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[2025] VCC 1705
General information, not legal advice.
County Court of Victoria
2025-11-21
Original judgment source is linked above.
Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 271 CLR 151;
Butler Pollnow Pty Ltd v Garden Mews - St Leonards Pty Ltd (1988) 15 ACLR 24;
Jones v Dunkel [1959] HCA 8; ;
Putt v Perfect Builders Pty Ltd [2013] VSC 442;
Sentinel Property Group Pty Ltd v ABH Hotel Pty Ltd [2024] QCA 14;
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359;
Smorgon v ANZ Banking Group Ltd [1976] HCA 53; (1976) 134 CLR 475;
Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 276 CLR 1;
Tournier v National Provincial and Union Bank of England [1924] 1 KB 461;
Walker v Munnecke [2025] VCC 267
Judgment: 1. Judicial Registrar's Decision confirmed
"Following my discussion with Anna on 8 August 2022, the following email correspondence was exchanged with the CBA:
"subject to finance. This is currently a 2 week period of which we either hope to have sold and obtained finance approval by that stage or we may be required to request an extension of the sale contract. Please see attached for your reference.
We have been advised that if we can not obtain finance from Commbank we will be able to exit the contract with all deposit monies returned." (CB 193, paragraph 40)
20.1 If the particulars of sale specify that this contract is subject to a loan being approved, this contract is subject to the lender approving the loan on the security of the property by the approval date or any later date allowed by the vendor.
20.2 The purchaser may end the contract if the loan is not approved by the approval date, but only if the purchaser:
(a) immediately applied for the loan; and
(b) did everything reasonably required to obtain approval of the loan; and
(c) serves written notice ending the contract, together with written evidence of rejection or non-approval of the loan, on the vendor within 2 clear business days after the approval date or any later date allowed by the vendor; and
(d) is not in default under any other condition of this contract when the notice is given.
20.3 All money must be immediately refunded to the purchaser if the contract is ended." (CB 1175, paragraph 20)
"At all times during the loan application process for the Property I understood from my telephone calls and emails with [Ms Sculthorpe] that in order to approve our loan to purchase the Property, the CBA required certainty that the Busana Property had sold for not less than $1.4 million." (CB 197, paragraph 64)
"the CBA would be passing on the full interest rate increase of 0.5 per cent ... [which] would likely take effect for CBA customers on 16 September 2022 ... based on the revised interest rate and the financial information provided to the CBA, the minimum forecast sale price of Busana Way of $1.4 million would no longer be sufficient for our loan application to be approved". (CB 198, paragraph 73)
We have sold Busana way this morning for 1.35m. We will send the contract across when we have an electronic copy. 60 Day settlement.
We are now not in a rush to finalise finance for Park Rd. Can we please obtain a letter or email from CBA stating that at this point in time you are unable to loan us 1.8m? This will allow us to exit the contract of Park Rd and we will still seek a formal pre approval for a lesser value which we would be more comfortable with.
A Big congratulations on the sale of Busana!! You must feel a lot of relief, I am so happy for you that it sold :)
I am so sorry for not replying over the weekend, I have been unwell and am only working intermittently today as on top of being unwell I have now caught conjunctivitis from my son and my eyes are very sore. Goodness me!
I can prepare an email to you stating that at this time the bank cannot at this time assist you in accommodating a borrowing capacity of $1,800,000 and that we would be happy to review this should your circumstances change?
"Please find attached decline letter from CBA." (CB 1320)
They may wish to request confirmation from the purchaser's bank that the purchaser:
(b) did everything reasonably required to obtain approval of the loan;
Therefore, to keep the ball rolling you may wish to make the request to the banker while I wait for instructions." (CB 1324)
Was hoping to get some guidance on this situation. Our client Cassie and Kyall Walker put in an offer for a property and Anna [Sculthorpe] had very thorough discussion regarding the loan and was not able to service on bridging so told them they would need to sell their home first and we had discussed this in our last 1:1 if you may recall. We both kept to this point we would not input an application UNTIL THEY SOLD THEIR FAMILY HOME and client went out on their own risk and purchased and paid a deposit then this last weekend they sold the family home but they are no longer wanting to proceed with their purchase. We have not completed any pre approval as Anna [Sculthorpe] was still awaiting on documents from accountant for this financial year in order to proceed and her discussion this week with client was she would submit the application upon return of her leave once accountant provides this document. This new loan still was in no relation to the purchased property. As they now wish to pull out so asked Anna [Sculthorpe] to prepare a letter in which Anna mentioned she cannot provide a decline letter however completed the attached ...
They have come back today and would like us to amend the letter with the following information below:
the Vendors have requested written confirmation from the bank confirming that the purchaser:
(b) did everything reasonably required to obtain approval of the loan."
I just wanted to reach out to seek your guidance as I am not comfortable in stating this as they have not applied for any loan hence so do I simply revert back to advise this? However require this letter in order to get their deposit funds back.
Happy to discuss anytime tomorrow if you can with me prior to me contacting Cassie." (CB 1328)
I have prepared the below, please confirm you are happy with this and we will place this on letterhead when in the office tomorrow and have this sent across to you both then.
If you need me to specifically place the address in the below please let me know
Thank you for your recent enquiry into acquiring finance for the purchase of a new residential home.
I am writing to you today to inform you that at this time, the bank cannot assist you in accommodating a borrowing capacity of $1,800,000 and therefore your finance has not been approved.
Please however know that we would be happy to review this should your circumstances change.
Thank you for the opportunity to look your borrowing needs and we look forward to working with you in the future.
"... I consider Mrs Walker to have been an unsatisfactory witness. ... I am not prepared to accept Mrs Walker's evidence on any contentious issue unless it is corroborated by contemporaneous documents or the evidence of another witness (other than Mr Walker) or is otherwise inherently objectively probable." ([2025] VCC 267 [150])
"I am also not prepared to accept Mr Walker's evidence ..." ([2025] VCC 267 [163])
"My impression of Mr Musgrove in the witness box was that he was a careful witness who sought to give responsive and truthful evidence. Whilst it will be apparent from what I have said above that I do not accept all of his evidence, I consider him generally to be a creditworthy witness. That said, his involvement in the Walkers' dealings with CBA was limited to discussions with Ms Vu and Ms Sculthorpe about the application, approving the wording of the Second Decline Letter, and reviewing records and providing the confirmations in the Q&A Email. It was not suggested by anybody that Mr Musgrove had any direct communications with the Walkers prior to the 10 September Email." ([2025] VCC 267 [179])
There has been various correspondence regarding the finance application, however I'll need to wait for Anna and Yen's return from leave on 5 October to confirm this question.
I can confirm that these letters (attached) were issued by CBA and are authentic. I note that the original letter issued contained an error with page 2 not being removed by CBA prior to issuing. I can verbally confirm the authenticity of these letters to any third party who the Walkers provide consent to.
"8. The general process for applying for a loan through CSA Private involves:
(a) the client contacts CSA Private;
(b) a private banker is appointed as lead contact for that client (if the client does not already have an appointed private banker);
(c) a meeting is held with the client either in person, by video conference or by phone to discuss what the client wants to achieve in terms of finance and what options may be available;
(d) the private banker then generally sends an email to the client setting out the information and documents they need to provide to progress a loan application which is generally income tax returns, notices of assessment, payslips, a balance sheet setting out assets and liabilities, monthly living expenses and ID verification;
(e) once the client has provided all of the information and documents requested, they are uploaded into our banking system and assessed by the private banker;
(f) our private banking team has authority to approve finance within certain parameters and authority to decline a finance application without the need to engage the credit risk team;
(g) if the loan application does not fit within certain parameters, the private banker will typically have discussions with the client about ways the application could be further supported such as considering further income or whether expenses can be reduced to improve serviceability;
(h) If the client is able to further support the application, CSA Private would further consider the application and it maybe sent to the credit risk team for further assessment;
(i) where a client is unable to provide further relevant information and there is no realistic prospect that the application will be approved by the credit risk team, the private banker will advise the client that the application falls outside the CBA's comfort level for borrowing and will not be approved; and
(j) where an application falls outside the CBA's comfort level for borrowing and it is apparent that it will not be approved, it is not submitted to the credit risk team." (CB 216-7)
"I was very clear around we need to be very forthright around the level of accommodation that the bank can provide and make sure that Cassie [Walker] understands that, yes, we can't provide - we can't support a position and that was what was said then." (CB 624, L9-14)
"Based on my recollection of discussions with Anna [Sculthorpe] and Yenny [Vu] and my review of the written records, the loan application was not approved and would not be supported because the Walkers did not meet stated parameters including meeting serviceability requirements." (CB 221, paragraph 41)
"... you can't approve a loan which isn't approvable. It's not like it's a decision to approve because that doesn't exist, if that makes sense." (CB 633, Lines 15-17)
"Because from an income and servicing point of view, we couldn't get sufficient comfort around acceptable servicing." (Ibid, L18-20)
" 'Serviceability issues' is, I suppose, a very broad concept so the aspects which underpin that can be determined by the borrowing history, the nature of where the income comes from, the type of borrowing entity that's used, the nature of whether it's PAYG versus self-employed versus an incorporated entity. When I say 'service built', there's lots of factors which on aggregate refer to serviceability." (CB 670, L21-29)
"We refer to counsel for your client's call for production by the CBA of the 'version of the document [that] existed in August/September 2022 which recorded the parameters within which the private banking team had authority to approve the loan' and counsel for our clients' confirmation that enquiries would be made of the CBA.
"There are general ratios. They are not necessarily codified in policy but there's general - there's debt to income ratio, certainly from a loan to value ratio; there's different policies and when I refer to 'loan to value ratio' I am referring to the level of debt that's secured against the property and that can be different depending on the industry and the situation, but certainly from an income point of view and debt to income point of view it can range, it depends on the circumstances." (CB 617, L13-23)
"Mr Musgrove, you gave evidence a moment ago about having reviewed various source documents: pay slips, notices of assessment, et cetera. You said that the conclusion had been reached that the loan wouldn't be approved based on certain things. When you were talking about that conclusion being reached, were you talking about a conclusion that you formed after the event, based on your review of those documents, or are you talking about the actual conclusion that was formed - or a conclusion that was formed by you at the time that the application was made?" (CB 629, L11-21)
"It's helpful to me, Mr Truong, if I know when the witness gives evidence about. It's not clear to me the extent to which Mr Musgrove was involved at the time. He is also giving evidence of him having looked at these materials after the event, and to simply say to him, 'Why wasn't it approved' or 'What did you look at', I don't know when he looked at it, that's the difficulty." (CB 630, L20-27)
" "The function of pleadings is to state with sufficient clarity the case that must be met" and thereby to "ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and ... to define the issues for decision". A plaintiff should be expected to plead all material facts on which the plaintiff relies to constitute the statutory cause of action, including any counterfactual on which that plaintiff relies to establish the requisite causal link between identified loss or damage and identified misleading or deceptive conduct. In the same way, a defendant resisting the statutory action should be expected to plead any different counterfactual on which that party might rely to deny the causal link. Unless and to the extent that the parties choose to depart from the pleadings in the way they go on to conduct the trial, choice between the competing pleaded counterfactuals on the balance of probabilities should then exhaust the fact-finding that is required to be undertaken by the court on the issue of causation." ((2020) [2020] HCA 27; 271 CLR 151, 190 [72])
"48. The purchaser acknowledges the sale is subject to registration of plan of subdivision, a copy of which is annexed to this contract (the Plan). If the plan has not been registered within twelve (12) months from the date of this contract either party may rescind this contract in writing to the other party, clause 19 shall apply." ([2016] NSWSC 1807 [21])
"[62] The authorities that will be considered below support the following principles, and related considerations:
(1) Where a contract for the sale of land gives a party a right to rescind the contract upon the occurrence or non-occurrence of a particular event, the party is subject to an implied obligation to do, or cooperate in doing, what is reasonably necessary to avoid the right to rescind arising, in order to permit completion of the contract.
(2) The party is precluded from exercising the right to rescind if (a) the party has not performed its implied obligation; and (b) the failure has caused the event which entitles the party to rescind. Mere breach of the implied obligation is insufficient to preclude the right of rescission.
(3) The same result arises where there is an express obligation upon a party to take steps to avoid the event that gives rise to the right of rescission, provided that performance of the obligation is not made a condition to the exercise of the right to rescind. Where performance of the obligation is not made a condition of the right to rescind, mere breach does not preclude rescission, but only does so if the breach has caused the right to rescind to arise.
(4) The burden of proof falls on the party who denies the right of the party who has rescinded to do so, to prove both the breach of the implied or express obligation by the rescinding party, and that the breach caused the event that has given rise to the right to rescind.
(5) Notwithstanding the placement of the legal burden of proof, the tender of limited evidence by the party subject of that burden may cause a burden of adducing evidence to shift to the other party, because relevant facts are peculiarly within the knowledge of the rescinding party, to lead evidence as to what happened, because otherwise inferences may be drawn against the rescinding party.
(6) The rules that are applicable are materially different where, as in the present case, the contract makes the right of one party to rescind conditional upon the performance by that party of an obligation to take action intended to avoid the right to rescind arising.
(7) If an action required by the obligation imposed on the rescinding party is not done, the right to rescind is lost, and it is immaterial that the breach of the obligation did not cause the right to rescind to arise.
(8) If an action is required by the obligation imposed on the rescinding party, it must be done, even if the doing of that action would not necessarily avoid the right to rescind arising.
(9) The issue of where the burden lies depends upon an analysis of the effect of the contract, to determine the substance of what must be proved by the parties to establish, or negate, the right to rescind. It should not depend solely on the fortuity of who is the plaintiff and who is the defendant.
(10) In principle, the substance of the obligations should require the party who resists the validity of the rescission to prove that the right of rescission was conditional, and to establish the terms of the condition. It should then fall upon the rescinding party to prove that the condition has been satisfied, as the right to rescind will only exist in that event.
(11) The possible shifting of the evidentiary onus may also arise in this context." ([2016] NSWSC 1807 [62])
"The reason that is not correct, as a matter of logic, is a deliberate choice was made to have a clause of this type, not the first type. It was done specifically for the purpose of not requiring parties for a standardised contract to have to run the complex counter-factual question." (T82, L3-8)
"Suppose we had a hypothetical borrower, and the financial institution nominated in the contract was prepared to make the loan, subject to the provision of a guarantee mortgage from the borrower's parents-in-law."
Mr Mitchell said that this would not be a reasonable request, and the borrower would not, in refusing to provide the guarantee mortgage, be excluded from reliance on GC 20. (T130, L29 - T131, L7) I am clear in my mind that unless there were some exceptional element to the proposed borrowing transaction which would render the normal loan to valuation ratio inapplicable, or if the borrower for instance had a deplorable credit history, such a request by a lending institution would not be reasonable, and a purchaser relying on GC 20 would be entitled to decline to provide the guarantee mortgage. In summary, therefore, I do not accept that the form of GC 20.2(b) and its reference to what is "reasonably" required necessarily leaves open the need to consider whether a step proven to be futile would for that reason alone be regarded as other than reasonable for the purposes of the subclause.
"We are now not in a rush to finalise finance for Park Rd. Can we please obtain a letter or email from CBA stating that at this point in time you are unable to loan us 1.8m? This will allow us to exit the contract of Park Rd and we will still seek a formal pre approval for a lesser value which we would be more comfortable with." (CB 1288)
I certify that these 24 pages are a true copy of the judgment of his Honour Judge Macnamara delivered on 21 November 2025.
Walker and Anor
Munnecke [2025] VCC 1705
(2020) 271 CLR 151
(1959) 101 CLR 298
(1976) 134 CLR 475
(1931) 45 CLR 359
(2022) 276 CLR 1