Plaintiff v Defendants

1 This is an action by the plaintiff ('Mr Allsopp') alleging failure by the first defendant ('Elly Property') to pay amounts due under a Deed of Loan entered into on or about 6 October 2022 ('Loan Deed'). The named parties to the Loan Deed are Steven Allsopp ('the Lender'), 3 Property Group Holdings 2 Pty Ltd (now Elly Property) ('the Borrower') and Gary James Kelly and Jaime Charles Farrelly ('the Guarantors').

2 The Loan Deed includes various defined terms. Where in these reasons the defined terms are referred to, the same definitions are adopted.

3 Pursuant to the Loan Deed, Mr Allsopp agreed to advance $2,900,000.00 ('Loan Amount') to Elly Property for the 'Limited Purpose' defined in item 8 of the Schedule to the Loan Deed ('Schedule'):

a commercial purpose of financing the development of property and working capital of property development companies in Australia.

4 There is no dispute that the Borrower, Elly Property, and the guarantors, are bound by the terms of the Loan Deed.

5 At issue in the proceeding is the proper construction of the Loan Deed. In particular, whether the loan has fallen due, whether there has been a breach and whether certain notices and demands made on behalf of Mr Allsopp, for repayment of the loan have been given in accordance with the Loan Deed with the consequence that Mr Allsopp is entitled to judgment against the defendants.

6 The Loan Deed provides that the Borrower, Elly Property, is required to pay all 'Secured Money', meaning 'the Loan Amount and all other money that the Borrower agrees to pay under any provision' of the Deed including interest, to the lender on or prior to the Expiry Date (as defined in item 6 of the Schedule) being:

Subject to Special Conditions, the earlier of:

(1) 12 months from the date the Loan Amount is advanced;

(2) the date that is 14 days following written demand from the Lender to the Borrower if an Event of Default occurs; and

(3) the day on which an Insolvency Event occurs.

7 On 6 October 2022 Mr Allsopp transferred $2.9 million to Elly Property. The Expiry Date was 6 October 2023. Elly Property has not repaid the $2.9 million. Mr Allsopp's primary case is that it should have done so on 6 October 2023.

8 The Loan Deed requires the payment of interest on the first business day of each calendar month. Interest on the Loan Amount for the month of December in the sum of $24,166.67 was due to be paid on 2 January 2024. Payment of that amount was not made until 8 January 2024.

9 Mr Allsopp relies on the late payment of interest in the alternative as an Event of Default, as defined in clause 1.1 of the Loan Deed, entitling him to repayment of the Loan Amount and interest.

10 Under the Loan Deed, Mr Kelly and Mr Farrelly guaranteed:

(i) the punctual performance and observance by the Borrower of all its obligations under this Deed; and

(ii) the punctual payment of all payments owed pursuant to this Deed by the Borrower to the Lender and to third parties.

12 On 2 October 2024 the parties filed an agreed list of issues. The list of issues does not displace the need to determine the case by reference to the pleadings but it does provide a helpful checklist of the matters in dispute.

13 Prior to trial the parties filed an agreed chronology and a statement of agreed facts. The trial proceeded on the basis of the facts and matters set out in those documents.

14 Although prior to trial oral evidence had been anticipated, in the course of opening submissions Counsel agreed that oral evidence was unnecessary and that the outcome of the proceeding turns on the documents.

15 In the course of the trial certain of the issues raised on the pleadings and in earlier correspondence on behalf of the defendants were expressly not pressed. It is necessary to identify those matters which, once identified, may be put to one side.

16 The defence alleges that clause 7 of the Loan Deed contains a dispute resolution clause which prohibits any party from commencing proceedings unless and until they have endeavoured to agree to a resolution in good faith. The defence alleges the plaintiff has not endeavoured to resolve the dispute in good faith and for that reason the claim should be dismissed or stayed. Similar allegations are referred to in the reply and in the rejoinder. Clause 7 was not mentioned in submissions filed on behalf of the defendants prior to trial. During oral opening Counsel for the defendants confirmed the pleaded allegations relying on clause 7 are not pressed.

17 The defence includes an allegation the plaintiff affirmed the Loan Deed by accepting and continuing to accept interest payments under the Loan Deed each month up to trial. Topics 3.5 and 3.6 in the agreed list of issues dealt with this subject matter. In closing submissions Counsel for the defendants confirmed the affirmation allegation is no longer relied on by the defendants.

18 Although not referred to in the pleadings, in correspondence in late 2023 Mr Farrelly questioned the authority of Ms Schmidt to act as an agent on behalf of Mr Allsopp when sending communications on his behalf. During oral opening Counsel for the defendants advised no issue is taken concerning the actual authority of Ms Schmidt to act as agent on behalf Mr Allsopp. There is however a separate question that remains live, namely, whether actions taken by Ms Schmidt in her capacity as authorised agent, in particular the sending of notices on behalf of Mr Allsopp, constitute effective notice pursuant to the Loan Deed.

19 When the facts and matters in the agreed documents for trial are taken together with the pleadings and following clarification of defences no longer pressed, the issues that separate the parties are both confined and technical.

20 Repayment is dealt with in clause 4 of the Loan Deed. Clause 4.1 provides:

(a) The Borrower must pay all Secured Money to the Lender on or prior to the Expiry Date.

(b) The Lender directs that the Borrower pay interest in arrears repayments by monthly instalments on each Payment Date in each and every year.

(c) For clarity, nothing in this Deed prevents the Borrower from repaying the Loan Amount prior to the Expiry Date.

21 The payment of interest is dealt with in clause 3 of the Loan Deed. Clauses 3.1 and 3.2 are in the following terms:

3.1 Calculation

Interest on the Loan Amount and / or other sums or amounts forming part of the Secured Money will be charged at the Interest Rate:

(a) from the dates those funds are advanced or charged to the Borrower;

(b) to the date that all Secured Money is repaid in full to the Lender; and

(c) calculated on the daily outstanding balance of all Secured Money (without charging interest on interest).

3.2 Interest Payments

Interest is to be paid in accordance with clause 4.

22 Clause 10 is titled 'Guarantee and Indemnity'. Clauses 10.1 and 10.2 provide:

(a) In consideration of the Lender entering into this Deed at the request of the Guarantor, the Guarantor guarantees to the Lender:

(i) the punctual performance and observance by the Borrower of all its obligations under this Deed; and

(ii) the punctual payment of all payments owed pursuant to this Deed by the Borrower to the Lender and to third parties.

10.2 Borrower's and Guarantor's Obligation to Pay

In the event of any breach by the Borrower covered by this guarantee, the Lender may proceed to recover the amount claimed as a debt or as damages from any or all of the Guarantors (if more than one) without having instituted legal proceedings against the Borrower and without first exhausting the Lender's remedies against the Borrower.

23 Clause 11.1 is titled 'Special Conditions'. That clause is in the following terms:

The Special Conditions apply to this Deed, and prevail in the event of any inconsistency between the Special Conditions and any other term or condition of this Deed.

24 Item 10 of the Schedule contains the Special Conditions. It is in the following terms:

1. Notwithstanding clause 3.l(a), Interest on the Loan Amount and/or other sums or amounts forming part of the Secured Money will be charged at the Interest Rate from the following date:

(a) if the entirety of the Loan Amount is funded prior to 13 October 2022, 15 September 2022; or

(b) if the entirety of the Loan Amount is not funded prior to 13 October 2022, the dates those funds are advanced or charged to the Borrower.

1. The Lender is required to notify the Borrower, in writing, 30 days prior to the Expiry Date of [12 months from the date the Loan Amount is advanced], if the Lender requires the Secured Monies to be repaid on that Expiry Date.

If the Lender does not provide written notice in this timeframe, then the Expiry Date of [12 months from the date the Loan Amount is advanced] shall not apply and instead this loan shall be rolled over on a calendar monthly basis until new roll over terms are agreed and finalised.

25 The Schedule includes the following additional items:

Item 4 - Service Address:

For the Lender:

Address: 540 Charlemont Road Connewarre VIC 3227

Attention: Steven Allsopp

Email: happypoorfarmer@outlook.com

For the Borrower:

Address: 152/41 Eastlake Parade Kingston ACT 2604

Attention: Jaime Farrelly

Email: jaime@3propertygroup.com.au

For the Guarantor:

Address: 152/41 Eastlake Parade Kingston ACT 2604

Email: jaime@3propertygroup.com.au

Item 5 - Loan Amount AUD$2,900,000.00 together with all other amounts advanced by the Lender to the Borrower (if any) from time-to-time.

Item 6 - Expiry Date Subject to the Special Conditions, the earlier of:

1. 12 months from the date the Loan Amount is advanced;

2. the date that is 14 days following written demand from the Lender to the Borrower if an Event of Default occurs;

3. the day on which an Insolvency Event occurs.

Item 7 - Interest Rate 10% per annum, unless an Event of Default occurs and is subsisting, in which case it is 15% from the date of the Event of Default until the Event of Default is no longer subsisting.

As noted in clause 4.1(b), interest payments are to be made in the first Business Day of each calendar month, for the interest due for the previous calendar month.

Interest is calculated to be $24,166.67 per calendar month, provided an Event of Default has not occurred and is not subsisting.

Item 8 - Limited Purpose A commercial purpose of financing the development of property and working capital of property development companies in Australia.

26 Clause 12 titled 'General' includes a clause dealing with notices (clause 12.1), a governing law clause providing that the laws of Victoria apply (clause 12.2(a)), an amendment clause which provides the deed may be amended only 'by a written document signed by the Parties' (clause 12.4) and an entire agreement clause (clause 12.8).

27 Clause 12.1 titled 'Notices' is in the following terms:

(a) A notice or other communication given under this Deed including, but not limited to, a request, demand, consent or approval, to or by a Party to this Deed:

(i) must be in legible writing and in English;

(ii) must be addressed to the addressee at the Service Address of that Party;

(iii) must be correctly executed by the Party or the Party's solicitor; and

(iv) is deemed to be received by the addressee in accordance with clause 12.1(b).

(b) Without limiting any other means by which a Party may be able to prove that a notice has been received by another Party, a notice is deemed to be received:

(i) if sent by hand, when delivered to the addressee;

(ii) if by post, two Business Days after the date of postage; or

(iii) if sent by email, on the day the email is sent.

(c) If the delivery or receipt is on a day which is not a Business Day or is after 4.00 pm (addressee's time) it is deemed to be received at 9.00 am on the following Business Day.

28 The following definitions are relevant to the disputed issues:

'Event of Default' means any event or occurrence where:

(a) the Borrower fails to pay any of the Secured Money when due; or

(b) the Borrower breaches a term of this Deed or any Security Document; or

(c) the Borrower defaults under any Security Document; or

(d) any warranty or representation made or deemed to have been made under this Deed, or any other written Deed between the Lender and the Borrower proves to have been untrue or misleading when made or deemed to have been made; and/or

(e) this Deed becomes wholly or partly void, voidable or unenforceable.

...

'Parties' means the Borrower, the Lender and, if applicable, the Guarantor and Party means either one of them.

'Payment Date' means the first Business Day of each calendar month.

...

'Representative' of a Party includes an employee, agent, officer, director, auditor, adviser, partner, consultant, joint venturer or sub-contractor of that Party.

'Secured Money' includes the Loan Amount and all other money that the Borrower agrees to pay under any provision of this Deed including interest.

The notices and the demand relied on by Mr Allsopp

29 The primary case for Mr Allsopp is that in accordance with Special Condition 2 of item 10 of the Schedule ('item 10(2)'), written notice was given on his behalf by Ms Schmidt requiring repayment of the Loan Amount more than 30 days before the 6 October 2024 loan Expiry Date. As a result, Elly Property was required by clause 4.1(a) to pay all Secured Money to Mr Allsopp on or prior to 6 October 2023. Elly Property failed to repay the Loan Amount. Mr Allsopp contends that as a result he is entitled to judgment against Elly Property and against the guarantors pursuant to the terms of the Loan Deed.

30 Mr Allsopp gave notice by email, sent by Ms Schmidt on his behalf to Elly Property on 12 August 2023 ('the first notice') and again on 15 August 2023 ('the second notice') that he required the loan to be repaid (collectively, 'the notices').

31 The defendants submit that neither the first notice nor the second notice complied with the requirements of item 10(2) of the Schedule and clause 12.1 of the Loan Deed. The defects alleged in the notices relied on to submit the Loan Amount is not due and payable were helpfully set out in tabular form in the defendant's submissions and were elaborated upon by Counsel at trial:

(a) Both emails were sent by a 'representative' of the lender. The Loan Deed requires the lender to notify the borrower.

(b) In neither case was the notice 'correctly executed'. The emails were not signed by the agent, Ms Schmidt, whether personally or by electronic signature.

(c) In each case the email referred to 28 days' notice. In the case of the second notice, an email from Ms Schmidt, part of the 15 August 2023 email chain included a reference to 30 days. The other email in the chain, an email from Mr Allsopp, referred to his expectation the funds would be 'in there 15th September'. The period of notice in item 10 of the Schedule is not 28 days, it is 30 days. The Expiry Date prior to which 30 days' notice must be given pursuant to item 10(2) of the Schedule is not 15 September 2023 to which the 15 August 2023 email referred, but 6 October 2023.

(d) In each case the email was not addressed to the addressee at the complete service address of that party as per the Loan Deed. The email address to which the notices were sent accurately reflected the email address in the Schedule. However, it did not include all of the addressee details in the 'box' in the Loan Deed.[1]

32 The third notice relied on by Mr Allsopp consists of an email sent by his solicitors on 5 October 2023 ('third notice'). Mr Allsopp relies on the email to contend in the alternative that he is entitled to judgment against Elly Property and against the guarantors by reason of the failure of Elly Property to repay the Loan Amount on 6 November 2023.

33 The third notice provided that on the assumption there had been no effective 30 day notice requiring payment of the Loan Amount on the following day, 6 October 2023 and that the loan would 'be rolled over on a calendar monthly basis', as provided for in the second part of item 10(2) of the Schedule.

34 On that assumption the third notice gave 30 days' notice, requiring repayment of the Loan Amount in full on or before 6 November 2023. Mr Allsopp contends he was entitled to terminate the loan on reasonable notice and that having regard to the terms of the Loan Deed, including the 30 day notice period referred to in the first part of item 10(2) of the Schedule, 30 days notice to terminate and to require repayment constitutes reasonable notice.

35 The defendants did not submit at trial that if the third notice was otherwise effective, that 30 days' notice was not reasonable notice.

36 The defendants contended the third notice was ineffective to require repayment of the Loan Amount because:

(a) The notice was not 'correctly executed'. The email was not signed by the solicitor, whether personally or by electronic signature.

(b) The email was not addressed to the addressee at the complete service address of that party.

37 On 10 January 2024 Mr Allsopp made a demand for immediate payment of all Secured Money under the loan deed ('demand'). The demand by email from Mr Allsopp's solicitors relied on an Event of Default being the failure by Elly Property to pay interest when due on 2 January 2024.

38 The primary case for Mr Allsopp is that as at 10 January 2024 the loan remained in default. That is because although on 8 January 2024 Elly Property paid the interest due on 2 January 2024, it did not remedy the default because it did not pay interest for the six day period of default at the higher rate of 15%.

39 Mr Allsopp submits in the alternative that item 6 of the Schedule to the Loan Deed properly construed entitles him to rely on a past default as an Event of Default even if that default had been remedied by the time of the notice. Accordingly, the 10 January 2024 demand triggered the obligation to repay.

40 In relation to the demand, the defendants submit:

(a) It was not 'correctly executed'. The email was not signed by the solicitor, whether personally or by electronic signature.

(b) There was relevantly no Event of Default subsisting at the time of the purported demand as on a proper construction of the Loan Deed, this is required in order for an obligation to repay the Loan Amount to arise. There is no allegation an Event of Default occurred after 8 January 2024 and Elly Property continued to make monthly interest payments thereafter.

Construction of the Loan Deed notice requirements

(a) The first consideration is the form of the document, being a deed. The principles of interpretation applicable to deeds are those that apply to private documents generally.[2] In construing a private agreement, preference is given to a construction supplying a congruent operation to the various components of the whole.[3]

(b) The second consideration is the nature of the Loan Deed, by reason of clause 10 as a contract of guarantee. As the High Court held in Ankar Pty Ltd v National Westminster Finance (Australia) Ltd ('Ankar'):[4]

the traditional view is that the liability of the surety is strictissimi juris and that ambiguous 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.

(c) The principles of construction of notices are not relevantly different to those governing the construction of contracts. In JPA Finance Pty Ltd v Gordon Nominees Pty Ltd ('JPA')[5] the Victorian Court of Appeal endorsed Lord Steyn's articulation of the principles in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd ('Mannai').[6]

(d) Mannai does not stand for the proposition that strict compliance with notice requirements is never required. In JPA,[7] McLeish JA held:

that 'the judgments in Bond reaffirm that the question whether a contract requires strict compliance with provisions as to notice, in order for a notice given in connection with the contract to be effective, is one of construction of the contract'.

(e) In JPA the Court of Appeal held: [8]

'Neither Tricontinental nor Bond stand for the proposition that notice requirements always require strict compliance. Both of them turned on the language of the relevant contract and, at least to some extent, on its nature as a contract of suretyship or guarantee'.

In this proceeding the Loan Deed is a contract of suretyship or guarantee and therefore Tricontinental Corporation Pty Ltd v HDFI Ltd ('Tricontinental')[9] and Bond v Hongkong Bank of Australia Ltd ('Bond')[10] apply.

(f) Whether 'notice' was validly given affects valuable rights and obligations. For that reason the notice requirements must be complied with strictly.[11] The valuable rights and obligations are:

(i) whether Elly Property is liable to repay $2,900,000;

(ii) whether the guarantors are liable to repay $2,900,000 pursuant to their guarantees; and

(iii) the right to negotiate and agree new rollover terms pursuant to item 10(2) of the Schedule.

42 In Tricontinental, Waddell A‑JA held:[12]

The clear commercial purpose of the provisions is to provide a mechanism whereby liability on the part of [the guarantor] can be established in a way which is unambiguous and certain. It is essential in commercial dealings that provisions of this kind should be applied strictly so that parties know exactly where they stand.

43 The plaintiff also relies for the applicable principles of construction on Mannai and on the decision of the Court of Appeal in JPA.[13]

44 In JPA, after canvassing relevant authorities including Tricontinental, Bond and Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd,[14] McLeish JA with whom Beach and Niall JJA agreed said:[15]

1. Two points emerge from [Tricontinental]. The first is that the question whether strict compliance is required with notice provisions is one of construction of the contract, in particular by reference to the commercial purpose of the provisions in question. The second is that, although the notice in question was not sent in strict accordance with the requirements as to the manner and mode, as distinct from the content, of notices, it is not suggested in the judgments that this was itself fatal to the efficacy of the relevant notice ...
2. Taken together, the judgments in Bond reaffirm that the question whether a contract requires strict compliance with provisions as to notice, in order for a notice given in connection with the contract to be effective, is one of construction of the contract.
3. Neither Tricontinental nor Bond stands for the proposition that notice requirements always require strict compliance. Both of them turned on the language of the relevant contract and, at least to some extent, on its nature as a contract of suretyship or guarantee.
4. The High Court's decision in Pan Foods is to the same effect ...

...

1. The question whether a contractual stipulation as to the mode of giving notice has been complied with may also involve a process of construction of the notice itself. The construction of the contract and the notice raises common issues, especially because both matters concern the same contractual and commercial context.
2. The principles of construction of notices are not relevantly different to those governing the construction of contracts. This Court has endorsed Steyn's articulation of the principles in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd. It is convenient to set out the analysis of Gillard AJA (with whom Winneke P and Buchanan JA agreed) in MLW, which was also endorsed by Warren CJ, Tate and Beach JJA in Salta:

The law should strive to uphold a contract wherever possible to avoid the reproach of being the destroyer of bargains. The principle applies not only to contracts but also to the actions of businessmen. The point has been recently reinforced in the House of Lords in relation to a notice given pursuant to a contract by Lord Steyn in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd. That case concerned a lease and the validity of a notice to determine the lease. The notice wrongly stated the date of termination and the question arose whether it was effective. The Court of Appeal, adopting a strict approach, held that it was not. On appeal, the House of Lords by a majority held that it was sufficient. Lord Steyn formulated a number of propositions and stated with respect to proposition 2 the following:

(2) The question is not how the landlord understood the notices. The construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene.

His Lordship posed the question as follows:

the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind. It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice.

His Lordship noted that the law had moved on from a strict technical approach and said:

Since then there has been a shift from strict construction of commercial instruments to what is sometimes called purposive construction of such documents. ... It is better to speak of a shift towards commercial interpretation. About the fact of the change in approach to construction there is no doubt.

In determining the meaning of the language of commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.

...

1. The only commercial purpose that was said by the respondent to be advanced by a literal construction of cl 10(b) was to ensure certainty in respect of the validity of notices. However, such a commercial purpose is not necessarily to be attributed to every notice provision. It will depend on the nature of the contract. Here, the deed concerns the grant of an option and provides for the manner of its exercise as well as the means of its termination. As the judge said, a valuable right is involved and the consequences of a properly given notice may be significant. Moreover, the deed also provides for a guarantee and so the notice provisions might also be applied in a context not dissimilar from Tricontinental and Bond. Those considerations might suggest that notice delivered to a place or fax number other than those specified in cl 10(b) might not be effective under the contract. But that is not this case. Neither the existence of valuable rights nor the potential application of cl 10(b) in the context of the guarantee suggests a reason why, as well as the notice being delivered to the specified place or fax number, the intended recipient must be addressed in the formal manner set out, rather than being 'addressed' as a matter of substance. Even the surety cases considered above do not adopt so literal a construction. They concern the place to which notice is sent, not the manner of its address. And even then, there are suggestions in both Tricontinental and Bond that the requirement as to place did not demand strict compliance.
2. The evident commercial purpose of the 'addressed to' requirement of cl 10(b) is to ensure that notices are directed to the attention of the parties through their respective solicitors. A notice is required to be delivered to a solicitor's address or fax number on behalf of the intended recipient. No commercial purpose is advanced by requiring that the client party be formally named by way of address, rather than being otherwise apparent as the intended recipient on the face of the notice, and cl 10(b) should not be construed to have that operation. For example, a notice not formally addressed to the intended recipient could state in its text that it is a notice to the intended recipient. It would be highly technical and merely destructive of the parties bargain, if such a notice were to be treated as ineffective.
3. In my opinion, the present notice is in no different position. Although formally addressed to the solicitor rather than to GNPL, the notice is headed 'Re: Notice of Termination' followed by a description of the deed which names GNPL and JPA as parties. The notice refers to GNPL as 'your client'. It is quite clear that the notice, and in particular the statement that JPA terminates the deed with immediate effect, is directed to the attention of GNPL, through its solicitors. That is what a reasonable commercial person would understand, and it is all that cl 10(b) required.

45 The plaintiff submits that when construing both the contract and the notice provisions of the contract, including contracts which include guarantees or sureties, the courts have regard to their commercial context.

46 The plaintiff notes that on the facts of JPA which involved a guarantee, the Court of Appeal accepted that a valuable right was involved but nevertheless decided that strict compliance with the notice provision was not necessary.

47 The plaintiff submits that in this case there is no valuable right. The commercial purpose of the requirement to give 30 days' notice is to give the borrower sufficient time to gather the money and to repay it but nothing more.

48 There is no requirement under the Loan Deed to give notice to the guarantors.

49 Referring to JPA at paragraph [73], the plaintiff submits the analogous question in this case is what commercial purpose is served by requiring Mr Allsopp to sign the notice himself or to do so physically as distinct from electronically. No commercial purpose is served by imposing the formalistic requirements for which the defendants contend with the consequence the loan cannot be required to be repaid.

50 The commercial purpose of notices is to give the lender the right to recover the money if sufficient notice is given. That purpose is not advanced by requiring a signature in person or a physical signature. To impose such a requirement has the effect of defeating the real purpose of the clause. To adopt the approach to construction for which the defendants contended would be highly technical and merely destructive of the parties' bargain as discussed by McLeish JA.

51 The plaintiff submits that while the Loan Deed includes guarantee and indemnity provisions, in the absence of a requirement for notice the liability of the guarantors crystallises on the Event of Default.[16]

52 The plaintiff does not accept the contract is a contract of guarantee. Unlike the Special Condition which imposes an obligation for the Lender to give notice to the Borrower, for example, 30 days' notice if the loan is to be repaid on the Expiry Date, the plaintiff does not accept that a valuable right is involved. There is no right of a borrower not to repay the loan on its expiry date. If anything, the right is the right of the lender to require money to be repaid on the expiry date, subject only to giving notice substantively required by the contract.

53 When determining the proper construction of the Loan Deed, including the notice requirements, I proceed on the basis that I am bound by the decision of the Court of Appeal in JPA including those parts of the reasons of McLeish JA reproduced above.

54 Whether a contractual stipulation as to notice has been complied with may require construction of the notice itself. When construing the notice, the principles of construction to be applied are not relevantly different to those governing the construction of contracts. A commercially sensible construction of the notices is to be adopted. Such an approach is more likely to give effect to the intention of the parties.

55 As stated by Lord Steyn in Mannai, the construction of notices must be approached objectively.[17] The issue is how a reasonable recipient would have understood the notices. The reasonable recipient of the notices would have had the terms of the Loan Deed at front of mind.

56 I do not accept the defendant's submission that because the Loan Deed incorporates the guarantors' obligations in clause 10 that Tricontinental and Bond apply and that a 'strict' approach to construction of the notices is mandated. JPA does not support a different approach based on the contract being or including a contract of guarantee.

57 As stated by McLeish JA in JPA, taken together the judgments in Bond reaffirm that whether a contract requires strict compliance with a notice provision in order for a notice to be effective is a question of construction of the contract by reference to the commercial purpose of the provisions in question.[18]

58 As the defendants submitted the statements by the Court of Appeal in JPA did not concern the proper construction of a deed that involved a contract of guarantee, it is necessary to briefly refer to the facts of JPA.

59 JPA was concerned with the validity of a termination notice given in relation to a call option deed. The parties involved were parties to two agreements in 2017, both of which were documented by deed.[19]

60 The first deed was a deed of cancellation and transfer between the respondent ('GNPL') and the appellant ('JPA Finance'), pursuant to which GNPL transferred 20 units in a unit trust to JPA Finance in consideration for the cancellation of a $2.1 million loan and other obligations under a loan deed.[20] The second deed was a call option deed executed by GNPL and JPA Finance and by Mr Moishe Gordon (the principal of GNPL), as the guarantor. The call option deed entitled GNPL to purchase back the 20 units from JPA Finance for the sum of $2.3 million plus duty during a period commencing twenty-four months from the date of the deed and expiring on 30 June 2020.[21] The notice considered by the Court of Appeal was a notice given pursuant to the call option deed.

61 On 6 November 2017 following a dispute in relation to the payment of legal costs JPA Finance's solicitors sent by facsimile the notice of termination the subject of the appeal.[22] At trial JPA Finance sought a declaration the termination was valid and effective and the obligations of the parties under the deed were now at an end.[23] GNPL claimed the notice of termination was not served in accordance with the call option deed and that the option deed had therefore not been terminated.[24]

62 After referring to the decisions in Tricontinental and Bond McLeish JA identified the principles of construction to be applied referring to the analysis of the statements by Lord Steyn in Mannai by Gillard AJA in MLW Technology Pty Ltd v May[25] and endorsed in Salta Constructions Pty Ltd v St George Bank (A Division of WESTPAC BANKING CORP LTD) ('Salta').[26] His Honour went on to apply the relevant principles to the notice in contention in the appeal. In the course of doing so his Honour expressly observed that 'the deed also provides for a guarantee so the notice provisions might also be applied in a context not dissimilar to Tricontinental and Bond'.[27]

63 In light of the statements of principle and the application of those principles to the facts in JPA there is no basis to distinguish between the context and circumstances considered by the Court of Appeal in JPA and the present context and circumstances when it comes to construction of the deed, the notice provisions of the deed or the notices themselves. Both cases concern the construction and application of notice provisions in a deed between two parties, supported by a guarantee.

64 As a separate matter, it is important to appreciate that the liability of the guarantors pursuant to the Loan Deed in the present case is not conditional upon the service of any notice on the guarantors although as will be seen, the notice provision in question does have potential application to the guarantors in other circumstances.

The Electronic Transactions Act 2000 (Vic)

65 The plaintiff submits his case concerning 'correct execution' is assisted by the Electronic Transactions Act 2000 (Vic) ('the Act'). The stated purpose of the Act is to recognise that transactions effected electronically are not by that reason alone invalid and to provide for meeting legal requirements as to writing and signatures by electronic means.[28]

66 The Act has application to the Loan Deed because the proper law of the contract is stated by clause 12.2 (a) to be the law of Victoria.

67 The Act provides that it has application to electronic transactions including any notice in connection with the performance of a contract.[29]

68 Section 9 of the Electronic Transactions Act 2000 (Vic) relevantly states:

(1) If, by or under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if -

(a) a method is used to identify the person and to indicate the person's intention in respect of the information communicated; and

(b) the method used was either -

(i) as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or

(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and

(c) the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a), having regard to the fact that it is not a sufficient reason to refuse to give consent merely because a person proposes to use a method mentioned in that paragraph.

(1A) For the avoidance of doubt, a requirement for a signature of a person may be met by electronic signature under subsection (1).

Example

Confirming a person's agreement by electronically selecting an option indicating agreement or affirmation.

69 The plaintiff submits the notices and demand satisfy the requirements of s 9 of the Act because:

(a) the notices and demand identify the Lender, his agent or solicitor by name;

(b) the notices and demand clearly state that it is the intention of the lender that the loan be repaid;[30]

(c) email was a reliable and appropriate means for the notices and demand to be given in light of the Loan Deed which contemplates service of notices by email;[31]

(d) the emails in fact fulfilled the purpose of notifying the Borrower that the Lender required the loan to be repaid; and

(e) the Borrower consented to notices being given, and implicitly consented to those notices being signed, by email.

70 It follows that by operation of s 9 of the Act, the requirement in clause 12.1(a)(iii) that the notices and demand be correctly executed was satisfied by the Lender's name and/or that of his agent being included in the emails that constituted the notices and the demand.

71 The defendants submit the Act requires a court to take into account the deed and what meaning might be attributed to the words 'correctly executed' in clause 12.1(a)(iii). An electronic signature will be sufficient in accordance with the Act if on a correct construction of the deed an electronic signature is acceptable.

72 I agree with the defendants. Section 9(1) is intended to facilitate proof, including by electronic signature. However, it does not assist to determine whether in accordance with clause 12.1(a)(iii) of the Loan Deed an electronic signature is required for a valid notice or demand. I do not take the typed name of the sender of the emails relied on to constitute the notice and demand as an 'electronic signature' as that expression is used in s 9(1A). I regard the reference in that section to be reference to a signature rather than the typing of a name.

73 As discussed in the course of argument, an electronic signature might be generated by the person tracing with their finger or a stylus on the screen or might be generated by the computer device itself. I do not agree with the plaintiff that a typed name at the foot of an email as has occurred in the case of each of the notices of demand in issue in this proceeding constitutes an 'electronic signature' for the purposes of s 9(1A) of the Act.

Does the requirement the notice be 'correctly executed' require the notice be signed?

(a) The Loan Deed does not define the term 'correctly executed' used in clause 12.1(a). In the absence of a definition that expression should be given its ordinary meaning.

(b) Whether the notices were 'correctly executed' is a question of ordinary construction of contracts.[32]

(c) The standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.[33]

(d) In ordinary loan agreements between financiers and business enterprises operating for profit, the construction of notices must be approached 'fairly and broadly, without being too astute or subtle in finding defects.'[34]

(e) The Shorter Oxford English Dictionary defines 'correct' as 'accurate; in accordance with fact or truth' or 'confirming to acknowledged standards of ... behaviour; proper'.[35]

(f) The same dictionary defines 'execution' as 'the due performance of all formalities, as signing, sealing, etc., necessary to give validity to a legal transaction'. 'Execute' is similarly defined as 'to go through the formalities necessary to the validity of: Hence to complete and give validity to, as by signing, sealing, etc.'.[36]

(g) The relevant formality, in this case, is that the notice must be signed, but not physically.[37]

(h) As to what constitutes a signature, a liberal interpretation is to be applied.[38] There is nothing magical about the form of a signature. Any mark, including the name or initials of the party signing, made by or with the authority of the signatory, will be sufficient.[39]

(i) What is important is that a signature (in whatever form) is written or placed on the document by or on behalf of the signatory to confirm that the contents of the document represent the signatory's wishes and to identify the document as the act of the signatory.[40] The signature also serves to identify the sender and to authenticate the communication.[41]

(j) In the case of an individual, a document will be 'signed' if a person writes his or her name or places his or her mark on it.[42] Unless it is a requirement that the document to be signed 'personally' or 'in person'[43], signing by an agent (with authority) will be sufficient.[44] The mark may take the form of the agent's or principal's name.[45]

(k) It is immaterial whether the document is electronically created, and the name, mark or signature applied electronically, or whether the document is in hard copy signed by the person.[46]

75 The plaintiff submits that for the reasons previously mentioned a notice or demand contained in an email, bearing the name of the signatory or his or her agent, will satisfy a contractual requirement that the notice must be in writing and signed by the signatory.

76 As Pembroke J said in Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd:[47]

The primary requirement is that the notice be in writing. The email satisfies this requirement ... As to the requirement for signing ... In my view the inclusion of the sender's name on the email amounted to 'signing' for the purpose of the clause. The requirement for signing is intended to identify the sender and authenticate the communication. That is sufficiently achieved in an email by the setting out of the sender's name together with the email address from which the email is despatched.

77 The plaintiff submits "the name of the sender and his email address are readily and rapidly verifiable. Any other conclusion would produce a capricious and commercially inconvenient result that might have wide-reaching and unintended consequences in modern day trade and commerce."[48]

(a) The word 'must' is used three times in clause 12.1. The use of 'must' was objectively intended to remove doubts about the validity of notices sent for the purposes of the Loan Deed. The language is mandatory and imperative and 'there is no room for saying near enough is good enough'. [49] By inference, some consequence of invalidity must be attached to a failure to comply with the requirement expressed in such imperative terms.

(b) It is necessary that the notice be addressed to the 'addressee at the Service Address of that Party' under clause 12.1(a)(ii). Item 4 of the Schedule details the service address for the Lender, the Borrower and the guarantor. It includes an address, the name of the individual to whom the notice should be addressed and an email address.

(c) Clause 12.1(a)(iii) requires that the notice be 'correctly executed'. Where possible, effect should be given to every word in a document, and no part should be treated as redundant.[50] The word 'correctly' evidences the intention of the parties that execution is treated as a condition precedent and must therefore be strictly complied with.

(d) It is a principle of contractual interpretation that where parties to a carefully drafted agreement have used the same word more than once in the document, they intended it to have the same meaning each time.[51] While this is a rebuttable presumption in the context of a deed which uses the language 'execution page' and 'executed as a deed', correctly executed should be construed as having the same meaning. The formality prescribed by 'correctly executed' is consistent with the nature of the document as a deed.

(e) In Victoria, execution with respect to deeds by an individual must be signed by the individual and must include express words to the effect that the deed has been 'sealed'.[52] By including the words 'correctly executed', the parties have intended for notice pursuant to clause 12 to follow the same formalities that are required for executing a deed. Namely, that it be signed. The common law recognises the importance of the act of signing in commercial and other dealings.[53]

(f) Compliance with the requirement for execution is a condition precedent to establishing liability under a notice, particularly in the context of a contract of suretyship. As held by Samuels JA in Tricontinental:[54]

It seems to me to follow from Ankar that it is meaningless to speak of substantial performance of a condition precedent. Either it has been performed, or it has not. If it has, performance enlivens the obligation to which the stipulation is a condition precedent. If it has not, the obligation does not arise.

79 None of the three notices were signed, whether by the sender signing in 'wet ink' or by the sender affixing her or his electronic signature. The same is the case with the 10 January 2024 demand. In the case of all four documents, the name of the sender appeared at the foot of the communication. In the case of the first and second notices, 'regards Anita Schmidt'. In the case of the third notice 'Yours faithfully, Andrew Green SBA Law'. In the case of the demand 'Yours sincerely Taylor Elterman Lawyers SBA Law'.

80 What is required by the words 'correctly executed' is not defined in the Loan Deed and nor does the balance of clause 12.1(a)(iii) elaborate on what must be done by a party or the party's solicitor to ensure 'correct execution'. Clause 12.1(a)(iii) does not say that when correctly executing a notice the person doing so must 'sign' the document. It also does not say that when signing the person must do so by signing either by hand or by affixing his, her or their electronic signature.

81 The proper contextual construction of the requirement in clause 12.1(a)(iii) is a construction which takes into account and accommodates all of the potential forms of communication to which clause 12.1(a) has application.

82 While clause 12.1 is titled 'Notices' the requirements of clause 12.1(a)(i)-(iv) apply more broadly than to 'notices' under the deed. Clause 12.1(a)(i)-(iv) has express application to:

A notice or other communication given under this Deed including, but not limited to, a request, demand, consent or approval, to or by a Party to this Deed.

83 The Loan Deed contemplates the following communications to which the requirement in clause 12.1(a)(iii) has application:

(a) The 'request' of the Borrower for an advance referred to in clause 2.1;

(b) The notification of the other parties of a dispute pursuant to clause 7.2;

(c) The written consent of the other party to disclosure in clause 9.1(a).

84 Although the Loan Deed does not require notice be given to guarantors, because clause 7.2 has potential application to the guarantors as parties to the deed, construction of clause 12.3(a)(iii) must be approached on the basis that the requirements of clause 12.1(a)(iii) have application to the guarantors.

85 Clause 12.1(b) is more narrowly cast than clause 12.1(a). It applies to notices only and facilitates proof that a notice, including a notice sent by email, has been received by another party. It has no application to other communications falling within clause 12.1(a).

86 I do not accept the defendants' submission that 'correctly executed' requires that each document falling within clause 12.1(a) must be 'executed as a deed'. The fact the sub-clause contemplates correct execution by the solicitor for a party tells strongly against such a construction. It would be highly unusual for a solicitor sending a notice, making a 'request', notifying of a dispute or providing written consent on behalf of a client, to do so in a document executed as a deed. To suggest clause 12.1(a)(iii) requires execution as a deed is unrealistic, uncommercial and must be rejected.

87 During the hearing Counsel for the defendants submitted the manner of execution of the Loan Deed drawdown notice supported the proposition that a wet ink or electronic signature is required in order to satisfy the requirements of clause 12.1(a)(iii). I do not agree. I do not consider the manner in which one of the parties executed documents assists in determining whether a different method of execution satisfies the requirements of the clause.

88 The opening words of clause 12.1(a) which is expressed in inclusive language do not refer to a document amending the Loan Deed. The formalities of what is required when amending the Loan Deed are dealt with separately in clause 12.4:

This Deed may be amended only by a written document signed by the Parties.

89 The requirements of clauses 12.1(a)(ii), (iii) and (iv) are each requirements that are inapt to have application to a document amending the Loan Deed as provided for in clause 12.4. However, the fact clause 12.4 expressly requires the written document to 'be signed by the parties' while clause 12.1(a)(iii) is silent in relation to the requirement for a signature tells against the words 'expressly executed' requiring that such execution be valid only when the notice or other document is 'signed by the parties'.

90 The Shorter Oxford English Dictionary definitions of 'correct' and 'execution' relied on by the plaintiff support a construction of clause 12.1(a)(iii) that requires accurate formal signing.[55] The definition of 'correct' in the Macquarie Dictionary includes 'adjective. conforming to fact or truth; free from error, accurate: a correct statement'. The definition of 'execution' includes **'**mode or style of performance'.[56]

91 Not only does clause 12.1(a)(iii) not specify that the mode or style performance must be by signing, whether that be by 'wet ink' or by affixing an electronic signature, properly construed clause 12.1(a)(iii) does not require such a mode or style of performance in order to be 'correctly executed'.

92 I accept the submission on behalf of the plaintiff that what is important is that the signature (in whatever form) confirms that the contents of the communication represents the wishes of the signatory and identifies the sending of the document as the sending of that person's document. The act of the sender either typing or electronically inserting his or her name serves to identify that person and to authenticate the communication is from that person.[57]

93 In the case of an electronic communication, by email as expressly contemplated by clause 12.1(b) concerning a notice, the requirement for 'correct execution' is met by the sender formally stating his, her or their name. That is what happened here in the case of the three notices and the demand. To approach the construction of 'correct execution' on that basis:

(a) is to adopt a commercially sensible construction of what is required by the sub-clause, one that is not overly technical but one which is purposive. The purpose of 'correct execution' is that the recipient of the notice or other communication will be clear as to the identity of the person sending the notice, request or consent. Once that information is provided, objectively the recipient will be able to evaluate whether the sender of the communication is a 'Party' or a 'Party's solicitor'.

(b) is consistent with the practice of solicitors communicating by email on behalf of their clients, ending their communication, as here, with a statement of their name and a description of their role and the identity of their firm where the communication from their firm is a communication in the form of a request, a notice, or signifying their clients' consent;

(c) is consistent with the dictionary definitions of 'formal' and 'execution';

(d) is supported by the absence of any reference to a person being required to sign in clause 12.1(a)(iii), in contrast to clause 12.4;

(e) is not inconsistent with the authorities relied on by the plaintiff that have held a document will be 'signed' if a person writes his or her name or places his or her mark on it.[58]

94 I do not consider the asserted existence of valuable rights to which the defendants referred in their submissions nor the potential application of clause 12.1(a)(iii) to the guarantors provides a reason why the notice as well as being formally sent by sender including with the name and, in the case of the solicitor, their designation within the firm and the firm name is not sufficient to constitute 'formal execution'.

95 Taking up the statement by Waddell AJA in Tricontinental upon which the defendants rely, 'correct execution' in the manner that I have found satisfies the requirements of clause 12.1(a)(iii), is both unambiguous and certain. There is nothing ambiguous or uncertain about an email formally signed off by the sender and in the case of a solicitor formally signed off with their name, position designation and firm name. I do not consider that clause 12.1(a)(iii) is ambiguous or that a doubt arises that should be resolved in favour of the guarantors as discussed by the High Court in Ankar.

96 In Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd Pembroke J was required to consider the validity of notice pursuant to an option to review in a lease, in an email which was 'signed' in circumstances where there was no 'signature' but the name of the sender was typed on the email and the sender's email address was readily apparent and verifiable.[59] His Honour held that a typed name of the sender on an email was sufficient to satisfy a requirement that any demand, requisition, consent, election or notice may be signed on behalf of the party.[60]

97 The lease in that case did not itself include a statement of the specific requirement concerning the form of notice needed in order that the exercise of the option be effective. Clause 7 of the lease required that the lessee give written notice. Pembroke J held:[61]

This formality engages clause 16.6 of registered memorandum X758927. It provides as follows:

All demands, requisitions, consents, elections or notices shall be inwriting and may be given to or served upon a party hereto by being left at that address specified as that party's address in the relevant Item of the Reference Schedule (which address may be amended from time to time by prior written notice to the other party). Any such demand, requisition, consent, election or notice if posted shall be deemed duly served at the expiration of three (3) business days after the time of posting. In proving the giving of the same it shall be sufficient to prove the envelope containing the same was properly addressed stamped and registered or put into a post office box in Australia. Any demand, requisition, consent, election or notice may be signed on behalf of the party giving the same by a director, manager, secretary or acting secretary of such party.

The primary requirement is that the notice be in writing. The email satisfies this requirement. The clause then provides that the written notice "may be given or served upon a party hereto by being left at that address specified as that party's address in the relevant item of the reference schedule." I do not read this language as imposing a mandatory requirement for physical delivery. By its express terms it is permissive. As to the requirement for signing, there are two answers. In my view the inclusion of the sender's name on the email amounted to "signing" for the purpose of the clause. The requirement for signing is intended to identify the sender and authenticate the communication. That is sufficiently achieved in an email by the setting out of the sender's name together with the email address from which the email is despatched. The name of the sender and his email address are readily and rapidly verifiable. Any other conclusion would produce a capricious and commercially inconvenient result that might have wide-reaching and unintended consequences in modern day trade and commerce.

99 Consistent with the interpretation applied by Pembroke J and for the reasons earlier discussed, each of the three notices and also the demand, sent in each case by email, was 'correctly executed', in the case of the first and second notices by Ms Schmidt, and in the case of the third notice and the demand, by the 'Party's solicitor'.

100 That leaves for consideration the second point raised by the defendants, namely, whether the first and second notices sent by email by Ms Schmidt as the authorised agent of Mr Allsopp rather than by Mr Allsopp himself as the party to the Loan Deed were 'correctly executed'.

Is notice given by an authorised agent correctly executed?

(a) 'Parties' is a defined term of the Loan Deed and 'means the Borrower, the Lender and, if applicable, the Guarantor and Party means either one of them'. 'Representative' is also a defined term of the Loan Deed and 'Representative of a Party includes an employee, agent, officer, director, auditor, adviser, partner, consultant, joint venturer or sub-contractor of that Party'. The parties could have included the term 'Representative' in the text of clause 12.1 but they did not, evincing the objective intention that the notice must come from the party, or the party's solicitor exclusively.

(b) This is also relevant in the context of a deed as only a party, or an agent authorised by deed to do so (that is, authorised by power of attorney) has the power to execute a deed.

(a) The submission that the notices were not executed 'by the Party', because clause 12.1 does not expressly refer to execution by an agent, should be rejected.

(b) The general rule of law is that whatever a person who is sui juris can do personally, he or she can also do through his or her agent.[63]

(c) Unless it is found, on the true construction of the Loan Deed, that the intention of the parties was that the right to give notice should only be exercised personally, it is not open to say that because an agent is not expressly mentioned, the exercise of the right by an agent is excluded.[64]

(d) In the context of execution by an agent specifically, it is similarly well established that:

(i) A 'signature' includes writing a person's name on a document to authenticate or give effect to what is written in that document.[65]

(ii) Absent an express provision or other indication to the contrary, a provision that requires a document to be signed is not taken to preclude signature by an agent, whether that signature is written in the name of the principal or of the agent.[66]

(iii) It is sufficient that the relevant person's signature is printed (or typed)[67] on the document by some other person, by or under the relevant person's authority.[68]

(iv) It is immaterial whether words were printed, typed by the signatory or later adopted or authenticated by the signatory (or their authorised agent).[69]

(e) In this case, the Loan Deed says no more than that 'the Lender' is required to notify the Borrower if he requires the Secured Money to be repaid on the Expiry Date and that any notice must be executed 'by the Party' or the 'Party's solicitor'.

103 Clause 1.1 titled 'Definitions' provides that unless the context suggests otherwise 'Parties' is defined to mean 'the Borrower, the Lender and if applicable the Guarantor and 'Party' means either one of them'.

104 'Representative of a Party' is separately defined to include an agent of that Party. The construction question that arises is whether the reference in clause 12.1(a)(iii) to 'the Party' properly construed includes the Party by that Party's agent. I do not consider that it does.

105 Clause 12.1(a)(iii) contemplates 'correct execution' by two persons, either 'the Party' or 'the Party's solicitor'.

106 While 'Representative' of a Party, including an agent of that party, is defined, clause 12.1(a)(iii) does not provide for a third category of persons, the 'Representative of a Party', whether that representative be an agent, employee, officer director, auditor adviser, partner, consultant, joint venture or subcontractor, to 'correctly execute' a notice or other form of communication falling within the sub-clause.

107 It is unsurprising that clause 12.1(a)(iii) does not refer to 'correct execution' by a Representative when regard is had to the breadth of categories of person falling within the definition of 'Representative' and the communications to which the clause has potential application. Namely, a request for an advance, the notification of a dispute and the written consent to disclosure of confidential information. None of these communications are communications that would be expected to be made on behalf the party by an auditor or a subcontractor.

108 It is accepted that the general rule of law is that whatever a party can do personally, she or he can also do through her or his agent.[70] However, the fact that a party may act through her or his agent does not mean that in all circumstances a reference in a document to an act that a party may take is objectively intended to refer to a party acting through that party's agent.

109 In this case the draftsperson has deliberately referred to 'correct execution' by the Party or by the Party's solicitor. Objectively it could reasonably be expected that the written consent to the disclosure of the provisions of the deed otherwise required to be kept confidential by the parties dealt with in clause 9.1 of the deed might be written consent from the solicitor acting on behalf of the party. The same may be said of notification for the purposes of the dispute resolution provisions in clause 7.2 noting that if resolution fails any party may commence legal proceedings. The request for an advance dealt with in clause 2.1 might also be by the parties' solicitor, although also by the party or the parties' agent.

110 I consider that if the draftsperson had intended that a communication otherwise falling within clause 12.1(a)(iii) might be sent by the agent of a party who is not their solicitor then the clause would have said so. It seems to me a deliberate drafting choice was made and that choice was to specify that either the party, which I interpreted to mean the party personally or the party by that party's solicitor could validly send a notice or other form of communication falling within the subclause. Implicitly, the failure to refer to a third category of sender, a party by that party's agent, reflects an objective intention that that category of person not be a category of person entitled to send a valid notice or communication falling within the subclause.

111 For those reasons I do not consider the sending of a notice by email by the agent, Ms Schmidt, constituted the sending of an effective notice in accordance with clause 12.1(a)(iii) of the Loan Deed. The first notice, sent solely by Ms Schmidt by email did not constitute a valid and effective 30 day notice, that the Lender was required to provide notice to the Borrower 30 days prior to the Expiry Date if the Lender required the Secured Money to be repaid on the Expiry Date as provided for in item 10(2) of the Schedule.

112 The position concerning the second notice is more complex. The second notice comprised two emails in a chain, both dated 15 August 2023, the first in the chain from Mr Allsopp, the second in the chain from Ms Schmidt. The email chain is reproduced below:

From: Anita Schmidt

Sent: Tuesday, 15 August 2023 11:08 AM

To: Jaime Farrelly

Subject: Fw: Private funding

Hi Jaime,

Hope your doing well. Just received this email from steven this morning. Can you please confirm receipt of withdrawal of Steven money with in 30 days.

Kind regards

Anita Schmidt

Ph 0425754910

...

Sent: Tuesday, 15 August 2023 9:54 AM

To: Anita Schmidt

Subject: Fw: Private funding

Hi Anita,

Thank you for coming out to the farm last Saturday to explain my private funding to me.

I had no ides so much was involved. Just to let you know can you please pass onto Jaime that i wanna with draw my funds, I'm planning to go a different direction.

They have my bank account details. So I will expect it in there 15th September.

I am giving you 28 days notice.

regards

Steven Allsopp

113 It would be artificial to regard the notice given by the 15 August 2023 email chain as a notice from the agent only and not also a notice from the party himself. To treat the email from the agent in isolation from the email from the party, part of the same email chain, would be to ignore both the entirety and the reality of the communication. As Gillard AJA (with whom Winneke P and Buchanan JA agreed) exhorted in MLW Technology Pty Ltd v May[71] should be the approach:

the law should strive to uphold the contract wherever possible to avoid the reproach of being the destroyer of bargains ... The point is been recently be reinforced in the House of Lords in relation to a notice ...

114 In his capacity as a Party to the Loan Deed, Mr Allsopp instructed his agent Ms Schmidt to 'please pass on to Jamie that I wanna withdraw my funds'. Ms Schmidt did as she was instructed. She passed on to Mr Farrelly at the email address specified as the address for service in item 4 of the Schedule the email 'correctly executed' by the Party, Mr Allsopp, saying that she 'just received this email from Steven this morning. Can you please confirm receipt of withdrawal of Steven money with in 30 days'.

115 The reasonable recipient of the 15 August 2023 email chain familiar with the provisions of the Loan Deed, including item 10(2) of the Special Conditions would know that the Lender, Mr Allsopp, had asked his agent, Ms Schmidt, to notify him that he required the Secured Money to be repaid. The Lender was notifying the Borrower, in writing, more than 30 days prior to the 6 October 2024 Expiry Date, that he required the Secured Money to be repaid.

116 Although the Lender referred to 15 September 2023 in his email as the date on which he expected the money to be repaid, I do not regard the reference to that date or the reference to 28 days by Mr Allsopp and 30 days by the agent as meaning the email chain did not give sufficient or effective notice for the purposes of item 10(2) of the Schedule. As Lord Steyn observed in Mannai:[72]

one cannot ignore the reasonable recipient of the notices would have had in the forefront of his mind the terms of the [deed]. Given that the reasonable recipient must be credited with knowledge of the critical date and terms of [item 10 (2) of the Schedule] the question is simply how the reasonable recipient would have understood such a notice.

117 I am in no doubt that the reasonable recipient of the 15 August 2023 email chain would have understood that the Lender required the Secured Money to be repaid on the Expiry Date and that he was not agreeable to the loan being 'rolled over on a calendar monthly basis' as would occur if the Lender did not provide written notice in the timeframe provided for in item 10(2) of the Schedule.

118 The second notice was effective notice for the purposes of the deed and in accordance with item 10(2) of the Schedule. As a result the Borrower was obliged to repay the Secured Money on the Expiry Date, 6 October 2023.

119 The plaintiff is entitled to judgment against all defendants for the Secured Money and interest in accordance with the Loan Deed at the rate of 15% from 6 October 2023. The calculation of interest will need to take into account interest actually paid to the date of trial at the lower rate of 10%.

120 If am wrong about the effect and validity of the second notice, it is necessary to consider the effect and validity of the third notice.

121 For the reasons previously discussed the third notice was 'correctly executed' by the solicitor sending the notice by email which stated his name, his position within the firm and the name of his firm.

122 As tacitly and correctly conceded by Counsel for the defendants, the decision of the Court of Appeal in JPA effectively rules out reliance by the defendants on a technicality based on a failure of the sender to include in the address to which the notice or communication was directed, all components of the item for service address in the 'box' for the Borrower in item 4 of the Schedule. In order for the third and also the first and second notices, and the demand, to be effective, to require all of the addressee details in the 'box' in item 4 of the Schedule to be reproduced would be:[73]

highly technical and merely destructive of the parties bargain, if such a notice would be treated as ineffective.

123 There being no other issues raised by the defendants in relation to the validity of the third notice, if I am wrong in my findings concerning the second notice, the Borrower should have repaid the Loan Amount in full on or before 6 November 2023.

124 In that alternative scenario the plaintiffs would have been entitled to judgment against all defendants for the Loan Amount together with interest at 15% from 6 November 2023, the calculation of such interest being required to take into account interest payments made in the meantime by the Borrower.

125 For completeness if I am wrong in my finding concerning the second notice and in my alternative finding concerning the third notice, it is appropriate to deal briefly with the demand.

126 For the reasons previously discussed there is no substance to the submission the 10 January 2024 demand was not 'correctly executed' by the solicitor.

127 The demand relied upon an earlier Event of Default, the failure to pay interest on 2 January 2024 when due. There is no dispute the failure to pay interest on that date was an Event of Default as defined in clause 1.1 of the Loan Deed.

128 Item 6 of the Schedule relevantly provides that subject to the Special Conditions, the Expiry Date is the earlier of the dates that is 14 days following written demand 'if an Event of Default occurs'. No relevant issue arises due to the reference in item 6 to Special Conditions.

129 Item 7 of the Schedule dealing with interest rate provides that 'unless an Event of Default occurs and is subsisting' the interest rate is 10% per annum but if an Event of Default occurs and is subsisting, in that case the interest rate is 15% from the date of the Event of Default 'until the Event of Default is no longer subsisting'.

130 When the Loan Deed was prepared the draftsperson saw fit in item 7 of the Schedule to expressly refer to the Event of Default 'no longer subsisting'. That language is to be contrasted with the reference in item 6 of the Schedule to, if an event of Default 'occurs'. I regard the difference in the language between the two items in the Schedule as important.

131 If it had been intended that the Lender was only entitled to rely on an Event of Default that occurred and was 'still subsisting' at the time the Lender made a written demand to the Borrower, it would have been an easy thing for the draftsperson to have said so in item 6 of the Schedule as was done in relation to the interest obligation dealt with in item 7.

132 Subject to the Special Conditions, the agreement was for a loan of $2.9 million for a period of 12 months from the date the Loan Amount was advanced. There was an obligation within that relatively short time period to pay interest in arrears on a monthly basis. The Expiry Date in item 6 was the earlier of the day on which an 'Insolvency Event' occurs, 14 days following written demand from the Lender to the Borrower if an Event of Default occurs, or 12 months from the date the Loan Amount is advanced. It is consistent with those three alternatives and the length of the loan if not earlier required to be repaid, that if an Event of Default, 'occurs' being the language used in item 6(2) of the Schedule, that is all that is required in order that the Lender might bring the loan to an end. That is, irrespective of whether after the Event of Default occurs it is continuing or subsisting.

133 For those reasons, if I am wrong in relation to each of the second and third notices, the defendants were required to repay all of the Secured Money pursuant to clause 6.1(a) of the Loan Deed 14 days after the 10 January 2024 demand.

134 As earlier stated in these reasons, there will be judgment for the plaintiff against the defendants for the Secured Money.

135 The defendants must pay the Loan Amount, $2.9 million and must pay interest in accordance with the Loan Deed from 6 October 2023 at the rate of 15%.

136 The calculation of interest will need to take into account interest actually paid from 6 October 2023 until 31 October 2024, the date of the judgment.

137 The defendants, including the guarantors are to pay the plaintiff's costs of the proceeding including reserved costs.

138 The plaintiff's solicitors should prepare an order that gives effect to those findings and provide a copy of the draft order to the defendants' solicitors and to my Chambers by 4:00pm on Friday 1 November 2024.

[1] It is to be noted the defendants did not press this aspect of non-compliance 'highly' having regard to the decision of the Court of Appeal in JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159 ('JPA Finance').

[2] Perry Herzfeld and Thomas Prince, Interpretation (Law Book Company Australia, 2nd Ed, 2020) 630.

[3] Wilkie v Gordion Runoff Limited [2005] HCA 17; (2005) 221 CLR 522 [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ).

[4] Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549, 561 ('Ankar') affirmed in Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242, 256 (Mason CJ, Brennan, Deane and McHugh JJ); Andar Transport Pty Ltd v Brambles Limited [2004] HCA 28; (2004) 217 CLR 424.

[5] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393 [67] (McLeish JA) ('JPA').

[6] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749, 767-771 ('Mannai').

[7] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393 [60] (McLeish JA).

[8] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393 [61] (McLeish JA).

[9] Tricontinental Corporation Pty Ltd v HDFI Ltd (1990) 21 NSWLR 689 ('Tricontinental').

[10] Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286 ('Bond').

[11] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393 [60]-[61], [66], [72] (McLeish JA).

[12] Tricontinental Corporation Pty Ltd v HDFI Ltd (1990) 21 NSWLR 689, 718 (Waddell A-JA).

[13] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393.

[14] Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20; (2000) 170 ALR 579.

[15] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) VR 393 [55]-[74] (McLeish JA) (citations omitted).

[16] Omlaw Pty Ltd v Delahunty [1995] 2 QD R 389.

[17] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749; [1997] 3 All ER 352, 767-771.

[18] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [60] (McLeish JA).

[19] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [5]-[6] (McLeish JA).

[20] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [5] (McLeish JA).

[21] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [6] (McLeish JA).

[22] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [23] (McLeish JA).

[23] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [24] (McLeish JA).

[24] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [25] (McLeish JA).

[25] MLW Technology Pty Ltd v May [2005] VSCA 29.

[26] Salta Constructions Pty Ltd v St George Bank (A Division of WESTPAC BANKING CORP LTD) [2014] VSCA 289; (2014) 45 VR 245 ('Salta'); JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [67] (McLeish JA).

[27] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [72] (McLeish JA).

[28] Electronic Transactions Act 2000 (Vic) s 1.

[29] Electronic Transactions Act 2000 (Vic) ss 3(1) and 7.

[30] Russells (A Firm) v Samuel Lewis McCardel [2014] VSC 287 [74] (Bell J).

[31] Russells (A Firm) v Samuel Lewis McCardel [2014] VSC 287 [58] (Bell J).

[32] JPA Finance Pty Ltd v Gordon Nominees Pty Ltd [2019] VSCA 159; (2019) 58 VR 393 [55], [60], [67] (McLeish JA); Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749, 771 (Lord Steyn).

[33] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749, 771 (Lord Steyn).

[34] Pan Foods Co Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20; (2000) 170 ALR 579 [14] (Kirby J).

[35] Shorter Oxford English Dictionary (online at 23 October 2024) 'correct'.

[36] Shorter Oxford English Dictionary (online at 23 October 2024) 'execute'; J&S Holdings Pty Ltd v NRMA Insurance Ltd (1981) 39 ACTR 1; (1981) 57 FLR 385, 401 (Kelly J).

[37] This is not a case where the law requires a signature to be witnessed (c.f. deeds or statutory instruments required to be witnessed such as affidavits, statutory declarations (Oaths and Affirmations Act 2018 (Vic)), wills, codicils, testamentary instruments (Wills Act 1997 (Vic)) or powers of attorney (Powers of Attorney Act 2014 (Vic)) for example).

[38] Re Male [1934] VicLawRp 52; [1934] VLR 318, 320 (Lowe J).

[39] R v Moore, ex parte Myers (1884) 10 VLR 322, 324 (Higinbotham J).

[40] Wild v Meduri [2023] NSWSC 113 [115] - [129] (Hallen J).

[41] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33] (Pembroke J).

[42] R v Moore (1884) 10 VLR 322, 324 (Higginbotham J); Morton v Copeland [1855] EngR 539; (1855) 16 CB 517, 535 (Maule J); Legal Services Board v Forster [2010] VSC 102; (2010) 29 VR 277 [42] (Emerton J).

[43] Motel Marine Pty Ltd v IAC (Finance) Pty Ltd [1964] HCA 7; (1964) 110 CLR 9.

[44] World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd [2007] FCA 114; (2007) 71 IPR 307 [90] (Jessup J); Muirhead v Commonwealth Bank of Australia [1996] QCA 241; [1997] 1 Qd R 567; (1996) 139 ALR 561, 565 (McPherson JA); McRae v Coulton (1986) 7 NSWLR 644, 663-666 (Hope JA).

[45] Ex parte Hirst [1874] UKLawRpEq 140; [1874] L.R. 18 Eq. 704 (Sir Bacon CJ); Deputy Commissioner of Taxation v Boxshall [1988] FCA 355; (1988) 19 FCR 435, 438 (Lockhart, Burchett, Gummow JJ).

[46] Pereira Fernandes SA v Mehta [2006] EWHC 813 (Ch); [2006] 2 All ER 891 [28] (Pelling J).

[47] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33]. Cited in Kegran Pty Ltd v Warrik Pty Ltd [2018] NSWSC 1357 [32] (Darke J); Trafalgar West Investments Pty Ltd v LCM Litigation Management Pty Ltd [2016] WASC 159 [41] (Beech J); C&P Syndicate Pty Ltd v Reddy [2013] NSWSC 643; [112] (Lindsay J).

[48] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33] (Pembroke J).

[49] Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286, 293 (Gleeson CJ), 312-313 (Kirby P).

[50] AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985; (2010) 15 BPR 28, 199 [13] (Ball J); XL Insurance Co SE v BNY Trust Co of Australasia Ltd [2019] NSWCA 215 [72] (Gleeson JA).

[51] Dura (Aust) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2013] VSCA 179; (2013) 41 VR 636 [26] (Maxwell P).

[52] Property Law Act 1958 (Vic) ss 73 and 73A.

[53] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 [47]; 219 CLR 165 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

[54] Tricontinental Corporation Pty Ltd v HDFI Ltd (1990) 21 NSWLR 689, 705 (Samuels JA); Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549, 555-557 (Mason ACJ, Wilson, Brennan and Dawson JJ).

[55] Shorter Oxford English Dictionary (online at 23 October 2024) 'correct' and 'execution'.

[56] Macquarie Dictionary (online at 23 October 2024) 'correct' and 'execution'.

[57] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33] (Pembroke J); Wild v Meduri [2023] NSWSC 113 [129] (Hallen J).

[58] R v Moore, ex parte Myers (1884) 10 VLR 322, 324 (Higinbotham J).

[59] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33].

[60] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [31].

[61] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [31].

[62] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 [33].

[63] Bevan v Webb [1901] UKLawRpCh 111; [1901] 2 Ch 59, 77-78 (Stirling LJ).

[64] Bevan v Webb [1901] UKLawRpCh 111; [1901] 2 Ch 59, 78 (Stirling LJ).

[65] Muirhead v Commonwealth Bank of Australia [1996] QCA 241; [1997] 1 Qd R 567; (1996) 139 ALR 561, 566 (McPherson JA).

[66] Muirhead v Commonwealth Bank of Australia [1996] QCA 241; [1997] 1 Qd R 567; (1996) 139 ALR 561, 565; McRae v Coulton (1986) 7 NSWLR 644, 663-666 (Hope JA).

[67] Parkesinclair Chemicals (Aust) Pty Ltd v Asia Associates Inc [2000] VSC 362, [107] (Byrne J).

[68] Muirhead v Commonwealth Bank of Australia [1996] QCA 241; [1997] 1 Qd R 567; (1996) 139 ALR 561, 566 (McPherson JA).

[69] Muirhead v Commonwealth Bank of Australia [1996] QCA 241; [1997] 1 Qd R 567; (1996) 139 ALR 561, 567 (McPherson JA).

[70] Bevan v Webb [1901] UKLawRpCh 111; [1901] 2 Ch 59 [77].

[71] MLW Technology Pty Ltd v May [2005] VSCA 29.

[72] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749, 768.

[73] JPA Finance Pty Ltd v Gordon Nominees Ptd Ltd [2019] VSCA 159; (2019) VR 393 [73].