Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2013] VSCA 152

Court of Appeal (Vic)|2013-06-20|Before: Croft J, Harper JA

Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504 (Croft J);

Shepparton Projects Pty Ltd v Cave Investments Pty Ltd (No 2) [2011] VSC 384 (Croft J).

CONTRACT - Loan agreement - Subdivision of land - Repayment schedule varied to provide for payment in money and by transfer of allotments - Failure by borrower to pay interest when due or to provide monthly reports - Extension of time for payment - Tender of cheque for sum less than that owed - Refusal by lender to accept land - Whether default provisions operated merely to accelerate repayment schedule as varied or whether lender exercised option to require repayment in cash - Whether repudiation by lender -Appeal dismissed.

CONTRACT - Calculation of interest owing - Whether trial judge erred in calculating interest on so much of monies outstanding rather than on total amount lent - Whether trial judge erred in calculating interest as compounding six monthly rather than daily - Cross appeal dismissed.

1 This litigation is an example of the problems which arise when, through a combination of carelessness and self-interest, contractual arrangements are fractured. One party, having been careless, seeks to avoid its consequences. The other, seeking to exploit the fault, claims rights to which, had the contract run the course contemplated by the contacting parties at the time the contract was made, it would not have been entitled. As in this case, it is sometimes left to the courts to disentangle the legal and often factual morass in which the parties find themselves.

2 The present appeal is brought by Shepparton Projects Pty Ltd ('SP') and its directors, Paul Linsdell, Peter Nolan and Kevin McGuire from orders made by Croft J on 21 October 2011. SP had become involved in the development of land on the Goulburn Valley Highway at Kialla West, not far south of the City of Shepparton. Mr Paul Cave was a director of the respondent, a company called Cave Investments Pty Ltd ('Cave'). Cave was one of the two entities within Mr Cave's group of companies (Cave Australia Pty Ltd was the second) which, at different times and pursuant to a series of agreements, financed the project.

3 The individual appellants guaranteed SP's obligations to Cave. One of these obligations was to pay, at the contractually prescribed intervals, interest on the amount outstanding from time to time. It is clear that, in the circumstances which obtained on 21 June 2008, interest - which was payable six monthly in arrears as from 21 December 2007 - had become due in the sum of $84,000 (being $14,000 per month). SP failed to pay. By a typewritten letter upon which the dates '9/7/08' and '10/7/08' both appear, but which was probably written on 9 July and forwarded to Mr Linsdell by fax on 10 July, Paul Cave (who was then either aged 81 or was in the final weeks of his 81st year) requested payment. He couched his request in stilted language, but apart from a reference to May instead of June, and a reference to an agreement still in full force as 'previous', his message could have been neither more explicit nor better justified: 'Pursuant to a previous agreement 8% from 21/12/07 to 21/5/08 $84,000 k'. A little later in the letter he added, in (it seems) his own hand, the expression: '(7 days please)'.

4 The contract which then governed the relations between Cave as financier and SP as borrower was made on 21 December 2006. Because it was the last in a succession of agreements and variations of agreements by which companies in Mr Cave's group provided finance to SP for the Kialla West development, it has in this litigation been referred to as 'the 2006 loan agreement'. It included a 'repayment programme' in a schedule designated as 'Schedule II'.

5 This programme was new. Previously, the arrangement was that money lent was to be repaid, with interest, by money returned. By contrast, Schedule II of the 2006 loan agreement provided that the debt owed by SP to Cave was to be repaid in part by money and in part by the transfer to Cave of a specified number of allotments in the subdivision of the land being developed at Kialla West. Item A of the Schedule provided that three of these allotments were to be transferred within 90 days of 21 December 2006, and on such transfer were to reduce SP's indebtedness by $150,000 per allotment; and item C provided for the transfer of the balance of 14 allotments after a first mortgage to the National Australia Bank ('the NAB') had been discharged. As with the three allotments the subject of item A, the consideration for each of the 14 allotments to be transferred pursuant to item C was to be a reduction of $150,000 in the outstanding principal, making a total reduction (in relation to this second tranche of 14 lots) of $2,100,000 (14 ×150,000 = $2,100,000).

6 In my opinion, it is in the context of these provisions that Mr Cave's letter of 10 July is to be read. It opens:

In the last few years we have had many agreements, hopefully this is the last one. Reluctantly I have to accept 14 blocks in lieu of $2.1 M in cash.

7 The letter went on to give SP seven days within which to remedy a default in its obligation to pay outstanding interest. On allowing that extension of time, Cave did indeed have to accept, reluctantly or otherwise, part repayment of its loan not in money but in land. There was one reason; and it was simple. In the absence of default, the contract provided that Cave must accept '14 blocks in lieu of cash'. It was all there in Schedule II.

8 The contract also provided for the possibility that SP might default. Clause 7, which was headed 'Default', opened with the words: 'Notwithstanding anything contained elsewhere in this agreement', and continued:

[T]he guarantee shall become enforceable and the whole of the principal sum plus any accrued interest remaining outstanding shall become forthwith repayable at the option of the lender on the happening of any one or more of the following events without the necessity of any notice or demand: ...

9 One of the 'following events' was default in the payment of interest. Another was default in the performance by SP of any of its covenants. The 2006 loan agreement included a covenant by SP that it provide to Cave a written monthly report on the progress of the development. On 9 July 2008, SP was in default in both the payment of interest and the provision of the monthly reports; by the letter of 10 July, Cave temporarily waived the default in payment of interest.

10 In subsequent dealings with Cave, SP translated Mr Cave's letter of 10 July 2008 in ways which were obviously wrong but which happened to suit SP's interests. First, having correctly read the letter as evidence that Cave would not for at least seven days exercise its option to invoke clause 7, SP also saw it as a binding affirmation of Cave's willingness to allow SP - despite its defaults - to continue with the repayment programme specified in Schedule II. This, according to SP, was the effect of the words 'I have to accept 14 blocks in lieu of $2.1 M in cash'. Secondly, SP chose to take the date '21/5/08' as correct, and the figure which followed ('$84 k') as wrong, despite the fact that to any sensibly realistic observer the opposite was the case. Indeed, the artificiality of SP's position is demonstrated by its purported belief, upon which it has traded up to and including this appeal, that Mr Cave was in truth demanding payment within seven days not of $84,000 but of $70,000.

11 I will return in more detail to each of these false interpretations. For the present, I observe that, if the date of 21 May is accepted as having any relevance, SP's calculation is, of itself, accurate. It is not in dispute that, at that time, SP was contractually obliged to pay interest at $14,000 per month. There being five months between 21 December 2007 and 21 May 2008, the interest which accrued during that period amounted to $70,000. But SP had no regard to the fact that - by the contract which it had negotiated with Cave, and which contained the very provision upon which SP relied in calculating the sum of $70,000 as having accrued by 21 May - interest was payable every six months in arrears; and so nothing was due on 21 May. SP likewise chose to ignore the fact that, because by 10 July 2008 the December 2007-June 2008 instalment of $84,000 was overdue, Mr Cave was absolutely correct when on 10 July he demanded payment of that sum, and was for that reason also entitled to invoke clause 7 of the contract. SP nevertheless argues that whatever rights Cave had before its receipt of the letter of 10 July 2008 were so compromised by that letter and by later events that, in the result, Cave repudiated the contract and in doing so forfeited any right to claim either arrears of interest or payment, pursuant to clause 7, of 'the principal sum ... remaining outstanding'.

12 That was the beginning of the battle which has now come to this Court on appeal from Croft J. The orders made by his Honour on 21 October 2011 followed two related judgments: the first was delivered on 10 December 2010;[1] the second on 9 September 2011.[2] In the first, the issue was that of liability - which in this case, given the events of 10 July 2008 and following, depended upon the proper construction of the contract which Mr Cave had incorrectly described as 'previous'. His Honour found that SP and the guarantors were indebted to Cave. The second judgment dealt with the proper calculation of that indebtedness. It also dealt with issues of costs.

13 At the trial, SP had contended that, in the light of the events of 10 July 2008 and those which succeeded them, it was entitled to a number of heads of relief: first, the discharge of a mortgage which it had granted to Cave; secondly, to the removal of a caveat which Cave had lodged over the Kialla West land; and thirdly, to Cave's compulsory acceptance of payment not in money as Cave wanted, but in specie in the form of a transfer of the 14 specified lots in the Kialla West project.

14 After dismissing these contentions, his Honour granted Cave's counterclaim against both SP and the guarantors of the loan. On 9 September 2011, the judge awarded Cave the amount of the principal sum which his Honour found to be then outstanding ($2,100,000) plus interest of $736,446.77 and nominal damages of $1.00.

15 SP's appeal has been succeeded not only by a notice of contention filed by Cave, which seeks to affirm his Honour's judgment on the basis that SP repudiated and/or breached the agreement, but also a cross appeal in relation to his Honour's assessment of the amount payable under the loan agreement.

16 With this brief introduction, it is convenient to turn now to a closer examination of the factual matrix which forms the background to the differing contentions which the parties have advanced about the law.

17 For present purposes, it all began in August 2003. In that month, SP borrowed $1,000,000 from Cave Australia Pty Ltd.[3] These funds were to be employed in the purchase and then development of the Kialla West land.

18 In March 2004, SP repaid $500,000 of the principal sum. The balance of $500,000 remained owing.[4] On 29 September that year, SP entered a loan agreement which has since been described, despite its chronological position but doubtless because Cave rather than Cave Australia Pty Ltd was now the financier, as 'the first loan agreement'. It recorded that the loan, to which it referred as 'the present advance', was in the sum of $3,454,000. It was to be used to purchase the land and then to sub-divide it into 81 allotments. The amounts making up that sum were to be paid by Cave as lender to SP as borrower in four instalments (the first instalment being the $500,000 which was the balance of the original $1,000,000). The last of these was to be paid on 23 November 2004.[5] The principal sum was to be repaid by 29 September 2006, but SP was entitled to repay some or all of it before that date. The schedule to the agreement provided for the payment of interest.

19 Each of the directors of SP (the appellants Peter Nolan, Kevin McGuire and Paul Linsdell) executed a guarantee[6] irrevocably and jointly and severally guaranteeing the due and punctual performance of all the obligations and undertakings of SP under the loan agreement, and indemnifying Cave against all loss, damage, costs and expenses should SP fail to perform. The guarantors also acknowledged that if the principal sum and any outstanding interest were not paid by SP in accordance with the agreement, the guarantors would pay such part of that sum, including interest, as was outstanding. On 11 February 2005 Cave became the first registered mortgagee of the land.

20 Clause 12 of the agreement contemplated that the 81 lots would be sold by SP, with $60,000 per allotment being paid to Cave on the settlement of each sale (or an adjusted amount should there be less than 81 lots). Clause 7 of the first loan agreement provided for the consequences which would follow certain events of default. It was in almost identical terms to clause 7 of the 2006 loan agreement, to which I referred at [8] and [9] of this judgment.

21 The first loan agreement was varied by a deed ('the 2005 deed of variation') entered into between SP, Cave and the guarantors on 17 November 2005. The time for payment by Cave to SP of the final advance was by this deed extended from 23 November 2004 to a date after 15 February 2006, being the date on which the City of Greater Shepparton was to issue a statement of compliance with the plan of subdivision. The result was that both the date for repayment and the interest provisions were adjusted. The variation increased the sum to be paid by SP to Cave on settlement of the sale of each allotment from $60,000 to $65,000.

22 The 2005 deed of variation provided for additional security in the form of a fixed and floating charge in favour of Cave over the assets of SP. It also inserted two new clauses (clauses 14 and 15) into the first loan agreement. The former (a 'purpose of loan' clause) expressly acknowledged that the funds being advanced by Cave were to be used solely for the purposes of the acquisition, development, subdivision and sale of the land. The latter (a 'reporting' clause) obliged SP to provide a written monthly report on the progress of the development. Those reports were to include, as a minimum, a cheque register, cash flow with copies of bank statements each month, details of allotment sales with copies of each contract of sale, information about the progress of any construction works on the land, and details of projected expenditure for the next three months including an assessment of the costs to complete the project.

23 Never once did SP fulfil its obligation to report in this way. Never once did it report at all.

24 A further deed of variation ('the 2006 deed of variation') was executed on 6 March 2006. It increased the 'present advance' from $3,454,000 to $4,404,000. It also varied the priority ranking of Cave's first mortgage to that of a second mortgage. This re-ordering of securities was to accommodate the requirements of an additional lender, the National Australia Bank, ('the NAB') which insisted on being registered as first mortgagee.

25 The project took longer than anticipated. When it became clear that the principal sum would not be repaid by 29 September 2006, the date specified in the 2004 loan agreement, the parties renegotiated their contractual relationships. The result was that, on 21 December 2006, they entered into a second loan agreement ('the 2006 loan agreement') which, while retaining many of the previous contractual terms, superseded their earlier agreements.

26 In addition to incorporating, as clause 13, the 'purpose of loan' requirement imposed by the 2005 variation and, as clause 14, the 'reporting' clause of that variation, the 2006 loan agreement provided by clause 2 that the 'principal sum' meant the present advance and any other monies then or thereafter owing by SP to Cave. It should also be noted that item 5 of Schedule I defined the expression 'present advance' as the sum of $3,680,000, while item 9 provided for the payment of interest as follows:

Interest: Nil for the first 12 month period and thereafter 8% per annum payable six monthly in arrears.[7]

27 Item 7 of Schedule I dealt with the terms of repayment:

Repayment: [SP] shall repay the principal sum in the manner and at the time stipulated in the repayment programme (which programme is set out in Schedule II) provided that the parties may by supplemental agreements vary the terms of the said repayment programme.

28 I referred at [5] above to items A and C of the repayment programme detailed in Schedule II. That programme also provided for the payment of $1,000,000 in cash and (i) the sale by one of the appellants (Peter Nolan) and the purchase by Cave of a service station/roadhouse for $750,000, with a maximum of $620,000 of that price being applied to repay a loan obtained by Mr Nolan from the NAB; (ii) the reduction of the principal sum by the difference between, on the one hand, the amount owing by Mr Nolan to the Bank and, on the other, the $750,000 to be nominally received by him from the sale of the service station; (iii) on a date nominated by the NAB or upon discharge of the NAB's first mortgage, the transfer to Cave of Lots 22, 23, 24, 25, 26, 27, 43, 44, 45, 46, 47 and 48 in Stage 2 of the subdivision, together with lots 51 and 52 in Stage 3; and finally (iv) the payment of any balance within six months of the last of thes[8] transfers.8

29 Schedule II also contained the following statement:

For the avoidance of doubt as to the balance which may be owed at any time the parties agree:-

The present advance of $3,680,000.00 comprises the principal amount of $3,054,000.00 plus deferred interest of $626,000.00.
The repayments under this Schedule II will be applied firstly against the principal amount and then in payment of any outstanding interest.
At the completion of the payment of $1,000,000.00, the transfer of Lots 1, 2 and 3 in Plan of Subdivision No 539137R and the sale of the property at 7647 Goulburn Valley Highway, Kialla the amount outstanding will be $2,100,000.00 comprising an outstanding initial principal amount of $1,474,000.00 and deferred interest of $626,000.00.

30 In accordance with clause 6 of the 2006 loan agreement, a deed of guarantee in the form of Schedule III was executed by Messrs Linsdell, Nolan and McGuire. It provided that the guarantors would:

... unconditionally guarantee to [Cave] the due and punctual payment by [SP] of all amounts whatever owing under and as a result of the [2006 loan agreement] and the due and punctual performance of all obligations and undertakings and provisions contained in the said agreement.

31 By early 2008, SP was experiencing difficulties selling lots in the subdivision. Messrs Linsdell, McGuire and Nolan discussed with officers of the NAB the bank's concerns that SP had not sold sufficient of the allotments to service the loan facilities it had with the bank. As a means of overcoming this problem, it was decided to put on the market for immediate sale as undivided land that portion of the property which had been set aside for Stages 3 and 4 of the subdivision. But before this could happen, it was necessary to obtain a discharge of Cave's mortgage. Although Mr Nolan collected a discharge from Mr Cave on 27 May 2008, and the settlement took place on 30 May, it would appear that negotiations were until 9 July that year being conducted with Cave about whether it would take Lots 49 and 50 from Stage 2 of the development in lieu of the allotments (Lots 51 and 52 in Stage 3) designated in item C of Schedule II as part of the repayment programme.[9] In his amended witness statement, Mr Nolan said that on or about 9 July he was informed that Mr Cave had accepted the alternative allotments.[10]

32 It was against this background that, on 21 June 2008 SP defaulted in its obligation to pay Cave interest under the 2006 loan agreement and, on 10 July 2008, Mr Cave faxed to Mr Linsdell the letter of 9 July 2008. The full terms of that letter are as follows:

RE: LOAN AGREEMENT 9/7/08

...

In the last few years we had many agreements, hopefully this is the last one. Reluctantly I have to accept 14 blocks in lieu of $2.1 M in cash

Pursuant to a previous agreement 8% from 21/2/07 to 21/5/08 $84k

Pursuant to paragraph 4 of the agreement 23/5/08 c.c. enc 10% - 3 mth = $52.5k

Total interest payable $136,500 (7 DAYS PLEASE)[11]

Please DISCHARGE the first mortgage from the NAB

DELIVER original copy of titles registered owner SHEPPARTON P/L and first Mortgage to CAVE INVESTMENTS P/L

Please FINALIZE the above immediately

Paul Cave.[12]

33 In my opinion, the effect of this letter, when viewed against the contractual relationship between the parties, is plain. Cave was at that time required to accept repayment in accordance with Schedule II of the 2006 loan agreement. Mr Cave's acceptance of '14 blocks in lieu of $21 M in cash' may have been reluctant (a reluctance perhaps exacerbated by the negations about the change from Lots 51 and 52 in Stage 3 to Lots 49 and 50 in Stage 2), but - putting aside the failure to report - it was no more and no less than his contractual obligation, given that he had explicitly elected to extend until 17 July time within which SP was required to pay the interest originally due on 21 June. As for the failure to furnish Cave with the monthly reports for which the 2006 loan agreement provided, Mr Cave's 'reluctant acceptance' could be taken as an implicit, but by no means necessarily permanent, waiver of that obligation. In other words, the 'acceptance' of the '14 blocks' was no more than the acceptance on an interim basis of the consequences of the extension of time within which to pay the overdue interest, and an implicit indication that the reporting default was not a matter of immediate consequence.

34 That 'acceptance' did not in my opinion amount to a binding election not to exercise the option to which, by clause 7 of the 2006 loan agreement, Cave was entitled on SP's default. The 'acceptance' was 'reluctant', and clearly arose from a misunderstanding by Mr Cave of the respondent's contractual rights. This is far from the exercise of an option which, because SP's default had been temporarily excused, was not as at 10 July open in any event.

35 The seven days to which Mr Cave referred in his handwritten addition to the letter expired on 17 July. By then, none of the requests made in it had been fulfilled. SP therefore remained in default - and not only in the payment of interest, but also in the failure to report. It did, on 17 July, tender $70,000 by way of overdue interest; but that tender was refused. No reports were tendered, either then or at all.

36 The trial judge said the following about the 17 July and 30 July meetings:

[50] Following the 10 July 2008 letter there was a meeting between the parties on 17 July 2008. There was no dispute that during that meeting an incorrect sum of money was tendered by way of an interest payment, said to be pursuant to the 2006 Loan Agreement. This payment was refused. The sum offered was $70,000, rather than the sum of $84,000, which was due as at 21 June 2008 under the agreement. Additionally, Shepparton Projects expressed its intention to seek to satisfy its obligations under the 2006 Loan Agreement by tender of transfers of the 14 lots of land referred to in paragraph C of Schedule II of the agreement in the then near future. Reiterating its submissions on the 10 July 2008 letter, outlined above, Cave Investments submitted that nothing that occurred at the 17 July 2008 meeting constituted any unequivocal exercise of rights by it which were inconsistent with the retention of a right to exercise its powers under clause 7 of the agreement.

[51] There was a further meeting on 30 July 2008, and there appears to be no dispute as to what occurred:[13]

Mr Linsdell and Mr McGuire provided photographs of original documents held in the plaintiff's solicitors office;
They indicated that the plaintiff was in a position to transfer the blocks of land as the NAB had agreed to discharge its mortgage;
They tendered an incorrect sum for interest then outstanding;
Mr Paul Cave indicated that he wanted cash and not land;
The defendant sought to justify its conduct by reference to the December 2006 agreement being 'old'.

[52] Cave Investments submitted that the conduct of Mr Paul Cave on behalf of Cave Investments at the 30 July 2008 meeting in asserting that the 'old' agreement was no longer binding should be seen as an assertion on its behalf that it was no longer bound to accept transfers of lots of land under Schedule II of the 2006 Loan Agreement. It further submitted that this was a correct statement of the position, assuming that the intention of Cave Investments was to exercise its option under clause 7 of that agreement (which it said it did, by demanding cash rather than land).[14]

37 His Honour continued, at [60] of his judgment, with an analysis of the purported tender of 30 July 2008. He there said:

Further, it was common ground that the conduct of Shepparton Projects at the 30 July meeting did not involve an actual tender. Cave Investments noted, in this respect, that Shepparton Projects' performance as of that time was deficient in that:

no discharge of mortgage was provided for execution by Cave Investments;
the original documents, namely the transfers of lots and discharges of mortgage from National Australia bank were not available but, rather, it was anticipated that settlement would occur, presumably at a solicitor's office, at some later time or date;
the tender of $70,000 by way of interest was an inadequate sum as the sum of $84,000 was then due and payable by way of interest; and
clearly there was a liability to pay interest which had accrued since 21 June 2008.

38 These findings have not subsequently been challenged. His Honour, correctly in my respectful opinion, did not go so far as to conclude that, on 17 July, Mr Cave exercised Cave's option, pursuant to clause 7, to enforce the guarantees and call for the payment forthwith of 'the whole of the principal sum plus any accrued interest remaining outstanding'. But, while no option was then exercised, nor was its future exercise foreclosed.

39 And there is in my opinion no doubt that that option was exercised on 30 July. At that time, SP was in default not only of its obligation to pay interest in the sum of $84,000 for the period 21 December to 21 June 2008 but also of its obligation to furnish Cave with the detailed monthly reports which the 2006 loan agreement required. It is true that $70,000 was tendered by way of arrears of interest, but part payment of a debt is not enough. The rule was stated as long ago as 1602, in Pinnel's case:[15]

It was resolved by the whole court, that payment of a lesser sum on the day in satisfaction of a greater cannot be any satisfaction for the whole, because it appears to the judges that by no possibility, a lesser sum can be satisfaction to the plaintiff for a greater sum.

40 SP was therefore, on 30 July, in default on two fronts either of which may have been, and the default in payment of interest certainly was, a proper basis for the exercise of the clause 7 option. And exercised it was. There was evidence before his Honour that during the course of the meeting Mr Cave said to Mr McGuire: 'I don't want the land and I don't want the cheque [for $70,000]'.[16] As his Honour found, Mr Cave 'indicated that he wanted cash and not land'.[17] This cannot be an expression of any other intention than an intention to exercise the option given by clause 7.

41 According to Mr McGuire, Mr Cave added: 'That agreement is two years old and is not valid.' SP contends that, in these circumstances, Mr Cave 'cannot be heard to say he had exercised an option. It clearly was not in his mind.'[18]

42 It is true that Mr Cave may have believed that clause 7, and the 2006 loan agreement as a whole, were no longer valid. But, if he held that belief, it was wrong. On the other hand, he clearly and correctly believed that SP was in default and that, consequently, he had legally enforceable rights. What is more, he made it clear that he intended to exercise those rights. By clause 7, these were 'notwithstanding anything contained elsewhere in [the] agreement' to the payment 'forthwith' of 'the principal sum plus any accrued interest remaining outstanding'. Clause 7 says nothing about the transfer of land.

43 The law does not deprive persons of their rights, whether or not they are under any disability such as old age, simply because they cannot point, when exercising those rights, to a clause in some agreement in which those rights reside. This is not a case in which a party has made a conscious choice from which he or she subsequently wishes to resile. Mr Cave made a conscious choice on behalf of his company. He has never resiled from it. Having made it, he wants this Court to enforce the rights to which his choice entitles him.

44 The appellants have nevertheless made the meeting of 30 July pivotal to their case. They submit (i) that SP then 'sought to perform the 2006 loan agreement by again tendering a cash amount of money for interest (albeit incorrectly calculated) and stating that it was ready, willing and able to transfer ... the 14 lots, the bank having agreed to discharge its mortgage'[19] and (ii) 'that by its conduct at this meeting and antecedent correspondence and conversations Cave Investments repudiated the 2006 loan agreement.'[20] The appellants' outline of submissions continues:

[25] Further, Cave Investments refusal of tender and conduct indicated to Shepparton Projects that any further tender of performance by transferring the 14 Lots would be futile, and would be rejected by Cave Investments. This dispensed with further compliance by Shepparton Projects.

[26] The learned trial judge erred in rejecting the appellants' submissions that by reason of the meeting on 30 July 2008, on and from that date:

(a) interest ceased to run on the principal sum because Cave Investments' repudiatory conduct;

(b) Shepparton Projects was not required to provide monthly reports (assuming it was required to do so) without Cave Investments first giving notice re-instating the obligation under Clause 14 of the 2006 Loan Agreement: cf [His Honours] reasons [for judgment at] [57]. Further, Cave Investments had to make time once again of the essence before a default in monthly reports could be relied upon;

(c) Shepparton Projects was ready, willing and able to perform all of the obligations required under Schedule II of the 2006 Loan Agreement as soon as Cave Investments intimated its willingness to accept the land in satisfaction of the principal amount outstanding in accordance therewith.

45 The gravamen of these submissions is that the appellants' obligation to pay interest necessarily came to an end when Cave rejected SP's tender because a creditor who unjustifiably refuses to accept tender of the outstanding principal cannot thereafter require his or her debtor to pay interest on the rejected sum. But the last proposition is only good (at least in the circumstances of this case) if the creditor's rejection of the debtor's tender was not justified.

46 In this case, however Cave was justified in rejecting SP's tender, and in insisting on its rights - even if it believed that the repository of those rights lay in some unspecified place which was not clause 7. First, Cave's allegedly repudiatory conduct followed the tender by SP of the incorrect amount for outstanding interest. Secondly, the 'title documents' produced were photocopies (no originals were included and no transfer in registrable form was tendered). Thirdly Cave was merely told of an 'indication' that the NAB had agreed to discharge its first mortgage; the discharge itself was not tendered. Finally, despite the contractual requirement, none of the monthly reports were presented.

47 In its outline of submissions, SP states that 'any further render of performance by transferring the 14 Lots would be futile'. As the trial judge pointed out, that contention may lead to a conclusion which is the opposite of that which SP seeks to promote. While, in pursuit of its own interests, SP may have chosen to portray Cave's refusal of tender as indicating to SP that any further tender of performance by transferring the 14 Lots would be futile, that refusal was in the context not of a repudiation of the 2006 agreement but of an insistence by Cave that SP's debt be repaid in money, as required by SP's contractual obligations to Cave. The respondent may not have identified clause 7 as the contractual provision upon which its stand was taken, but that is not to the point. As his Honour said at [59] of his judgment:

[I]f Mr Cave's refusal of the lots of land was sufficiently clear to amount to repudiatory conduct, then it must follow that if at the relevant time Cave Investments was entitled to exercise the option to accelerate under clause 7 of the agreement, then this conduct is also sufficiently clear and certain to amount to a valid exercise of the option to accelerate under clause 7.

48 I respectfully share his Honour's opinion that Cave was so entitled, and its conduct was sufficiently clear and certain to amount to a valid exercise of its option to accelerate. Moreover, all that Cave subsequently did is consistent with the position taken by Mr Cave on 30 July and therefore with the conclusion just expressed; and all that SP did not do was consistent with its contention that Cave would never accept payment in accordance with Schedule II and that, if it ever was in default in the payment of interest, that default had been excused and no further payments were due.

49 Thus, SP never paid or even tendered the $84,000 that fell due as interest on 21 June. It never produced the monthly reports. Nor did it ever produce the documents which would have enabled settlement of any transfer of any of the Kialla West allotments. Its explanation is that, on 30 July, Cave repudiated the 2006 agreement. Yet SP has never tendered the interest which on any tenable view accrued between 21 June and 30 July. Moreover, interest for the six months following 21 June which (if Cave did not repudiate) accrued on 21 December 2008, has never been tendered either.

50 As further protection of its position, Cave on 12 September 2008 lodged a caveat claiming an interest in the Land as mortgagee.

51 There is no possible answer, as it seems to me, to the proposition that SP did not do enough on 30 July to put Cave in a position from which it had no choice but to adhere to the repayment schedule set out in Schedule II; or, to put the argument the other way, SP did not do enough on 30 July to enable it properly to characterise as a repudiation of the 2006 agreement Cave's refusal to accept the tender purportedly made by SP that day. Moreover, even were that not the position on 30 July, SP never subsequently tendered interest for the period 21 June 2008 to 30 July 2008, and has therefore been in default in relation to that interest since at least 21 December that year.

52 Senior Counsel for Cave nominated this as his client's 'killer point'. I accept the correctness of that nomination.

53 Despite SP's failure to make another move following 30 July 2008, Cave did not sit back and wait for the plums to fall into its lap. On 2 October, Mr Cave wrote to Paul Linsdell. In his letter, he asserted that 'Shepparton owes me $2.1M CASH plus 8% interest'. He added that, as he was 81, he must assert his legal rights. SP made no positive response, if it made any response at all.

54 Another letter was written, this time after 21 December 2008, the due date for payment of the next instalment of interest. It was written by Cave's solicitors and dated 4 February 2009. It demanded payment of $2,100,000, being the principal claimed to be outstanding, together with $193,762 being the amount of interest which Cave asserted had accrued but was unpaid. Similar letters, similarly dated, were written to SP's solicitors and at least one of the guarantors (Mr Nolan). Again, there was no relevant response.

55 It is in this context that I turn to the grounds of appeal.

56 SP relies on ten grounds. Neither the first of these (that the trial judge erred in failing to adjudicate the claim made by SP for specific performance) nor the fifth (that his Honour erred in failing to apply the rule in Jones v Dunkel to the fact that Cave did not call Mr Paul Cave to give evidence) was addressed in either the written or the oral submissions put to this Court. I take it, therefore, that each has been abandoned.

57 Grounds 2 to 4 relate to the construction of clause 7 of the 2006 Loan Agreement. The contention is that his Honour erred (a) in holding that, on its proper construction, (i) Cave could not be required to take allotments of land in satisfaction of SP's debt and, (ii) were Cave to so elect, SP would lose its right to satisfy the debt by the transfer of such land and instead have to repay in money (ground 2); (b) in holding that SP's submissions on the proper construction of the agreement would represent a most unlikely bargain (ground 3); and (c) in failing to conclude that the parties had varied their agreement from one in which payment was wholly in money to one in which SP's debt could be discharged partly in money and partly in specie - in the form of land, and had done so because SP was unable to repay the whole of the loan in money (ground 4).

58 Grounds 6 to 9 relate to his Honour's findings about the meetings on 9 July, 17 July and 30 July 2008. It is said that his Honour erred in characterising the 10 July 2008 letter as simply an extension of time for payment, rather than being an affirmation of paragraph C of Schedule II and a variation of the 2006 Loan Agreement by altering the identity of two of the 14 lots to be transferred in lieu of cash (ground 6); it is said that his Honour should have held that, as a result of the 10 July letter, 17 July 2008 was not a date on which interest was due to be paid, so that SP was not in default (ground 7) or, alternatively, SP's default in not paying interest on that date did not amount to a repudiation which Cave could accept to accelerate payment of the principal (ground 8); his Honour also erred in characterising the conduct of Paul Cave on 30 July 2008 as an election under clause 7, and instead his Honour should have (a) held that Mr Cave's conduct constituted a clear intimation to SP that performance by it of its obligations under the payment schedule would be futile and (b) that Mr Cave had no intention of electing under clause 7, having explicitly repudiated its continued operation (ground 9).

59 Finally, ground 10 concerns the effect of the repudiation of the 2006 Loan Agreement. SP says that his Honour erred in rejecting its argument that as a result of what happened on 30 July 2008, (a) interest ceased to run on the principal, (b) SP was not required to provide monthly reports without Cave first giving notice of reinstating that obligation, and (c) SP was ready, willing and able to perform all the obligations required by Schedule II as soon as Cave intimated its willingness to accept the land in satisfaction of the principal outstanding.

The cross appeal and notice of contention - grounds

60 Cave has brought a cross appeal from paragraph 5 of the orders which, following the judgment of 9 September 2011, were made on 21 October 2011. The Court then ordered that there be judgment for Cave against the appellants in 'the sum of $2,836,447.77 constituted by the sum of $2,100,000 plus interest of $736,446.77 plus nominal damages of $1.00.' The grounds are:

His Honour erred in deciding that interest was to be calculated under the 2006 Loan Agreement on so much of the Present Advance as remains outstanding, rather than the fixed sum of $3,680,000.
His Honour erred in deciding that default interest on overdue payments under the 2006 Loan Agreement compounds six-monthly, rather than daily.

61 Cave has also filed a notice of contention seeking (subject to the cross appeal) to affirm the trial judge's judgment on the basis that SP breached and/or repudiated the 2006 Loan Agreement by (a) failing to provide a monthly report by 14 July 2008 and (b) failing to pay interest on 17 July 2008. It also says that SP breached the 2006 Loan Agreement by failing to pay interest on 21 December 2008.

Grounds 2-4: the construction of the 2006 Loan Agreement

62 A central issue at trial and on this appeal was the relationship between clause 7 of the 2006 loan agreement and the repayment programme provided for in Schedule II.

63 The trial judge summarised this aspect of the litigation in the following terms:

The issue of the proper construction of the 2006 Loan Agreement arises with respect to the operation of the default provisions contained in clause 7 of that agreement. The operation of clause 7, and the effect of other provisions of the 2006 Loan Agreement, depend principally upon whether the acceleration provisions, which might operate on the occurrence of one or more of the default events specified in paragraph (a) to (h) of clause 7, alter the nature of the performance required under the repayment programme provided for in Schedule II, or whether clause 7, once triggered, operates merely to alter the time for performance. This, in turn, raises the nature of the obligations under the repayment programme specified in Schedule II.[21]

64 The appellants argued that, because the Schedule was on 21 December 2007 introduced into the relationship between SP and Cave for the first time, the 2006 loan agreement was fundamentally different from its predecessors. Unlike the earlier contractual arrangements, it provided for the repayment of SP's indebtedness only in part by the by the transfer of money. The balance was to be repaid by the transfer to Cave of title in 17 of the allotments created or to be created by the Kialla West development. And that distinction formed an element in the factual matrix against which the 2006 loan agreement was to be construed. Accordingly, the appellants' argument continued, clause 7 must be taken as accelerating the time within which, on default and on the exercise by Cave of its 'clause 7' option, SP would be required to effect the transfers of title and the repayment of the cash balance. It did not otherwise affect the means by which the debt owed by SP would be extinguished.

65 SP accordingly submitted that, upon a default following which Cave exercised the option to accelerate, SP would be to obliged to do everything in the Schedule II repayment programme 'straight away.' SP contended that, in giving paramountcy to the opening words of clause 7 - 'Notwithstanding anything contained elsewhere in this agreement' - his Honour was in error: there was no inconsistency between clause 7 and the repayment programme; and the acceleration clause can work, whether or not the principal sum is repaid in specie or in cash, or a mixture of both. What cannot happen is that, in the event of default, clause 7 be so construed as to convert SP's obligation from an agreed combination of repayment in cash and in specie into a requirement that repayment be in cash.

66 SP also submitted that the construction of the 2006 loan agreement for which it contended was supported by clause 5(a). That clause provides that SP would repay Cave 'the principal sum at the time or times specified in item 7 of Schedule I'. Item 7 in turn reads:

Repayment: [SP] shall repay the principal sum in the manner and at the time stipulated in the repayment programme (which programme is set out in Schedule II) provided that the parties may by supplemental agreements vary the terms of the said repayment programme.[22]

67 This, according to SP, meant that - whether on default or otherwise - repayment was to be in the manner prescribed by Schedule II. Alternatively, if there was any ambiguity in the way clause 7 and Schedule II related to each other, then his Honour was obliged to take into account the surrounding circumstances and commercial purpose of the agreement. This venture was always cash poor. The parties recognised this when they executed the 2006 loan agreement and provided for repayment partly in cash and partly in land. According to SP, his Honour should have considered this critical difference between the 2004 and 2006 loan agreements, which demonstrated that the objective intention of the parties when they executed the latter agreement was to substitute land for cash in relation to $2.1 million of the obligation to repay the principal sum. Mr Cave was aware of this situation when he wrote the 10 July letter and met with the SP representatives on 10 July and 30 July. His Honour engaged in impermissible reasoning by concluding that the construction of the agreement for which SP argued 'would represent a most unlikely bargain.' In the absence of the contract being absurd, it is not sufficient to say that the agreement appears not to be commercial or business-like.

68 By contrast, Cave submitted that the natural and ordinary meaning of the word 'repayable' used in clause 7 is 'repayable in cash'. It contended that SP advanced no reasons why 'repayable' in clause 7 should be given a different meaning because the phrase 'in the manner and at the time' is used in item 7 of Schedule I. Clearly those words would operate to govern the repayment programme in the absence of default; but SP's assertion that they would also govern the situation where a default occurs and repayments are accelerated is wrong. For one thing, the timing would no longer be dictated by Schedule II. Cave pointed out the inconsistency in accepting, as SP's position would require, that clause 7 overrides Schedule II in relation to timing but not in relation to manner. This, Cave argued, would lead to a 'surprising' result, given that the clause which introduced Schedule II into the agreement (that is, clause 5(a)) is concerned only with timing.

69 The respondent also takes issue with SP's assertion that his Honour engaged in impermissible reasoning when he concluded that the approach urged by SP would result in 'most unlikely bargain'. On the contrary, the respondent argued, his Honour was bound to adopt an approach to construing the agreement which was commercial and businesslike. If a developer of a large subdivision is encountering difficulties servicing its financial obligations, then it is highly possible that this will be because the developer is not able to sell the individual lots at either the rate or the price anticipated. In those circumstances, a prudent lender would wish to protect itself by taking cash, and not the very land which, on this hypothesis, is not as valuable as it was once hoped it would be. Moreover, the parties' objective intention was unlikely to be that SP as a defaulting borrower could insist on repayment in land, given that some of the transfers of lots required the consent of a third party, which if not given, would have meant that as a remedy Cave, as a secured lender, would only have a claim in damages.

70 It is true, as SP contended in a written submission filed during the course of oral argument on the appeal, that the word 'payment' may include payment in kind.[23] And contracts can make provision accordingly. That is not to say, of course, that the word must always embrace payment both in money and otherwise. Thus, as employed in clause 7 it does not extend that far. Clause 7 speaks only of 'repayment' of the 'principal sum' and interest. In context, these words refer to repayment in money, not in kind. Explicit reference to the latter form of payment in, or in reference to, clause 7, would in my opinion be required were immediate payment on default to encompass payment in kind.

71 In his Honour's opinion, Cave was 'correct in its submission that the position advanced by Shepparton Projects with respect to the proper construction of the provisions of the 2006 Loan Agreement would represent a most unlikely bargain.' His Honour proceeded to reject the 'position' adopted by SP, with the result that the appellants now complain (by ground 3) that the reference to 'a most unlikely bargain' was in itself an error, leading in part to the ultimately erroneous conclusion that SP's claim must fail.

72 I have already noted that clause 7 provides that '[n]otwithstanding anything contained elsewhere in this agreement the guarantees shall become enforceable and the whole of the principal sum plus any interest remaining outstanding shall become forthwith repayable at the option of' Cave on the commission by SP of any of the breaches enumerated thereafter. Taken in context, looked at also in the commercial setting against which the 2006 loan agreement came into being, and read in conformity with their ordinary meaning as part of the English language, these words simply mean what they say. On default, and at the option of Cave, SP loses the right it would otherwise have to partly repay in land.

73 A requirement that payment by the transfer of titles to land be effected 'forthwith' is so obviously fraught that it would not be read into a contract unless by plain words or unavoidable implication. In this case, plain words and unavoidable implication both point in the opposite direction.

74 For the reasons given above, I am of the opinion not only that the judge was entitled to characterise 'the position advanced by Shepparton Projects' as representing 'a most unlikely bargain', but also that grounds 2-4 must fail.

75 There is no contest that SP was on 17 July 2008 required under the terms of the 2006 loan agreement to pay interest amounting to $84,000. It did not do so. The question is what effect the letter of 10 July 2008 and Mr Cave's conduct at the meeting on that day and on 30 July had on that obligation. The appellant submitted at trial that the terms of the letter show that Cave did not elect to demand the immediate payment of the principal sum under clause 7; instead, as a result of Mr Cave's annotation '7 days please', Cave extended the deadline for payment of the interest to 17 July 2008 and affirmed its acceptance, albeit reluctantly given, of repayment being by transfer of the 14 lots instead of $2.1 million in cash. The terms of the letter are, it is submitted, inconsistent with any exercise of an option to demand immediate payment of the principal sum.

76 At the hearing of the appeal senior counsel for the appellant raised, for the first time, a submission that the evidence of what occurred at the meetings on 10 July and 30 July 2008, as set out in the unchallenged affidavit of Mr McGuire, demonstrates that Mr Cave's words were not consistent with the state of mind necessary to effect a proper election under clause 7. In order to elect, a person must choose between two inconsistent courses. Mr Cave did not do so. It is clear from the words used that Mr Cave did not turn his mind to accelerating the repayment of the principal sum because SP was in default; his state of mind on 10 July was that SP would not be able to obtain a discharge of the mortgage from the bank and obtain the certificates of title. And on 30 July the basis he put for not accepting the transfer of the land was that the agreement was 'old' and not valid. There was no election. SP did exactly what Cave demanded it do in the 10 July letter: it discharged the mortgage, delivered copy certificates of title and tendered a cheque in the sum of $70,000 - which is the correct amount of interest for the period 21 December 2007 to 21 May 2008 at $14,000 per month. And while this is inconsistent with the loan agreement, his Honour accepted that the letter had the effect of altering the contractual position. Mr Cave did not take the opportunity to clarify that the amount of interest being tendered was incorrect or that the period set out in the letter was incorrect. The trial judge therefore had no basis on the evidence before him to find that Mr Cave made an election under clause 7.

77 I would again observe that the tender of a cheque in the sum of $70,000 did not comply with the demand made in the 10 July letter. That letter sought payment of $84,000 - the amount actually due on 21 June 2008 - albeit, on one reading of the letter, for the period to 21 May 2008. For the reasons which I gave earlier in this judgment, it seems to me clear that the error in the letter was Mr Cave's reference to '21/5/2008'. He should have written '21/6/2008'. Alternatively, another way of reading the letter was that Cave was demanding a greater amount for a shorter period.

78 Even if Cave was by the 10 July letter offering to accept a lesser sum than that due under the loan agreement, there remains the question of what consideration, if any, SP gave for such acceptance. I have already noted that part payment of a debt cannot satisfy the debtor's obligation to repay unless there is consideration, even nominal consideration, for the relinquishment of the balance.[24] There are some exceptions, such as a promise under deed.[25] None apply here. There is no suggestion, for example, that SP offered consideration by paying the interest early; on the contrary, it was overdue.

79 It is true, SP acknowledges, that it was technically in default by not providing monthly reports. However, SP's contentions continue, Cave did not ask for them, and their absence was never a matter of complaint.

80 I reject these contentions of SP. It was in default, for the reasons I have given. The effect was to enliven the option given to Cave by clause 7. Cave made the election for which the option provided. That election was never rescinded, and SP never did that which would have been required were it to be placed in a position from which it could demand a rescission.

81 In my opinion, grounds 6-9 of the grounds of appeal cannot be sustained.

82 I am of the same view about ground 10. Again, I have already given my reasons for concluding that his Honour correctly rejected SP's contention that, as a result of what happened on 30 July: (a) interest ceased to run on the principal; (b) SP was not required to provide monthly reports without Cave first giving notice of reinstating that obligation; and (c) SP was then ready, willing and able to perform all the obligations required by Schedule II.

84 The notice of contention covers ground already furrowed, if not ploughed. First, the judgment below can be affirmed on the basis that SP breached the 2006 loan agreement by failing to provide by 17 January 2007 (being two weeks before the end of that month) and within two weeks of every month thereafter a monthly report containing all the information required by clause 14 of the agreement. The failure was, it seems (because there was no evidence to the effect that it could be excused) egregious. But these considerations are not really to the point. Clause 9(h) of the agreement provided that no waiver by Cave of any of its rights, or of any breach, shall be deemed a waiver of any continuing or recurring breach. It is therefore clear that, contrary to the submissions of SP, Cave was as at 10 July 2008 and thereafter entitled to rely on the failure to report as a default which was caught by clause 7(b) of the agreement (default by SP in the observance of any of its covenants or obligations). SP's attempts to rely upon waiver, and upon the proposition that the reports were not required because Cave had not first given notice re-instating that obligation cannot therefore succeed. Nor can its contention that Cave was required to again make time of the essence.[26] The 2006 loan agreement contained, in clause 9(g), an unqualified requirement that time be of the essence.

85 The second issue raised by the notice of contention is readily answered. The judgement of his Honour can be affirmed on the basis that SP did indeed breach the 2006 loan agreement by failing to pay interest on 17 July 2008 and again on 21 December 2008. There can be no basis for a claim by SP that it thought that Cave was, by the letter of 10 July, seeking only $70,000 in full satisfaction of an obligation to pay $84,000 - the very amount which the letter requested, and an amount the correctness of which (given that 21 June had come and gone) SP must have been aware.

The cross appeal - the proper calculation of interest

86 Clause 5(b) of the 2006 loan agreement provided that interest was to be payable 'upon the present advance'. But the clause did not stop there. By its terms, interest was also to be payable (unless otherwise agreed) 'upon any other monies forming part of the principal sum outstanding ... such interest to accrue and be payable from day to day'.

87 The expressions 'present advance' and 'principal sum' are defined in the agreement. The former is the subject of item 5, where it is said to be 'The sum of $3,680,000.00'. the 'present advance' is, therefore a fixed amount. The definition of the latter is found, together with seven other definitions, in clause 2(a), where (so far as is presently relevant) it is said to mean 'the present advance and each and all sums of money in which [SP] may now or hereafter be indebted. By contrast with the 'present advance', the 'principal sum' is not a fixed amount. It increases or decreases as SP's indebtedness rises or falls.

88 The answer to the first ground of the cross-appeal depends upon whether interest is properly calculated on the fixed amount (the 'present advance') or upon the (variable) 'principal sum.'

89 His Honour held that the principal sum was the contractually established base for the relevant calculation. The respondent contends that this was an error, and that interest ought be calculated on the fixed amount of $3,680,000.00. Cave maintains that, because clause 5(b) expressly provides that SP is 'to pay interest ... upon the present advance', that is the end of the argument.

90 I disagree. Interest is not payable only on the present advance. It is payable upon that 'and ... upon any other monies forming part of the principal sum outstanding from time to time'. It follows that, depending upon the proper construction of the clause, interest is either payable both on the 'present advance' and upon any other monies - being monies which constitute the outstanding portion of the 'principal sum' or upon the 'present advance' (which forms part of the 'principal sum) together with the other parts of the 'principal sum'.

91 The first alternative, it seems to me, cannot be correct. The expression 'other monies being monies which constitute the outstanding portion of the principal sum' is meaningless and therefore incalculable. Moreover, the construction favoured by Cave would mean that interest was payable on the present advance ad infinitum.. That would be absurd. It is true that words such as 'until the present advance is repaid in full' could by inference be read in; but if that is so, the words 'or as much of it as remains outstanding from time to time' would be equally apposite.

92 Cave submits that clause 2(b) is unambiguous and, as such, must be given its unambiguous meaning, no matter to what absurd results that might lead. In my opinion, however, for the reasons I have given, the clause is far from unambiguous. This contention of the respondent does not go beyond its false premise.

93 The second alternative, by contrast, avoids these difficulties and accords with normal practice. It is therefore to be preferred. In my opinion his Honour was correct to so conclude.

94 Clause 5(b) specifies that interest is to accrue and be payable from day to day. The respondent contends that these words, too, are unambiguous, and mean that interest is to be calculated on a daily basis. On the other hand, item 9 of Schedule I provides that interest is not payable for the first 12 months, and thereafter is payable at 8% per annum every six months. His Honour therefore concluded, at [22] of his judgment, that interest could only be calculated bi-annually.

95 This conclusion is entirely consistent with Cave's own calculation of the

interest owing as at 17 July 2008. The outstanding principal upon which interest was then calculated was $2,100,000. At 8 per cent per annum, interest on that sum is $168,000, or $14,000 per month. But because reliance upon subsequent conduct is not permitted as a basis for or as an aid to the construction of contracts,[27] my conclusion has not been influenced by that fact.

96 For the reasons given by his Honour, I agree. The cross-appeal must be dismissed.

[1] Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504.

[2] Shepparton Projects Pty Ltd v Cave Investments Pty Ltd (No 2) [2011] VSC 384.

[3] Amended witness statement of Peter Nolan dated 12 September 2010, Appeal Book, B22.

[9] Amended witness statement of Peter Nolan, [53]-[62], Appeal Book B29-30.

[11] The parenthesis and contents apparently written in Mr Paul Cave's hand.

[13] See Defendant's Summary of Argument (13 September 2010), [36].

[14] Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504, [50]-[52].

[16] Affidavit of Kevin McGuire, [8] Appeal Book B3.

[17] Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504, [51]

[18] Outline of submissions of the appellants, [22].

[19] Outline of submissions of the appellants, [20].

[21] Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504, [30].

[23] White v Elmdene Estates Ltd [1959] 2 All ER 605.

[24] Pinnel's Case [1572] EngR 290; (1602) 5 Co Rep 177a; 77 ER 237, Cumber v Wayne (1721) 1 Stra 426; 93 ER 613, Foakes v Beer [1884] UKHL 1; (1884) 9 App Cas 605.

[25] See generally J W Carter and D J Harland, Contract Law in Australia (Butterworths Australia, 4th ed, 2002) [356]-[360].

[26] Outline of submissions of the appellants, [26(b)].

[27] FAI Traders Insurance Co Ltd v Savoy Pty Ltd [1993] VR 343. In Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290, Santow J expressed a contrary view and thus the extent to which subsequent conduct may be relied upon in construing a contract remains somewhat uncertain (see also Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310, 326 (Priestley JA)).

At a glance

Court

Decision date

Before

Source

Judgment (141 paragraphs)

Parties

Cases Cited (2)