PRACTICE AND PROCEDURE - Application for reinstatement of appeal - Appeal deemed abandoned pursuant to r 64.16(1)(b) of the Supreme Court (General Civil Procedure) Rules 2005 - Failure to deliver Appeal Books within time mandated by Registrar's order - Breach of contract for subdivision and development of land - Exercise of power of sale by mortgagee due to default on loan amounted to 'revocation of finance' - 'Termination Event' - Appeal wholly devoid of merit - Application dismissed.

2 On 13 September 2013 the Court heard two applications in this proceeding.

3 The first was an application by Longreach Family Living (Vic) Pty Ltd ('Longreach'), by summons filed 26 July 2013, for reinstatement of its appeal, pursuant to r 64.16(2)(a) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (the 'Rules of Court'), taken to be abandoned pursuant to r 64.16(1)(b) of the Rules of Court. The appeal was deemed abandoned due to Longreach's failure to deliver the appeal books within the time directed by orders made 14 March by Judicial Registrar Pedley, namely, by 9 May. The appeal was from the orders of Daly AsJ giving judgment for Simonds Homes Melbourne Pty Ltd ('Simonds'), the respondent to the appeal, for $300,000, plus interest of $78,882.05 and costs.[1]

4 The second application was made by summons filed 21 August 2013, by Simonds. Simonds sought an order for security for costs in the appeal, should it proceed, pursuant to r 64.24(2) of the Rules of Court, in the sum of $39,632. Simonds alleged that its demands for payment of the judgment sum have been ignored and that if the appeal is reinstated, there is a very real risk that Longreach will be unable to pay Simmonds' costs if Longreach is unsuccessful on the appeal.

5 For the reasons that follow, I would not reinstate the appeal on the ground that it is devoid of merit.

6 In these circumstances, it is unnecessary to consider the application for security for costs.

7 Woondella Pty Ltd ('Woondella'), a company related to Longreach, was, until May 2010, the registered proprietor of a large parcel of land outside Sale, Victoria ('the Land').[2] The Land was the site of a substantial homestead, but was also of a scale and location suitable for more intensive residential development.

8 On 3 December 2007, Simonds and a related company, Madisson Homes Australia Pty Ltd ('Madisson'), entered into an 'Exclusive Relationship Agreement' ('ERA') with Longreach to develop the Land in accordance with a 'Development Plan'.[3] Simonds is a well-known residential development company in Victoria. The Land was to be purchased and subdivided by Longreach, and Simonds was to construct dwellings thereon. Under cl 15 of the ERA, the ERA would be terminated in consequence of certain 'Termination Events' contemplated by the terms of the ERA, including the revocation of finance or a relevant 'insolvency event'.

9 The relevant terms of the ERA, cls 15(c) to (f), provided as follows:

(c) The occurrence of any of the following events constitutes a 'Termination Event' for the purposes of this Agreement:

(i) material default of any party which is not rectified within 60 days of delivery to the defaulting party of a default notice from a nondefaulting party specifying the default and requiring the defaulting party to rectify the default;

(ii) the inability of a party to meet an obligation of that party under the performance timetable in Schedule 9 (whether that inability constitutes or does not constitute a material default under clause 15(c)(i)) subject to clause 14;

(iii) a dispute in relation to an essential term is not resolved under clause 14;

(iv) Simonds and Longreach have not been able to agree upon a Lot Price List under clause 5 by the required date and review dates respectively;

(v) the revocation of any necessary approvals, licences or finance required to continue the Development contemplated by the Development Plan;

(vi) the occurrence of an insolvency event in relation to any party. The following constitute an insolvency event:

(A) an insolvency event specified under section 459C(2)(a) to (f) inclusive of the Corporations Act 2001 (Commonwealth) has occurred in respect of the party prior to completion and has not been remediated or withdrawn (where capable of remedy or withdrawal); or

(B) a receiver, receiver and manager, provisional liquidator, liquidator or other officer of the Court has been appointed in relation to all or any material assets of the party; or

(C) the party is insolvent within the meaning of Section 95A of the Corporations Act 2001 (Commonwealth); or

(D) the party has stopped paying its debts as and when they fall due;

(E) the party is subject to administration under Part 5.3A of the Corporations Act 2001 (Commonwealth).

(d) If a Termination Event occurs any party (other than the party in respect of whom an insolvency event has occurred) will be entitled to terminate this Agreement and this Agreement shall then be at an end save for any accrued rights, obligations and liabilities. Where the Termination Event relates to a material default of a party the nondefaulting parties reserve and retain all their rights and remedies to claim damages from the defaulting party.

(e) In addition to the Termination Events specified in clause 15(c) in the event that the subdivision works for the Development contemplated by the Development Plan shall not have commenced within five months of the date of this Agreement then Simonds has the additional right to terminate this Agreement by notice to Longreach. In the event of such termination Longreach must repay and refund to Simonds all monies paid by Simonds to Longreach for the Fee and additionally must pay to Simonds interest on such monies calculated at the rate of 8% per annum from the date or dates such monies were paid until the date of repayment. Longreach hereby charges all the right title and interest of Longreach in the Land with the payment of all such monies and interest in favour of Simonds and acknowledges that Simonds is entitled to protect its rights under such charge by a caveat.

(f) In the event that the subdivision works for the Development contemplated by the Development Plan have commenced and this Agreement is terminated in consequence of any Termination Event then:

(i) Simonds and Madisson respectively will complete all buildings for which construction has commenced or all terms of contract have been agreed (including price) and Longreach must pay all monies payable under the terms of this Agreement or such contract for such building works. However if Madisson or Simonds have a separate right under the terms of a Simonds Building Contract or a Madisson Building Contract to suspend works or terminate such contracts in consequence of an event of default of Longreach they may proceed to exercise such right despite this sub-clause.

(ii) Longreach must rebate the Fee to Simonds pro rata at the rate of $4,000.00 for each unsold/undeveloped Lot to a maximum of the funds paid by Simonds in or towards the Fee as at the date of termination.

10 The sole director of Longreach, Mary Irving, and her husband, John Benjamin, executed a personal guarantee ('the Guarantee') of Longreach's obligations under the ERA on 27 November 2007, shortly before the ERA was entered into. The Guarantee provided, in cl 1, that in consideration of Simonds having agreed to enter the ERA, and to pay the Fee as defined in the Agreement to Longreach, the 'Guarantor' (defined as including John Robert Benjamin and Mary Gaywin Irving):

GUARANTEES to Simonds (if there is more than one guarantor, jointly and severally) the due and punctual performance and observance by Longreach of Longreach's obligations to Simonds under clause 15(d) and (e) of the said Agreement [the ERA] and the monies relating to the Fee and interest to be paid by Longreach to Simonds under those provisions.

11 Clause 3 of the Guarantee provided that the Guarantor:

DECLARES that this Guarantee and Indemnity:

3.1 is a continuing guarantee and indemnity;

3.2 will not be determined by the death of the Guarantor;

...

3.4 binds all persons executing it (and their personal representatives and successors) ...

12 Payment of the Fee referred to in the Guarantee was provided for in cl 11 of the ERA, which stated that Simonds would pay $150,000 to Longreach upon execution of the ERA; $150,000 on the day following commencement of subdivision construction works; and a further two sums of $50,000 each to be paid on the days following the settlements of the 15th and 35th lots as sold by Simonds, respectively.

13 It is common ground that payments totalling $300,000 were made by Simonds to Longreach pursuant to cl 11 of the ERA. For these purposes the payment of $300,000 can be described as 'the Fee'.[4]

14 In order to finance the project, a loan agreement was entered into on or about 14 December 2007 between Longreach and South Eastern Secured Investments ('SESI') whereby Longreach borrowed $3.3 million from SESI. This was 55 per cent of the valuation of the Land. The loan was secured by, amongst other things, a mortgage over the Land granted by Woondella executed on or about 21 December 2007. The details of the loan were relevantly:

Borrowers name: Longreach Family Living (Vic) Pty Ltd

ACN 103 230 075

...

Amount of Advance: $3,300,000 (55% of Valuation)

Security:

(a) Address: Woondella Park, Maffra Road, Sale

...

Mortgagor/Guarantor: Woondella Pty Ltd

Supporting Security: A fixed and floating charge over the assets of Longreach Family Living (Vic) Pty Ltd

A fixed and floating charge over the assets of Woondella Pty Ltd

A personal Guarantee from Mary Gaywin Irving

A personal guarantee from John Robert Benjamin

A guarantee from Woondella Pty Ltd

Interest Rate: 9.75% per annum fixed for a period of 12 months from draw down ...

Repayments: Interest will be calculated on the daily outstanding balance and will be debited to the loan monthly. Sufficient funds for 12 months interest capitalisation will be required to be left undrawn.

15 The loan was signed by, inter alia, Mary Irving under the statement:

I, Mary Gaywin Irving as Sole Director of Longreach Family Living (Vic) Pty Ltd accept the offer of loan on the above terms and conditions.

16 Subdivision work was commenced on the Land in or about the first week of May 2008.

17 By September 2008, Longreach was in default of the loan agreement. Daly AsJ found that the reasons for this default were the difficulties and constraints experienced by SESI as a consequence of the liquidity problems in the financial sector caused by the global financial crisis in 2008.[5] As a result of these difficulties, a further $1.4 million which Longreach had expected to be advanced by SESI was never received. In November 2009, SESI exercised its power of sale as mortgagee, and the settlement of the sale of the Land took place on or about 4 May 2010. As a result the proposed development did not, and could not, proceed.

18 On or about 4 June 2010, Simonds sent Longreach a Notice of Termination of the ERA (the 'Termination Notice'). The Termination Notice stated, in summary, that:

(a) within the meaning of clause 15 of the Agreement there had been:

(i) a revocation of finance required to continue the Development contemplated by the Development Plan; and/or

(ii) the occurrence of an insolvency event in relation to Longreach;

(b) Longreach, through failing to comply with its obligations to SESI, which resulted in SESI exercising its power of sale of the Land, has manifested an inability or unwillingness to perform its obligations under the Agreement, and has therefore repudiated the Agreement, with such repudiation accepted by Simonds and Madisson; and

(c) as at the date of the Termination Notice, there were 84 unsold/undeveloped lots on the Land, and as such Longreach was required to repay the entirety of the Fee paid to date, namely $300,000.

19 Simonds contended that it also sent a Notice of Demand on or about 4 June 2010 to Mr Benjamin and Ms Irving, enforcing the Guarantee and requesting repayment of the Fee within 14 days.

20 Proceedings were issued by Simonds on 23 June 2010. Although Madisson was initially a party to the proceedings, claiming damages jointly with Simonds for Longreach's repudiation of the agreement, these claims were not pursued at trial and Madisson ceased to be an active plaintiff.[6] Instead, at trial, Simonds pursued the claim seeking repayment of the Fee by Longreach and/or the guarantors on the basis of its right to terminate the ERA under cl 15.

21 Longreach argued that cl 15 of the ERA imposed no obligation upon it to repay the Fee. It argued further that even if such an obligation did exist, the terms of the Guarantee did not impose any obligation upon John Benjamin and Mary Irving to pay any money to Simonds in respect of the Fee.

22 In her judgment, Daly AsJ held that Simonds was entitled both to terminate the ERA and to recover moneys due under the ERA from Longreach. Her Honour held that the exercise by SESI of its powers of sale as a mortgagee amounted to a revocation of finance, as in so doing SESI was, in effect, withdrawing the financial accommodation it had provided Longreach to finance the performance of its obligations under the ERA.[7] SESI's exercise of its power of sale prevented Longreach from performing its obligations under the ERA in a most fundamental way: that is, by removing from Longreach's control the land which was to be developed and sold under the agreement.[8]

In my view, equating SESI's sale of the Land with a withdrawal of an offer of a loan by SESI does not strain the language of this provision of the Agreement, particularly when this clause is viewed in its entirety, and in the context of the objectives of the Agreement as set out in the Recitals. Clearly, clause 15(c)(v) of the Agreement is directed at a situation where the acts of third parties (whether they be financiers, local councils, or other regulatory authorities) prevent the parties from pursuing the primary commercial purpose of the Agreement, being the development of the Land.[9]

24 In addition, her Honour held that the language of cl 15(c)(vi) of the ERA, which provided for the occurrence of an 'insolvency event' in circumstances where the party had 'stopped paying its debts as and when they fall due', was broad enough to encompass past failures to pay debts.

[T]he question of a company's solvency has to be viewed holistically, and ... the overall commercial position of the company needs to be considered. In the current case, Longreach, which had entered into an agreement with Simonds and Madisson for the extensive development of a substantial parcel of land, no doubt with a view to making substantial profits, was unable to meet its obligations to SESI within months of commencing the works necessary to develop the Land, in circumstances where such defaults placed in jeopardy its ability to maintain control of the Land, which was fundamental to performing its obligations under the Agreement.[10]

26 Her Honour held also that Simonds was entitled to recover the Fee from Longreach. She held that the language of the Guarantee was unambiguous in its requirement that Mr Benjamin and Ms Irving, as the Guarantor, were required to repay the Fee, in the event that Longreach failed to do so, on the basis that the obligation upon Longreach to repay the Fee under cl 15(f)(ii) of the ERA was an 'accrued obligation or liability' within the meaning of cl 15(d) of the ERA, which in turn was expressly referred to in cl 1 of the Guarantee.[11]

27 On 21 December 2013, her Honour ordered Longreach to pay Simonds a total of $300,000 plus $78,882.05 interest, plus costs.

28 Longreach served a Notice of Appeal on 21 January 2013. On 14 March 2013, Judicial Registrar Pedley made orders that the Proposed Contents of the Appeal Books were to be filed by 22 March 2013, including a transcript of certain evidence given at trial. The procedural progress of the appeal has been delayed since then, and there has been substantial disagreement between the parties regarding the filing of the Appeal Books in the matter. One such disagreement arose in relation to the acquisition of the transcript of proceedings required to complete the Appeal Books. Rather than obtain their own copy of the trial transcript, Longreach sought a copy from Simonds, who refused on the grounds that copyright remained with the Court and the transcript must be purchased from Victorian Transcript Services. There were also difficulties involved in securing Ms Irving and Mr Benjamin's attendance at a settlement mediation, associated with Ms Irving's medical treatment. The mediation was not held.

29 The Court was informed at the hearing of the applications on 13 September that Ms Irving had died about two weeks before. This gave rise to questions about the source of authority for any instructions given to counsel for Longreach in respect of continuing to prosecute the application for reinstatement of the appeal. I return to this issue below.

30 Although a Note of Proposed Contents was finally agreed between the parties and filed with Registry, the Appeal Books themselves were not filed. Counsel for Longreach claimed that this was because Longreach did not receive confirmation that the proposed contents had been approved and settled by the Registrar. On 17 July, Judicial Registrar Pedley made orders stating that the appeal was taken to be abandoned due to non-filing of the Appeal Books, due 9 May, pursuant to his orders of 14 March.

31 It was only after Longreach received notice of the vacation of the hearing date originally set down that it prepared and filed Appeal Books, and served copies on Simonds' solicitors on or about 26 July 2013.

The application for the reinstatement of the appeal

32 Longreach seeks reinstatement of the appeal. It submits that as the Appeal Books have been filed, the appeal is now ready for hearing and it would be inappropriate to deem the appeal abandoned. Moreover, Longreach has already filed its submissions on the appeal.

33 In support of its application that the appeal not be taken to be abandoned, it relied on the merits of the appeal as demonstrated in its grounds of appeal and its submissions for the appeal.

34 Simonds opposes reinstatement of the appeal, on the ground that this is one of those rare cases where the appeal is wholly devoid of merit: Jackamarra v Krakouer.[12] Simonds submits that no error attends the reasons of Daly AsJ, the appeal has no prospects of success and it should not be allowed to proceed. It further submits that Longreach has been dilatory in its conduct of the appeal, and that the inordinate delay already experienced should be a factor relevant to the Court's exercise of its discretion to conclude the matter immediately.

35 The discretion to reinstate an appeal taken to be abandoned is, as Tadgell J said in Lagarna Pty Ltd v Bridge Wholesale Acceptance Corp (Aust) Ltd, 'as broad, wide and deep as the circumstances demand'.[13] Some of the factors that may guide the exercise of the discretion include the legitimate expectation of a respondent to an appeal that there will be adherence to the Rules of Court, and the orders that are made in the application of the Rules of Court. There is also a need to balance any prejudice to either party that may result. Ultimately, it is a matter of a court determining 'what, in its opinion, is the just way in which its discretion should be exercised'.[14] Where the failure of the appeal is 'plainly demonstrable'[15] and reinstatement would be futile, the interests of justice will favour dismissal of the application.[16]

36 The grounds of appeal relied upon by Longreach are as follows:

(1) The Court erred in finding that a 'termination event' had occurred as referred to in the Exclusive Relationship Agreement of 3 December 2007 ('the ERA') thereby enabling the respondent [Simonds] to demand from the first appellant [Longreach] the refund of a Fee of $300,000 ('the Fee').

(2) The Court erred in finding that a guarantee dated 27 November 2007 entered between the second and third appellants [Mary Irving and John Benjamin, respectively] as guarantors and the respondent [Simonds] ('the guarantee') made those appellants liable to pay the Fee to the respondent on the basis that the Court ought to have found that:

(a) the guarantee only covered obligations of the first appellant to pay the respondent under clauses 15(d) and 15(e) of the ERA; and

(b) the present claim of the respondent against the first appellant is made under clause 15(f) of the ERA.

(3) The Court erred in finding there was no ambiguity in the wording of the guarantee that required the guarantee to be construed in favour of the second and third appellants thereby relieving them of any liability to the respondent.

37 In the circumstances of this case, it is necessary to consider each of the Grounds of Appeal.

38 The two termination events referred to in the Notice of Termination were these:

(1) a 'revocation of finance required to continue the development contemplated by the Development Plan'; and/or

(2) 'the occurrence of an insolvency event in relation to Longreach'.

39 Thus the primary question arising from Ground 1 is this: was there a revocation of finance? If so, there was a 'termination event' under the ERA and her Honour was correct to so find.

40 In its submissions in support of Ground 1, Longreach focused upon the allegation made in the statement of claim that 'Longreach had an expectation that in addition to the Initial Loan, SESI would provide a further loan to Longreach of $1.4 million, as works on the land proceeded'. It submitted that the fact that this loan (the correct recipient of which would have been Woondella) did not proceed does not amount to a 'revocation of finance'. In order for there to be a 'revocation', it was argued, it must be shown that there was more than an 'expectation'. If Longreach was to succeed in relation to the SESI refinancing there must have been an agreement with SESI which was 'revoked'. There must have been an actual 'withdrawal of an offer' which would reflect the dictionary meaning given to 'revocation'.[17] By contrast, the circumstances here were merely those of an expectation that had not been fulfilled. The failure of this expectation to be fulfilled would not have precluded Longreach having many more opportunities for alternative sources of finance in normal circumstances. While during the global financial crisis, Longreach was not able to utilise these alternative sources of finance there was nevertheless no 'revocation' of finance, certainly to Longreach. Any revocation, even if there had been one, would have been to Woondella Pty Ltd and thus not under the ERA at all.

41 In response, Simonds argued, both in its written submissions and orally, that Longreach's submissions were misconceived. The relevant allegation made by Simonds in the Statement of Claim related to the power of sale exercised by SESI as mortgagee in possession. It did not relate to the failure of SESI to meet an expectation that a further loan of $1.4 million would be forthcoming. Rather the relevant allegation was that 'SESI's sale of the land as mortgagee in possession, amounted to a revocation of any necessary approvals, licences or finance required to continue the Development contemplated by the Development Plan' (reflecting the terms of cl 15(c)(v) of the ERA).

42 Simonds submitted that even adopting Longreach's dictionary definitions of 'revocation', the exercise by SESI of its power of sale of the Land prevented Longreach from performing its obligations under the ERA. The loan from SESI to Longreach was secured by the mortgage of the Land owned by Woondella. The loan to Longreach was called up and cancelled (that is, revoked) by the sale of Woondella's land by SESI as mortgagee in possession in circumstances in which the loan to Longreach was secured by the mortgage and the mortgage was enforced because the loan to Longreach was seriously in default. Simonds relied upon the reasons of her Honour, set out above, to the effect that cl 15(c)(v) of the ERA 'is directed at a situation where the acts of third parties (whether they be financiers, local councils, or other regulatory authorities) prevent the parties from pursuing the primary commercial purpose of the Agreement, being the development of the Land'.[18]

44 In my view it is untenable to submit, as Longreach has done, that the exercise of the power of sale by SESI as the mortgagee in possession, in respect of the Land upon which the development by Simonds was to proceed, does not amount to a 'revocation of finance' under cl 15(c)(v), where the power was exercised by reason of the default by Longreach on its loan agreement with SESI which was secured by the Land. Clause 15(c)(v) is concerned with the revocation of those matters which are 'required to continue the Development contemplated by the Development Plan'. including approvals, licences, or finance. The Development contemplated by the Development Plan could not continue on the Land when the Land was no longer available for development, having been sold. Given that the reason that the Land was no longer available for development was the breach by Longreach of its obligations under the loan agreement with SESI, the Development could not continue because the financing arrangements underpinning the continuation of the Development had abruptly come to an end. The loan to Longreach was called up and cancelled by the sale of the Land by SESI as mortgagee in possession because Longreach was in default under its loan with SESI. Such cancellation was, in my view and as Simonds submitted, a 'revocation of finance' within the meaning of cl 15(c)(v).

45 I agree with AsJ Daly that cl 15(c)(v) is directed at acts of third parties preventing the parties to the ERA from pursuing the commercial objective of the ERA, being the development of the Land. Where SESI, as the mortgagee in possession, was entitled to exercise its right of sale, by reason of default under a loan agreement between SESI and Longreach, it was engaging in an act that would prevent the pursuit of the commercial objective of the ERA by the cancellation or 'revocation' of the loan.

46 It follows that there has been a 'Termination Event' under cl 15(c) of the ERA.

47 It is not a question, as Longreach would suggest, of considering the effect of the failure of SESI to meet the expectation of a further loan of $1.4 million. The submissions made by Longreach on the distinction between, on the one hand, a failure to meet an expectation and, on the other hand, a withdrawal or cancellation do not speak to the point that the revocation was constituted by the cancellation of the loan, secured by the mortgage of the Land, by means of the exercise by the mortgagee of its power of sale.

48 Given my conclusions, there is no need to consider the alternative means by which a Termination Event might have occurred, such as an insolvency event under cl 15(c)(vi).

49 In my view, Ground 1 has no prospect of success.

50 Grounds 2 and 3 seek to challenge the reasons of her Honour with respect to the construction of the Guarantee on the basis that the present claim of Simonds against Longreach is made under cl 15(f) of the ERA whereas the guarantee only covered obligations under cls 15(d) and 15(e) of the ERA, and the language of the Guarantee was ambiguous and ought be construed in favour of the Guarantor.

51 With respect to the principle of construction, Longreach relied upon the following statement made in Ankar Pty Ltd v National Westminster Finance (Australia) Limited:

In law, as in equity, the traditional view is that the liability of the surety is strictissimi juris and that ambiguous contractual provisions should be construed in favour of the surety. The doctrine of strictissimi juris provides a counterpoise to the law's preference for a construction that reads a provision otherwise than as a condition. A doubt as to the status of a provision in a guarantee should therefore be resolved in favour of the surety.[19]

52 It is true that the claim made by Simonds falls under cl 15(f)(ii) to the effect that, in the event of a Termination Event, Longreach was obliged to repay to Simonds 'at the rate of $4,000.00 for each unsold/undeveloped Lot to a maximum of the funds paid by Simonds in or towards the Fee as at the date of termination'. As her Honour noted,[20] because there were 84 unsold lots, this entitled Longreach to a full refund of the Fee ($300,000). The right enjoyed by Simonds under cl 15(f)(ii) of the ERA was a right that was only enlivened upon the termination of the ERA; that is, it was an 'accrued right' under cl 15(d) of the ERA which arose after the ERA was at an end.

53 Clause 1 of the Guarantee, set out above, guarantees the due and punctual performance by Longreach of Longreach's obligations under cl 15(d). It thus includes Longreach's obligations with respect to the accrued rights enjoyed by Simonds. Those accrued rights include the right to repayment of the Fee under cl 15(f)(ii). There was no need for the Guarantee expressly to refer to cl 15(f)(ii) and there is no ambiguity in the language of cl 1 of the Guarantee.

54 I consider that her Honour was correct when she concluded that cl 1 of the Guarantee did not need expressly to refer to cl 15(f)(ii) for the obligations under cl 15(f)(ii) to be covered by the Guarantee. I also consider that her Honour was correct in concluding that the language of the Guarantee was relevantly unambiguous. There is thus no occasion for the principle of construction favouring the surety to be applied.

55 In my view, Grounds 2 and 3 have no prospect of success.

56 I consider that this is indeed one of those rare cases in which the appeal is wholly devoid of merit and it should not be permitted to proceed by means of a reinstatement. As Gummow and Hayne JJ said in Jackamarra v Krakouer, in discussing whether an appeal might be 'arguable':

It is important to understand what is meant in this context by 'arguable'. If it means no more than that counsel, acting responsibly, can formulate an argument which can properly be advanced in support of the appeal, the test is too loose; if it is clear that that argument will fail, the appeal should not proceed. To permit it to proceed is to subject the respondent to the many costs of litigation needlessly and is to occupy the courts when they could be occupied more productively.[21]

57 As mentioned above, the Court was informed that the sole director of Longreach, Mary Irving, had died recently. This raises the serious question of who had the authority to give instructions, on behalf of Longreach, to continue with the application for reinstatement. The Court was not provided with any sensible answer to this question.

[1] Simonds Homes v Longreach Family Living [2012] VSC 629 ('Reasons').

[2] More particularly, 'the Land' was defined as that known as Woondella Park, SaleMaffra Road, Sale, 3850 comprising Lot 1 on Plan of Subdivision No. 316517A, and Ca 96 Parish of Sale situate at 1460-1486 Sale-Maffra Road, and Cemetery Road, Sale. The Land was identified in the plans comprising Schedule 1 to the ERA.

[3] This was attached as Schedule 2 to the ERA.

[6] Initially Simonds and Madisson claimed damages by reason of Longreach's repudiation of the ERA in the sum of $1,567,200.

[7] Reasons, [33]. However, her Honour agreed with Longreach that the failure of SESI to make a further advance as anticipated by the parties was not a revocation of finance.

[12] (1998) 195 CLR 516.

[13] Lagarna Pty Ltd v Bridge Wholesale Acceptance Corp (Aust) Ltd [1995] VicRp 9; [1995] 1 VR 150, 152.

[16] Ibid; Luxmore Pty Ltd v Hydedale Pty Ltd [2008] VSCA 212, [3].

[17] Longreach relied upon the meaning in Black's Law Dictionary, (Kluwer Law International, 7th ed, 2000), 1321 and the Oxford English Dictionary (Clarendon Press, 2nd ed, 1989), 838 where 'revocation' includes 'to annual, repeal, rescind, cancel'.

[19] [1987] HCA 15; (1987) 162 CLR 549, 561. This statement was affirmed in Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242, 256.

[21] (1998) 195 CLR 516, 529 (dissenting in the result).