writing he would pay Westpac at the local pub at 10.30 am on a Thursday.” The point is not that a note can never have legal effect. The point is that this note did not, on the evidence and contractual arrangements before the court, replace the loan-payment obligations.
At [41], the court quotes the test from Empirnall Holdings: “The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted.” In ordinary terms, the court looks at what the recipient’s conduct objectively communicated, rather than treating silence as acceptance merely because the offeror says it should count that way. The court found no objective signal of acceptance by Westpac. [42]
At [54], the court concludes that the transfer made the relevant St George assets and rights Westpac’s, including the mortgagee interest and rights under the loan agreements. In plain English, Westpac’s claim rested on statutory succession, not on Mr Bayly entering into a new contract with Westpac.
At [56], the court states that a creditor must prove the repayment terms relied on, but need not possess or produce an original loan agreement as an element of the debt claim. This does not remove the need for evidence. Rather, it addresses the particular contention that possession of an original document was itself essential. The court found other evidence of the agreements, advances and default. [61]-[63]
The decision is relevant to disputes where a debtor says that sending a promissory note discharged an existing loan or other debt. The critical questions reflected in the judgment include whether the creditor agreed to accept the note as satisfaction, what the contract says about payment, and what the creditor did after receiving it. In Bayly, there was no agreement to accept the note and Westpac expressly rejected it. [34]-[38]
It is also relevant where an offeror argues that a recipient accepted an offer by failing to reject it within a stated period. The court applied the objective approach described in Empirnall Holdings, asking whether the recipient’s conduct would signal acceptance to a reasonable bystander. [38]-[42] The decision does not say that silence can never form part of acceptance by conduct; it rejects the asserted general rule that silence alone, or a unilateral deadline imposed by the offeror, necessarily amounts to acceptance.
The statutory succession reasoning may be relevant where a financial institution enforces an agreement originally made with another institution after a statutory business transfer. The documents and statutory provisions establishing the transfer, its scope and its effective date were important in this case. [50]-[54] The decision should be read in light of the particular Transfer Act provisions and APRA materials before the court.
Finally, the proof discussion may matter where a debtor challenges a creditor’s reliance on account records, affidavit evidence or contractual certificates, or argues that the original agreement must be produced. The judgment recognises the need to prove the terms relied on, while holding that original-document possession is not itself an element of the debt claim. [56], [61]-[66]
The judgment itself does not discuss any later judicial treatment of Bayly v Westpac Banking Corporation. It was delivered on 14 July 2020, and the supplied text contains no subsequent decisions applying, distinguishing or criticising it. It would therefore be unsupported to describe how later courts have treated this judgment based only on the material provided.
The authorities discussed in Bayly are earlier authorities, not later treatment of Bayly. The Court distinguished Fielding & Platt Ltd v Najjar because it concerned liability on notes given as the agreed payment mechanism, rather than a unilateral attempt to discharge an existing debt. [32]-[35] It applied the contract-formation analysis in Empirnall Holdings to the argument that Westpac’s silence amounted to acceptance. [39]-[42] It referred to Dobbs v National Bank of Australasia Ltd, Byrne v Javelin Asset Management Pty Ltd and Permanent Trustee Co Ltd v Gulf Import & Export Co in discussing contractual certificates as evidence of indebtedness. [65]
Accordingly, the decision’s treatment of these authorities can be described from the judgment, but its influence on later decisions cannot be assessed from this source alone.
The judgment resolves the arguments presented on its facts, but it does not decide every possible question concerning payment by negotiable instrument. For example, it does not determine the effect of an express contractual term requiring a creditor to accept a promissory note, or of clear evidence that a creditor accepted a note in satisfaction of an existing debt. Its holding on this appeal rests on the absence of an acceptance agreement and Westpac’s express rejection. [34]-[42]
Nor does the decision establish that silence can never contribute to acceptance in any contractual setting. It adopts the reasonable-bystander test discussed in Empirnall Holdings and concludes that Westpac’s conduct did not meet it. [39]-[42] Other conduct or contractual circumstances could require their own analysis.
On statutory transfers, the judgment explains the effect of the total transfer and materials in evidence in this case. It does not resolve the effect of a transfer with a different statutory basis, narrower scope or different terms in its APRA-approved statement. [50]-[54] The precise transfer statute, certificate and transfer documents would remain material in another dispute.
On debt evidence, the court decided that the material before the primary judge was sufficient for this summary judgment application. [61]-[67] It did not hold that any particular business record or certificate will invariably establish a debt regardless of its content, reliability or any contrary evidence. The certificate provision itself contemplated that the stated amount could be proved incorrect. [65]
The judgment also does not examine later developments in the law or provide later-court treatment. Any assessment of those matters would require sources beyond the judgment supplied here.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have it checked by a qualified Australian lawyer.
Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: Bayly v Westpac Banking Corporation [2020] QCA 148
PARTIES: DALLAS HENRY BAYLY (appellant) v WESTPAC BANKING CORPORATION ABN 33 007 457 141 (respondent)
FILE NO/S: Appeal No 1892 of 2020 DC No 1030 of 2019
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: District Court at Brisbane – Unreported, 29 January 2020 (Koppenol DCJ)
DELIVERED ON: 14 July 2020
DELIVERED AT: Brisbane
HEARING DATE: 2 June 2020
JUDGES: Sofronoff P and Fraser JA and Bradley J
ORDER: The appeal is dismissed with costs.
CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – FOR DEBT OR LIQUIDATED DEMAND OR FOR POSSESSION OF LAND – where the respondent sued the appellant under a mortgage and successfully applied for summary judgment – where the appellant had delivered a promissory note to the respondent – where the respondent did not agree to accept the promissory note in satisfaction of the debts secured by the mortgage – where the appellant nonetheless claimed he had discharged his liability to the respondent under the mortgage by delivering the promissory note – whether the learned primary Judge erred in finding the appellant had no real prospect of succeeding in his defence based on the contention that his debt to the respondent had been extinguished as a result of the delivery of the promissory note / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – FOR DEBT OR LIQUIDATED DEMAND OR FOR POSSESSION OF LAND – where the respondent sued the appellant under a mortgage and successfully applied for summary judgment – where the appellant entered into the mortgage with the respondent’s predecessor in law – where all of the assets and liabilities of the respondent’s predecessor in law became the assets and liabilities of the respondent without any transfer, conveyance or assignment on 1 March 2010, pursuant to the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) – where the appellant nonetheless claimed the respondent was not entitled to enforce the mortgage because he had not entered into any contract with the respondent – whether the learned primary Judge erred in finding the appellant had no real prospect of succeeding in his defence based on his challenge to the standing of the respondent / Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth), s 20, s 22 / Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214, cited Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523, applied Fielding & Platt Ltd v Najjar [1969] 1 WLR 357, distinguished
COUNSEL: The appellant appeared on his own behalf D M Turner for the respondent
SOLICITORS: The appellant appeared on his own behalf Minter Ellison for the respondent
SOFRONOFF P: I agree with Bradley J.
FRASER JA: I agree with the reasons for judgment of Bradley J and the order proposed by his Honour.
BRADLEY J: The appellant (Mr Bayly) appeals against the order of the District Court giving summary judgment for the respondent (Westpac) for the recovery of possession of a unit at First Avenue, Broadbeach (the unit). The court also ordered that Westpac’s costs of the application and the proceeding be treated as reasonable enforcement expenses under the mortgage over the unit granted by Mr Bayly in 2006 (the Mortgage).
Before considering the written and oral submissions about the appeal, it is convenient to set out the background facts.
Background
On 14 August 2006, Mr Bayly accepted two written offers from St George Bank Limited (St George).
The first was an offer to lend $128,400 to Mr Bayly as a residential investment loan for a business purpose, secured by a first priority registered mortgage over the unit. The offer provided for the interest on the loan to be 0.7% per annum below the “residential investment Low Doc Variable Rate”.
The other offer was also to lend $128,400 to Mr Bayly as a residential investment loan for a business purpose, secured by a first priority registered mortgage over the unit. It provided for the interest on the loan to be a fixed interest rate of 7.19% per annum for three years from the settlement date and afterwards at the “residential investment Low Doc Variable Rate”.
Each of the two loans offered would require Mr Bayly to make 360 repayments over a loan term of 30 years.
Mr Bayly signed each of the offers and returned them to St George. By signing them, he entered into two loan agreements with St George.
Also on 14 August 2006, Mr Bayly executed the Mortgage charging his estate in the unit with the repayment or payment to St George of the amount owing from time to time.
On 21 August 2006, St George advanced $128,400 to Mr Bayly pursuant to the first loan agreement and the same amount pursuant to the second loan agreement. These amounts are shown on the two home loan account statements issued to Mr Bayly by St George on 26 August 2006.
On 20 January 2010, St George and Westpac provided a statement (the section 20 statement) to the Australian Prudential Regulation Authority (APRA) under s 20(1) of the then Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) (the Transfer Act), which recorded agreements about matters connected with the transfer of the business of St George to Westpac.
On 18 February 2010, APRA issued a certificate of transfer recording the voluntary transfer approval under the Transfer Act in respect of the total transfer of business from St George to Westpac, stating that the transfer was to take effect on 1 March 2010. The same day, APRA also approved the section 20 statement.
From 16 September 2016, Mr Bayly ceased making repayments of the loans.
By 11 December 2018, Mr Bayly was in arrears: $21,932 under the first loan agreement; and $24,863 under the second loan agreement.
On 12 December 2018, Westpac, by its solicitors, gave Mr Bayly a notice. The solicitors signed the notice as solicitors and agents for “St George Bank Ltd – a division of Westpac Banking Corporation”. It was both a notice of exercise of power of sale under s 84 of the 1974 (Qld) (the ) and a default notice under s 88 of the . It gave notice to Mr Bayly that he was in default and that if he did not remedy the default within 31 days, the whole of the amount owing under each of the loan agreements would become immediately due and payable. It notified him that, amongst other things, Westpac could commence enforcement proceedings against him, repossess the unit and exercise the powers conferred by the Mortgage, the PLA and the 1994 (Qld).
Matters raised in the appeal
“1. Lack of jurisdiction of District Court: The District Court of Queensland lacks jurisdiction to hear matters of fact and law concerning interpretation of Commonwealth Acts and the Constitution, and
Errors of law and facts: Errors of law and facts pertaining to Commonwealth legislation, errors of interpretation/misinterpretation of legal definitions of words and errors of fact and jurisdiction pertaining to valid cause of action, valid claim and jurisdiction to proceed, by the Judge of the Primary Court.”
Mr Bayly filed a written outline of argument.2 In it, he set out the “Principal Issues Giving Rise to an Appeal”. These he arranged as “Errors of Fact and Law”, “Obstructions”, “Promissory Note Proceedings Settled Privately or Discontinuance” and “Erred Assertions and/or Presumptions”. Each of them is an alleged error of law or of fact, and so relates to his second ground of appeal.
On 2 June 2020, at the hearing of the appeal, the court gave leave for Mr Andrews to appear for Mr Bayly. Mr Andrews raised no additional issues in his oral submissions.
So Mr Bayly put no submission, written or oral, about the first ground of appeal concerning the jurisdiction of the District Court. The topic was not raised before the learned primary Judge. In his defence to Westpac’s claim, Mr Bayly had admitted that Westpac’s cause of action “arose … within the jurisdiction of the District Court”.3
The District Court has jurisdiction to hear and determine actions to recover possession of any land, where the value of the land does not exceed $750,000.4 Subject to certain limitations, for the purpose of exercising this jurisdiction, the District Court has all the powers and authorities conferred on the Supreme Court by Queensland legislation.5
The first ground of appeal is unsupported and without merit.
The submissions on the second ground – “Errors of law and facts” – are numerous. It is convenient to consider them under the following subjects: the promissory note; Westpac’s standing; Westpac’s proof of its claim; the signing of the claim and statement of claim; and obstruction.
Promissory note
At the hearing of the appeal, the only topic of Mr Andrews’ oral submissions was a promissory note Mr Bayly delivered to Westpac’s solicitors on 23 August 2019. Mr Andrews described it as “the first and probably most singularly important” of the appeal points.
According to the text of the promissory note, Mr Bayly offered to pay Westpac:
“The Sum of Seven Hundred Thousand Dollars Australian Only
Redeemable at:
First Avenue Tavern, At the Crown Plaza Hotel, at the entrance to the First Avenue Entrance in First Avenue, Broadbeach, Queensland, Australia
At 10.30 am hours without; let, delay, hindrance or ado on
The Fifth day of September, AD 2019”
“A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to or to the order of a specified person, or to bearer.”
“Where a promissory note is in the body of it made payable at a particular place, it must be presented for payment at that place in order to render the maker liable. In any other case, presentment for payment is not necessary in order to render the maker liable.”
Mr Andrews relied on this provision to submit that “the liability was discharged against the maker” i.e. Mr Bayly. It is not clear how this could be the case. Mr Bayly’s note was made payable at a particular place, the First Avenue Tavern. It is common ground that the promissory note signed by Mr Bayly was never presented for payment. It follows that Mr Bayly was never liable to honour his note.
Mr Andrews relied on a statement of Lord Denning MR in Fielding & Platt Ltd v Najjar,6 that “a bill of exchange or a promissory note is to be treated as cash”. This, according to Mr Andrews, meant that the tender of a promissory note was the same as a payment of cash. In that decision, the plaintiff, based in Gloucester, had agreed to make and sell industrial machinery to a company based in Lebanon. By the terms of the written agreement, the plaintiff was to be paid by six promissory notes given personally by the defendant, Mr Najjar, who was the managing director of the buyer. The notes were payable at intervals during the progress of the work. When the first note fell due, it was presented, but not paid. In due course, each of the notes was presented and none was paid. The plaintiff sought and obtained summary judgment against Mr Najjar for failing to honour the promissory notes. The reported decision, to which Mr Andrews referred, was an appeal by Mr Najjar against a decision refusing him leave to defend. In the passage from which Mr Andrews drew his quote, Lord Denning MR explained:
“Stopping there, it is quite plain to me that Mr Najjar was liable to pay the first of the promissory notes. We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. It is suggested that … there was a failure of consideration. That suggestion is quite unfounded. The English company were getting on with their part of the contract. They were, they say, ordering goods from their suppliers and getting on with the work. At any rate, there is no evidence to the contrary; and, unless they were themselves in default, they were clearly entitled to payment of the first note.”
The import of the passage is that a person who draws a promissory note must honour it when it is due; so there was little scope to defend a claim for the amount of the note. Mr Andrews seemed to think it meant Mr Bayly could write out his own promissory note and it would be “as good as cash” to settle any debt. He was quite wrong.
Neither Mr Bayly in his written outline nor Mr Andrews in oral submissions identified any provision of either loan agreement or the Mortgage which bound Westpac to accept a promissory note from Mr Bayly in satisfaction of any amount owing. Each loan agreement included the term that “[r]egular repayments should be made by automatic transfer” from a St George transaction account nominated by Mr Bayly. Other options mentioned were the use of “phone and internet banking to … credit (funds transfers) your loan account” and Mr Bayly authorising St George “to meet your repayment by debiting an account”.
No agreement to accept a promissory note was alleged by Mr Bayly in his defences and none was asserted in his written or in Mr Andrews’ oral submissions. In the absence of agreement, Westpac did not have to accept Mr Bayly’s promissory note as payment for the outstanding debt.
It follows that Mr Bayly could not discharge his debt to Westpac by delivering the promissory note to Westpac’s solicitors. Put simply, he could not affect his or Westpac’s existing legal rights by promising in writing he would pay Westpac at the local pub at 10.30 am on a Thursday.
The language on the reverse of the promissory note described it as “for the Settlement of St George Bank Fully Drawn Advance Mortgage Loans”. It appears from this and from Mr Andrews’ oral submissions that, by delivering the note to Westpac’s solicitors, Mr Bayly was proposing that Westpac accept the note in discharge of his obligations in respect of six listed loan accounts. There was no evidence that Westpac accepted the note in this fashion. On the contrary, the evidence was that Westpac, through its solicitors, wrote to Mr Bayly advising “for the avoidance of any doubt, Westpac does not accept the Promissory Note as a method of payment”. This communication was sent by email on 12 September 2019.
According to Mr Andrews, because Westpac received the promissory note and took possession of it, they accepted the note. As well, Mr Andrews contended that Westpac’s “silence” for the period between 23 August and 12 September 2019 meant that Westpac had accepted the promissory note. He submitted that according to “contractual principles” Westpac’s failure to reject the note within 72 hours meant Westpac was bound by Mr Bayly’s offer and his debt to Westpac was extinguished. There is no such contractual principle.
In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd,7 the New South Wales Court of Appeal considered a submission that a contract had been created by an offer followed by a period of silence. Kirby P observed:
“The starting point for the legal classification of the facts which I have set out is that an offeror may not impose a contractual obligation upon an offeree by stating, that if the latter does not expressly reject the offer as made, it will be taken to have accepted it. This general principle is accepted throughout the common law world.
Various explanations may be offered for this principle. One is that it derives from the disinclination of the common law to impose legal liability upon individuals for omissions. Another is that it is a consequence of the common law's protective attitude towards liberty of conduct and its resistance to the unilateral imposition of obligations. Still another is that it derives from the contractual theory of the common law that a binding and legally enforceable agreement must be mutually achieved by offer and acceptance. Whatever the history of and reasons for the general rule, its existence is not in doubt.”8
“Under the common law theory of contract, the silent acceptance of an offer is generally insufficient to create any contract. The objective theory of contract requires an external manifestation of assent to an offer. Convenience, and especially commercial convenience, has given rise to the rule that the acceptance of the offer should be communicated to the offeror. After a reasonable period has elapsed, silence is seen as a rejection and not a[n] acceptance of the offer. Nevertheless, communication of acceptance is not always necessary. The offeror will be bound if he dispenses with the need to communicate the acceptance of his offer. However, an offeror cannot erect a contract between himself and the offeree by the device of stating that unless he hears from the offeree he will consider the offeree bound. He cannot assert that he will regard silence as acceptance. The common law’s concern with the protection of freedom is opposed to the notion that a person must take action to reject an uninvited offer or be bound by contractual obligations.”9
“The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted.”10
The conduct of Westpac could not reasonably be regarded as an acceptance of an offer put by Mr Bayly to pay his debt by the promissory note. No step was taken by Westpac to show acceptance, in particular, the promissory note was not presented for payment.
Mr Bayly included in the appeal record excerpts of the Commonwealth Constitution and five Commonwealth statutes, in addition to the Bills of Exchange Act. These may be considered briefly.(a)The power of the Commonwealth Parliament to make laws with respect to currency, conferred by s 51(xii) of the Constitution, and its power to make laws with respect to promissory notes, conferred by s 51(xvi), were not in issue in the court below or in this appeal.(b)The definition of “money” in s 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 as including “promissory notes” has the effect that, for the purpose of the Act: the supply of a promissory note is not a “supply”; the acquisition of a promissory note is not an “acquisition”; the importation of a promissory note is not a “taxable importation”; and a “settlement amount” (and related insurance obligations in respect of legal claims) may be calculated by adding the sum of payments, including by promissory notes.(c)The definition of “Australian currency” in s 39(8) of the Banking Act 1959 as including “promissory notes” has the effect that the authorisation of the Governor-General to make regulations providing for or in relation to the control or prohibition of transactions involving dealings with Australian currency includes such dealings with promissory notes denominated in Australian dollars.(d)The dollar is designated as the monetary unit or unit of currency in Australia, and the dollar and the cent as the denominations of money, by s 8 of the Currency Act 1965. The requirement in s 9(1) of that Act is that every promissory note be made according to the currency of Australia, unless it is made according to the currency of some country other than Australia.(e)A person who pays a tax-related liability had to do so in Australian currency, under s 18(1) of the repealed Taxation Administration Regulations 1976 and their successor.11(f)The definition of “money” as including “negotiable instruments”, in s 131.7(4) of the Criminal Code Act 1995, has the effect that, for the purpose of the offence of theft of Commonwealth property, property belongs to the Commonwealth even if a person obtained it by another person’s mistake about the amount of money (including negotiable instruments) being paid.
None of these provisions has any relevant effect on the matters in issue between Westpac and Mr Bayly below or in this appeal. None makes a promissory note “money” for any broader general purpose.
Mr Bayly had no real prospect of succeeding in his defence based on the contention that his debt to Westpac had been extinguished as a result of the delivery of the promissory note. The learned primary Judge was not in error in this respect.
Westpac’s standing
In his written outline, Mr Bayly submitted Westpac lacked “standing to prosecute the claim from the basis there is no contract between” Westpac and Mr Bayly.12
In the proceeding below, Westpac pleaded:
“By operation of [s 22 of the Transfer Act] and on and with effect from 1 March 2010, all of the assets and liabilities of St George … became the assets and liabilities of [Westpac] without any transfer, conveyance, assignment and the duties, obligations, immunities, rights and privileges applying to St George apply to [Westpac], which has become the successor in law of St George.”13
In his defence, Mr Bayly denied this allegation “by reason there is no document that establishes a contract between” Mr Bayly and Westpac. In his particulars of this denial, Mr Bayly again asserted that no document established a contract between him and Westpac, before stating that he has never consented or assented to conducting business with Westpac, and that “[a]ny claim of implied contract is denied immediately, and in the alternative is revoked immediately”.
Mr Bayly’s explanation seems to proceed on a misunderstanding of Westpac’s allegation.
The statutory provision pleaded by Westpac relevantly provided:
“22 Time and effect of voluntary transfer
(1)When the certificate of transfer comes into force, the receiving body becomes the successor in law of the transferring body, to the extent of the transfer. In particular:
(a)if the transfer is a total transfer—all the assets and liabilities of the transferring body, wherever those assets and liabilities are located, become (respectively) assets and liabilities of the receiving body without any transfer, conveyance or assignment; and
…
(c)to the extent of the transfer, the duties, obligations, immunities, rights and privileges applying to the transferring body apply to the receiving body.
…
(5)Subject to subsection (2), if the transfer is a total transfer, on and after the day when the certificate comes into force, each translated instrument continues to have effect, according to its tenor, as if a reference in the instrument to the transferring body were a reference to the receiving body.”
“20 Agreements about matters connected with the transfer
(1)The transferring body or the receiving body, or both of those bodies, may provide APRA with a written statement specifying, or specifying a mechanism for determining, things that are to happen, or that are taken to be the case, in relation to assets and liabilities that are to be transferred, or in relation to the transfer of business that is to be effected.
(2)APRA may, in writing, approve the statement before issuing the certificate of transfer if APRA is satisfied that:
(a)the statement has been agreed to by the transferring body and the receiving body; and
(b)the matters specified in the statement are appropriate.”
“Timing
(b)Westpac and St George agree that each of the paragraphs set out below will take effect at 12.01am (Sydney time) on 1 March 2010.
Consequences of certificate of transfer
(c)With effect on and from the time when this paragraph comes into force in accordance with paragraph (b), Westpac becomes the successor in law of St George and is for all purposes a continuation of and the same legal entity as St George.
Assets and liabilities
(d)With effect on and from the time when this paragraph comes into force in accordance with paragraph (b):
(i)all assets of St George, wherever located, vest in, or are otherwise available for the use of, Westpac without the need for any conveyance, transfer, assignment or assurance and without the need for any prior notice or further act;
…
For the avoidance of doubt, the assets and liabilities of St George include, without limitation, the following:
(iii)all customer relationships relating to each customer that has been or is liable, or owed an obligation, in respect of one or more of the assets or liabilities of St George, or that otherwise has acquired any services from St George immediately before the time when this paragraph comes into force in accordance with paragraph (b);
…
In this paragraph (d):
(vi)customer relationship means, in relation to a customer:
(a)the relationship (including all legal incidents of that relationship) between St George and the customer in relation to any product or service issued or provided by St George;
…
(c)all contracts, instruments, documents and information relating to any of the relationships referred to in sub-paragraphs (A) and (B), including security interests …
Translated Instruments
(g)On and after the time when this paragraph comes into force in accordance with paragraph (b), each translated instrument continues to have effect, according to its tenor, as if a reference in the instrument to St George were a reference to Westpac. For this purpose:
(i)translated instrument means a document, agreement, instrument, notification or quotation of any kind … which is subsisting immediately before the time when this paragraph comes into force in accordance with paragraph (b):
(A)to which St George is a party; or
(B)that was given to, by or in favour of, or issued by, St George; or
(C)that refers to St George …; or
(D)under which money is, or may become, payable, or other property is, or may become, liable to be transferred, to or by St George; and
without limiting any other respect in which a translated instrument is subsisting at a time if it is physically in existence at that time (whether in paper, electronic or any other form);
…
Relationships with customers and depositors
(q) The relationship between St George and a customer or depositor at an office or branch or agency of St George is, on and after the time when this paragraph comes into force in accordance with paragraph (b), between Westpac and that customer or depositor, and gives rise to the same rights and duties (including rights of set-off) as would have existed before that time if that relationship had always been between Westpac and the customer or depositor.
…
Interests in land
(w) If, immediately before the time when this paragraph comes into force in accordance with paragraph (b), St George is, or is taken to be, the registered proprietor of an interest in land, with effect on and from the time when this paragraph comes into force in accordance with paragraph (b):
(i)Westpac is taken to be the registered proprietor of that interest in land; and
(ii)Westpac has the same rights and remedies in respect of that interest as St George had.”
Westpac put before the learned primary Judge the APRA instrument by which a delegate of APRA approved the section 20 statement. Westpac also put into evidence the certificate of transfer issued by the delegate and authorised officer of APRA. The certificate states that the total transfer of business from St George to Westpac is to take effect and that the certificate comes into force on 1 March 2010.
It follows that, with effect from 12.01 am on 1 March 2010, all of the assets and liabilities of St George became assets and liabilities of Westpac, and all of the rights and privileges applying to St George applied to Westpac. This included the interest of St George in the unit, as a registered mortgagee, and all of the rights of St George pursuant to the Mortgage and each of the loan agreements with Mr Bayly, being choses in action.
Mr Bayly adduced no evidence about these matters. He did not dispute that Westpac was the successor in law to St George and he did not dispute the effect of the APRA certificate. He submitted to the learned primary Judge that Westpac had failed to prove it was “in fact in possession of all the assets” and “in possession of the securities”, by which it appears he meant the original copy of each loan agreement.14
A creditor must prove that a debtor agreed on any particular terms for the repayment of the debt, upon which the creditor relies. However, it is not an element of a cause of action for the debt that the creditor must possess or produce an original of the loan agreement.
Westpac’s standing to pursue its claim against Mr Bayly was not affected by the fact that Mr Bayly did not sign any contract or agreement with Westpac or that Mr Bayly had never consented or assented to conducting business with Westpac. No “implied contract” was involved in Westpac’s claim. Westpac proceeded against Mr Bayly as the successor in law of St George and the person entitled to exercise the rights of St George under the Mortgage and the loan agreements.
The learned primary Judge did not err in concluding with the requisite degree of certainty that Mr Bayly had no real prospect of succeeding in his defence based on his challenge to the standing of Westpac.
Westpac’s proof of its claim
In his written outline, Mr Bayly contended that Westpac had failed to prove the loan agreements and the advances made under them.
In his defence, Mr Bayly had admitted that on 12 December 2018 he was in arrears of repayments of $21,932 owing under the first loan account and so in default under the Mortgage and in arrears of repayments of $24,863 under the second loan account and also in default under the Mortgage on that basis.
Before the learned primary Judge, Westpac read an affidavit of Amanda Payne.15 Ms Payne exhibited copies of documents used in the ordinary course of Westpac’s business to record its financial transactions. Ms Payne deposed that these were true copies of the ordinary books of account of Westpac and the entries were made in the usual and ordinary course of Westpac’s business. Ms Payne also exhibited a copy of the Mortgage and each of the loan agreements.
Ms Payne gave evidence, based upon her access to Westpac’s books of account, that Mr Bayly borrowed $128,400 pursuant to the first loan agreement and $128,400 pursuant to the second loan agreement. She exhibited copies of the St George home loan account statements issued to Mr Bayly recording the advances at that time. Ms Payne also deposed that Mr Bayly had failed to pay moneys due and owing under each of the loan agreements and, as at 11 December 2018, was in arrears in the amount of $21,932 in respect of the first loan agreement and $24,863 in respect of the second loan agreement. Drawing on the business records of Westpac, Ms Payne deposed that there had been no deposits by way of reduction of the debt balance of either loan since 16 September 2016.
It follows that there was evidence before the learned primary Judge of the loan agreements and of the advances made under them. This evidence was admissible.16 It was sufficient to prove Westpac’s allegation that it had made financial accommodation available to Mr Bayly pursuant to the two loan accounts, and his default.
In a separate affidavit read below, Ms Payne certified that, as at 23 January 2020, the amount payable by Mr Bayly pursuant to the Mortgage was $323,701.18.17
In each loan agreement, Mr Bayly had agreed that St George may give him a certificate about an amount payable in connection with the loan agreement and that the certificate would be sufficient evidence of the amount, unless it is proved to be incorrect. The relevant clause is a plain English version of that considered by the High Court in Dobbs v National Bank of Australasia Ltd. As the Victorian Court of Appeal observed of a similarly drawn clause in , it facilitates proof of the existence and the amount of a person’s indebtedness. The clause provides a means by which Westpac could establish the legal existence and the amount of Mr Bayly’s debt, unless it is proved that the matter or sum referred to in the certificate is false.
The signing of the claim and statement of claim
Next, in his written outline, Mr Bayly contended that the claim, the statement of claim and amended statement of claim were not “properly and validly signed”.
This argument was not put to the learned primary Judge. At the hearing below, Mr Bayly and Mr Andrews submitted that Westpac had not properly signed an affidavit. They were unable to identify the affidavit in question. The learned primary Judge examined a number of affidavits read by Westpac and concluded, with respect correctly, that there was no impropriety in their execution.
In this appeal, Mr Bayly submitted that errors had been made by Mr Andrews below and that, rather than an affidavit, he and Mr Andrews should have submitted that Westpac had not validly or properly signed the claim and the pleadings.
Rule 19 requires that Westpac (as plaintiff) or its solicitor must sign the originating process, which in this instance is the claim. The claim was not included in the appeal record. The only pleading by Westpac in the record is the amended statement of claim filed on 30 September 2019. It is signed by Westpac’s solicitors, both on its final page and in the endorsement of the amendment notice under r 378. Mr Bayly (and Mr Andrews) were simply wrong in this respect.
There was no error by the learned primary Judge. No issue about signing the claim or the statement of claim was raised before his Honour. The decision is not to be set aside on the basis that Westpac’s solicitors signed the claim and the statement of claim. Mr Bayly’s contentions to that effect have no real prospects of success.
Obstruction
In his written outline, Mr Bayly complains of obstruction by the learned primary Judge.
I have read carefully the transcript of the hearing, which was included in the appeal record. It records that the learned primary Judge interacted directly and courteously with Mr Bayly and Mr Andrews. During the 90 minute hearing, his Honour took each of the matters raised at the hearing in turn, clarified with Mr Bayly and Mr Andrews the true nature of their submission on the matter, indicated his initial view of any difficulty with their submission and invited them to address it, before his Honour indicated a final position and then moved to the next matter. In this way, the learned primary Judge explained his conclusion on each point raised by Westpac and by Mr Bayly and Mr Andrews.
With respect, this approach was appropriate. Mr Bayly needed to raise only one defence with a real prospect of success to deny Westpac summary judgment. Mr Bayly was not legally represented.21 The approach adopted by the learned primary Judge may have assisted Mr Bayly to understand the issues raised by Westpac at the hearing and any difficulties his Honour saw with submissions put by Mr Bayly and Mr Andrews.
In Mr Bayly’s written outline, the learned primary Judge’s rejection of a number of submissions put by Mr Bayly or Mr Andrews is characterised as his Honour having “avoided, ignored or circumvented taking into consideration” what was put. These assertions are not borne out by the transcript of the hearing. The submissions, identified by Mr Bayly in his outline, are a variety of factually false, legally wrong or nonsensical propositions. They are matters considered under the other topics above, with one exception.
The exception is Mr Bayly’s submission that the learned primary Judge incorrectly asserted that Mr Bayly’s denial of paragraphs 3, 5, 7, 13, 14 and 15 of the statement of claim was a bare denial. His Honour did read the unexplained denials in paragraph 2 of the amended defence as “effectively admissions”, as indeed they are. However, within minutes Mr Turner, counsel for Westpac, drew his Honour’s attention to paragraph 5 of the amended defence where Mr Bayly gave reasons for his denial of paragraph 3 of the statement of claim. That explanation, and the related and similar explanations, in paragraphs 6 and 7 of the amended defence, for the denial of paragraphs 5 and 7 of the statement of claim, were then the subject of submissions and exchanges between his Honour, Mr Bayly and Mr Andrews. I am satisfied that the initial impression, created by Mr Bayly’s manner of pleading, did not persist and had no effect on his Honour’s decision to order summary judgment for Westpac.
Mr Bayly and Mr Andrews had a proper opportunity to present Mr Bayly’s case against summary judgement for Westpac before the learned primary Judge. Mr Bayly re-presented his case in his outline for this appeal, which was elaborated upon by Mr Andrews at the hearing. His submissions were to no avail. The decision of the learned primary Judge should not to be set aside on the basis that there was any obstruction at the hearing.
Disposition of the appeal
Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth). ↩
Appellant’s outline of argument filed 14 April 2020 (Appellant’s outline). ↩
Amended defence at [1]. ↩
District Court of Queensland Act 1967 (Qld), ss 68(1)(b)(xi), (2). ↩
Ibid, s 69(1). ↩
[1969] 1 WLR 357 at 361B. ↩
(1988) 14 NSWLR 523 (Empirnall Holdings). ↩
Empirnall Holdings at 527F-528A. ↩
Empirnall Holdings at 534D-F (citations omitted). ↩
Empirnall Holdings at 535E (citations omitted). ↩
Section 21(1) of the currently in force Taxation Administration Regulations 2017 is in the same terms. ↩
Applicant’s outline at [8]. ↩
Amended statement of claim at [3].
Bayly
Westpac Banking Corporation [2020] QCA 148
(1988) 14 NSWLR 523
(1935) 53 CLR 643
Appeal dismissed with costs. The District Court's summary judgment for Westpac remained in place.
Mr Bayly did not pay the arrears.
On 27 March 2019, Westpac commenced the proceeding below in the District Court. Mr Bayly filed three defences, on 30 April 2019, 24 September 2019 and 28 October 2019.
On 29 January 2020, Westpac succeeded in its application for summary judgment against Mr Bayly, which is the subject of this appeal.
As a separate matter, Mr Bayly asserted that Westpac had failed to prove it advanced the loan moneys because it had not revealed “the source of the funds”. This is not a defence. Mr Bayly could not avoid his own debts by arguing that his creditors might or might not owe money to others.
In the circumstances, there was no error by the learned primary Judge in concluding that Mr Bayly had no real prospects of defending against Westpac’s claim on the basis that Westpac had failed to prove the facts upon which its claim was based.
Mr Bayly cannot have meant the original Mortgage, as that was lodged with the registrar of titles. ↩
Filed on 2 October 2019. ↩
See s 84 of the Evidence Act 1977 (Qld). ↩
Ms Payne certified that this was the total of $172,169.03 in respect of the first loan account and $151,532.15 in respect of the second loan account. ↩
(1935) 53 CLR 643 at 651 (Rich, Dixon, Evatt and McTiernan JJ). ↩
[2016] VSCA 214 at [39] – [42] (Hansen, Ferguson and McLeish JJA). ↩
Permanent Trustee Co Ltd v Gulf Import & Export Co [2008] VSC 162 [85] (Hansen J), cited with approval in Byrne v Javelin Asset Management at [41]. ↩
Although Mr Bayly introduced Mr Andrews as his “counsel”, the learned primary Judge quickly discerned that Mr Andrews was not a barrister. Nonetheless, his Honour allowed Mr Andrews to appear to assist Mr Bayly. ↩