United Pacific Finance Pty Ltd (Receivers and Managers Appointed) v Govindasamy

Judgment

1. In these proceedings, the plaintiff, United Pacific Finance Pty Ltd (Receivers and Managers Appointed), seeks to recover from the defendant, Vijayalatshimi Govindasamy, amounts alleged to be payable under two loans made from Forest Enterprises Australia Ltd (FEA) to Ms Govindasamy in 2007. The loans were made to enable Ms Govindasamy to invest in two agricultural schemes known as the FEA Plantations Project 2006 ARSN 119 069 591 and the FEA Plantations Project 2007 ARSN 125 108 063.
2. United Pacific claims to be entitled to recovery from Ms Govindasamy as the assignee of FEA's rights in relation to the loans.
3. United Pacific contends that the loans were advanced for the principal sums of $99,792 and $93,555, were payable over 10 years, and that Ms Govindasamy ceased making loan repayments in August 2010. It argues that the loans are enforceable under deeds of loan or, alternatively, agreements for loan and seeks judgment in the sum of $323,495.95, being the amounts payable under the loans together with interest.
4. Ms Govindasamy does not dispute that she applied for loan finance from FEA to invest in the Plantations Projects or that she made loan repayments for nearly two years. But, she resists United Pacific's claim.
5. Ms Govindasamy denies that the documents she signed took effect as deeds of loans. She also disputes that she entered into loan agreements with FEA and that loan funds were advanced to her.
6. Ms Govindasamy also argues that United Pacific's claims based on contract are statute barred as they were commenced more than six years after the relevant causes of action accrued.
7. In her defence and written submissions, Ms Govindasamy also raised whether United Pacific's pleading is sufficiently clear to make out any basis of relief, including because it does not plead the loan agreements as deeds, and whether the purported assignment of FEA's rights to United Pacific was effective. Counsel for Ms Govindasamy did not press those matters at the hearing.
8. The key issues for determination are: 1. Did FEA and Ms Govindasamy enter into any agreements for loan in relation to the Plantations Projects and, if so, were they made by way of binding deeds of loan or loan contracts? 2. Has United Pacific established that loan funds were advanced to or on behalf of Ms Govindasamy? 3. If the loans were advanced under loan contracts, is United Pacific time-barred from recovering from Ms Govindasamy?

Comments on the evidence

1. United Pacific, as FEA's assignee and not the original leader, seeks to prove its case based on records it obtained from FEA, its own books and records and documents obtained on a notice to produce served on Ms Govindasamy. There are some gaps in the documentary records before the Court which led to submissions by Ms Govindasamy's counsel about the adequacy of the evidence that I deal with later in these reasons.
2. Most of the documents relied on by United Pacific are put in evidence by an affidavit sworn 12 February 2018 from Mr Peter Gothard, one of two receivers and managers appointed to the property of United Pacific on 31 August 2012. Parts of Mr Gothard's affidavit were objected to on the basis that it amounted to submissions or purported to represent the effect of documents that speak for themselves. Those objections were resolved by orders pursuant to s 136 of the Evidence Act 1995 (NSW) limiting the use of his evidence.
3. Ms Govindasamy relies on her own affidavit affirmed 27 July 2018.
4. Mr Gothard and Ms Govindasamy were both cross-examined at the hearing.

FEA Plantations Projects - overview

1. The FEA Planation Projects for which Ms Govindasamy sought finance were the subject of two product disclosure statements. The product disclosure statement for the 2006 Plantations Project was dated 13 April 2006. The product disclosure statement for the 2007 Plantations Project was dated 2 May 2007. As the full product disclosure statements are not in evidence, the key features of the FEA Plantations Projects are not known to the Court.
2. To invest in a FEA Plantations Project, an investor applicant was required to complete a template application and power of attorney form. Apart from providing personal details, the application and power of attorney form required the applicant to identify, in multiples of $3,465 per woodlot (including GST), the number of woodlots applied for and whether loan finance was sought for the investment.
3. By signing an application and power of attorney form, an investor agreed to become a registered grower and appointed FEA Plantations as the investor's attorney to execute and complete a management agreement and Forestry Rights Lease Deed. Copies of the management agreements and Forestry Rights Lease Deeds relevant to the 2006 and 2007 Plantations Projects are not in evidence.
4. An investor who selected the loan finance option on the application and power of attorney form was required to complete a separate application for loan finance from FEA and a direct debit request authority form which authorised the payment of funds for the loan to be debited from the bank account nominated by the investor.
5. The application for loan finance, also in template form, required the applicant to provide personal details, identify the amount of finance sought, the term of the loan (with options of 3, 5, 7 and 10 years), and provide a statement of their financial position.
6. The template loan finance application forms provide that, if the finance application is accepted, FEA would make a loan available on the terms and conditions in the loan agreement which the applicant had read and understood. They also stated they were "Executed as a Deed on [date to be inserted]"

2006 Project: application

1. On 9 March 2007, Ms Govindasamy signed an application and power of attorney form to purchase 32 woodlots in the FEA 2006 Plantations Project for $110,880. She elected to take finance by paying the minimum 10% deposit with a principal and interest loan for the balance and provided her credit card details for the deposit monies of $11,088.
2. The 2006 application and power of attorney form is signed by Ms Govindasamy as an individual applicant and witnessed by Mr Stanley Khoo, Ms Govindasamy's financial planner. Under the last section of the form headed "SIGNATURES" and above where Ms Govindasamy and Mr Khoo signed, the form states "Executed as a Deed on" and is dated 23/03/07.
3. On 9 March 2007, Ms Govindasamy also signed a finance application form in relation to the 2006 Plantations Project with FEA as lender. The finance application form is two pages long.
4. The completed finance application form identifies the amount of the "Finance Sought" as $99,792 for 10 years with an interest rate of 11%. It contains Ms Govindasamy's personal and contact details and a statement of her financial position, including her income and expenditure details.
5. Page 2 of the finance application form contains a section headed "BORROWER'S STATEMENTS". The section includes five clauses, some of which are referred to as declarations, including a declaration that the purpose of the loan is for business or investment purposes, namely participation in the FEA Plantations Project 2006. Relevantly, the borrower's statement section also includes the following: All Finance Applicants If Forest Enterprises Australia Ltd accepts the application for loan finance, it will make the loan available on the terms and conditions in the loan agreement set out in Section 12 - Loan Agreement ("Terms and Conditions") which you have read and understood. The application for loan finance is subject to Forest Enterprises Australia Ltd's normal credit approval process. Forest Enterprises Australia may request further information in assessing the application.
6. The last section of the finance application form is headed "SIGNATURES". Beneath that heading, the form is signed by Ms Govindasamy as an individual applicant and witnessed by Mr Khoo. Above their signatures, the form includes the wording "Executed as a Deed on" and is dated "23/03/07".
7. On 9 March 2007, Ms Govindasamy also signed a direct debit authority nominating a bank account from which FEA Plantations and FEA were authorised to debit from her account any funds in connection with the 2006 Project, including any insurance premiums and loan repayments.
8. Ms Govindasamy's evidence, which was not challenged, is that Mr Khoo completed the 2006 Plantations Project forms as well as the direct debit authority on 9 March 2007 and that she signed each of them on that day. She does not know why the 2006 application and power of attorney and finance forms are dated 23 March 2007. At the hearing, no issue was raised about these different dates.

2006 Project: Loan Terms

1. The documents in evidence include what United Pacific asserts are the terms and conditions referred to in the 2006 finance application form as the "terms and conditions in the loan agreement set out in Section 12 - Loan Agreement ("Terms and Conditions") which you have read and understood" (2006 Loan Terms).
2. Based on the page numbers of the document in evidence, the 2006 Loan Terms appear to have been part of a larger document, presumably the product disclosure statement. The 2006 Loan Terms do not include any reference to "Section 12".
3. The 2006 Loan Terms are headed "Loan Agreement (Terms and Conditions)" and relevantly include the following clauses: 1. Parties The Loan Agreement is made by way of deed between Forest Enterprises Australia Ltd (ACN 009 553 548) ("the Lender") and the Borrower ("the Borrower") specified in the "Finance Application Form (as defined in clause 4). 2. Loan The Lender loans to the Borrower the amount set against the words "Finance Sought" on the Finance Application Form, together with stamp duty payable on the deed and any further amounts as are requested by the Borrower and agreed to between the parties (collectively, the "Loan Monies"). 3. Purpose The sole purpose of the loan is to pay for the monies and fees owed to FEA Plantations shown in the Application Form & Power of Attorney attached to this PDS signed by the Borrower ("Application Form"). The Borrower irrevocably authorises and directs the Lender to pay the Loan Monies to FEA Plantations Ltd for that purpose. 4. Defined Terms 'Finance Application Form' means, in the case of an application for finance for 3 years or more, the Application for Loan Finance form attached to the Product Disclosure Statement once completed or, in the case of an application for a 12 month interest free loan, the Application Form & Power of Attorney. Terms defined in the Product Disclosure Statement have the same meaning in this loan deed unless otherwise defined in the deed. 5. Loan Account The Lender may set up a loan account in the name of the Borrower ("Loan Account") for administrative purposes to which it may debit any amounts owing by the Borrower to the Lender including, without limitation, unpaid fees and charges payable. The Borrower must pay the debit balance of the Loan Account on demand. … 10. Repayment The Borrower agrees to repay the loan by instalments of principal and interest (if applicable), payable monthly in arrears as set by the Lender, until all monies owing under this deed are paid. Repayments will commence the next occurring 15 August, after the date the Lender first debits an amount to the Loan Account or the date the Lender approves the loan, whichever is the latter date, i.e. finance approved on or before June 30, 2006 will have a first monthly repayment date of 15 August 2006, finance approved in the 2006/07 financial year will have a first repayment date of 15 August, 2007, etc. The Lender may re-set the repayments at any time to ensure that the loan will be paid on or about the end of the loan term set for the loan. When it re-sets the repayments, the Lender will give the Borrower written notice at least 30 days before the change takes effect. The Borrower may prepay the outstanding balance of the loan in whole or in part at any time. If the Borrower makes a prepayment, the Lender reserves the right to charge a reasonable fee for the early repayment. The Borrower must make all payments under this deed in immediately available funds, without any set-off, counterclaim or condition whatsoever, and without any deductions or withholding for any tax or for any other reason, unless the Borrower is required to make a deduction or withholding by any applicable law. In that event the Borrower must increase its payment to the Lender to an amount which will result in the Lender receiving (after deduction or withholding of any tax in respect of the increased payment) the full amount which it would have received if no deduction or withholding had been required. … 15. Default The following events represent default (each an "Event of Default"): (a) if the Borrower defaults in payment of an amount due for thirty (30) days; … If an Event of Default occurs, the Lender may, but is not required to, serve on the Borrower a notice to remedy the default within a further period of seven (7) days. If an Event of Default occurs, the outstanding Loan Monies plus all interest and costs due but unpaid (including the debit balance of the Loan Account) will at the Lender's election become immediately due and payable. Thereupon all of the Borrower's interests assigned or charged by clause 11 may forthwith be appropriated to the Lender to its own use absolutely or sold by it for a reasonable price and the proceeds applied in reduction of the Borrower's obligations under this deed. … 23 General … 23.5 The laws of Tasmania govern this deed. The Borrower irrevocably submits to the non-exclusive jurisdiction of the courts of Tasmania. … 23.10 This deed is enforceable by the Lender even if the Lender does not execute it.

2006 Project: FEA approval of finance application and other documents

1. Ms Govindasamy's finance application for the 2006 Project was approved by FEA on or about 10 April 2007. An internal FEA document records the approval and identifies the total amount of finance sought as $99,969.14, being the remaining amount payable in respect of the 32 woodlots plus stamp duty. It also identifies the monthly loan repayment amount as $1,377.07.
2. Pausing here, there is no evidence of how or when Ms Govindasamy's application for finance was sent to FEA. Presumably, it was received by FEA between 23 March and 4 April 2007.
3. On 30 April 2007, FEA Plantations sent a letter to Tasmanian Perpetual Trustees Limited enclosing a list of growers in relation to the 2006 Plantations Project and a cheque payable to Tasmanian Perpetual Trustees Limited from FEA in the amount of $1,957,663 which, in the letter, is said to represent loan funding for those growers. The list of growers attached to the letter refers to Ms Govindasamy, her loan funding in the amount of $99,792, the number of her woodlots as 32 and the "date accepted" as 10 April 2007.
4. A FEA statement for loan number 009-150A in the name of Ms Govindasamy document identifies that an amount of $99,969.14 was debited to the account on 15 July 2007. It also identifies that interest was debited to the account each month and that payments of $1,377.08 were credited to the account on the 15th or 17th day of each month from 15 August 2007 to 15 December 2008.

2007 Project: application

1. On 25 June 2007, Ms Govindasamy signed an application and power of attorney form to purchase 30 woodlots in the FEA 2007 Plantations Project for $103,950. She elected to take the finance option by paying 10% deposit with a principal and interest loan for the balance. She paid the deposit monies of $10,395 by way of cheque.
2. The 2007 application and power of attorney form is signed by Ms Govindasamy as an individual applicant and witnessed by Mr Khoo. Under the section headed "SIGNATURES", the 2007 woodlot application form states that it is "Executed as a Deed on" and is dated 25/06/07.
3. On 25 June 2007, Ms Govindasamy also signed a finance application form in relation to the FEA 2007 Plantations Project with FEA as lender. The 2007 finance application form is six pages long and contains twelve numbered sections.
4. Section 1 of the 2007 finance application form identifies the "Total Finance Sought" as $93,555, with finance over 10 years at a special finance interest rate of 10.5%.
5. The completed form contains Ms Govindasamy's personal and contact details (sections 2 and 5), a statement of her financial position which refers to her FEA investment loan of $100,000 with a monthly commitment of $1378 as a liability (section 6), and her employment and/income details (section 7).
6. Section 8 of the 2007 finance application from is headed "ACKNOWLEDGMENTS". Under the heading "BORROWER STATEMENTS" are two statements in the same terms as those in the borrowers statements section of the 2006 finance application form except that the first statement in the 2007 form refers to making "the loan available on the terms and condition of the attached loan agreement, which you have read and understood", rather than referring to "Section 12 - Loan Agreement".
7. Section 9 of the 2007 finance application form, which is headed "DATE", includes the wording "Executed as a Deed on" and is dated 25/06/2007.
8. The 2007 finance application form is signed by Ms Govindasamy as an individual applicant and witnessed by Mr Khoo in section 10 of the form, which is headed "EXECUTION - INDIVIDUAL APPLICANTS".
9. On 25 June 2007, Ms Govindasamy also signed two direct debit authority forms, one of which does not appear to be relevant as it relates to a 12 month loan. The other form nominated a bank account from which FEA was authorised to debit funds.
10. Ms Govindasamy's evidence, which was not challenged, is that Mr Khoo completed the 2007 forms on 25 June 2007 and she signed each of them on that day.

2007 Project: Loan Terms

1. The documents in evidence include what United Pacific asserts are the terms and conditions referred to in the 2007 finance application form as the "terms and conditions of the attached loan agreement, which you have read and understood" (2007 Loan Terms).
2. The 2007 Loan Terms are headed "Loan Agreement (Terms and Conditions)". They are in substantially the same terms as the 2006 Loan Terms. The relevant differences between the 2007 and 2006 Loan Terms are: 1. Clause 1 of the 2007 Loan Terms refers to the Loan Agreement being made by way of deed between FEA ("the Lender") and the Borrower ("the Borrower") specified in this Finance Application, rather than as specified in the "Finance Application from" (as defined in clause 4). 2. Clause 2 of the 2007 Loan Terms refers to the Lender loaning to the Borrower the amount set against the words "Total Finance Sought" on page 5, rather than the amount set against the words "Finance Sought" on the Finance Application Form. 3. The 2007 Loan Terms do not include a defined terms clause, as the 2006 Loan Terms does at clause 4. This has the impact that the 2007 Loan Terms contain 22 clauses, whereas the 2006 Loan Terms contain 23. 4. Clause 9 of the 2007 Loan Terms provide for different payment dates to the 2006 Loan Terms, with repayments to commence on the next occurring 31 July (rather than 15 August).

2007 Project: FEA approval of finance application and loan account

1. Ms Govindasamy's loan finance application for the 2007 Project was approved by FEA on or about 30 June 2007. An internal FEA document in evidence records the approval and identifies the total amount of finance sought as $93,555, being the remaining amount payable in respect of the 30 woodlots, and the monthly repayment amount as $1,262.38. It also notes that Ms Govindasamy had made a previous investment in the 2006 Project in April 2007 but that repayments had not yet started.
2. As with the 2006 application, there is no evidence as to how and when Ms Govindasamy's 2007 finance application was sent to FEA.
3. On 25 September 2007, FEA Plantations sent a letter to Tasmanian Perpetual Trustees Limited enclosing a list of growers in relation to the 2007 Plantations Project for whom loans have been funded. The attached list of growers refers to Ms Govindasamy, her loan funding in the amount of $93,555, the number of her woodlots as 30 and the "date accepted" as 30 June 2007. The letter states that the amount of $20,786,134.02, representing the balance of loan funding due has been funded by FEA by way of EFT.
4. An FEA statement for loan number 010-416 in the name of Ms Govindasamy identifies that an amount of $93,555 was debited to the account on 30 June 2007. It also identifies that interest was debited to the account each month, and that payments of $1,262.38 were credited to the account each month from 31 July 2007 to 31 December 2008.

Assignment of loans to United Pacific

1. On or about 5 December 2008, Ms Govindasamy received two letters from FEA. The letters refer to her investments with FEA Plantations and advise that her loans, with FEA Reference Nos 009-150 and 010-416, had been acquired and that United Pacific was now the legal owner of them. The letter states that the existing repayment arrangements and terms were unchanged and remained as outlined in the original loan agreements with FEA, and that all future monthly repayments via direct debit will refer to United Pacific.
2. On 31 December 2008, FEA and United Pacific entered into a Deed of Assignment pursuant to which FEA assigned all of its rights, title, benefit and interest in the loan agreements referred to in Schedule 1 of the Deed of Assignment to United Pacific.
3. Loans bearing the FEA Reference Nos 009-150A and 010-416 in the name of Ms Govindasamy are referred to in Schedule 1 to the Deed of Assignment.
4. Following the assignment of Ms Govindasamy's loans, United Pacific allocated account number UPF 116914 to the loan bearing the FEA Reference No 009-150A, and account number UPF 117078 to the loan bearing the FEA Reference No 010-416.

Cessation of loan payments

1. A United Pacific statement for loan number 116914 in the name of Ms Govindasamy identifies a loan advance of $91,536.45 as a debit as at 15 December 2008. It also identifies that interest was debited to the account each month and that payments of $1,377.08 were credited to the account each month from 15 January 2009 to 16 August 2010 (with the exception of July 2009), after which a number of repayments were dishonoured.
2. A United Pacific statement for loan number 117078 in the name of Ms Govindasamy identifies a loan advance of $84,943.91 as a debit as at 30 December 2008. It also identifies that interest was debited to the account each month from 30 January 2009 and 30 September 2010 and that payments of $1,262.68 were credited to the account each month from 30 January 2009 to 30 August 2010 (with the exception of November 2009), after which a number of repayments were dishonoured.
3. On 15 August 2010, following media reports that FEA and FEA Plantations were in financial difficulties and receivers and managers had been appointed, Ms Govindasamy cancelled her direct debit arrangements in relation to her 2006 and 2007 Plantations Projects loan repayments. She has made no loan repayments since that time.
4. While United Pacific's statement of claim pleads that it sent notices of default in relation to Ms Govindasamy's non-payments, Ms Govindasamy's evidence, which was not challenged, is that she never received any such notices.

Did FEA and Ms Govindasamy enter into binding deeds of loan or merely contractual loan agreements?

1. The key issue in this case is whether the amounts claimed by United Pacific are payable by Ms Govindasamy under valid and binding deeds of loan or enforceable contracts for loan. The significance of that issue is that United Pacific's case based on deeds of loan is not statute barred, whereas there are limitation issues if the loans were made under loan agreements in contract.
2. United Pacific's case is that Ms Govindasamy entered into binding agreements for loan with FEA to finance the payments of her investments into the 2006 and 2007 Plantations Projects upon FEA approving her finance applications. Its primary position is that each of the loan agreements were executed as deeds of loan when Ms Govindasamy executed the 2006 and 2007 finance application forms. In the alternative, it argues that enforceable loan contracts were entered into.

Is there evidence of the applicable loan terms?

1. Before considering the key contentions of the parties, it is convenient to first deal with a submission made by Ms Govindasamy about the adequacy of the evidence.
2. Ms Govindasamy submits that United Pacific cannot establish any enforceable loan agreements (whether by way of deeds or contractual agreement) because there are not complete sets of terms in its evidence and there is nothing linking the finance applications forms to any of the loan terms in the evidence. At the hearing, Ms Govindasamy's counsel also said that she did not accept that the 2006 Loan Terms were the loan agreement terms and conditions referred to in the 2006 finance application form.
3. I do not accept Ms Govindasamy's submission that there is nothing linking the signed finance application forms and the Loan Terms in evidence. I am satisfied that the evidence establishes that the 2006 and 2007 Loan Terms are the loan agreement terms and conditions referred to in the 2006 and 2007 finance application forms.
4. The 2006 finance application form and the 2006 Loan Terms both refer to FEA as the Lender. The 2006 Loan Terms also refer to the loan as the amount next to the words "Finance Sought" in the Finance Application Form, which is consistent with the wording used in the 2006 finance application from. The 2006 Loan Terms also refer to the finance application form in a way consistent with the heading of the finance application form signed by Ms Govindasamy, being "Application for Loan Finance".
5. The 2007 Loan Terms contain similar links to the 2007 finance application form. For example, they refer to the "Total Finance Sought", which is the same wording used in the 2007 finance application form. The 2007 Loan Terms and 2007 finance application form also both refer to the FEA Plantations Project 2007.
6. The Borrowers Statement section of the 2006 finance application form signed by Ms Govindasamy refers to the "Loan Agreement (Terms and Conditions)" which is the same title of the 2006 Loan Terms. The 2007 finance application form refers to the "terms and conditions in the attached loan agreement" which is consistent with the title of the 2007 Loan Terms.
7. There is also Ms Govindasamy's own evidence.
8. At paragraphs [4] and [7] of her affidavit dated 27 July 2018, Ms Govindasamy deposes that she filled out and signed the 2006 and 2007 application and power of attorney and finance application forms and that a copy of each of them appears at pages 58 to 73 and 5 to 25 of the exhibit to her affidavit. Those pages include copies of the 2006 and 2007 Loan Terms.
9. Ms Govindasamy' evidence is that she did not receive copies of the documents she signed until they were sent to her by United Pacific's lawyers on 3 November 2017. Nevertheless, by her own evidence, Ms Govindasamy identifies the 2006 and 2007 finance application forms and the 2006 and 2007 Loan Terms as being the documents that relate to her applications for finance from FEA in respect of her investments in the 2006 and 2007 Plantations Projects.
10. At the hearing, Ms Govindasamy's counsel raised concerns about the lack of full product disclosure statements in evidence, referring to "bits" that had "been pulled out". By that reference, I understood him to mean the Loan Terms and the various application forms which United Pacific contends had formed part of the product disclosure statements. He also referred to other irregularities raised by some of the documents in evidence, such as discrepancies between some amounts referred to in the loan account statements and the authority to approve one of Ms Govindasamy's finance applications.
11. Counsel for Ms Govindasamy submits that these gaps in the documentary records and irregularities, as well as the lengthy period of time since the relevant events, mean there is a lack of certainty and the Court cannot have confidence as to what might comprise the terms of the alleged loan agreements between the parties.
12. The documentary evidence before the Court is, in a number of respects, limited and incomplete. In addition to the absence of the product disclosure statements, there are very few internal FEA records or communications with Ms Govindasamy about her Plantations Project investments and loans with FEA in evidence. There is also a lack of detail in the evidence about the circumstances in which Ms Govindasamy signed the relevant forms.
13. That said, I am satisfied that the documents relied on by United Pacific, being the 2006 and 2007 Loan Terms together with Ms Govindasamy's completed finance application and application and power of attorney forms in relation to the 2006 and 2007 Plantations Projects, constitute sufficiently complete and certain terms to support a finding that loan agreements of the nature alleged by United Pacific exist. The documents relied on clearly contain the essential terms necessary for loan agreements.
14. The 2006 and 2007 Loan Terms refer to the product disclosure statements in two ways. They locate the forms as being within the product disclosure statements and to incorporate meanings from the product disclosure statements to undefined terms. Those references are not matters which are necessary to an understanding of the alleged loan agreements for the purposes of the enforcement action. Nor are they essential terms of the alleged agreements.

Are there binding deeds of loan?

1. The question of whether Ms Govindasamy became bound to deeds of loan requires consideration of whether it was intended that her execution of the finance application forms would operate as execution of and create binding deeds of loan on the terms provided for in the Loan Terms. It also involves considering whether the formal requirements for the execution of deeds have been satisfied.
2. The argument advanced by United Pacific is, in summary, to the effect that: 1. together, the finance application forms and the Loan Terms comprise the relevant deeds of loan. It submits that it is made clear from the terms of the documents that it was intended for the loan agreements to be by way of deed of loan as the finance application forms are executed as deeds and the Loan Terms include multiple references to "deed"; 2. by signing the finance application forms as deeds, Ms Govindasamy executed the relevant deeds of loan that also contained the terms and conditions of the loan agreements referred to in the applications forms; and 3. the deeds of loan became binding and enforceable upon satisfaction of conditions precedent, being FEA's approval of Ms Govindasamy's applications for finance.
3. As to the formal requirements for deeds, United Pacific relies on Ms Govindasamy's execution of the finance application forms as witnessed by Mr Khoo. It argues that FEA's execution is not required, pointing to the clauses in the Loan Terms which provide for the deeds to be enforceable by the Lender in the absence of the Lender's execution.
4. Ms Govindasamy denies that she entered into binding deeds of loan. Her evidence is that she did not understand nor intend for the finance applications forms to operate as deeds of loan when she signed the forms. She submits that the absence of her intention to enter into deeds of loan is fatal to United Pacific's case.
5. Mrs Govindasamy also submits that the pleaded loan agreements cannot operate as deeds of loan because only she executed them. As they are inter partes deeds, she submits that both parties were required to execute them.

Legal principles

1. At the hearing, it was common ground that, as the 2006 and 2007 Loan Terms are expressed to be governed by the law of Tasmania, the applicable legislation in respect of the validity of the alleged deeds of loan is the Conveyancing and Law of Property Act 1884 (Tas).
2. As with other State legislation, s 63 of the Conveyancing and Law of Property Act qualifies the common law requirements that, in order for an instrument to be a deed, it must written on parchment, vellum or paper, sealed and delivered: Nicholas Seddon, Seddon on Deeds, (2015, The Federation Press) at [2.2].
3. Under the Tasmanian legislation, execution of a deed by an individual is by signing, or making a mark on, on the instrument and having the deed attested by at least one witness who is not a party to the deed: Conveyancing and Law of Property Act, ss 63(1)(a), 63(2)(a). A corporation can execute a deed if the document is expressed to be executed as a deed and is executed in accordance with the requirements of s 127(1) or s 127(2) of the Corporations Act 2001 (Cth): Corporations Act, s 127(3). A corporation can execute a deed in other ways, such as the method prescribed by the company's constitution: Corporations Act, s 127(4).
4. The Tasmanian legislation provides that sealing of a deed is unnecessary unless required by some other Act and that delivery and indenting are also not necessary: Conveyancing and Law of Property Act, ss 63(1) (b), 63(3).
5. Section 63 of the Conveyancing and Law of Property Act also includes the following provisions: (4) Notwithstanding the defective execution of a deed by or on behalf of a party to the deed, the execution is taken to be valid if it appears from evidence external to the deed that the party intended to be bound by it. (5) Notwithstanding any other law, an instrument executed in accordance with this section is a deed if - (a) the instrument is expressed to be an indenture or deed; or (b) the instrument is expressed to be sealed and delivered or, in the case of an instrument executed by a natural person, to be sealed; or (c) it appears from the circumstances of the execution of the instrument or from the nature of the instrument that the parties intended it to be a deed.
6. In addition to the legislative requirements, for an instrument to be a deed, the common law requires that the executing party must have intended to create a deed: Nicholas Seddon, Seddon on Deeds (2015, The Federation Press) at 2.5.
7. The question of intention to create a deed is to be considered by reference to the form, substance and object of the instrument under consideration, as well as admissible extrinsic evidence. Important factors include whether the instrument reflects the phraseology and structure commonly found in deeds and whether it is cast in the most solemn form of documentation appropriate for that particular transaction: Brendan Edgeworth, Butt's Land Law (7th ed, 2017, Lawbook Co) at [12.350].

Was it intended that Ms Govindasamy's execution of the finance application forms would operate as execution of and create binding deeds of loan?

1. In support of her submission that the absence of her intention to enter into deeds of loan is fatal to United Pacific's case, Ms Govindasamy relies on the decision of McMurdo J in 400 George Street (Qld) Pty Limited v BG International Limited [2010] QSC 66 at [44] - [54]. In that case, his Honour rejected the validity of the instrument as a deed, concluding that the references on the execution pages to a deed and to sealing and delivery were surplusage and not representative of the true intention of the party signing.
2. In 400 George Street (Qld) Pty Limited v BG International Limited [2012] 2 Qd R 302; [2012] QCA 245, the Queensland Court of Appeal overturned that aspect of his Honour's decision and held that the question of whether a party intended to make a deed is to be decided objectively, principally by reference to the contents of the instrument under consideration. The Court of Appeal also concluded that the reference in the execution page to "Executed as a deed" in that case was not to be regarded as surplusage and was a strong indicator that the legal nature of the instrument was intended to be a deed: at [30] - [32] and [34] - [39].
3. Having regard to the applicable legal principles, I do not accept Ms Govindasamy's submission that her subjective understanding is determinative of the question of whether she intended to create deeds of loan. I turn then to consider the documents in this case.
4. The Loan Terms are expressed to be deeds between two parties, FEA (as Lender) and the Borrower referred to in the finance application forms, in this case Ms Govindasamy. Under the Loan Terms, each party makes promises to the other. FEA, as Lender, promises to loan monies to Ms Govindasamy to pay to FEA Plantations what she owes for her woodlot investments. Ms Govindasamy, as Borrower, promises to repay the loans by monthly instalments of principal and interest over 10 years. As such, there are two "sides" to the proposed deeds, each side having different rights and obligations.
5. While the Loan Terms are described as "Loan Agreements" and contain some other indications that they are agreements rather than deeds, I accept United Pacific's submission that the various references to "deed" and "this deed" indicate that the word "deed" was used purposefully. Other than their lack of execution clauses, the structure and content of the Loan Terms are also consistent with deeds of loan.
6. The structure and terms of the finance application forms are very different. The forms are not expressed to be deeds between two parties, but as applications made by one party (the applicant) for something (finance) from another (FEA, as Lender). The only indicia that the finance application forms were intended to operate as deeds are the words "Executed as a Deed" in the Signature section of the 2006 form and the Date section of the 2007 form.
7. Considering their structure and terms overall, I accept there are indications that the parties intended that the Loan Terms would operate as inter partes deeds. Because of the words "Executed as a Deed" near Ms Govindasamy's signatures on the finance application forms, I also accept that it might be said that she intended to execute them as deeds. Ms Govindasamy can be presumed to have read the forms and, having signed them, is bound to their terms.
8. The fact that parties have described a document in some part as a deed is also not decisive as to whether the execution of an instrument is intended to create a deed: Meredith Projects Pty Ltd v Fletcher Construction Australia Ltd [2000] NSWSC 493 at [130].
9. The question in this case is whether, determined objectively and with regard to the text and structure of the documents and other admissible evidence, was it intended that execution by Ms Govindasamy of the finance application forms would operate as execution of and create inter partes deeds of loan on the Loan Terms, which became binding upon FEA's approval of Ms Govindasamy's application for finance.
10. Having considered the evidence and submissions, I am not persuaded by United Pacific's submission that Ms Govindasamy's execution was intended to do so and have concluded that the answer is no. This is for the following reasons.
11. In my view, there is nothing in the wording of the finance application forms that reveals an intention that they are to take effect as deeds of loan and were being executed in that capacity. The forms are not described as deeds of loan but as applications for finance.
12. Importantly, there is no statement or indication on the finance application forms that, by signing and attesting, Ms Govindasamy was executing deeds of loan which were to take effect upon approval of her finance application by FEA. This is to be contrasted, for example, with the terms of the power of attorney in the 2007 application and power of attorney form which provided that the attorney is to complete the management agreement and Forestry Rights lease deed which each Grower (investor) signs by signing the application and power of attorney form.
13. Although there are various references in the Loan Terms to execution of "this deed" (see, for example, 2006 Loan Terms, cls 20.1 and 20.2, and 2007 Loan Terms, cls 19.1 and 19.2), nowhere do the Loan Terms state that execution of the finance applications forms by the Borrower amounts to execution of the deeds of loan or "execution of this deed".
14. In my view, the manner in which the finance application forms are referred to in the Loan Terms is also not consistent with an intention that the execution of the finance application forms are to operate as execution of the deeds of loan. The finance application forms are referred to in the Loan Terms as a form or an application, not as deeds. Nor do the Loan Terms specify that the finance application forms comprise part of "this deed". Rather, the forms are referred to for the purposes of identifying the Borrower (cl 1) and the amount of finance sought (cl 2).
15. Other than the references to being executed as a deed, the finance application forms contain no other indicia of what would be expected to be found in an inter partes deed of loan. They are not otherwise described as deeds, but are described as an "Application for Loan Finance" and a "Finance Application". They provide no place for execution by FEA, as the Lender. They contain no recitals or other structures commonly found in deeds. Their commercial purpose is seemingly to record Ms Govindasamy's applications for finance, which ordinarily could be expected to be a transaction from which an applicant could withdraw prior to finance being approved and loan documentation being executed by all the parties. There is also no legal reason why a loan application from should be in the form of a deed: Meredith Projects Pty Ltd v Fletcher Construction Australia Ltd [2000] NSWSC 493 at [175].
16. The finance application forms refer to the loans becoming available on the terms and conditions in the "loan agreement" set out in Section 12 or in the attached loan agreement. The finance application forms also refer to Ms Govindasamy having "read and understood" the loan agreement terms and conditions. In my view, these matters make clear that it was the Loan Terms, and not the finance application forms, that were intended to have contractual force and would take effect as deeds of loan when the relevant conditions were satisfied. While the Loan Terms may have incorporated some content from the finance application forms, as noted above, they do not refer to nor purport to incorporate execution of the finance application forms as execution of the deeds of loan.
17. At the hearing, United Pacific's counsel accepted that FEA's approvals of Ms Govindasamy's applications for finance were conditions precedent to the formation of any loan agreements between the parties. He asserted that the loan agreements came into existence at a date after execution by Ms Govindasamy and that there were no obligations that could be enforced against either party prior to the fulfilment of the conditions precedent.
18. The effect of this submission is that United Pacific does not contend that the finance application forms were executed as deeds in escrow from which Ms Govindasamy was bound and could not withdraw. Rather, its argument is that the executed forms operate as execution of binding deeds of loan only when FEA approved Ms Govindasamy's finance applications. If execution of the loan application forms was intended to operate in that way, it is to be expected that wording to that effect would be included in the forms and in the Loan Terms. As noted above, there is no such wording.
19. Even accepting that the finance application forms were executed as deeds, they would have the effect that Ms Govindasamy could not withdraw from the transaction and had to take loan agreements on the Loan Terms. The finance application forms are not the relevant loan agreements because those agreements only arose when FEA approved the finance applications.
20. United Pacific also submits that there would be no reason for an applicant to a loan to execute a finance application form as a deed if the form was simply intended to be a loan application and not form part of the deeds of loan themselves. It points to the lack of any further paperwork to be provided or executed, with the offer by the Lender to make a loan available on the Loan Terms attached or referred to in the forms if the loan applications are approved. Put another way, it submits that there was no need or condition precedent as to the execution of another document before binding deeds of loan were created.
21. There is some force to those submissions. The difficulty I have is that they seem to rely, at least in part, on implications and assumptions about what paperwork, or not, was available and necessary to complete. As noted earlier, the evidence before the Court is limited. It does not deal with the circumstances in which the finance application forms were actually signed.
22. Presumably, the product disclosure statements for the 2006 and 2007 Plantations Projects or some other document such as a checklist or execution instruction sheet might have explained the intended interaction between execution of the finance application forms as deeds of loan and the Loan Terms. Those documents are not in evidence.
23. Nor was Ms Govindasamy questioned about what was explained to her when she signed the finance application forms or whether the Loan Terms were, in fact, included and attached to the forms that she signed.
24. Ms Govindasamy's evidence is that she signed the finance application forms but did not know she was executing deeds of loan and nor did she intend to do so. That evidence was also not challenged on cross-examination. To the extent it is a relevant factor, her evidence supports the conclusion that the relevant party did not intend to create deeds of loan by executing the finance application forms.
25. From Ms Govindasamy's evidence and the parts of the finance application forms which state that the applicant "had read and understood" the loan agreement terms and conditions, I consider it open to infer that Ms Govindasamy had seen and read the 2006 and 2007 Loan Terms at the time she signed the finance application forms.
26. I do not consider that Ms Govindasamy's evidence establishes that "following the defendant's signature, the document includes the 'Loan Agreement (Terms and Conditions)'", as United Pacific asserts in its written submissions. The evidence is unclear as to precisely how the Loan Terms were presented to Ms Govindasamy and where they were located relative to the finance application and other forms she signed. To the extent anything can be drawn from the page numbers of the documents in evidence, the Loan Terms did not follow Ms Govindasamy's signatures on the finance application forms.
27. United Pacific also pointed to the finance application forms having been stamped for duty as an indication that the parties intended them to comprise part of the loan documentation.
28. The fact that the Lender stamped the forms at a later date does not, in my view, assist in considering the question of whether, at the time she signed the forms, it was intended that Ms Govindasamy's execution would take effect as execution of inter partes deeds of loan that became binding upon her when FEA approved her finance applications. There is also other extrinsic evidence from the Lender's side which might suggest otherwise, as the Deed of Assignment refers to agreements for loans, rather than deeds of loan.
29. The making of a deed is the most solemn act that a person can perform with respect to a particular piece of property or other right: Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 369.
30. The documents executed by Ms Govindasamy are application for finance forms, the contents and structure of which detract from the solemnity to be expected when making a deed. While expressed to be executed as deeds and referring to the terms of loan agreements that will come into effect upon the happening of a future event, the forms provide no indication that execution of them is intended to take effect as execution to create deeds of loan on the Loan Terms. Nor do the Loan Terms.
31. In conclusion, in my view, there are insufficient indicia to conclude there was the requisite intention to make binding deeds of loan on the Loan Terms from Ms Govindasamy's execution of the finance application forms. It follows that I find that the finance application forms were not executed as binding deeds of loan containing the Loan Terms which means that United Pacific's case based on the loan deeds must fail.

Were the formal execution requirements for deeds met?

1. There is no dispute that the finance application forms were executed by Ms Govindasamy and attested in accordance with the relevant statutory requirements for execution and attestation of deeds by individuals: Conveyancing and Law of Property Act, ss 63(1)(a), 63(2)(a).
2. It is also common ground that FEA did not execute the finance application forms or the Loan Terms and that there was no place for it to do so on either of those documents.
3. The question raised by the submissions of the parties is whether the FEA was also required to execute the loan deeds for them to be binding and enforceable against Ms Govindasamy.
4. Neither party cited any authority on the question of whether, to be enforceable, an inter partes deed requires execution by both parties. Nor did they provide any authority on whether it is permissible, in the context of a deed, to contract out of the usual requirement that a party to a deed must execute.
5. At common law, the general rule is that a party to an inter partes deed who has not executed the deed may sue another party who has executed even where the deed contains cross-covenants on the part of the non-executing party: Morgan v Pike (1854) 14 CB 472 at 484 cited with approval in Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 at [50]; Netglory Pty Ltd v Caratti [2013] WASC 364 at [746] and Lady Nass v Westminister Bank Limited [1940] AC 336 at 409.
6. The general rule is subject to exceptions where the deed is expressly or impliedly conditional upon execution by another party or where the failure to execute by the party would impose additional burdens or substantially alter the obligations of the executing party: Lady Nass v Westminister Bank Limited [1940] AC 336, at 374, 391, 403, 405 and 410; Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 at [39] to [47]; Netglory Pty Ltd v Caratti [2013] WASC 364 at [749].
7. In my view, the recognised exceptions do not apply in this case. To the contrary, the Loan Terms expressly provide that failure by the Lender to execute does not prevent the deeds from being enforceable: 2006 Loan Terms, cl 23.10; 2007 Loan Terms, cl 22.10. No submission was advanced by Ms Govindasamy that FEA's failure to execute imposed any additional burden on her or substantially altered her loan obligations.
8. Accordingly, I reject Ms Govindasamy's submission that the absence of FEA's execution of the loan application forms or the Loan Terms mean that the alleged loan agreements could not be valid deeds of loan and cannot be enforced by United Pacific against her.
9. United Pacific also argued that FEA's lack of execution is defective execution within the meaning of s 63(4) of the Conveyancing and Law of Property Act and can be taken to be valid execution in accordance with the Tasmanian legislation.
10. I do not accept United Pacific's submission that FEA's lack of execution can be relied on as valid execution or execution in accordance with the legislation as provided for in s 63(4) and s 63(5) of the Conveyancing and Law of Property Act.
11. To be defective means to be imperfect or faulty: Macquarie Dictionary (2020, online).
12. Properly understood, s 63(4) would permit the validation of a faulty or imperfect execution where there was evidence FEA attempted to execute the relevant instruments but did so in an incorrect manner, intending to be bound: Gibbons v Pozzan (2007) 209 FLR 233; [2007] SASC 99 at [52].
13. There is no evidence of any attempt to execute any of the instruments by FEA. In my view, it follows that there was no execution by FEA as provided for by the Tasmanian legislation. Nor was there any attempt at execution in accordance with s 127 of the Corporations Act 2001.
14. If I had found there was the requisite intention to create binding deeds of loan on execution of the finance applications forms, I would have concluded that the formal requirements for the execution of deeds had been satisfied.

Were agreements for loan entered into?

1. The alternative argument advanced by United Pacific is that Ms Govindasamy and FEA entered into enforceable contracts for loan on the Loan Terms.
2. Ms Govindasamy accepts that FEA's approval of her finance applications were conditions precedent to any contracts for loan on the Loan Terms coming into existence. Her evidence, which was not challenged, is that she did not receive any acknowledgement, communication or documentation from FEA that her finance applications had been approved.
3. Ms Govindasamy submits that there has been no acceptance to her offers to take finance as FEA failed to communicate its approvals to her. She argues that there can be no binding agreements for loan as acceptance of an offer to contract is effective only after it is communicated to an offeror: relying on Byrne and Co v Leon Van Tienhoven and Co (1880) 5 CPD 344 and Brinkibon Ltd v Stahag Stahl Gmbh [1983] 2 AC 34 at 42 per Lord Wilberforce.
4. In Byrne and Co v Leon Van Tienhoven and Co (1880) 5 CPD 344, the Court concluded that a purported withdrawal of an offer that had been sent by post and received after the offeree had communicated its acceptance of the offer was ineffective. Having regard to the mode of communications and the nature of the issue before the Court, I do not consider that the principles from that case greatly assist Ms Govindasamy.
5. In Brinkibon Ltd v Stahag Stahl Gmbh [1983] 2 AC 34, the main issue before the Court concerned the nature of offer and acceptance in the context of telex communications between two countries in Europe. The Court held that conduct by a party to set up a line of credit did not amount to acceptance of an offer from another party because the conduct took place between the offeree and its agent (the bank) only and because the line of credit was opened in the United Kingdom and the offer was made from Vienna.
6. The traditional approach to determining whether a contract has been formed includes identifying an acceptance of an offer that has been communicated by the offeree to the offeror. It is recognised that acceptance can be implied from conduct: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at 262 per Ipp AJA (with whom Mason P agreed) at [162].
7. The formation of an agreement may also be inferred from the conduct of the parties, focussing on whether, by their conduct, they intended to contract. Subsequent conduct by an offeree in performing acts contemplated by the offer may indicate an intention to accept an offer where there is no evidence of direct communication of acceptance of an offer: JW Carter, Contract Law in Australia (7th ed, 2018, LexisNexis Butterworths) at [3.05] and the cases cited therein; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [71]-[81] per Heydon JA.
8. Evidence as to post-contractual conduct is admissible on the issue as to whether a contract was formed: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25] per Heydon JA.
9. As United Pacific submits (correctly in my view), Ms Govindasamy was aware from the finance application forms she signed and the Loan Terms that there was no express contractual requirement on FEA to communicate acceptance of the finance applications. The forms state that loans were to be made available on the Loan Terms and were to come into existence upon FEA approving the applications for finance.
10. The evidence discloses that FEA approved Ms Govindasamy's finance applications on about 10 April 2007 in relation to the 2006 Plantations Project and on about 30 June 2007 in relation to the 2007 Plantations Project.
11. For the reasons set out below, I am satisfied that FEA performed its obligations under the loan agreements by advancing loan funds in relation to the 2006 and 2007 Plantations Projects pursuant to the irrevocable authority and direction to pay contained in the Loan Terms.
12. In cross-examination, Ms Govindasamy accepted that she borrowed 90% of the funds to pay for her woodlot investments in the 2006 and 2007 Plantations Projects from FEA. She accepted that she made loan repayments in respect of those borrowings up until August 2010. Presumably, she did so on the understanding that her finance applications had been approved.
13. Ms Govindasamy also accepted that she had claimed tax deductions for the full amounts paid for her FEA 2006 and 2007 Plantations Projects investments in the financial ending 30 June 2007 and for her interest payments for the financial years ending 30 June 2008, 2009 and 2010. Based on the declarations in her tax returns that she had paid those amounts, Ms Govindasamy must have known or believed that FEA had approved her finance applications as receipt of the loan funds for the 2006 and 2007 Projects from FEA was a necessary precondition to payment of her investments.
14. There are also the letters sent in late 2008 by FEA to Ms Govindasamy advising that her loans had been acquired by United Pacific and referring to existing repayment arrangements and terms remaining as outlined in the original loan agreements with FEA. The original loan agreements referred to in those letters are those that came into existence after FEA approved Ms Govindasamy's finance applications. In that context, the letters can be read as confirmation to Ms Govindasamy that her finance applications had previously been accepted by FEA.
15. Based on all the evidence, I consider it open to infer that Ms Govindasamy was aware that FEA had approved her finance applications and accepted her applications to take finance for the 2006 and 2007 Plantations Projects, notwithstanding the lack of any direct communication from FEA to Ms Govindasamy to that effect in the material before the Court.
16. As to the other essential elements of a binding contract, I have already dealt with Ms Govindasamy's submission about the terms of the alleged loan contracts and concluded that they are sufficiently certain and complete. No submission was made that the loan contracts did not provide consideration for the promises made, and I am satisfied that they do. I am also satisfied that the evidence discloses that the parties intended to create legal relations by entering into loan contracts on the Loan Terms.
17. I conclude that FEA and Ms Govindasamy entered into enforceable contracts for loan in relation to the 2006 and 2007 Plantations Projects on the Loan Terms. The loan contracts were entered into on or about the dates on which FEA approved Ms Govindasamy's loan applications, being 10 April 2007 in relation to the 2006 Plantations Project loan and 30 June 2007 in relation to the 2007 Plantations Project loan.

Were loan funds advanced in compliance with the loan agreements?

1. If United Pacific cannot establish that loan funds in favour of Ms Govindasamy were advanced by FEA, then it will not be entitled to recover, as FEA's assignee, any of the loan funds alleged to be outstanding.
2. Ms Govindasamy submits that United Pacific has not established that loan funds were actually advanced as there is no evidence of: 1. any transfer of loan funds to Ms Govindasamy; 2. Ms Govindasamy receiving any entitlements to the woodlots; or; 3. FEA actually paying over loan funds on account of Ms Govindasamy.
3. As to Ms Govindasamy's first point, United Pacific relies on cl 3 of the 2006 and 2007 Loan Terms as containing an authorisation and direction that Ms Govindasamy's loan funds were to be paid by FEA to FEA Plantations, not to Ms Govindasamy. While the authorisations and directions do not contain any acknowledgment or confirmation that loan funds were advanced, they confirm that the loan funds were not to be transferred to Ms Govindasamy personally.
4. The relevant question is, therefore, not whether there is evidence the loan funds were transferred to Ms Govindasamy, but whether there is sufficient evidence that the loan funds were advanced by FEA on behalf of Ms Govindasamy pursuant to the 2006 and 2007 Project loans at all, as raised by Ms Govindasamy's third point.
5. There is no direct evidence that the loan funds were advanced by FEA to FEA Plantations on behalf of Ms Govindasamy. There is also no direct evidence of the receipt of those funds by FEA Plantations from FEA. But an examination of the various documents in evidence provides a sufficient basis to conclude, on the balance of probabilities, that loan funds were advanced by FEA on Ms Govindasamy's behalf in relation to both the 2006 and 2007 Plantations Projects. I come to this conclusion for the following reasons.
6. First, the letters from FEA Plantations to Tasmanian Perpetual Trustees Limited dated 30 April 2007 and 25 September 2007 identify that payments were made by FEA Plantations of loan funding for growers by way of cheque (with FEA as payer) and by electronic funds transfer. The attachments to the letters details the growers loan funding amounts for each of the 2006 and 2007 Projects and identifies Ms Govindasamy as a grower, her loan funding and the dates on which her loans were approved. The information relating to Ms Govindasamy loan funding is consistent with the information in her completed application and power of attorney and finance application forms and the internal FEA approval documents.
7. While those letters and their attachments are not the best evidence of payments by FEA of Ms Govindasamy's loan funds to FEA Plantations, I consider they provide some evidence from which to infer that Ms Govindasamy's loan funds were advanced by FEA to FEA Plantations and her obligations to FEA Plantations to pay for woodlots in the 2006 and 2007 Projects were satisfied as a result.
8. Second, documentary records maintained by FEA, and adduced into evidence as Exhibits 1 and 2, show amounts debited to accounts in Ms Govindasamy's name reflecting her approved loan funding for the 2006 and 2007 Projects. The records refer to Ms Govindasamy's loans for principal and interest of 10 years (120 months) and show that she was charged interest and made repayments on a monthly basis towards both of the loans until they were assigned to United Pacific in December 2008. Specifically, they show that: 1. as at 15 July 2007, Ms Govindasamy owed FEA the amount of $99,969.14 in respect of the 2006 Project loan, and that she was charged by, and paid to, FEA monthly principal and interests amounts on that loan; and 2. as at 30 June 2007, Ms Govindasamy owed FEA the amount of $93,555 in respect of the 2007 Project loan, and that she was charged by, and paid to, FEA monthly principal and interest amounts on that loan.
9. Similar records for the period from when United Pacific took an assignment of the 2006 and 2007 Project loans are in evidence in respect of payments by Ms Govindasamy up until August 2010. These internal FEA and United Pacific records also provide some evidence that the loans were advanced by FEA in relation to Ms Govindasamy.
10. Third, there are other records which reflect that the 2006 and 2007 Project loans had been advanced on behalf of Ms Govindasamy.
11. The Deed of Assignment refers to Ms Govindasamy. Schedule 1 to the Deed of Assignment identifies that, as at 8 January 2009, the balance of her 2006 Project loan was $92,198.52 and the balance of the 2007 Project loan was $85,139.40.
12. Ms Govindasamy's tax returns for the financial years 2007 to 2011 also show that Ms Govindasamy claimed and received tax reductions in respect of the principal and interest loan amounts for the financial years ending 30 June 2007, 2008, 2009 and 2010. Her tax return for 2011 also shows she claimed a tax deduction for her interest payments although in a significantly lower amount than the previous financial years reflecting the cessation of her repayments in late 2010.
13. Fourth, although not accompanied by any statement acknowledging that Ms Govindasamy's direct debit payments were made to discharge parts of her obligations under the loans, in my view, they clearly had that effect and I would infer that they were made by Ms Govindasamy in recognition that the 2006 and 2007 Plantations Project loan funds were advanced and the loans were outstanding and required repayment.
14. It is also relevant, in my view, that the issue raised by Ms Govindasamy's amended defence is whether loan funds were advanced at all, rather than who they were advanced by and to whom. This is not a case where, for example, there is a question as to which entity was the relevant financier: cf Burkett v Bendigo and Adelaide Bank Ltd [2018] VSC 723; Bendigo and Adelaide Bank Ltd v Howard [2018] NSWSC 383. The only loans offered to Ms Govindasamy were by FEA as the lender. The evidence is consistent with that position.
15. As to Ms Govindasamy's second point, FEA, as lender, had no obligations under the 2006 or the 2007 Loan Terms to provide or procure certificates of title in the woodlots that Ms Govindasamy was acquiring from FEA Plantations.
16. The Loan Terms provide that FEA was to advance loan funds so Ms Govindasamy could pay FEA Plantations for the woodlots. FEA was contractually obliged to pay those funds directly to FEA Plantations in accordance with the authorisations and directions provided for in cl 3 of the 2006 and 2007 Loan Terms. The assets which Ms Govindasamy would be entitled to on payment of those funds, being the woodlots, were assets to be provided by FEA Plantations, not FEA.
17. It follows that I am not persuaded by Ms Govindasamy's submissions and I find that United Pacific has, on the balance of probabilities, established that loan funds in respect of Ms Govindasamy's 2006 and 2007 Plantations Project loans were advanced.

Is United Pacific time-barred from recovery of unpaid loan amounts from Ms Govindasamy?

1. The parties agree that limitation issues arise if, as I have found, the loan agreements are not enforceable as deeds of loan but were binding contracts for loans. There is no dispute that the relevant limitation period for a claim under a contract is six years and 12 years for claims under a deed: Limitation Act 1974 (Tas) ss 4(1), 4(3).
2. The statement of claim was filed on 25 September 2017 more than six years after Ms Govindasamy defaulted in making her loan repayments in late 2010.
3. United Pacific accepts that its claims against Ms Govindasamy in respect of loan repayments which were due and payable prior to 25 September 2011 are statute barred.
4. United Pacific contends that its claims in respect of loan repayments which were due and payable after 25 September 2011 are not out of time because it did not elect rely on the default and acceleration provisions in the Loan following Ms Govindasamy's defaults. In those circumstances, United Pacific submits that Ms Govindasamy's loan repayments continued to be due and payable each month and each default constituted a new cause of action for breach of contract for which the six year limitation period commenced on each default date. United Pacific did not refer the Court to any authority in support of these submissions.
5. Ms Govindasamy argues that United Pacific's claims are statute barred in their entirety.
6. She submits that the causes of action arose when each of the Loans were first advanced in 2007, although she accepts that the relevant six year limitation periods were extended as a result of the repayments she made up until late 2010. She submits that, as time began to run from the last date she made payments towards each Loan (being 15 August 2010 for the 2006 Loan and 30 August 2010 for the 2007 Loan), the six year limitation periods expired in August 2016, and prior to the commencement of the proceedings.
7. United Pacific pleads that Ms Govindasamy defaulted under the Loan Agreements by failing to make repayments and that Ms Govindasamy is in breach of her contractual loan obligations by doing so. United Pacific claims judgment for the total amounts which it alleges are payable under the Loan Agreements, which comprise the outstanding principal and interest under the Loans.
8. United Pacific's claims are for liquidated sums payable under the pleaded Loan Agreements. While United Pacific's claim may be pleaded as breaches of the loan agreements, strictly speaking, its claims are for the recovery of contractual debts, not claims for damages for breach of contract: J D Heydon, Heydon on Contract (2019, Lawbook Co) at [27.410]; J W Carter, Contract Law in Australia (7th ed, 2018, LexisNexis Butterworths) at [37.03].
9. As the High Court explained in Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 at 567: The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit.
10. The time at which a cause of action accrues in relation to amounts due under a loan contract is determined by the repayment terms in the relevant contract: Peter Handford, Limitation of Actions, The Laws of Australia (4th ed, 2017, Lawbook Co) at [5.10.640].
11. A loan which is payable on demand creates an immediate and enforceable debt and the cause of action arises as soon as the money is advanced: Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 at 566; Ogilvie v Adams [1981] VR 1041, at 1043 and 1049.
12. If a loan contract specifies a time or condition for repayment, the cause of action accrues upon the expiration of the time specified or the happening of the condition: Netglory Pty Ltd v Caratti [2013] WASC 364, at [275].
13. If a loan is repayable by instalments, each failure gives rise to a separate cause of action. If the loan contract provides that the principal sum becomes repayable on demand upon default in payment of any instalment, then the time period for the whole debt will run from the first default in relation to any instalment, including instalments of interest: Falzon v Adelaide Development Co Ltd [1936] SASR 93 (FC); Reeves v Butcher [1891] 2 QB 509; Netglory Pty Ltd v Caratti [2013] WASC 364 at [275].
14. The loans in this case were for terms of 10 years. The Loan Terms provide that principal and interest payments were to be made on a monthly basis and the loans were to be repaid by the end of the 10 year terms: 2006 Loan Terms, cl 10; 2007 Loan Terms, cl 9; 2006 application and power of attorney form, heading "Loan Finance Sought"; 2006 finance application form under heading "Finance Sought" and "Select Option"; 2007 application and power of attorney form under heading "Payment Options"; 2007 finance application form under heading "Project and Finance Details".
15. The proper characterisation of the loan contracts is that, in the ordinary course of events and in the absence of any default, the principal and other loan funds were not payable by Ms Govindasamy on demand. It follows that I am not persuaded by Ms Govindasamy's submission that the causes of action arose when the loan funds were first advanced by FEA and that the relevant limitation periods were extended as a result of her payments.
16. The loan contracts also include default and acceleration provisions, the relevant parts of which I have set out at [29] above. Those provisions specify the circumstances in which the principal sums of the loans and all other outstanding monies under the agreements become immediately due and payable. Those circumstances include any default in repayment of a monthly amount by Ms Govindasamy.
17. The question in this case is whether, on a proper construction of the loan contracts, did the principal amount of the loans became repayable on demand upon Ms Govindasamy's defaults in repayment, or did some form of actual demand or notice of claim have to be given to Ms Govindasamy before the Lender's entitlement to claim the principal and other amounts arose: Ogilvie v Adams [1981] VR 1041 at 1049. In my view, they became repayable on demand.
18. United Pacific's submission that the causes of action arose on each default as a breach of contract relies on the wording of the Loan Terms that the outstanding monies under the loans would, at the Lender's election, become immediately due and payable and United Pacific not having elected to rely on the default and acceleration provisions as a matter of fact.
19. The reference in the Loan Terms to an election of the Lender represented an option or choice on the Lender's part. That is, the Lender may have proceeded on the basis that the principal and all other amounts to be paid under the loan contracts were then due and payable and may be sued for, or it may have waited to see whether repayments would be made. Irrespective of what in fact it elected to do, upon Ms Govindasamy's defaults in making repayments, United Pacific had the right to immediately sue her for the principal and all other amounts to be paid under the loan contracts without having to make any formal notice or demand for those amounts: Falzon v Adelaide Development Co Ltd [1936] SASR 93 (FC) at 97-99; Bendigo and Adelaide Bank Limited v Russo [2019] NSWSC 661 at [189].
20. Put another way, making some form of prior demand or giving notice to Ms Govindasamy that she was liable and had to immediately pay the principal and all other amounts payable under the loan contracts were not necessary pre-conditions to the Lender (in this case United Pacific) commencing proceedings against Ms Govindasamy to recover those amounts: Central City Pty Ltd v Montevento Pty Ltd [2011] WASCA 5 at [37]; Netglory Pty Ltd v Caratti [2013] WASC 364 at [288].
21. If some form of demand was required before a cause of action accrued for the entirety of the outstanding loan monies upon Ms Govindasamy's default, some words would need to have been included in the Loan Terms to that effect. There is no reference in the default and acceleration provisions of the Loan Terms to the Lender having to do so. Indeed, the Lender was not required to provide notice of and an opportunity to Ms Govindasamy to remedy her defaults, although the Lender may have chosen to do so: 2006 Loan Terms, cl 15; 2007 Loan Terms, cl 14.
22. In my view, the reference to the election on the part of the Lender is not enough to suggest an intention that the causes of action to recover the principal and other amounts payable were not to arise until some form of demand was made by the Lender after Ms Govindasamy's defaults. There is also provision for the debit balance of the Loan Account to be repayable on demand: 2006 Loan Terms, cl 5; 2007 Loan Terms, cl 4.
23. I also note that United Pacific's statement of claim (at 4(d) and 12(d)) pleads that the Loan Agreements contain the following terms: If the borrower defaults in payment of an amount due under the [Loan Agreement] for a period of 30 days, then the full amount of the loan including all interest and costs due but unpaid will become immediately due and payable by the borrower to FEA pursuant to the [Loan Agreement].
24. This pleading accepts that the full amounts of the Loans became repayable on Ms Govindasamy's events of default and does no more than plead that they were Loans payable on demand from that time. This brings the loans within the ordinary rule and the causes of action in this case arising on Ms Govindasamy's defaults, rather than the exception that no causes of action accrued to United Pacific in the absence of some form of demand being made after election by the Lender.
25. I find that the causes of action for recovery of amounts claimed to be payable under the loan contracts accrued to United Pacific on 15 August 2010 for the 2006 Loan and 30 August 2010 for the 2007 Loan. As the causes of action became time-barred prior to the commencement of these proceedings, United Pacific is no longer entitled to recovery of those amounts from Ms Govindasamy.

Conclusion, costs and orders

1. I have found that valid and binding deeds of loan were not created by Ms Govindasamy executing the 2006 and 2007 finance application forms.
2. While accepting that FEA and Ms Govindasamy entered into loan contracts in relation to finance for the 2006 and 2007 Plantations Projects on the 2006 and 2007 Loan Terms and FEA advanced funds in accordance with its obligations under those contracts, I find that United Pacific's claims are statute barred.
3. As United Pacific's claims have failed, I see no reason why costs should not follow the event in the usual way and will order United Pacific to pay Ms Govindasamy's costs of the proceedings.
4. If either party considers that some other costs order should be made, they are to confer with the other party and, within seven days, notify my Associate that a variation to the costs order is sought. They should also provide an agreed timetable so that the issue of costs can be determined on the papers.
5. For these reasons, I make the following orders: 1. Proceedings be dismissed. 2. Plaintiff to pay the defendant's costs of the proceedings.

Amendments 26 February 2020 - Paras 86 and 87 typographical error corrected. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 February 2020