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[2009] WADC 72
defendant. Chamber summons for summary judgment dismissed; the purchasers' approach to a mortgage broker arguably satisfied the contractual obligation under the finance clause, creating a real question to be...
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The plaintiffs sought summary judgment saying the buyers breached the 'subject to finance' clause by not applying to the named lender (ANZ). The court held that the contract's definition of 'Lender' includes a mortgage broker carrying on business in Western Australia. Because the buyers had approached a mortgage broker, there was a real question to be tried about compliance with the clause, so summary judgment was refused and the plaintiffs' application dismissed.
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1,783 words · generated 10/07/2026
This is a chamber ruling on a summary judgment application in a dispute arising from a contract for sale of land executed under the 2002 REIWA form. The plaintiffs (Gillian and Donncha Kennedy) sued the purchasers, the first defendants (Suzanne and Timothy Dodds), for breach of the subject-to-finance clause, alleging the purchasers never applied for finance to the lender nominated in the contract (the ANZ Bank) and therefore were in breach. The purchasers had consulted a mortgage broker, Jason Christopher Blackburn, who, after assessing their financial position and on the basis of his experience with ANZ, concluded ANZ would not lend to them. There was correspondence indicating the purchasers had been told an application to ANZ would be hopeless and detrimental to future prospects (paras 2, 5-7).
The plaintiffs filed a chamber summons for summary judgment on 6 March 2009. The matter was heard on 13 May 2009 and the Deputy Registrar (Hewitt) delivered reasons on 11 June 2009 (para 1). The crucial dispute was contractual construction: did the purchasers satisfy the obligation to "make an application for finance approval to the lender" by approaching a mortgage broker, or did they need to apply to the nominated lender (ANZ) specifically (paras 2-4, 8-12)? The Deputy Registrar concluded that the contract's definition of "Lender" (par (b)) plainly included a mortgage broker carrying on business in Western Australia, and that approaching such a broker could arguably satisfy the buyer's obligations under par 1.1(a). Because that raised a genuine issue to be tried, summary judgment was inappropriate and the plaintiffs' application was dismissed (paras 10-12, 13).
Two lines of reasoning drove the result.
First, the interpretive text of the contract. The finance clause expressly defines "Lender" to include "the lender or mortgage broker nominated in the Schedule" and alternatively, if no lender is nominated or the buyer makes a finance application to such an entity, "any bank, building society, credit union or other institution which makes loans and in each case is carrying on business in Western Australia or a mortgage broker carrying on business in Western Australia" (para 8). The Deputy Registrar read that definition as allowing a mortgage broker to be, for the purposes of the contract, a "lender". On that textual basis, the purchasers' approach to Mr Blackburn, a mortgage broker, could be an application to "the lender" within par 1.1(a) (paras 11-12).
Second, procedural law on summary judgment. The court invoked the established Fancourt v Mercantile Credits Ltd principle that summary judgment should only be granted when it is clear there is no real question to be tried (para 10). Because the interpretation adopted by the Deputy Registrar created an arguable case that the purchasers complied with the clause by consulting a mortgage broker, there remained a real question requiring trial and summary judgment had to be refused (paras 10-12).
The court also addressed, and largely rejected for the purposes of summary judgment, the plaintiffs' contention that "lender" must be limited to an entity in possession of loan funds. That narrower construction was said to be weakened by the express language of par (b), which admits a mortgage broker carrying on business in Western Australia without any further qualification (para 12).
Finally, the Deputy Registrar observed that the 2002 REIWA clause is materially different from an earlier form considered in Fay v Sheridan, and therefore Fay was unhelpful to the present interpretive exercise (para 10). The judgment therefore rests on contract text and summary judgment doctrine, not on any broad policy pronouncement.
Before: The court acknowledged there had been earlier authorities on subject-to-finance clauses, notably Fay v Sheridan in the Western Australian Court of Appeal. However, the Deputy Registrar found Fay to be concerned with a materially different (earlier) version of the clause and therefore not persuasive for interpreting the revised 2002 REIWA clause (para 10). The court did not purport to overturn or modify Fay; it simply declined to treat it as directly applicable.
After: The ruling clarifies the approach to interpreting the 2002 REIWA finance clause in the District Court of Western Australia context. It establishes that, read textually, the definition of "Lender" may include a mortgage broker carrying on business in Western Australia and that, where the purchaser approaches such a broker, there can be an arguable compliance with an obligation to "make an application for finance approval to the lender." As a practical consequence, plaintiffs seeking to obtain summary judgment for an alleged failure to apply for finance in these contract forms must confront the possibility that an approach to a mortgage broker creates a triable issue on compliance. The decision is procedural in its effect, it denies summary judgment rather than laying down a definitive appellate ruling on interpretation, but it signals that contractual definitions in the REIWA 2002 clause will be given weight.
The contract obligation (para 3):
The definition of 'Lender' (para 8):
The summary judgment principle (para 10):
The application to facts (paras 11-12):
The ruling is pertinent where all these elements exist:
In such circumstances, the decision indicates that courts should not grant summary judgment where the contractual definition generates an arguable compliance defence.
This decision is itself a district court in-chambers ruling and references two authorities: Fancourt (High Court authority on summary judgment) and Fay v Sheridan (WASCA authority on an earlier form of finance clause) (para 10). The judgment explicitly treats Fay as materially distinguishable because the 2002 REIWA clause is different (para 10). The text of this judgment does not record any subsequent appellate treatment or later citations; the decision is limited to denying summary judgment on the facts before the Deputy Registrar (paras 10-13). To establish how later courts have treated the precise interpretive point (whether a mortgage broker can be a 'lender' under the 2002 REIWA clause), further research into subsequent reported decisions and citations to this judgment would be required.
The Deputy Registrar resolved the immediate procedural question but left several issues unresolved and therefore available for trial or future appellate clarification:
Definitive interpretation at trial or on appeal: This ruling was procedural and held only that an arguable case existed. It did not finally decide whether approaching a mortgage broker objectively satisfies the obligation to "make an application for finance approval to the lender" in every case. That remains open to factual and legal determination (paras 11-12).
The content of 'application' and 'best endeavours': The decision did not define what concrete steps amount to an application for finance or what activities satisfy "use all best endeavours in good faith." Those are fact-sensitive issues likely to require evidence at trial (paras 3, 11-12).
The role of ability to make funds available: The plaintiffs contended a 'lender' should be limited to someone with access to loan funds. The Deputy Registrar regarded that contention as weakened by the contractual definition which admits mortgage brokers on a simple business-carrying-on test (para 12). But the tension remains: to what extent should the market role of a mortgage broker (as intermediary vs. fund-provider) affect the construction of 'lender' in other contexts or under different drafting? That precise boundary was not resolved (para 12).
Interaction with nomination in Schedule: The clause separately contemplates a nominated lender or mortgage broker in the Schedule. The court's reasoning applied where a mortgage broker was approached; whether different conduct is required when a specific institution is nominated in a Schedule but the purchaser approaches a broker instead could engage nuanced disputes about contractual expectations (para 8).
Applicability to other REP forms or later REIWA revisions: The Deputy Registrar noted this clause was an innovation in the 2002 revision (para 10). Whether subsequent REIWA forms or other standard forms adopt materially different wording that will change the outcome is a matter for textual comparison and further judicial interpretation.
In sum, the Deputy Registrar's decision is pragmatic and textually driven: under the 2002 REIWA clause the definition of 'Lender' can include a mortgage broker and that fact alone can deny summary judgment. The substantive questions of what conduct conclusively satisfies the contractual obligations remain for trial or higher court determination.
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
CITATION : KENNEDY & ANOR -v- DODDS & ORS [2009] WADC 72
Practice and procedure - Western Australia - Summary judgment - Finance clause - 2002 REIWA contract for sale of land
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Fay v Sheridan [1999] WASCA 61
1 DEPUTY REGISTRAR HEWITT: In this matter the plaintiffs brought a chamber summons for summary judgment on 6 March 2009 and it is that summons which came before me on 13 May 2009 for determination.
2 The basis of the plaintiffs' claim has as its genesis a contract for the sale of a property to the first defendants. It is alleged that the contract had a subject to finance provision requiring the defendant to make application for finance, that they failed to make that application and as a consequence breached the contract and are liable to either common law damages or liquidated damages calculated according to the general conditions applicable to the contract. In so far as the second defendants are parties they are real estate agents holding the deposit paid by the defendants when entering the contract. The argument has gravitated down to one issue. The allegation by the plaintiffs relied upon to support the summary judgment application concerns par 1 of the contract for sale which is brought into play by completion of the finance clause on the previous page. That finance clause nominates the ANZ Bank as a lender, the latest time for approval of finance to be 21 April 2008 and the amount of the loan $667,500. It is signed by the purchasers.
3 The relevant terms relied upon by the plaintiffs to support the application are to be found in par 1.1(a) which provides:
4 Elsewhere in the clause a definition of finance approval is contained but for the purposes of the present application it is sufficient to say that an indication that finance will be made available on the terms sought is a finance approval.
5 The real basis of controversy between the parties concerns the actions taken by the buyers following the entry of the contract. In summary, what happened was the defendants approached one Jason Christopher Blackburn who is a mortgage broker with a view to obtaining the finance necessary for the completion of the purchase contract they had entered into.
6 The mortgage broker took details from the defendants concerning their financial situation and after analysing that information concluded, on the basis of his previous dealings with the ANZ Bank, that the bank would not be prepared to loan the monies to the defendants to allow their purchase to proceed.
7 There elsewhere appears information contained in the form of a letter written from the defendants to the plaintiffs, information to suggest that they were advised that the proposed application for a loan was hopeless and furthermore to make such an application and have it refused would damage their prospects of obtaining finance on other occasions.
8 After that brief summary I now return to an analysis of the relevant clause of the contract between these two parties and in particular focus on the definition term. That portion of the clause contains the following definition:
(a) The lender or mortgage broker nominated in the Schedule; or
(b) If the buyer makes a finance application to, or if no lender is nominated in the Schedule then, any bank, building society, credit union or other institution which makes loans and in each case is carrying on business in Western Australia or a mortgage broker carrying on business in Western Australia."
9 The contention advanced by the plaintiffs is that the provision contained in par 1.1(a) to make an application to the lender must mean the lender nominated in the subject to finance clause namely, the ANZ Bank. The plaintiffs have gone to argue that it is common ground that no such application was made hence the clause has been breached and as a consequence the plaintiffs was entitled to act, as it did, by terminating the contract, re-selling the property and suing for damages.
10 The finance clause contained in this contract appears to be an innovation introduced by a revision of the standard REIWA contract in 2002. Although the first defendants rely on the case of Fay v Sheridan [1999] WASCA 61 that case revolved around the interpretation of a previous version of the clause which in my view is materially different to that in the present case. It is therefore unhelpful. No other decision seems to offer guidance as to the correct interpretation of the clause. The power to grant summary judgment should only be exercised when it is clear there is no real question to be tried: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87.
11 I have difficulty accepting that the interpretation contended by the plaintiffs is unarguable. The definition of the lender to my mind clearly includes the prospect that a mortgage broker can be a lender within the meaning of the clause. Furthermore, I interpret par (b) of the definition of lender to mean that a purchaser need not apply to the lender nominated in the subject to finance clause but may satisfy the requirements for making an application for finance by approaching any bank, building society, credit union or other institution which makes loans carrying on business in Western Australia or a mortgage broker carrying on business in Western Australia.
12 It is my conclusion that the contention advanced by the first defendants that their actions in approaching Mr Blackburn, a mortgage broker, with a view to arranging the finance for the completion of the purchase arguably satisfied their obligations under the terms of par 1.1(a). In doing so I am mindful of the argument advanced by the plaintiffs that a lender must be limited to some person actually in possession of or having access to funds which can be made available by way of loan. In my view such an argument is very much weakened by the definition of lender contained in par (b) of the definition clause since the only qualification placed upon a mortgage broker being a lender within the meaning of this contract is simply that mortgage broker carry on business in Western Australia.
13 Although a great deal of other material was canvassed in the course of argument before me, in my view the application simply boils down to the simple point which I have decided and there is no need to further canvass other issues raised in argument or any advantage in giving my views on those matters since they were not central to the plaintiffs' application and do not add anything to the understanding of the decision that I have reached.
Fancourt
Mercantile Credits Ltd
(1983) 154 CLR 87
Chamber summons for summary judgment dismissed; the purchasers' approach to a mortgage broker arguably satisfied the contractual obligation under the finance clause, creating a real question to be tried and precluding summary judgment (paras 11-12).