Dart v Vidler

Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA 57; (2008) 83 ALJR 196 Barclay v Messenger (1874) 43 LJ Ch 449 Bettini v Gye (1876) 1 QBD 183 Immer (No 145) Pty Ltd v Uniting Church In Australia Property Trust (NSW) [1993] HCA 27; (1993) 182 CLR 26 CASES CITED : Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115 L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 Tropical Traders Ltd v Goonan [1964] HCA 20; (1964) 111 CLR 41

Lorraine Dart (Plaintiff) PARTIES : David Vidler (First Defendant) Karen Wright (Second Defendant)

S Brennan (Plaintiff) COUNSEL : Self represented (First Defendant) M Young (Second Defendant)

Creaghe Lisle Termora Solicitors (Plaintiff) SOLICITORS : Self represented (First Defendant) Bransgroves Lawyers (Second Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13918/2007 Lorraine Kay Dart v David James Vidler & Anor

JUDGMENT 1 HIS HONOUR: Ms Lorraine Dart (the plaintiff) and Ms Karen Wright (previously Karen Vidler) (the second defendant) are sisters. Ms Dart lent money to Ms Wright and her then husband, Mr David Vidler (the first defendant). The loan was secured by a mortgage and Ms Dart alleges that there has been default and proceeds against Mr Vidler and Ms Wright for possession of the land and/or for moneys owing. 2 Mr Vidler accepts that the debt is owing and has not, in these proceedings, opposed the making of the orders sought by Ms Dart. Ms Wright denies that moneys were owing at relevant times, pleads breach of the loan agreement and claims damage for consequential loss allegedly suffered as a result of the breach. 3 Further, Ms Wright seeks relief under the Contracts Review Act 1980 in relation to both the abovementioned loan agreement and in relation to an alleged variation to that agreement. In these reasons for judgment the original loan document (including the mortgage) will be referred to as "the Loan" and the subsequent document referred to as "the Variation". The Loan also consists of a Deed of Loan, referred to in these reasons as "the Deed". During the course of divorce proceedings in the Family Court of Australia, Ms Wright provided some form of indemnity, as to debts of this kind, to Mr Vidler. While this Court does not find, or rely on, the existence of any such arrangement or indemnity, its existence may explain Mr Vidler's passivity in these proceedings. 4 Ms Dart advanced the moneys to Mr Vidler and Ms Wright for the purpose of allowing them to develop a block of land in Wagga Wagga by building a number of units on the property. It is necessary to deal with the proper construction of the Loan and the Variation and the circumstances of the execution of each, before determining these proceedings. That exercise will necessarily involve resolving some areas of conflict of evidence, although some of the differences are irrelevant to the ultimate conclusion. The Agreements 5 The Loan agreement was negotiated between the parties in or about September 2005. The Loan is in usual form and consists, inter alia, of a document titled "Mortgage" being the form used for the registration of a mortgage. As is usual, it refers to an Annexure "A" to the Mortgage, which sets out the rights and duties, powers and obligations of the mortgagors and the mortgagee. 6 The Loan includes a Deed of Loan ("the Deed") executed on 4 November 2005. The Mortgage was executed on 15 November 2005. The Mortgage refers to the obligation on Mr Vidler and Ms Wright of paying Ms Dart $600,000, "or so much thereof as shall remain unpaid on the [sic] 1 January 2006." It further provides that interest will be paid at 15% per annum on the principal sum ($600,000) or so much as remains unpaid as follows: "By equal monthly payments on the first day of the months of November, December and January and then on the first day of each month thereafter if the loan is extended until the Principal Sum shall be fully paid and satisfied. The first of such payment to be computed from the 1 October 2005 to be made on the 1 November next." [Annexure A to the Affidavit of Lorraine Dart of 8 September 2008.] 7 The foregoing is consistent with the partly uncontroversial view that the Loan was negotiated in September 2005, and intended to be for a relatively short time, but the documents (and advances of money) occurred later than originally anticipated. 8 Those inferences also arise from the Deed [Exhibit A]. The recitals refer to the fact that "the Borrower" (defined as Mr Vidler and Ms Wright) sought from "the Lender" (Ms Dart) an advance of $600,000 ("the principal sum"), which has been agreed on the terms there set out. The Deed, as may be obvious from the title, is in the form of a deed, but there is consideration by both parties. 9 The Deed is said to witness that the parties acknowledge the Deed is entered into "for the purpose of recording the advance of the principal sum now paid by the Lender to the Borrower (the receipt of which is hereby acknowledged)". At the date of execution of the Deed, the principal sum had not been advanced. Part only of the principal sum ($200,000) was advanced on 15 November 2005 (the date that the Mortgage was signed and, it seems, registered): Clause 1 of the Deed. 10 The Deed records that the Loan is "for a term of 3 months from 1 October 2005 to 1 January 2006". Further, it provides for repayment of "the principal sum, or so much thereof as shall remain unpaid on the 1st day of January 2006": Clause 2(a) of the Deed. Interest is payable on the principal sum "by calendar monthly payments on the 1st day of the months of November, December and January, the first of such payments computed from the [sic] 1 October 2005 and to be made on the 1st day of November next": Clause 2(b) of the Deed. 11 Clause 2(b) of the Deed contains a proviso that operates as an "exception" to the operation of the foregoing. It is in the following terms:

"2(b) The Borrower shall pay the interest on the principal sum and upon any Judgment or Order in which this or the proceeding covenant may become merged, at the Higher rate as follows, namely by calendar monthly payments on the 1st day of the months of November, December and January, the first of such payments computed from the 1 October 2005 and to be made on the 1st day of November next; PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED THAT if the Borrower shall on every day on which interest is herein before made payable under this deed pay the Lender interest on the principal sum or on so much thereof as shall for the time being remain unpaid at the Lower rate, and shall also duly observe and perform all and every covenant on the Borrower's part herein contained or implied then the Lender shall accept interest on the said principal sum at the Lower rate in lieu of the Higher rate for every month for which interest shall be paid to the Lender on the due dates as aforesaid." The Deed defines Higher Rate to be 16% and Lower Rate to mean 15% per annum. 12 The Deed expressly "supersedes all prior representations, arrangements, understandings and agreements between the parties" relating to the advance: Clause 8(a) of the Deed. And it saves the rights of the parties notwithstanding any failure to exercise, or exercise within time, and/or any such failure or delay does not constitute any waiver: Clause 8(c) of the Deed. 13 Lastly, it is necessary to refer to Clauses 9 and 11 of the Deed. Clause 9 renders "any breach in the terms attaching to or touching on any collateral security to this Deed of Loan, including … the mortgage … [to be] … deemed a breach of any [sic] essential terms" by reason of which the principal and any other moneys become immediately due and payable: see Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115; Bettini v Gye (1876) 1 QBD 183 at 187; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235; Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 at 627. Clause 11 is in the following terms: "11(a) The borrowers acknowledge that interest shall accrue on the full principal sum from 1st October 2005 notwithstanding the full principal sum has not been received by the Borrower. It is agreed that the Lender will lend the principal sum by way of progress payments each of which shall be up to ninety per cent (90%) of the value of the land and improvements as valued by a valuer or surveyor as agreed by the parties from time to time over which the Lender has taken security herein (b) It is further acknowledged that interest will continue to run on the full principal sum (notwithstanding that a part payment of principal has been made) until such time as the full principal sum has been repaid (c) Any variance on the Terms and Conditions contained herein shall only be with the full consent of the Lender and the Borrower." The italicised words in the above quote were handwritten additions to an otherwise printed document. There is an obvious tension between the provisions of Clause 11(b), on the one hand, and the proviso to Clause 2(b) and the Annexure to the Mortgage, on the other. 14 The Variation, which the Court has earlier mentioned, was executed on or about 6 June 2006. It was executed in circumstances that Ms Wright claims were duress, vitiating the Variation. Further, it is submitted that the Variation is not binding and/or not effective because it is not a deed or contract (lacking, it is said, consideration), on the one hand, and it does not achieve anything, on the other hand. The terms of the Variation (it being a short document) are as follows: " MEMORANDUM OF VARIATION

This Memorandum is a Variation of the Deed of Loan made between LORRAINE KAY DART (Lender) and DAVID JAMES VIDLER and KAREN ELIZABETH VIDLER (Borrower) dated the 4 November 2005.

IT IS ACKNOWLEDGED as follows:- 1 That the repayment of all moneys on loan has been delayed and the due repayment date has expired. 2 That the full loan amount of Six Hundred Thousand ($600,000.00) Dollars will not be advanced as the Lender wishes to retain some of the funds to enable her to purchase land at Hillston. 3. That the amount advanced as at the date hereof is Four Hundred and Eighty Thousand ($480,000.00) dollars.

IN CONSIDERATION of the repayment of the loan being overdue interest will continue to be paid at the rate of Seven Thousand Five Hundred Dollars ($7,500.00) per month notwithstanding the reduced amount that has been advanced.

IT IS ACKNOWLEDGED that the principal sum outstanding at the time when the borrowers are in a position to repay the debt will be that amount which has been advanced only.

DATED 6TH DAY OF JUNE 2006" There are no handwritten amendments to the document and the document is over the signature of Ms Dart, Mr Vidler and Ms Wright (by her earlier married name). Witness Evidence 15 Only two witnesses were called in the proceedings, namely, Ms Dart and Ms Wright, in the plaintiff's and second defendant's cases respectively. The contest in evidence is within short compass. It relates to discussions that occurred before or during the "negotiation" of the Deed and Loan and, likewise, "negotiation", if any, of the Variation. Other issues in dispute are peripheral, but, it is submitted, go to issues of credit. 16 Ms Dart made clear in her evidence that her recollection of events was "not precise" and relied on the "written documents" (Transcript page 9.16). Nevertheless, on the major conceptual issues, she was clear and believable. Her recollection also, except on some issues of detail, accorded with the documents. She gave the impression, through her answers and, in particular, her demeanour, of being an uncomplicated, perhaps a little unsophisticated, person who was doing her best to recall details in circumstances where her general approach is to recall major aspects and not worry about some of the detail. Except in the area of detail that is inconsistent with the documents, I found her evidence believable and reliable. Even on matters of detail, she gave the overwhelming impression of a genuinely truthful person who, despite her best efforts, may have been unable to recall some aspects. 17 Ms Wright, on the other hand, could not be described in the above manner. Ms Wright is a project manager for an Information Technology firm and gives the impression of being a sophisticated, intelligent woman, who, for the purposes of these proceedings, studied her Affidavit. Her recollection was more a recollection of that which was in her Affidavit than of the original events, when they occurred. I do not, with that comment, suggest that Ms Wright was necessarily untruthful. It is clear that in relation to the Loan documents, including the Mortgage and the Deed, on which she obtained legal advice, that she had read the documents and understood them. Further, it is clear from the evidence she gave and her attitude to it, that, at the time it was executed, she had read the Variation and understood it correctly. On the Variation, I accept that she did not receive legal advice. 18 Notwithstanding her steadfastness as to that which is attested in her Affidavit, there were, during unguarded moments, critical concessions that, consistent with the impression she was giving by her demeanour, disclosed significant difficulties with some aspects of that which she said in her Affidavit. For example, she admitted (Transcript page 60, lines 17-22) that the agreements beyond 1 January 2006 were "agreements to extend the Loan". She gave the impression of being glib. Her cavilling with the use of the term "mortgage agreement" (Transcript page 71-72), if truly believed, discloses a reconstruction of events favourable to her own position. The verified defence which establishes that she had no opportunity to obtain, and did not obtain, legal advice on the "mortgage agreement" also discloses that, at the time, she was earning $280 per week. As such, it can be a reference only to the Loan and the Deed and not, as she steadfastly attested in the witness box, to the Variation. Her steadfastness displayed, at times, an attitude that disclosed that she recalled matters in a manner consistent only with that which best served her interests. The passage (Transcript page 71-72) relating to the mortgage agreement lacks common sense and shows significant prevarication by the witness, not all of which is obvious from a reading of the Transcript. 19 On issues of detail (and otherwise), the documentary and independent evidence is the best source for determining that which is agreed and that which occurred. On issues of substance and importance in these proceedings, I prefer the evidence of Ms Dart to that of Ms Wright. There are aspects of detail on which I accept neither of them. Facts 20 Notwithstanding the foregoing comments, most of the factual material is uncontested. Mr Vidler and Ms Wright purchased property in Wagga Wagga for the purpose of developing units on it. They commenced development in or about April 2005 and, in or about September 2005, approached Ms Dart for a loan of $600,000. 21 It is obvious, from the terms of the Deed, the mortgage documents and the evidence that is before the Court, that discussions occurred in August or September 2005 and resulted in the reaching of an agreement that was intended to operate from 1 October 2005. The term of the Loan is expressed as from 1 October 2005 to 1 January 2006. As already stated, the Deed of Loan was not signed until 4 November 2005 and the first advance was made at the time of the registration of the Mortgage, which was 15 November 2005. 22 As to the terms of the discussion that occurred in or about September/October 2005, to the extent that the Court is entitled to take such discussions into account in the interpretation of the documents (about which there is more than significant doubt), I find that the discussions were not inconsistent with the terms of the agreement as expressed in the Deed. 23 It is clear from the evidence (by which I include both oral evidence and documentary evidence including the executed agreements) that the parties discussed Ms Dart lending Mr Vidler and Ms Wright $600,000. Moreover, there is agreement that such would occur. The discussion included:

(a) that the Loan was intended to be for a short time only;

(b) that it was intended to finance the construction of units (or part of the construction of units);

(c) that it was likely that units 1 and 2 would be concluded within three to four months but possibly longer;

(d) that, to the extent that units 1 and 2 could not be concluded in the time initially anticipated, Mr Vidler and Ms Wright would need an extension of the Loan;

(e) that any such application for an extension of the Loan period would be favourably considered by Ms Dart. 24 There is little doubt, because Ms Dart and Ms Wright are sisters, that there was a degree of trust and informality in the discussions. However, there is no evidence that would suggest, and by which I would find, that the terms of the Deed entered and executed on 4 November 2005 do not reflect the agreement between the parties. The evidence before the Court is clear as to one aspect, each of the parties to the agreement had read the documents, they understood them and they executed them as reflecting the agreement between them. 25 Ms Wright, in particular, gave evidence that she had read the contract (being the Mortgage, the annexure thereto and the Deed of Loan), was not forced to sign it and understood it. She considered it important and she understood that the date of 1 January was one of the dates they discussed and was the date reflected in the agreement and by which they were bound. At the time, Ms Wright was represented by a solicitor who assisted her in the drafting of the document. 26 Ms Wright also gave evidence that there was an extension of the Loan. I find, on the basis of the evidence adduced, that, for the period after 1 January 2006, the parties agreed to extend the duration of the agreement, allowing more time for Mr Vidler and Ms Wright to progress the development and thereby qualify for an advance of more money under the Loan and allowing an extension of the time by which the advance was to be repaid. I accept the evidence of Ms Dart that the extension was for 5 months, expiring 1 June 2006. It is also clear from the evidence that, notwithstanding that these were time stipulations in a commercial transaction, only substantial compliance was required and it was not an essential condition. Rather, from the circumstances surrounding the making of the extension agreement (including its terms and the pre-existing relationship between the parties), the time for performance was an intermediate term, a significant breach of which would give rise to a right to terminate the contract. (The agreement was oral and extended the duration for "four or five months".) 27 On one view, the extension agreement was made before 1 January 2006 and may have been a collateral agreement between the parties reached before 15 November 2005. For any practical purpose, it is unnecessary to resolve which of those possibilities was the case. 28 On or about 6 June 2006 Ms Dart asked for repayment of the principal sum to which request the defendants sought an extension of time and arising from that exchange, the Variation was executed. I find, as a fact, that Ms Dart did not express the view that Ms Wright or Mr Vidler had to "take it or leave it". I also find that the discussion was such that Ms Dart expressed serious concerns about the future of the project and the capacity of the defendants to repay the Loan and expressed her unwillingness to continue lending the principal sum and/or extending her exposure. 29 By 6 June 2006, Ms Dart had advanced $480,000 to Mr Vidler and Ms Wright. They were advanced in tranches, as requested, being $200,000 on 15 November 2005, $100,000 on 23 January 2006, $100,000 on 23 March 2006, $50,000 on 10 May 2006 and $30,000 on 6 June 2006. As a result of the Variation and the discussions that occurred on or about 6 June 2006, a further $13,000 was advanced on 23 June 2006 and a further $7,000 was advanced on 9 August 2006. The total amount advanced between 15 November 2005 and 9 August 2006 was $500,000. 30 The Deed, as recited above, required that interest accrue on the full principal sum (defined as $600,000), notwithstanding that the full principal had not been received by the Borrower. The interest at the Lower Rate of 15% is (as acknowledged, whether bindingly or otherwise, in the Variation) $7,500 per month. As a consequence, in the period ending (and including) 1 January 2007, if $7,500 per month were the interest payments, Mr Vidler and Ms Wright ought to have made payments totalling $112,500. Even if one were not to include the payment due on 1 January 2007, payments due, under that construction, up to and including 1 December 2006 would be $105,000. In the period ending 1 January 2007, the defendants paid $67,500 in interest. 31 Even if one were to calculate the 15% on the $500,000 advance, the interest that would have been payable would have been either $93,750 (including 1 January 2007) or $87,500 (excluding the payment that might otherwise have been due on 1 January 2007). In that period (1 November 2005 to 1 January 2007, inclusive), the defendants, as stated, paid $67,500 and, on the material before the Court, were charged interest of $68,622.26. The last-mentioned figure is a calculation of the interest on each of the amounts outstanding on a daily basis at the equivalent of 15% per annum between that period. 32 There is only one basis under any of the agreements (or any of the discussions about which either witness gave evidence) for charging interest on that basis, namely, that the proviso to Clause 2(b) operated as the primary obligation. The only exception to the foregoing statement is that it accords roughly with the proposition suggested by Ms Dart that approximately four months' interest was foregone after June 2006 and before 1 January 2007. That four months' interest would be the difference between the interest charged in the balance sheets (Schedule C and D to the Affidavit of Ms Dart) and the amount calculated as 15% per annum on $500,000 over 15 payments. 33 Further, the calculation of debt in Annexure D to the Affidavit of Ms Dart continues to calculate the interest at 15% of the amount outstanding, rather than at the rate of $7,500 per month regardless of the amount outstanding. Further, at no stage have the defendants paid, at least on an average basis, an amount of $7,500 per month. 34 Lastly, on the questions of fact that are before the Court, I find that no agreement was reached to the effect that the amount lent by Ms Dart would be lent until such time as units 1 and 2 of the proposed development project were completed. Other than Ms Wright's testimony, there is no evidence (including documents) that supports this proposition. 35 This proposition, submitted by Ms Wright, amounts to an agreement that the principal sum would be lent and never require payment if, as was the case for a significant time, units 1 and 2 were never completed, or never completed by Mr Vidler and/or Ms Wright. I find that the discussion as to the completion of units 1 and 2 was a discussion that dealt with the purpose of the Loan and the estimation of the time for the Loan, but the agreement being the Deed of Loan reflects the agreement of the parties. After 1 January 2006, the sum advanced was advanced, on the terms already described concluding 1 June 2006 and subject to any agreement that may thereafter be made varying the terms upon which the Loan or a different loan may be made and/or extended. 36 It is desirable, although possibly unnecessary, to discuss the issues of loss for which Ms Wright agitates. As was clear from the evidence before the Court, and that the Court accepts, an advance was made for a particular purpose, which was not fulfilled. Part of the reason, if not the only reason, that the purpose was not fulfilled was the breakdown in the relationship between Mr Vidler and Ms Wright. 37 At the time that the agreement to advance the money was made (i.e. August/September 2005) and at the time that the Deed of Loan was executed (i.e. 4 November 2005) and the Mortgage was registered (15 November 2005), Ms Wright and Mr Vidler were husband and wife and in a continuing relationship. The tension in the relationship was first manifested in or about December 2005 and in February 2006 Mr Vidler moved out of the family residence and into a caravan (which, it seems, was paid for by part of the sum advanced by Ms Dart), which was situated on the development site. 38 Notwithstanding the aforementioned physical separation, Mr Vidler and Ms Wright continued to seek to complete the development of the project in question, at least until and shortly after 6 June 2006. However, in October 2006 (Transcript page 64.40-45) Mr Vidler walked off the job and communication ceased between Mr Vidler and Ms Wright. Part of the reason for that cessation of work was the unavailability of money to pay Mr Vidler. 39 Moneys were available from Mr Vidler's parents, but Ms Wright refused a loan from them because the loan required Mr Vidler and Ms Wright to be "jointly and severally liable". Ms Wright took the view that such an agreement would allow Mr Vidler's parents, on the occasion of a default, to proceed against Ms Wright and not Mr Vidler. Ms Wright insisted (which request was rejected) on the liability being "joint only". Apparently this insistence was at the behest of or on the advice of her family law legal practitioner. 40 Ms Wright's attitude to the loan seems, if it be a result of the difference between "joint and several" and "joint" liability, irrational. If her parents-in-law, in the case of default, were to proceed against her alone, there would be available proceedings by which Mr Vidler could be brought in to indemnify or contribute to the damage awarded. Moreover, in the only circumstances one can imagine that would disentitle such a contribution from Mr Vidler, namely if Mr Vidler were to become bankrupt, Ms Wright's liability on a "joint" rather than "joint and several" basis would not differ. 41 Further, the alleged loss and/or damage arising from the failure to provide an additional $100,000 by way of advance assumes that the $100,000 would have made a difference to the result. No evidence has been adduced, which is capable of being accepted, as to how much was required to complete the development in its entirety or to complete only units 1 and 2. Further, there is no evidence before the Court as to the agreement or arrangement between the first and second defendants that would allow the Court to conclude that any additional amount of money would have assisted in the completion of the project. 42 It seems that Ms Wright borrowed other moneys to pay creditors in her bankruptcy proceedings (Transcript page 63.32), refused a loan from her parents-in-law on the basis recited above and otherwise has adduced no acceptable evidence to prove the losses that she claims are attributable to the failure of Ms Dart to provide the additional $100,000. 43 The evidence leads inexorably to the conclusion that the failure of the project and the losses claimed by Ms Wright are attributable to the breakdown in the relationship between Ms Wright and Mr Vidler and Mr Vidler's refusal to perform work. Commercial lenders, sought by Ms Wright, seem to have been available to refinance the project, but no agreement could be reached with them before Mr Vidler walked off the job (Transcript page 63.5-15). 44 At one stage, Ms Wright accepts, at least implicitly, that $570,000 was needed to finish the project (Transcript page 67.30 and following). Claims of Ms Wright 45 Ms Dart's claim is a simple statement of claim based upon the Mortgage and Deed of Loan, and, to a lesser extent, the Variation. Notwithstanding the simplicity of the statement of claim and the cause of action, there are some difficulties with it. 46 Ms Wright's position is significantly different. Firstly, Ms Dart's claim, based upon the Deed of Loan, is resisted on the basis that Ms Dart breached the contract, which, I assume, is a reference to the Deed of Loan and/or contract arising from the discussions in relation thereto. Secondly, Ms Wright seeks a declaration that the Memorandum of Variation of June 2006 is not binding, as a matter of contract, and, alternatively, should be set aside either as unconscionable or as a result of declarations and remedies available under the Contracts Review Act. Overlapping the two bases upon which the Memorandum of Variation is sought to be set aside, is an allegation of duress, namely, the failure of Ms Dart to perform the original agreement and/or the "take it or leave it" basis upon which the variation was offered. 47 As is made clear in the foregoing findings of fact, the Deed of Loan requires the advance of $600,000 repayable on 1 January 2006. It was not repaid on 1 January 2006. Further, the Deed of Loan required the payment of interest at the rate of $7,500 per month, regardless of the amount advanced and outstanding during the period for which the interest was calculated. No attempt is made by Ms Wright to void or vitiate any contract or arrangement arising from the Deed of Loan on account of the foregoing. The Contracts Review Act claim and the claim as to unconscionability and duress arise and were agitated at the hearing, only in relation to the Variation. 48 Once the facts relating to the Deed of Loan (and any agreement relating thereto) are ascertained, it is unclear as to why one would seek, and what benefit is gained from, the vitiating, varying or voiding of the Variation. As earlier stated, the Deed of Loan required the payment of principal by Ms Wright and Mr Vidler on 1 January 2006. Thereafter, the advances were by separate contract extending the period of the Loan. There was no requirement on Ms Dart to extend the agreement beyond 1 January 2006, or, after the extension, beyond 1 June 2006. There was an expectation arising from the terms of the discussion, but that expectation was, neither by conduct nor statement, such as to give rise to any contract. Nor is there any agreement or representation that would prevent Ms Dart from refusing to extend the Loan. Further there could be no expectation of the loan be extended beyond 1 June 2006. 49 Thus, the extension must be viewed as a separate contract or variation to the Deed of Loan. When, in June 2006, Ms Dart, for her own reasons (including the lack of progress in the project), refused to extend the Loan further, except in relation to an amount of $500,000, Ms Dart was perfectly within her legal rights. The Memorandum of Variation adds little or nothing to that proposition. It matters not, on the analysis that I undertake, whether the Variation is operative and whether it was binding or unfair. At best, it was a condition or variation of the terms upon which the advance, already made (including the additional $20,000 to be made), would be effected. While it is strictly unnecessary to decide the issue, the Variation is a separate contract for a loan of $500,000 on certain terms, which are, except to the extent expressly varied, identical to the Deed. There is consideration (the provision of a further $20,000 loan and the extension on the repayment) and it is binding. 50 If the Variation is not effective and operative, the principal was repayable forthwith in accordance with the original Deed of Loan or the extension thereof. If the Variation were operative, it would grant an extension of time by which the defendants, Ms Wright and Mr Vidler, were required to repay the principal. 51 As earlier stated, the extension of time from 1 January 2006 was not an exercise that Ms Dart was obliged to undertake nor was it a right of either Mr Vidler or Ms Wright. Ms Wright trusted her sister to give her the extension. Until June 2006, the extension was simply that. It was an extension of the timeframe for the performance of the obligations of the Borrowers (Mr Vidler and Ms Wright) and the Lender (Ms Dart). An extension of time is, to the extent that it is a "waiver", a waiver only to the extent of substituting the extended time for the original time of performance and not the destruction of the essential character of the contract or the time: Barclay v Messenger (1874) 43 LJ Ch 449 at 456, cited with approval in Tropical Traders Ltd v Goonan [1964] HCA 20; (1964) 111 CLR 41 at 53-55 and the principle was restated in Immer (No 145) Pty Ltd v Uniting Church In Australia Property Trust (NSW) [1993] HCA 27; (1993) 182 CLR 26 at 30, per Brennan J. 52 As recently pointed out, waiver, as a term, can be used in a variety of situations, which tend to blur the precise use of the term in contractual circumstances such as the present: see Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA 57; (2008) 83 ALJR 196 at [100]. As adumbrated by the majority in Agricultural and Rural Finance Pty Limited, supra, waiver is a term that, if it were necessary to be used, ought be used with great caution. By and large, waiver is an imprecise term used for what ordinarily should be considered either as election or estoppel. 53 The starting point for the defining of the relationship between Ms Dart and Ms Wright (and Mr Vidler) is the Loan and the Deed of Loan. The subsequent conduct of the parties, or their subsequent statements, cannot, during the subsistence of the contract, be used to construe the contract. As a proposition, the foregoing is irresistible. If authority were necessary, it is a principle restated in Agricultural and Rural Finance Pty Limited, supra, at [35] and [163]. But the statement of the general principle and its application is of assistance only during the subsistence of the contract. The Deed of Loan (and the contract for the borrowing) required all of the steps to have been taken by 1 January 2006. Clearly, the steps were not taken by that time. There was an extension of time by Ms Dart for the repayment of the principal sum (or so much of it that remained unpaid). Further, the provisions of Clause 11(a) of the Deed of Loan were such that the occasion for the advancement of more than $200,000 had not yet arisen. 54 On one view of the evidence of Ms Dart (Transcript page 28.10-28.21), she was aware that, by the time she signed the Deed of Loan (4 November 2005), the money advanced would not be repaid before the beginning of June 2006. The answer, when given, did not acknowledge the date, only two sets of discussions: one relating to a repayment date of 1 January 2006; and the other to a date not later than June 2006. 55 I find that when the parties signed the Deed on 4 November 2005 and at the time they registered the Mortgage (15 November 2005), they had agreed on a repayment date, as expressed in the documents, of 1 January 2006. However, that date was agreed as a date by which it was hoped repayment could occur. There was an expectation that, to the extent necessary, an extension would be granted until no later than June 2006. That expectation did not detract from the terms of the Deed or Mortgage or Loan. It formed a collateral agreement reached in or after November 2005 and was an extension until no later than 1 June 2006. 56 The extension of the time that occurred for the period after 1 January 2006 was an extension of time by which the defendants Mr Vidler and Ms Wright could request the advancement of the progress payments described in Clause 11(a), supra, (i.e. an extension of time for the purpose of reaching a value, either agreed or independently assessed, of land and improvements for which the advancement was no more than 90%). As earlier stated, the extension of time was an agreed variation to the stipulations otherwise made in the contractual arrangements between the parties. 57 The terms of the conversation between the parties made clear that the extension of time would, unless there was a further or different agreement reached, conclude by 1 June 2006. On 6 June 2006, the Variation was executed and operated in a way which made clear that no further extension would be granted of the period allowed under the Deed of Loan for Mr Vidler and Mr Wright to complete such improvements that would allow more than $500,000 to be advanced. However, further extensions were made on the requirement to pay the principal which was due and payable. 58 Further, Ms Wright represented, at least from 6 June 2006 and, it seems, from before or shortly after 1 January 2006, that, notwithstanding the terms of Clause 11(b) of the Deed of Loan, the amount of interest charged would be calculated at 15% of the amount outstanding (not the full amount of the principal to be advanced). 59 This is not the use of the subsequent conduct of the parties as a tool in the construction of the Deed of Loan. There is a tension in the wording of the Deed of Loan. As earlier stated, the Deed of Loan defines the principal sum as $600,000. Further, the proviso to Clause 2(b) requires interest to be paid or calculated on so much of the principal as shall, for the time being, remain unpaid. So too does the Annexure to the Mortgage. 60 On the other hand, Clause 11(b) of the Deed of Loan acknowledges "that interest will continue to run on the full principal sum". It may be that Clause 11(b) applies only in circumstances of a part-payment or repayment of the principal and after the full principal sum has been advanced. It may be that interest "runs" on the full amount, but the proviso in Clause 2(b) operates to effect the Lower rate on the amount outstanding. Nevertheless, the representation made by Ms Dart, at least on and from 1 January 2006, and upon which Mr Vidler and Ms Wright relied in relation to the extensions of the time specified, was that interest would be charged, at the lower rate of 15%, on that amount of money (less than the defined principal sum) that was outstanding, and no more. 61 At least for the period up to and including 1 January 2006, the rights in Clause 2(b) and the rights in Clause 11(b) could not be said to be inconsistent. The Deed of Loan must be properly construed and the rights therein determined. Only then can it be said that inconsistent rights arise, which could be the subject of an election by Ms Dart. 62 However, at least after 1 January 2006, it seems that the extension of time was made on the basis of the representation of Ms Dart that the interest would be charged, as it was, on the amount outstanding (and no more). That representation was made by conduct. It was acted upon by Mr Vidler and Ms Wright, to their detriment, in that they did not, as they could have at that earlier stage, seek to refinance, or seek other finance, to replace the Loan. 63 Whether the foregoing amounts to an election between inconsistent rights (i.e. rights under the Deed of Loan or subsequent rights which are a variation of that Deed), or of estoppel by conduct, makes little difference to the outcome. The result is that the arrangements between Ms Dart, on the one hand, and Mr Vidler and Ms Wright, on the other, initially described in the Deed of Loan, were varied to the following effect:

(a) the amount to be advanced, and which was advanced, was $500,000;

(b) the interest would be payable not at a rate of $7,500 per month, regardless of the amount of the principal sum outstanding, but calculated on a daily basis at a rate of 15% per annum, payable monthly, on the total amount outstanding, being so much of the principal sum that had been advanced and any interest that was owing. 64 In fact, that is how the debt specified in the statement of claim has been calculated (see Annexure C and D to the Affidavit of Ms Dart of 8 September 2008). Ms Dart was of the view that four months' interest had been waived. In fact, as earlier stated, the agreement to calculate interest on the above basis (rather than on the full amount of the principal) equals to at least four months' interest. 65 One other conclusion and/or finding needs comment. As at 1 June 2006, when the extension originally granted expired, Ms Wright claims she and Mr Vidler were entitled to be advanced a further $120,000, of which only a further $20,000 was provided. 66 There are two answers to this submission. The first answer is that already provided, namely, that on or about 1 June 2006, the principal sum (however much had been advanced) was required to be paid. It was not. 67 Secondly, the "entitlement" of Ms Wright and Mr Vidler to the advance of the remaining $120,000 was conditioned on the 90% valuation to which Clause 11(a) of the Deed refers. In order to prove to the Court that there was an entitlement, it would have been necessary to prove that, as at 1 June 2006 (or even as at 6 June 2006) the value of the land and improvements was equal to or more than $666,667. There was no evidence advanced by Ms Wright from which such a finding could be inferred. Ms Wright has not proved an entitlement to the additional $120,000 or any part of it. 68 I have, during the course of the findings of fact, determined that there was no duress, economic or otherwise. I have also determined that the Variation is irrelevant to any of the foregoing findings. The findings are based upon the agreement between the parties before, or during the course of, the period of the extension and the terms upon which a further extension of time for the repayment of the principal was conditioned. The validity or otherwise of the Variation, which I categorise as a record of that which was otherwise agreed, is irrelevant. 69 It is unnecessary to consider the operation of the doctrine of unconscionability at any length. It is sufficient to note, on the facts as I have found them, no argument for unconscionability arises. Nor does any remedy under the Contracts Review Act arise. 70 If I be wrong on the construction of the Deed of Loan and the extensions of time, and the issue of the payment of interest and the manner of its calculation, I would make clear that, once the period of the Loan expanded from three months, a provision that interest would be calculated on a principal that was never advanced (and never would be), may give rise to significant issues associated with the application of the Contracts Review Act and other contractual remedies. None of those remedies have been sought and, on the view I take, they would accomplish no more than the result otherwise determined. 71 As a consequence of the foregoing, I consider that there is a binding contract between Ms Dart, on the one hand, and Mr Vidler and Ms Wright, on the other. The terms of that contract require the repayment of an advance of $500,000, which advance is secured by the Mortgage over the property in Wagga Wagga. Further, it requires the payment of outstanding interest calculated, on a daily basis, at 15% of the principal and any outstanding interest on that day. That amount is to be reduced by the amount of interest that has already been paid. Further, and as a consequence of the foregoing, Ms Dart is entitled to judgment against Mr Vidler and Ms Wright, for an amount calculated on the foregoing basis, and, to the extent such judgment cannot be satisfied, judgment for possession. I reject the claim under the Contracts Review Act. 72 The Court makes the following orders:

(iii) The plaintiff is to file and serve an order reflecting these reasons within seven days and the matter is listed for directions on that order and any order as to costs at 9.30am on Thursday 16 April 2009;

(iv) The parties have liberty to apply on one working day's notice.

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