The terms of the agreement
9 The agreement took the form of a letter from 'Magnolia Credit' to The Agency. The letter enclosed a term sheet and an annexure setting out Standard Terms and Conditions. The letter was dated 30 January 2020. It began as follows:
Magnolia Private Capital Pty Ltd via its nominated entity, MCL … is pleased to advise you that your application for finance has been approved on the terms detailed within this Letter, the attached Term Sheet and its Annexures (Offer).
10 The letter went on to say that once the Offer had been executed, 'you will be bound by the terms but note that we will not have any obligation to provide finance until and unless the formal loan and security documentation have been executed and all obligations under those documents have been complied with'.
11 The Offer as described was accepted by The Agency executing a form of acceptance provided at the end of the Offer. The form of acceptance stated, amongst other things:
We hereby accept the terms and conditions set out in this Offer and its incorporating Annexures.
12 The result of the use of the term 'Offer' in this way is that, somewhat awkwardly, it comes to be the term used to describe both the offer made by MCL and the agreement created by the acceptance of that offer. Indeed, in submissions for the parties the term 'Offer' was used to refer to the agreement. Consistently with this approach, the Standard Terms and Conditions included as an annexure to the letter contain the following provision in cl 1(b):
The Lender is offering to enter into an agreement with the Borrower comprising of the following documents that are set out in the Lenders Offer terms (which we describe as the, 'Term Sheet', 'the loan', 'the Offer', 'Offer terms' or 'these terms'):
i. the cover letter;
ii. the Loan Summary/Term Sheet;
iii. this Annexure;
iv. any other document which is annexed to or referred to in the Loan Summary or this Annexure; and
v. any other document which the Lender notifies to the Borrower as being part of the Offer.
13 Therefore, when it comes to the Standard Terms and Conditions (see below), it is important to bear in mind that the capitalised term Offer refers to the offer prior to its acceptance as well as to the agreed terms once there is acceptance (that is, the agreement created by acceptance of the offer).
14 The Term Sheet (also described as Annexure 1) included the following terms:
(1) The date of offer was specified as 30 January 2020.
(2) The Lender was specified as MCL 'and related entities (or its nominee)'.
(3) The Borrowers were specified as The Agency and group subsidiaries.
(4) The loan amount was specified as:
Up to $15,000,000 subject to LVR condition to be advanced in two tranches:
1. Tranche A - capped at $12,300,000.00;
2. Tranche B - capped at $2,700,000.00.
(5) Financial Close was specified as '31 March 2020 and subject to the conditions of this Offer'.
(6) The purpose of the loan was stated as to Tranche A to refinance existing Macquarie Bank debt and for working capital purposes and as to Tranche B to be used for working capital, to be approved by the Lender.
(7) There were provisions as to interest that applied based upon the LVR which was specified as:
As at the drawdown date, the Facility Limit must be no more than 60% of the current market value of the Rent Roll of the Borrower Parties to be calculated based on the prior 3 month rolling average of the rent roll to the satisfaction of the Lender.
(8) There was a summary of the estimated security which included an estimated value of the Rent Roll of $23,500,000 and a specified LVR at 60% showing a corresponding estimated loan amount of $14,100,000. The estimate referred to 'ASX 4C announcement date 30 January 2020'.
(9) There were a number of special conditions including:
1. Lender to be satisfied with the most recent monthly Rent Roll Report;
…
12. any other conditions precedent usual for a facility of this type and nature.
(10) There were a number of matters listed as 'Information Undertakings' as follows:
1. a copy of the Borrower's Rent Roll Book Report detailing amongst other things, the number of properties managed, the number of properties with rental arrears, the average management fee %, number of landlords and average weekly rent, the property management and other income received each month;
2. a copy of the Borrower's Recipient Created Tax Invoice (RCTI) received by the Borrower from the Aggregator and an electronic excel copy of the commission payments each month;
3. Updated report relating to achievement of KPIs by the Borrower and each Guarantor and statement of Rent Roll figures required for the calculation of the LVR to be provided within 5 days of month end and updated monthly financial statements for the Borrower to be provided within 14 days of month end; and
4. any other information that the Lender requires.
(11) There were specified Loan Fees and Charges expressed as follows:
Establishment Fee - a fee to be paid by the Borrower to the Lender as an establishment fee for this loan. The Establishment Fee is due and payable by the Borrower on the occurrence of Financial Close. The Establishment Fee is to be capitalised at the commencement of the initial term of the loan.
2.0% of the Facility Limit
Withdrawal Fee - a fee to be paid by the Borrower in the event that the Borrower does not proceed with the loan after issue of final execution copies of Loan Documentation on usual terms for a facility of this type and nature and negotiated in the usual course (and after provision of valuation that is reasonably satisfactory to the Borrower)
1.0% of the Facility Limit
Early Withdrawal Fee - a fee to be paid by the Borrower in the event the Borrower does not proceed with the loan after the Offer is accepted in accordance with clause 9 of Annexure 2
0.5% of the Facility Limit
Loan Documentation Fee - a fee to be paid by the Borrower to us (or our solicitor) for the loan documentation that has been prepared for this Loan. This fee is payable at or prior to the entry into this loan or the advance by the Lender of the Loan Amount. This fee is only an estimate and may vary depending on the actual cost charged by our solicitor.
At Cost
Due Diligence Fee - a non-refundable fee to be paid by the Borrower to the Lender. This fee is due by the Borrower on execution of this Offer and will be payable on the sooner of Financial Close of the Debt Facility or termination of this Offer.
$10,000
Annual Review Fee - a fee that may be charged by the Lender to the Borrower on each anniversary date from Financial Close. This is payable immediately upon of the upon demand by the Lender.
2.00% of the outstanding balance
Minimum Interest Amount - the Lenders must earn a minimum interest amount equivalent to 12 months interest on each drawdown.
12 months interest
15 It is the Establishment Fee, Due Diligence Fee, Early Withdrawal Fee and the Loan Documentation Fee that are relevant for present purposes. It should be noted that the Term Sheet did not simply specify the amounts that were applicable for each of these fees. It also specified the circumstances in which each fee would be payable. That is to say, it set out operative terms that would determine when liability to pay the fees would arise.
16 The Standard Terms and Conditions were included as a separate annexure to the letter. They set out detailed provisions in terms that were generic in the sense that they did not refer to MCL or The Agency by name and contained no provisions that were specific to the circumstances of the particular funding referred to in the letter.
17 The Interpretation provision of the Terms and Conditions stated that terms italicised in the Term Sheet will have the same meaning when used in the Standard Terms and Conditions (cl 1(a)). However, terms are only italicised in the Standard Terms and Conditions and it appears that the intention was for those italicised terms to refer to the Term Sheet. So, for example, the term 'Magnolia, we, us' is defined to mean 'the Lender or its nominee'. The term 'Borrower Parties' is defined to mean 'the Borrower and any Guarantor'. The term 'Upfront Fees' is defined to mean 'the Establishment Fee, Due Diligence Fee and Risk Fee'. Each of these (and other) italicised terms in the Terms and Conditions are terms that are set out in the Term Sheet.
18 As to Loan document preparation, the Standard Terms and Condition provide (cl 5(a) and (b)):
At your expense we will instruct our solicitor to prepare all loan and security documentation ('the Formal Loan Documents') which will contain the provisions that we require.
By signing the Offer you authorise us to instruct our solicitor to proceed with the preparation of the loan documentation and acknowledge that all fees, costs and outlays charged by our solicitor are immediately payable by you upon demand by our solicitor, even if the loan does not proceed for any reason whatsoever (including withdrawal by the Lender).
19 As to Upfront Fees, the Standard Terms and Conditions provide (cl 7):
a) We require you to pay the non-refundable Upfront Fees upon signing the Offer.
b) If we agree to defer the Upfront Fees until drawdown of the loan, the Upfront Fees are payable by you whether or not the loan proceeds (whether or not it is you or us that withdraws from this loan).
c) Valuations and Formal Loan Documents may not be ordered until the Upfront Fees are paid by you (or deferred in accordance with the preceding paragraph).
20 As to Withdrawal of the offer by MCL, the Standard Terms and Conditions provide (cl 8):
(a) We may withdraw or revoke the Offer at any time if:
i. settlement is not affected [sic] within 7 days of acceptance of this Offer;
ii. circumstances or facts arise or come to our attention which, in our opinion may be prejudicial to our interests or result in a situation where it would, in our opinion, be uncommercial to provide the loan pursuant to the Offer.
b) You agree that we shall incur no liability whatsoever to you if we withdraw or revoke the Offer.
21 At this point it may be noted that the terms of cl 8 do not confer a general contractual right on the part of MCL to withdraw. Instead, cl 8 takes the form of specifying particular circumstances in which MCL 'may' (that is, at its discretion) withdraw or revoke the Offer.
22 It is clear from its terms that cl 8 is dealing with instances that include where MCL withdraws after the Offer has been accepted because it refers to withdrawal within seven days of acceptance of the Offer. The use of the term 'withdraw' does suggest that cl 8 is conferring a unilateral right, despite acceptance of the Offer, to bring to an end the effect of its acceptance. It appears that the potential to 'revoke' the Offer would apply even before acceptance. The provision (unlike most of the provisions in the Standard Terms and Conditions) appears to be using the term Offer in both senses (the offer extended by the sending of the letter and the Offer being the agreement brought into existence by its acceptance). In consequence, cl 8(b) would operate to relieve MCL of any liability where there was a revocation of the Offer before its acceptance.
23 It must be doubtful whether, in the particular circumstances of this case, the right specified in cl 8(a)(i) would arise because of the express provision in the Term Sheet that Financial Close is '31 March 2020 and subject to the conditions of this Offer' (being a date many weeks after acceptance). However, that is not an aspect that was in issue between the parties because no reliance was placed by MCL upon the terms of cl 8(a)(i). Rather, the claim made by MCL was that it was entitled to withdraw under cl 8(a)(ii) and that it did so.
24 Clause 8(a)(ii) enabled MCL to withdraw based upon its opinion as to the commerciality of proceeding based upon facts and circumstances known to MCL. Also, it is to be noted that cl 8(a)(ii) is dealing with circumstances that provide a foundation for the formation of the opinion that it would be 'uncommercial to provide the loan pursuant to the Offer'. It is not dealing with circumstances where MCL is unable to provide the loan because it does not have the funds to do so. Therefore, cl 8 is not a provision that might be relied upon by MCL to withdraw from its agreement to provide finance to The Agency on the basis that it did not have the funds to advance. As we will see, the terms of cl 9(g) are consistent with this position because they provide that The Agency is not liable to pay the fees if the 'Facility' is exclusively cancelled because the Lender did not have the capital to fund the loan.
25 The precise scope of what may be embraced by the term 'commercial' was not explored by the parties. MCL maintained that concerns were raised in the course of its due diligence and it was those matters that caused it to exercise its right to withdraw under cl 8. The Agency disputed those claims as a matter of fact.
26 However, the scope of the circumstances in which cl 8 permitted withdrawal by the Lender may assume significance for the overall construction of the Terms and Conditions because of the claim by MCL that it was entitled to payment of fees if it withdrew under cl 8. As is considered below, the broader the circumstances in which MCL may withdraw then perhaps it may be said to be less likely that the parties intended that it conferred a right to withdraw on the basis that The Agency must still pay some or all of the fees provided for in the Offer. In that regard, it may be significant that cl 8(b) provides that there will be no liability on the part of MCL if it withdraws, but there is no reference in cl 8 to the Borrower being liable for fees if the Lender withdraws. Whether that is so is addressed below.
27 Finally, it may be noted that cl 8 does not itself contain any provision for the payment of fees in consequence of withdrawal under that clause.
28 Next, there is cl 9. It is at the heart of the issues in dispute. It is expressed as follows (including the heading):
Costs if you withdraw [from] the Offer after acceptance [of] the Offer.
a) Once you accept this Offer you agree that you cannot withdraw from the Offer without our prior written consent.
b) If, after you accept this Offer, the Offer is withdrawn prior to the Formal Loan Documents' being issued then you agree to pay on demand:
i. any unpaid Upfront Fees (if any);
ii. the Valuation Fee;
iii. the full amount of the Loan Documentation Fee;
iv. any other costs and expenses incurred by the Lender including (but not limited to) any costs incurred as referenced in the Special Conditions; and
v. 33% of the Early Withdrawal Fee.
c) If, after you accept this Offer, the Offer is cancelled after the Formal Loan Documents have been issued but before the final execution version of the Formal Loan Documents are issued, then you agree to pay on demand:
d) any unpaid Upfront Fees;
i. the Valuation Fee;
ii. the full amount of the Loan Documentation Fee;
iii. any other costs and expenses incurred by the Lender including (but not limited to) any costs incurred as referenced in the Special Conditions; and
iv. 100% of the Early Withdrawal Fee.
e) If, after you accept this Offer, the Offer is cancelled after the final execution version of the Formal Loan Documents are issued but before the Loan Amount has been deposited into trust, then you agree to pay on demand:
i. any unpaid Upfront Fees;
ii. the Valuation Fee;
iii. the full amount of the Loan Documentation Fee;
iv. any other costs and expenses incurred by the Lender including (but not limited to) any costs incurred as referenced in the Special Conditions; and
v. 100% of the Withdrawal Fee.
f) If the Offer is cancelled by you after the Loan Amount has been deposited into trust, which will not occur without the consent of the Borrower, then you agree to pay on demand:
i. any unpaid Upfront Fees;
ii. the Valuation Fee;
iii. the full amount of the Loan Documentation Fee;
iv. any other costs and expenses incurred by the Lender including (but not limited to) any costs incurred as referenced in the Special Conditions;
v. 100% of the Withdrawal Fee; and
vi. the costs of funds fee, which is the cost incurred by us in obtaining the loan amount from our investors which is equal to one months' interest at the normal interest rate.
(collectively 'the Costs')
g) You agree that you are liable to pay the Costs on demand even if we have agreed to defer the payment of any of the Costs until drawdown of the loan amount, unless it can be demonstrated by the Borrower that the Facility was exclusively cancelled because the Lender did not have the capital to fund the Loan, in which case the Borrower will be reimbursed the Costs.
h) You agree that the Costs are a genuine pre-estimate of the loss that we will suffer if you withdraw from the Offer.
i) You agree that should the Costs not be paid within 7 days of being invoiced or demanded, the Costs will attract interest at 15% per annum.
j) You agree that you will be liable for all recovery costs, including legal fees, on an indemnity basis, should the Costs not be paid within 7 days of invoicing.
29 Plainly there is an error in the paragraph numbering at cl 9(d) and its provisions should form part of cl 9(c).
30 It may also be noted that the Standard Terms and Conditions provide that headings are for reference only and are not intended to affect the construction or interpretation of the agreement.
31 One of the main issues between the parties concerning the construction of cl 9 is whether it applies to a case where MCL as Lender withdraws from the Offer, particularly if MCL withdraws in the exercise of the rights conferred by cl 8.
32 Of course, cl 9 must be read in the context of cl 8 which, as has been noted, deals with withdrawal or revocation by MCL. Clause 9 begins by stating in sub-clause (a) that withdrawal from the Offer (that is, the agreement) by the Borrower requires the consent of MCL. This suggests a focus upon the circumstances in which the Borrower may withdraw. If so, having dealt with withdrawal by MCL in cl 8, the Standard Terms and Conditions then deal with withdrawal by the Borrower.
33 Thereafter, the sequence of provisions in cl 9 (noting that (d) is part of (c)) is as follows:
(1) (b) deals with withdrawal prior to Formal Loan Documents being issued;
(2) (c) deals with cancellation after Formal Loan Documents have been issued but before the final execution version of those documents;
(3) (e) deals with cancellation after the final execution version but before the Loan Amount has been deposited into trust; and
(4) (f) deals with cancellation 'by you' after the Loan Amount has been deposited into trust.
34 The evident scheme of the provisions is that they provide for a greater burden of fees the later the occurrence of the withdrawal or the cancellation in the course of performance of the Offer.
35 Different terminology is used in sub-clause (b) compared to the other sub-clauses. It uses the term 'withdrawn', being the same terminology used in cl 8. Thereafter, the term 'cancelled' is used in the various sub-clauses up until sub-clause (h). It refers to the identified 'Costs' being a genuine pre-estimate of the loss that the Lender will suffer 'if you withdraw from the Offer'.
36 For reasons explained below, the reference to Costs is to the fees that are to be paid under any of the sub-clauses (b) to (f). In that context, there are two points to be made about the way sub-clause (h) is expressed. First, it uses the term withdraw from the Offer to refer to Costs that are to be paid under provisions that are expressed to apply if the Offer is 'cancelled'. This mixing of terminology indicates that the terms are used without discrimination. Second, and significantly, it refers to pre-estimate of loss 'if you withdraw from the Offer' (emphasis added). The reference to 'you' is to the Borrower (that is, The Agency). The language of cl 9(h) of 'you withdraw' may be contrasted with the language of cl 8 of 'We may withdraw'. It is consistent with the language of cl 9(a) 'you cannot withdraw'. Therefore, the provision appears to contemplate, at least, that the agreement about genuine pre-estimate of loss binds the Borrower and not the Lender. However, it is equivocal as to whether the earlier provisions giving rise to the liability to pay the Costs also contemplate their application in the case of withdrawal by the Lender. As has been indicated, that aspect is addressed below.
37 Although different terminology is used ('withdrawn', 'cancelled', 'cancelled by you') the sequence of the provisions would indicate to a reasonable reader that it is dealing with the same type of activity at different stages. It would not be logical if each stage in the sequence was referring to a different type of activity. Commercially unlikely consequences would follow. For example, if there was a material distinction between the terms withdrawal or cancellation then it would mean, for example, that if there was a cancellation that was not a withdrawal that occurred prior to formal loan documentation then there would be no provision that would apply. There is no apparent reason why there would be such a distinction that would leave a gap in the application of the clause. It would mean that there was a liability to pay upon withdrawal by the Borrower (which can only occur with consent of MCL) but no provision that would apply in the event of a cancellation by the Borrower.
38 Further, it would be illogical if cl 9(b) applied to withdrawal by either MCL or by the Borrower, but later provisions referring to cancellation did not. There is no evident reason why the staged character of the clause would not apply. In short, its structure indicates that either the whole of cl 9 applies to withdrawal by either party or the whole of the provision is confined to the Borrower.
39 There are other aspects of cl 9 which point to its application to withdrawal (or cancellation) by either party.
40 Firstly, there is the reference in cl 9(f) to 'cancelled by you'. It may be contrasted with the earlier sub-clauses where the reference is simply to 'is cancelled'. This difference suggests that the earlier parts of the provision apply to cancellation by either party but cl 9(f) is dealing only with cancellation by the Borrower. The proposition that the language is significant is supported by the whole of the opening language to cl 9(f) which is as follows:
If the Offer is cancelled by you after the Loan Amount has been deposited into trust, which will not occur without the consent of the Borrower, then you agree to pay on demand [the Costs].
41 The words 'which will not occur without the consent of the Borrower' hark back to cl 9(a). Those words appear to be included to remind the reader of the Standard Terms and Conditions that the cancellation of the Offer by the Borrower can only occur with the consent of the Lender. This appears to be a further instance that indicates that the terms 'cancelled' and 'withdraw' are used interchangeably.
42 Notably, similar language to that contained in the opening words of sub-clause (f) is not to be found in the earlier sub-clauses which simply refer to the Offer being cancelled. The difference suggests that the earlier provisions were expected to apply to cancellation by the Lender as well as cancellation by the Borrower with the requisite consent.
43 Secondly, there is the language used in cl 9(g). For convenience of reference, I will set it out again. It says:
You agree that you are liable to pay the Costs on demand even if we have agreed to defer the payment of any of the Costs until drawdown of the loan amount, unless it can be demonstrated by the Borrower that the Facility was exclusively cancelled because the Lender did not have the capital to fund the Loan, in which case the Borrower will be reimbursed the Costs.
44 Sub-clause (g) creates an obligation to pay the Costs unless the cancellation of the Offer was because MCL as the Lender did not have the funds (in which case there would be a reimbursement). The terms of cl 9(g) and the nature of the qualification reinforce a construction of cl 9 to the effect that the reference to '(collectively 'the Costs')' at the end of sub-clause (f) refers to the costs that are payable as described in each of the preceding sub-clauses (see below). It would be odd if the obligation to pay the Costs on demand subject to the qualification only applied to the case described in cl 9(f). There is no evident commercial reason why it should only arise in such a case, particularly as cl 9(f) deals with an instance where the Loan Amount has been deposited into trust. It would confine the operation of cl 9(g) to those instances where the qualification would not apply.
45 Clause 9(g) goes on to provide that there is no liability to pay the Costs if the Borrower could demonstrate that the cancellation of the facility was because the Lender did not have the capital to fund the loan. A qualification of that kind suggests that it may be the Lender who has cancelled and the Borrower is being provided with the benefit of a qualification to the circumstances in which it would have to pay the Costs. If indeed the Lender (MCL) does not have the money then it is difficult to see how that would lead to the Borrower (The Agency) as distinct from the Lender cancelling the Offer and being liable to pay the Costs specified in the clause as a result.
46 Turning attention then to the end of cl 9, it has a series of provisions which are expressed as 'you agree' (see sub-clauses (g) to (j)). Although, each of those provisions applies only to the Borrower they do so in a way that could deal with consequences of cancellation by either party. They each apply to 'the Costs' being a term that is defined at the end of sub-clause (f). The defined term 'Costs' is set out at the end of sub-clause (f) using the words '(collectively "the Costs")' suggesting it applies to the list of costs in that sub-clause. However, it is to be noted that the list in sub-clause (f) encompasses the full set of costs referred to in earlier provisions. Given the form of cl 9 as a whole it would be odd if the protections afforded by sub-clauses (g) to (j) were confined to the circumstances addressed by sub-clause (f). There is no evident commercial purpose that would be served by confining them to cl 9(f). They apply equally to instances in which there was a liability to pay by operation of sub-clauses (b) to (e).
47 The manner in which cl 9(h) operates has already been addressed.
48 For those reasons, the terms in which sub-clauses (g) to (j) are expressed apply to the Costs in the earlier sub-clauses and reinforce the conclusion that sub-clauses (b) to (f) are dealing with the same type of activity (whether it be described as withdrawal or cancellation) occurring at different stages of the process of performing the Offer.
49 On that approach, the fees (or, as described in the clause, the Costs) that the Borrower must pay increase the further along the process of performance of the terms of the Offer that there is a cancellation. Which is the final aspect of the clause to be considered in determining whether it applies to cancellation by either party or just to cancellation by the Borrower. The scheme of increasing costs to be paid by the Borrower is consistent with either construction, provided the alternative where it applies to the Lender is limited to instances where the Lender is exercising rights under cl 8 and those rights are reasonably confined. A confined application of the circumstances in which it was 'uncommercial' to proceed because of facts that arise or come to the attention of the Lender would mean that it would be commercially logical for the Borrower to bear the Costs as provided for in cl 9.
50 It can be seen that not all incidents of cl 9 point in the same direction when it comes to its construction. However, in the result the distinct language used in cl 9(f) which is not to be found in the other provisions is the most significant aspect of the clause. It makes clear that it is the only provision that applies only to cancellation by the Borrower.
51 For those reasons, the provisions of cl 9 (other than cl 9(f)) should be construed as applying to withdrawal or cancellation by the Lender in the exercise of the contractual right conferred by cl 8 or by the Borrower with the consent of the Lender as required by cl 9(a). As to the need for consent if the Borrower is withdrawing or cancelling, there is no indication that the provisions in sub-clauses (b) to (e) were intended to confer a contractual right on the part of the Borrower to withdraw with the consent of the Lender. Any such withdrawal would be in breach of the Terms and Conditions and would not be the kind of circumstance provided for by cl 9. In such a case, MCL would have its contractual remedies for breach of contract. The assessment of damages is likely to be undertaken by reference to the fees that would be payable if there had been withdrawal or cancellation with consent as required by cl 9. However, MCL would not be confined to claiming the fees. These matters need not be explored further because, as is explained below, the claim by MCL was confined to a claim to the fees in accordance with the terms of the Offer. There was no claim to damages.
52 Therefore, the terms of cl 9(g) mean that there is an expressly agreed contractual liability to pay the Costs as specified in the relevant sub-clause if MCL exercised its right to withdraw under cl 8 of the agreement. Further, if such a right is exercised then there is no liability to pay the Costs and any Costs that have been paid must be reimbursed in any case where the Borrower can demonstrate that 'the Facility' was cancelled only for the reason that the Lender did not have the capital. The reference to 'exclusively cancelled' for that reason is to be noted. For a party in the position of The Agency to claim that it should not bear the Costs it must be shown that the lack of capital to fund the Loan was the only reason for the cancellation. Otherwise, if the cancellation is the act of the Borrower then there is a liability to pay the Costs on demand.
53 The next provision of relevance is cl 10(a) of the Terms and Conditions. It provides that the Borrowers will deal exclusively with MCL. It is expressed in the following terms:
The Borrower Parties agrees to deal exclusively with us in relation to any type of debt finance arrangement similar to the Offer and no other arrangers, advisors, brokers, financiers or other parties will be appointed, employed, solicited or briefed to approach, procure, structure or negotiate the [sic] any of the funding set out in this Offer while this engagement remains in existence.
54 The reference to 'debt finance arrangement similar to the Offer' is to be noted. The exclusivity provided for is confined by that language.
55 As to breach of the exclusivity provision, cl 10(c) of the Terms and Conditions provides:
In the event of any breach of this provision this will constitute an automatic default of this Offer and the terms contained herein, and the Lender will thereby be entitled to withdraw and/or revoke the Offer and thereafter the provisions of this agreement, including clause 9, will apply.
56 Finally, it may be observed that there is a no waiver provision in cl 23.
57 Clause 27(b) of the Terms and Conditions provides as follows:
Any advance of the Loan Amount is conditional upon complete satisfaction of the loan, security and any other matters we consider are important in our absolute discretion.
58 Reliance was placed upon that provision to support the actions of MCL in terminating the agreement. Precisely what was to be made of that provision was not articulated. It is a provision that should be considered in its immediate context. Clause 27(a) provides:
This is not an unconditional Offer for financial accommodation and should not be relied upon as such by any party.
59 Clause 27(c) provides:
The Offer is a brief summary of facility terms and the full terms will be outlined in the formal loan documents.
60 It may be noted that these provisions appear to emphasise that there will be more detailed provisions in the loan documentation to be provided and that the agreement that comprises the Offer is concluded on that basis. However, there was no claim by either party that that the agreed terms lacked the requisite certainty to be enforceable. Indeed, the claim by MCL presupposed that the Offer was enforceable according to its terms. Therefore, in context, the terms of cl 27(b) do no more than state, in effect, that the agreement is to be more fully documented and MCL reserved the right to include further matters of usual detail. It is necessary to read the terms of cl 27(b) in that way in order for the Offer to be binding as the parties evidently intended.