Bedrock Funding Pty Ltd v SSA Pty Ltd

1. [1]

   These proceedings principally involve a dispute about the proper construction of a Finance Consultancy Agreement, and whether certain fees are due and owing to the plaintiff under that agreement in the events which have happened. For the reasons that follow, I have determined that there are no fees due and owing to the plaintiff. It follows that the proceedings must be dismissed.

Salient facts

1. [2]

   The relevant facts are not in dispute save to the extent that I have expressly indicated below.

2. [3]

   The plaintiff, Bedrock Funding Pty Limited (Bedrock), is a finance broker specialising in construction finance. Mr Pieter Eksteen is the sole director of Bedrock.

3. [4]

   The defendant, SSA Pty Limited (SSA), is the owner of land at 122-124 Barton St, Oak Flats NSW 2529, being the land described in folio identifiers 3XX/XXXX7 and 3XX/XXXX7 (the Property). Mr Manvinder Singh and Mr Aayush Attri are the directors of SSA.

4. [5]

   SSA purchased the Property on 29 October 2024 with a view to developing six townhouses on the Property (the Project) in accordance with development consent that had been granted on 22 August 2023. SSA had negotiated a building contract with Mr Nirmal Singh Bhullar, who appears to go by the name Mr Singh, of Norwest Construction & Renovation (Norwest).

5. [6]

   SSA’s purchase of the Property was financed by a loan from Westpac Banking Corporation. SSA’s title to the Property was subject to a registered mortgage over the Property in favour of Westpac at all times during the events that have given rise to these proceedings. As a result of a refinancing that SSA appears to have undertaken in about February 2025, the Westpac mortgage has been discharged and the Property is now subject to a mortgage in favour of Perpetual Corporate Trust Limited.

6. [7]

   On or about 3 June 2024, Mr Singh of Norwest, acting on behalf of SSA, approached Bedrock and provided information which elicited from Bedrock a Finance Consultancy Proposal that Mr Eksteen sent to Mr Singh at Norwest by email on 4 June 2024. The proposal involved a loan of $3,169,000 for a term of 12 months, of which $1,070,000 would refinance the existing Westpac loan and the balance would be applied to fund construction costs, which the proposal recorded would amount to $1,650,000.

7. [8]

   Mr Manvinder Singh contacted Mr Eksteen by email on 17 July 2024 seeking to arrange a call that day to discuss the proposal. Mr Eksteen indicated that he was available, but an email from Mr Manvinder Singh to Mr Eksteen that same evening states that he had tried to call him but had been unable to connect. Mr Singh’s email then set out a number of points for Mr Eksteen’s consideration “[j]ust to start the conversation”, including that the estimated construction costs for the development were $1,850,000, that the loan was required to finance the construction and should ideally be for a term of 18 months to cover the period of construction and sale of the units, that the required loan amount was $1.85 million, that SSA would draw down on the loan “when we are shovel ready”, and that the value of the Property was between $1,700,000 and $1,800,000. Mr Singh’s email also stated that he had reviewed Bedrock’s proposal and had certain questions.

8. [9]

   On 18 July 2024, Mr Eksteen replied to Mr Singh’s email attaching a revised proposal “to be in line with your numbers” and to “give you enough to refinance [the Westpac loan] and also spend $1.85mil on Construction”.

9. [10]

   Contemporaneous email correspondence records that this revised Finance Consultancy Proposal was the subject of discussion between Mr Manvinder Singh and Mr Eksteen during the period between about 29 July 2024 and 2 August 2024, following which Mr Singh signed it on behalf of SSA on 6 August 2024.

10. [11]

    The document signed by Mr Singh comprised:

    1. (1)

       a description of the claimed expertise of Bedrock and Mr Eksteen in construction and commercial property finance, a description of the “Key Product Offerings” of Bedrock, and a list of recent finance transactions;

    2. (2)

       a description of the eight-stage “Bedrock Funding Process” and a guide to the typical timeframe for the process;

    3. (3)

       one page entitled “The Basics” which identified SSA as the client, identified the Property as the location of the proposed Project for the development of six townhouses, and recorded that SSA had requested Bedrock to provide it with proposed funding solutions to assist with refinancing the Property and funding the construction of the Project;

    4. (4)

       a description of “Your Project” which depicted an aerial photograph of the Property and reiterated SSA’s request to Bedrock to provide it with proposed funding solutions to assist with refinancing the Property and funding the construction of the Project;

    5. (5)

       one page entitled “The Proposed Solution”;

    6. (6)

       a two-page spread entitled “The Numbers” comprised of a “Feasibility Analysis” which set out the financial metrics of the Project, including estimated development costs, sales revenue and development profit for the Project, a “Funding Table” which provided calculations of the Loan to Cost Ratio and Loan to End Value Ratio based on a proposed loan amount of $3,398,108, and a cash flow analysis;

    7. (7)

       one page setting out the proposed indicative terms of the proposed loan in respect of which SSA was engaging Bedrock;

    8. (8)

       one page listing the information that Bedrock would require in order to prepare a detailed credit submission, and the further information that Bedrock would require “once we have credit approval”;

    9. (9)

       one page entitled “Authority to Act on Your Behalf” in the terms which I have set out below, followed by an execution block for SSA;

    10. (10)

        one page containing instructions for an “Initial Payment” to Bedrock of $5,500; and

    11. (11)

        two pages entitled “The T’s & C’s”, the salient terms of which I refer to below.

11. [12]

    There is no dispute that all of the above sections of the Finance Consultancy Proposal document were provided to Mr Singh of SSA for his perusal before he signed the Authority to Act page on behalf of SSA on 6 August 2024. The parties refer to the totality of the documents referred to above as the Finance Consultancy Agreement or FCA, and I will adopt that convention.

12. [13]

    The description of Bedrock’s and Mr Eksteen’s claimed expertise described Bedrock as specialising in construction finance and commercial property finance – a “highly specialized field requiring a very specific skill set, years of experience and a solid industry reputation.” It promised the application of that specialised expertise to provide an “appropriate Funding Solution” on the basis of an assessment of the proposed project and an understanding of what the prospective borrower wants to achieve. The FCA described Bedrock as having an “insider’s advantage” which was “essential” when “navigating potential funding structures”, and the ability to “present your vision in a way that lenders can understand!” The FCA described Mr Eksteen as “a result driven Construction and Commercial Property Finance Expert with extensive experience in Property Development, Business and Project Management” which enables him to “quickly understand the commercial requirements of new or existing projects and craft the most suitable solutions”. The FCA stated that Mr Eksteen had “cemented long-standing relationships with key people within the major banks and lending institutions”.

13. [14]

    The eight stages of the “Bedrock Funding Process” were described in the FCA as follows:

    1. (1)

       an “Introductory Conversation” in which Bedrock would seek to “understand your business and any projects that might require a Funding Solution”;

    2. (2)

       a “NO OBLIGATION detailed Funding Proposal” that Bedrock would prepare once it understood “the project and the key requirements”;

    3. (3)

       a “Detailed Discussion” in which Bedrock would “walk through all the details in our proposal, to confirm that our proposed solution will provide the best possible outcome”;

    4. (4)

       “Authority to Act & Credit Submission”, in relation to which the FCA stated: “Our proposal will include an Authority to Act on your behalf. This enables BEDROCK Funding to compile a highly detailed credit submission and take this to the Funding Market Place. Our Credit Submissions are detailed and provide potential funders with enough information to make a credit level decision”;

    5. (5)

       “Indicative Finance Terms”, in relation to which the FCA stated: “We will typically receive credit endorsed terms from a lender at this stage. These terms are discussed with you and, if need be, some of these terms are negotiated”;

    6. (6)

       “Formal Approval”, in relation to which the FCA stated: “After negotiating funding terms that works [sic] for you, the lender will then progress the Funding Application towards a formal approval. The process leading up to formal approval might include a Project Valuation Report, a Quantity Surveyors Report and other conditions to be satisfied by the funder”;

    7. (7)

       “Loan Documents”, in relation to which the FCA stated: “After the application is formally approved, the funder will issue a formal set of Loan Documents to be executed prior to settlement of the loan”; and

    8. (8)

       “Ongoing Management”, in relation to which the FCA stated: “Once the loan has settled, BEDROCK Funding continues to stay involved and assist in the ongoing management of the facility. This might include assisting in arranging Quantity Surveyors Progress Reports and attending Project Control Group meetings.”

14. [15]

    As counsel for Bedrock submitted, its description of the eight stages clearly distinguishes between the indicative terms a lender may offer in stage five, and formal loan approval in stage 6. Indicative terms offered in stage 5 may be the subject of further negotiation and are likely to be subject to conditions that a lender will require to be satisfied before any formal approval is issued in stage 6.

15. [16]

    The proposed indicative terms of the proposed loan stipulated in the FCA were (emphasis in original):

16. [17]

    The FCA listed the following further information that Bedrock would require “once we have credit approval” (which I infer refers to stage five – “credit endorsed terms” – as distinct from “formal approval” in stage 6):

    1. (1)

       a valuation report for mortgage security purposes; and

    2. (2)

       a quantity surveyor’s report supporting the estimated construction costs and providing information about the proposed builder to support their suitability to deliver the Project.

17. [18]

    As counsel for Bedrock submitted, the indicative terms set out in the FCA differed from the draft proposal that Bedrock had prepared on 4 June 2024, in that the indicative facility limit set out in the FCA was $3,398,108 (compared to $3,168,676 in the draft proposal) and the maximum loan to end value ratio set out in the FCA was 70.0% (compared to 66.8% in the draft proposal). These changes appear to reflect changes in the figures set out in the feasibility analysis, including an increase in the construction costs and a reduction in the estimated sales revenue in the FCA compared to the draft proposal.

18. [19]

    The “Authority to Act on Your Behalf” page of the FCA provided (emphasis in original):

19. [20]

    As I have already mentioned, Mr Manvinder Singh executed the “Authority to Act on Your Behalf” page of the FCA on behalf of SSA on 6 August 2024.

20. [21]

    The initial payment instructions on the page immediately after the “Authority to Act of Your Behalf” were followed by the two pages entitled “The T’s & C’s”, which included the following:

21. [22]

    It is common ground between the parties that the FCA, including the “Authority to Act on Your Behalf” page and “The T’s & C’s”, is a binding agreement entered into by Bedrock and SSA on 6 August 2024.

22. [23]

    It is also common ground that SSA paid to Bedrock the Signing Fee of $5,500 (including GST) at or about the time that it entered into the FCA.

23. [24]

    Mr Manvinder Singh gave evidence, which I accept, that he did not read “The T’s & C’s” pages of the FCA before he signed the Authority to Act page on behalf of SSA on 6 August 2024. Mr Singh did not suggest that that he did not have an opportunity to read those pages, or that he had been unable to do so for any reason. On the contrary, the terms of the “Authority to Act on Your Behalf” and “The T’s & C’s” in the FCA signed by Mr Singh on 6 August 2024 were the same as the terms of those parts of the draft proposal that Bedrock had provided on 3 June 2024 and that Mr Singh had reviewed, or had an opportunity to review, on or about 17 July 2024. Under cross-examination, Mr Singh agreed that he had chosen not to read “The T’s & C’s”. I accept the submission made on behalf of SSA that Mr Singh thereby accepted that he had not been prevented from reading “The T’s & C’s”, and that Mr Singh’s evidence should not be understood as embracing the proposition (which was not expressly put to him) that he had seen “The T’s & C’s” pages which came after the execution block on the “Authority to Act on Your Behalf” page and after the initial payment instructions page, and made a deliberate decision not to read them. As I have already mentioned, SSA does not dispute that “The T’s & C’s” pages form part of the terms of the FCA.

24. [25]

    Mr Singh stated in his 17 July 2024 email to Mr Eksteen that he wanted to “[d]iscuss the fees etc for the loan”. [1] There is no evidence of any subsequent discussion or negotiation in relation to Bedrock’s fees set out in the “Authority to Act on Your Behalf” before the parties entered into the FCA on 6 August 2024.

25. [26]

    On or about 30 August 2024, Bedrock finalised a credit submission in respect of a proposed loan to SSA to refinance the existing Westpac mortgage and to finance the construction of the Project on indicative terms that were very similar to the indicative terms set out in the FCA. The indicative terms in the credit submission included (emphasis in original):

26. [27]

    The indicative terms in the credit submission did not specify a maximum loan to cost ratio, but the feasibility analysis within the credit submission estimated the loan to cost ratio as 82.7%.

27. [28]

    The indicative terms in the credit submission also stated that the proposed loan would be secured by first mortgage over the Property, a general security agreement in respect of SSA’s assets and uncalled capital, and personal guarantees from Mr Manvinder Singh and Mr Manjit Singh. Curiously, the credit submission included a statement of financial position in respect of Mr Manvinder Singh and Mr Nirmal Singh (not Mr Manjit Singh) as prospective guarantors. According to Mr Manvinder Singh’s evidence, this is an error. He was not aware of this error at the time because Mr Eksteen had not advised him that he had prepared or submitted a credit submission. Nor had Mr Eksteen asked Mr Singh who would be the guarantors for the proposed loan. The evidence adduced by Bedrock in these proceedings did not address or explain this internal inconsistency within the credit submission as to the identity of the proposed guarantors.

28. [29]

    The indicative terms in the credit submission also set out certain general conditions to be satisfied before drawdown of the facility, including the provision of a valuation report prepared by a valuer on the lender’s panel supporting the “As Is” and “As If Complete” values for the Project, credit checks for the borrower and guarantors which are satisfactory to the lender, and a report from a quantity surveyor on the lender’s panel confirming various matters including the estimated costs of the works and the acceptability of the construction program and timetable.

29. [30]

    SSA does not dispute that the credit submission was a detailed submission of the kind that the FCA required Bedrock to prepare.

30. [31]

    Bedrock sent the credit submission to two potential lenders: Millbrook Group (Millbrook) and La Trobe Financial Services Pty Limited (La Trobe). Contrary to Mr Eksteen’s evidence given in his affidavit affirmed on 19 November 2025, Bedrock did not send the credit submission to Pallas Capital and did not discuss the Project or the proposed loan to SSA with Pallas Capital, as Mr Eksteen acknowledged in cross-examination. Mr Eksteen had a general discussion with Mr Darragh O’Riordan of Pallas Capital on 6 August 2024 about Pallas Capital’s potential interest in financing various kinds of projects, including small townhouse developments. As a result of that discussion, Mr Eksteen had formed the view before the credit submission was even prepared that Pallas Capital would not be interested in lending to SSA for this Project because the loan sought was less than $5,000,000.

31. [32]

    The credit submission was sent to Millbrook on 2 September 2024 by email from Mr Eksteen to Mr George Lyall, Head of Origination at Millbrook. Mr Eksteen’s email was sent as a reply to an email that he had received from Mr Lyall on 9 November 2021 in which Mr Lyall had referred to a discussion between them “a while ago about Millbrook’s Product range and how we could maybe assist you and your clients going forward”, before asking Mr Eksteen whether he had “anything on your desk we could look at”. Mr Eksteen’s email sent almost three years later on 2 September 2024 stated:

32. [33]

    Under cross-examination, Mr Eksteen said that he had suggested in his email to Mr Lyall that it should not be a problem for him to get his client, SSA, to accept Millbrook’s pricing if it was higher than La Trobe’s pricing because he knew that Millbrook and La Trobe get their money from different sources, “so sometimes [Millbrook’s] money costs them more than what a big institution like La Trobe would” and he did not want Millbrook to “kill the deal” based on “one thing” (by which I understood Mr Eksteen to be referring to the indicative pricing in the credit submission). Mr Eksteen said that, if Millbrook had made an indicative offer at a higher interest rate than that proposed in the credit submission, he “would have taken it to the client and we would have tried to negotiate it”.

33. [34]

    Mr Lyall replied to Mr Eksteen’s email on the following day, 3 September 2024, stating:

34. [35]

    Those two emails are the only evidence of any communications between Mr Eksteen or any other person on behalf of Bedrock and Millbrook concerning the credit submission, the Project, or the loan sought by SSA. In his affidavit affirmed on 19 November 2025, Mr Eksteen asserted on the basis of his reading of those two emails that he had a discussion with Mr Lyall about the credit submission on or about 3 September 2024. As counsel for SSA submitted, that is a purported reconstruction of a discussion, which finds no basis in the two emails. The terms of the emails contain no suggestion that there had been any other discussion between Mr Eksteen and Mr Lyall at about the times the emails were sent and received. I reject Mr Eksteen’s evidence and find that his communications with Millbrook about the credit submission, the Project and the loan sought by SSA were limited to his email to Mr Lyall sent on 2 September 2024 and Mr Lyall’s reply by email sent to Mr Eksteen on 3 September 2024.

35. [36]

    The credit submission was sent to La Trobe on 4 September 2024. There is no evidence that Mr Eksteen or any other person on behalf of Bedrock subsequently discussed the credit submission with La Trobe, or had any other communication with La Trobe about the credit submission, the Project, or the loan sought by SSA, until 21 October 2024, when Mr Eksteen gave evidence that he had a conversation with unnamed representatives of La Trobe to which I refer below.

36. [37]

    Mr Eksteen did not give evidence explaining why Bedrock limited the potential lenders to whom it sent the credit submission to Millbrook and La Trobe.

37. [38]

    On 9 October 2024, Mr Eksteen and Mr Singh had a telephone discussion in which they agreed that the term of the proposed loan would need to be extended to 18 months in light of a quantity surveyor’s report that SSA had received some weeks earlier estimating the construction timeframe as 15 months. As counsel for SSA submitted, there is no evidence that Mr Eksteen and Mr Singh had any discussion on this or any other occasion about whether this would be likely to increase the interest rate terms on which potential lenders might be willing to advance the proposed loan.

38. [39]

    Mr Singh was not aware that SSA’s appointment of Bedrock was on an exclusive basis because he had not read “The T’s & C’s” in the FCA. He told Mr Eksteen during a telephone call on 16 October 2024 that SSA had “received a lower net cost from another broker and will be going ahead with them.” Mr Eksteen asked Mr Singh to send him a comparison so that Mr Eksteen could “see what I can do”.

39. [40]

    On Friday, 18 October 2024, Mr Singh sent an email to Mr Eksteen attaching an excel spreadsheet entitled “Finanace [sic] offer Comparison Barton Street to BR” which set out Mr Singh’s comparison of the indicative terms of finance in the FCA with the indicative terms that he understood another broker known as “George” would seek to procure for SSA. George’s indicative terms included in the comparison table did not include any brokerage fee. Mr Singh discussed his comparison table with Mr Eksteen in a telephone conversation later that day, and Mr Singh made the point to Mr Eksteen that the overall cost of the Project would be lower without a brokerage fee. Mr Eksteen told Mr Singh that he would “look at it and come back to you”.

40. [41]

    On the basis of the evidence which I have outlined above, the position as at 18 October 2024 may be summarised as follows. Bedrock had not engaged in any discussions with Millbrook since receiving its unfavourable response to the credit submission on 3 September 2024. Bedrock had received no response from La Trobe to the credit submission which it sent to La Trobe on 4 September 2024, and had not taken any other steps to engage with La Trobe about the credit submission. Bedrock had not discussed the credit submission, the Project or the loan sought by SSA with any other potential lender. Bedrock had not procured any indicative offer of finance. SSA had been entitled since 6 October 2024 to terminate the FCA on 21 days’ notice in writing to Bedrock in accordance with clauses 3 and 4 of “The T’s & C’s” in the FCA. [2]

41. [42]

    According to Mr Eksteen’s evidence, he had a conversion with unnamed representatives of La Trobe on Monday, 21 October 2024, “to the effect that ‘I have a Finance Consultancy Agreement and, pursuant to that agreement, I want La Trobe to issue an offer to provide finance’.”

42. [43]

    The evidence adduced in these proceedings sheds no light on how Bedrock’s Finance Consultancy Agreement with SSA entitled Mr Eksteen to demand or request that La Trobe issue an indicative offer of finance to SSA, or had any potential to persuade La Trobe to accede to that demand or request in circumstances where it had not engaged with the credit submission in the six weeks that had passed since La Trobe received it on 4 September 2024.

43. [44]

    Nevertheless, Mr Eksteen’s demand or request made on 21 October 2024 appears to have elicited immediate action from La Trobe. Mr Jeremy Enconniere, Senior Executive – Head of Commercial Partnerships at La Trobe, sent an email to Mr Eksteen at 7:59am on Monday, 21 October 2024 attaching a letter to SSA setting out an indicative quote for finance.

44. [45]

    Mr Eksteen sent an email to Mr Singh at 9:53am that morning attaching La Trobe’s letter, together with an invoice for the Indicative Offer Payment component of Bedrock’s fees specified in the FCA in the amount of $5,500 (including GST) which Mr Eksteen stated was “payable now”.

45. [46]

    La Trobe’s letter to SSA stated (emphasis in original):

46. [47]

    SSA accepts that La Trobe’s letter was an indicative offer of finance within the meaning of the FCA. I will refer to it as the La Trobe Offer.

47. [48]

    I note that the indicative “Loan Amount” in the La Trobe Offer is stated to be “$3,390,000 (or 70.00% of valuation, whichever is the lesser)”. Neither the evidence nor the parties’ submissions addressed the question whether the “valuation” referred to the value of the Property in its then-current state (undeveloped, but with the benefit of the development application) which Mr Singh had told Mr Eksteen on 17 July 2024 was between $1,700,000 and $1,800,000, or the value of the Property as if the proposed development had been completed, which the feasibility analysis included in the credit submission estimated at $4,854,545. The terms of the FCA anticipated that any prospective lender would require valuations on both bases. It is inherently improbable that La Trobe would have indicated a loan amount of $3,390,000 if it had intended to cap any loan at 70% of the as-is value of the Property which the credit submission disclosed had been acquired at a cost of $1,700,000. I therefore proceed on the assumption that La Trobe was referring to 70% of an as-if-complete valuation of the Property, which would equate to $3,398,181.50 on the basis of the $4,854,545 estimate in the credit submission. SSA made no submission to the contrary.

48. [49]

    I note that the indicative interest rate in the La Trobe Offer is 10.69% per annum, which is 1.24% higher than the 9.45% indicative interest rate stipulated in the FCA. Although SSA accepts that the La Trobe Offer was an indicative offer of finance within the meaning of the FCA, it contends that it was not “generally in accordance with” the FCA within the meaning of the “BEDROCK Funding Fee” terms and clause 15 of “The T’s & C’s” of the FCA by reason of this 1.24% interest differential. It is common ground between the parties that an interest rate of 10.69% would have increased the finance costs of the Project by a total amount of $40,705 over the term of the Project, having regard to the estimated timing of drawdowns under the proposed loan.

49. [50]

    Mr Singh and Mr Eksteen apparently had a telephone conversation on 21 October 2024 after Mr Singh received the La Trobe Offer and Bedrock’s invoice for the Indicative Offer Payment fee. On the afternoon of 22 October 2024, Mr Eksteen sent an email to Mr Singh stating (emphasis in original):

50. [51]

    The “Attached Invoice” appears to be a reference to the 21 October 2024 invoice for the Indicative Offer Payment fee.

51. [52]

    On 24 October 2025, Mr Singh sent an email to Mr Eksteen stating:

52. [53]

    Mr Eksteen replied on 25 October 2024, stating (emphasis in original):

53. [54]

    The invoice attached to Mr Eksteen’s email was Bedrock’s invoice for the Final Payment fee specified in the FCA in the amount of $55,935.00 (including GST), being 1.5% of the $3,390,000 indicative loan amount in the La Trobe Offer.

54. [55]

    Mr Singh replied to Mr Eksteen by email later that day:

55. [56]

    Correspondence between the parties’ solicitors followed.

56. [57]

    Bedrock issued a statutory demand to SSA on 11 November 2024 demanding payment of $61,435.00. That demand was withdrawn on 25 November 2024 after SSA’s solicitors wrote to Bedrock’s solicitors contending that the issue of the statutory demand was an abuse of process and referring to an earlier letter sent by SSA’s solicitors to Bedrock on 11 November 2024 setting out the grounds on which SSA contended that there was a genuine dispute that any debt was owing.

57. [58]

    On 11 December 2024, La Trobe made an offer of finance to SSA for a loan of up to $3,325,000 at an interest rate of 9.99% per annum for a term of 18 months. The credit provider named in the offer is Perpetual Corporate Trust Limited. This offer was procured by “George” – the other finance broker acting on behalf of SSA.

58. [59]

    On or about 5 December 2024, SSA served a lapsing notice on Bedrock in respect of caveat AU5XXXX4 that SSA discovered Bedrock had lodged against the title to the Property on 4 November 2024. Bedrock then commenced these proceedings on an urgent basis on 23 December 2024. The Court made interim orders including an order extending the operation of the caveat until further notice, subject to an order requiring Bedrock to withdraw the caveat to facilitate settlement of any refinancing of the existing mortgage and an order granting leave to Bedrock to lodge a further caveat following settlement of that refinancing. That appears to have occurred in about February 2025, and the Property is now subject to a registered mortgage in favour of Perpetual Corporate Trust Limited, and Bedrock’s further caveat, being caveat AU8XXXX3.

The plaintiff’s claims

1. [60]

   In its statement of claim filed on 7 February 2025, Bedrock claims:

   1. (1)

      a declaration that, pursuant to the FCA signed on 6 August 2024, SSA has charged its interest in the Property in favour of Bedrock for all monies due and payable under the FCA, and that the charge is valid and binding (prayer 1);

   2. (2)

      an order for the judicial sale of the Property and, further or in the alternative, orders for vacant possession of the property (prayer 2);

   3. (3)

      judgment in the sum of $61,435 (including GST), being the total amount of the Indicative Offer Payment and Final Payment calculated on the basis of the $3,390,000 loan amount set out in the La Trobe Offer (prayer 3, as amended orally in opening submissions); and

   4. (4)

      interest pursuant to s 100 and s 101 of the Civil Procedure Act 2005 (NSW) (prayer 4).

2. [61]

   Bedrock did not join the registered mortgagee of the Property as a party to these proceedings. Bedrock informed the Court in opening submissions that it proposed to “defer” its claim for an order for judicial sale and/or possession of the Property.

The issues

1. [62]

   As I have already mentioned, it is common ground that Bedrock and SSA entered into the FCA on 6 August 2024. Although SSA decided to engage the services of a different finance broker on or about 18 October 2024, SSA does not claim to have terminated the FCA at that time or at any other time.

2. [63]

   There is a dispute between the parties about whether Bedrock performed the “Work” as defined in the FCA. Bedrock’s claimed entitlement to the Indicative Offer Payment and the Final Payment rests on its claim to have performed the Work. SSA contends that Bedrock did not perform the Work, and that it is therefore not entitled to the Indicative Offer Payment and the Final Payment.

3. [64]

   If this first issue is resolved against Bedrock, that will require all of its claims to be dismissed. The other disputed issues identified below will not arise for determination.

4. [65]

   If Bedrock is found to have done the Work, it will be necessary to resolve the parties’ dispute about whether the receipt of the La Trobe Offer on 21 October 2024 enlivened Bedrock’s entitlement to:

   1. (1)

      the Indicative Offer Payment; and

   2. (2)

      the Final Payment.

5. [66]

   The dispute concerning Bedrock’s entitlement to the Indicative Offer Payment turns on:

   1. (1)

      the construction of the FCA – specifically, whether the La Trobe Offer was “generally in accordance with” the FCA notwithstanding that the indicative interest rate of 10.69% in the La Trobe Offer was 1.24% higher than the 9.45% indicative interest rate stipulated in the FCA; and

   2. (2)

      whether the FCA was varied on or about 9 October 2024 by an express or implied agreement between the parties that, as a result of their agreement that the term of the proposed loan would need to be 18 months rather than 12 months, the “risk profile” of SSA to any potential lender had adversely changed and the interest rate stipulated in any indicative offer was therefore “likely to be more than” the indicative rate of 9.45% per annum stipulated in the FCA. Bedrock contends, and SSA denies, that a term to that effect is implied in fact in order to give business efficacy to the FCA.

6. [67]

   The dispute concerning Bedrock’s entitlement to the Final Payment turns on:

   1. (1)

      the proper construction of the FCA as to when the Final Payment became due; and

   2. (2)

      whether clause 15 of “The T’s & C’s” in the FCA is an “unfair” term within the meaning of s 12GB of the Australian Securities and Investments Commission Act 2001 (Cth) that is void pursuant to s 12BF of that Act.

7. [68]

   SSA does not dispute the validity of clause 23 of “The T’s & C’s” in the FCA. SSA accepts that, if the Court finds that the Indicative Offer Payment and/or the Final Payment are due and payable under the FCA, then those amounts are secured by an equitable charge over the Property pursuant to clause 23. SSA disputes that those amounts are due and payable on the grounds summarised above.

8. [69]

   Bedrock expressly abandoned its pleaded claim that it is indemnified under the FCA in respect of its costs of prosecuting these proceedings, and those costs are therefore also the subject of a charge pursuant to clause 23 of “The T’s & C’s”.

Consideration and determination

1. [70]

   The FCA is to be construed in accordance with the established principles governing the construction of commercial contracts. As the High Court said in Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd, [3] and re-affirmed in Simic v New South Wales Land and Housing Corporation: [4]

2. [71]

   As Bedrock submitted, the FCA expressly provides that Bedrock’s stipulated fees – including the Indicative Offer Payment and the Final Payment – are payable in consideration for Bedrock performing “the Work”. [5]

3. [72]

   The “Work” is defined in the “Authority to Act” section of the FCA as compiling a detailed credit submission that includes the client’s personal and financial information, and submitting and discussing that submission with “various” financial institutions or lenders. [6]

4. [73]

   In my opinion, a reasonable businessperson would understand that definition as being satisfied only if Bedrock compiled a detailed credit submission and submitted and discussed that credit submission with “various” financial institutions or lenders. A construction of the FCA as entitling Bedrock to perform the Work merely by compiling the credit submission, without submitting that document to and discussing it with financial institutions or lenders who may be interested in advancing the loan sought by SSA, would make commercial nonsense because the preparation of the credit submission would be futile.

5. [74]

   SSA submitted that the definition of the Work required Bedrock to submit the credit submission to, and discuss it with, more than two financial institutions or lenders because the word “various” means more than two. SSA submitted that the mere fact that an indicative offer has been received is not determinative of the question whether the Work, as defined, was done.

6. [75]

   Bedrock disputed this, relying on clauses 9 and 10 of “The T’s & C’s” which expressly state that Bedrock “does not guarantee” how many lenders or the type of lenders it will approach, or the number of submissions or requests for proposals it will make to lenders.

7. [76]

   I reject SSA’s submission that the reasonable businessperson would understand the word “various” as necessarily requiring Bedrock to send the credit submission to, and discuss it with, more than two financial institutions or lenders.

8. [77]

   I also reject Bedrock’s submission that clauses 9 and 10 mean that it will have performed the Work (as defined) merely by sending the credit submission to one financial institution or lender because it has not guaranteed to engage with more than such financial institution or lender.

9. [78]

   In my opinion, the reasonable businessperson, reading the FCA as a whole, and understanding that it had been entered into in circumstances where SSA required construction finance for the Project and Bedrock claimed to offer the expertise described in the FCA, [7] would have understood the language used to define the Work as meaning that Bedrock was required to compile the credit submission and to submit it to, and discuss it with, those financial institutions or lenders that, in Bedrock’s judgment based on its specialist expertise, may be interested in offering an appropriate funding solution for the construction of the Project. The reasonable businessperson would have understood that Bedrock was obliged to use its claimed expertise to form a professional judgment about the number and identity of the financial institutions or lenders to be approached, and to use Mr Eksteen’s relationships to facilitate those approaches and initiate and sustain discussion about the credit submission with each such financial institution or lender, with a view to eliciting one or more offers of appropriate funding solutions. The reasonable businessperson would have understood the salient finance terms set out in the FCA to have been agreed by the parties as indicative of what would be an appropriate funding solution for SSA’s Project.

10. [79]

    The reasonable businessperson would not have understood the definition of the Work, read in the context of the FCA as a whole (including clauses 9 and 10 of “The T’S & C’s”) to oblige Bedrock to submit the credit submission to, and discuss it with, a specified minimum number of financial institutions or lenders, irrespective of the nature of the Project, the financial position of the prospective borrower and any guarantors, and the state of the finance market (or relevant segments of it) at the time. Nor would the reasonable businessperson have understood clauses 9 and 10 of “The T’S & C’s” as meaning that Bedrock was entitled to submit the credit submission to only one financial institution or lender, irrespective of those matters and without forming any professional judgment about the likely appetite of that financial institution or lender to offer an appropriate funding solution.

11. [80]

    As SSA submitted, Bedrock bears the onus of proving that it did the Work.

12. [81]

    There is no dispute that Bedrock did compile the credit submission.

13. [82]

    As I have explained above, Bedrock submitted the credit submission to Millbrook on 2 September 2024 and received an unfavourable response the following day. Bedrock did not have any further discussions with Millbrook. Bedrock then submitted the credit submission to La Trobe on 4 September 2024, but there is no evidence that La Trobe engaged with the submission or that Bedrock discussed it with La Trobe before Mr Eksteen demanded or requested that La Trobe issue an indicative offer on 21 October 2024 and La Trobe did so. Bedrock did not adduce any documentary evidence or witness testimony identifying the financial institutions or lenders that it considered at the time may be interested in offering an appropriate funding solution for the construction of the Project on terms “generally in accordance” with the indicative terms set out in the FCA, or otherwise explaining the reasons for its decision to send the credit submission to Millbrook and La Trobe, and to no other financial institutions or lenders. Nor did Bedrock adduce any evidence explaining its lack of discussions with Millbrook and La Trobe in relation to the credit submission. [8] To the extent that counsel for Bedrock submitted that the Court should infer that Bedrock applied its claimed specialist expertise and exercised its professional judgment in relation to those matters, I reject that submission. Mr Eksteen is the person who would have been able to give evidence about those matters, yet his four affidavits are silent on the subject. The drawing of the inference for which Bedrock contended would be contrary to the established principles in Blatch v Archer, [9] Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd, [10] Ho v Powell, [11] and many other cases, as recently summarised by the Court of Appeal in Capitalink Pty Ltd v Withnall. [12]

14. [83]

    For those reasons, Bedrock has failed to discharge its onus of proving that it did the Work within the meaning of the FCA by compiling the credit submission and submitting it to Millbrook and La Trobe, and demanding or requesting that La Trobe issue an indicative offer on 21 October 2024. As SSA submitted, the mere fact that Bedrock elicited the La Trobe offer does not remove the need for Bedrock to establish that it performed the Work described at [78] above. It follows that Bedrock has failed to establish that the Indicative Offer Payment and the Final Payment are due and payable by SSA under the FCA, and there is no equitable charge securing any such amount pursuant to clause 23 of “The T’s & C’s”. Bedrocks claims for relief must therefore be dismissed.

15. [84]

    That conclusion renders it unnecessary to determine the other issues identified at [65]-[67] above.

16. [85]

    If it had been necessary to determine those issues, I would have held that the La Trobe Offer was not “generally in accordance with” the FCA. As counsel for Bedrock submitted, the meaning of the words “generally in accordance with” are informed by the circumstances in which the parties entered into the FCA. As recorded in the FCA, SSA was seeking a loan to finance the construction of the Project, which was then estimated to cost $4,106,283 (including $206,168 in interest costs assuming an interest rate of 9.45% per annum, and also including a contingency allowance of 5% of construction costs), to achieve an estimated profit of $641,463 representing a profit margin on cost of 15.6%. As I have already mentioned, it is common ground between the parties that the 10.69% indicative interest rate in the La Trobe Offer would have increased the total costs by $40,705. This would have reduced the estimated development profit by 6.35% to $600,758 and reduced the estimated profit margin (calculated as a percentage of cost as it was in the FCA feasibility analysis) from 15.6% to 14.47%. I accept Bedrock’s submission that I can take judicial notice of the fact that interest rates in any given segment of the finance market may vary from time to time. It follows from that circumstance, and from the language used by the parties in stipulating that any indicative offer must be “generally in accordance with” the FCA in order for Bedrock to be entitled to an Indicative Offer Payment, that the parties contemplated that there may be some difference between the indicative finance terms set out in the FCA and the terms of any indicative offer. As counsel for SSA accepted, it is a question of degree. Bedrock did not adduce any evidence of the range of interest rates available for loans financing residential property development projects, or “small townhouse developments” as Bedrock described the Project in contemporaneous documents, at the time the FCA was entered into. In circumstances where Bedrock has failed to establish that it did the “Work” as defined in the FCA, the 10.45% indicative interest rate in the La Trobe Offer is not a sound basis for drawing any inference about the range of rates available in the market at that time for finance for this Project or comparable projects. Nor did Bedrock adduce any evidence of the range of profit margins for residential property projects and small townhouse developments. In the absence of such evidence, I am not persuaded that the La Trobe Offer was “generally in accordance with” the indicative terms in the FCA notwithstanding that it would have reduced the estimated profit margin from 15.6% to 14.47% thereby wiping out 6.35% of the estimated monetary amount of profit.

17. [86]

    I would have rejected Bedrock’s contention that the FCA was varied by an express or implied agreement between the parties that, as a result of their agreement that the term of the proposed loan would need to be 18 months rather than 12 months, the “risk profile” of SSA to any potential lender had adversely changed and the interest rate stipulated in any indicative offer was therefore “likely to be more than” the indicative rate of 9.45% per annum in the FCA. The evidence establishes that the parties agreed that the term of the proposed loan should be increased from 12 months to 18 months, but there is no evidence of any express agreement that this would change the risk profile of SSA or otherwise result in an increase in the interest rates that any prospective lender might offer. [13] The alleged term cannot be implied consistently with the established principles in BP Refinery (Westernport) Pty Ltd v Shire of Hastings. [14] In particular, I am not satisfied that the term is so obvious that it goes without saying. Contrary to Bedrock’s submission, the potential effect of a six-month increase in the proposed loan term on the risk profile of SSA to a potential lender and on the interest rate that a potential lender may be willing to offer is not a matter that is not reasonably open to question about which I am entitled to inform myself in the absence of evidence. [15]

18. [87]

    I would have held that, on the proper construction of the FCA, Bedrock did not become entitled to a Final Payment merely by delivering a conditional indicative offer for a loan with a facility limit yet to be calculated by reference to a valuation, and which may or may not progress to formal approval stage. As counsel for Bedrock accepted, the “Bedrock Funding Fee” clause of the FCA stipulates that the four listed fees, including the Final Payment, are payable “on the following due dates”, but fails to expressly state a due date for the Final Payment in item 3. [16] In my opinion, the reasonable businessperson would understand the language used in item 3 of that clause – particularly the description of the Final payment as “equal to 1.5% of the facility limit (PLUS GST) for the Senior Debt” – to mean that the amount of the fee was ascertainable only when a facility was the subject of formal approval in the sense described in stage 6 of the description of the “Bedrock Funding Process”, so that it was open to SSA to settle the loan following the execution of loan documents. [17]

19. [88]

    That is consistent with clause 15 of “The T’s & C’s”, which I consider that the reasonable businessperson would have understood the parties to have intended to apply distributively to an Indicative Letter of Offer and to a Final Letter of Offer. [18] That is to say:

    1. (1)

       where Bedrock delivers an Indicative Letter of Offer/Term Sheet the key terms of which are generally in accordance with the FCA, SSA agrees that Bedrock has performed “all their obligations” (i.e., “the Work”) under the FCA, and its fees (i.e., that component of its fees payable within one business day of a lender approached by Bedrock issuing an indicative term sheet or letter of offer) are payable in full; and

    2. (2)

       where Bedrock delivers a Final Letter of Offer the key terms of which are generally in accordance with the FCA, SSA agrees that Bedrock has performed “all their obligations” (i.e., “the Work”) under the FCA and its fees (i.e., the remaining Final Payment component of its fees) are payable in full.

20. [89]

    I reject the submission made on behalf of Bedrock that the reasonable businessperson, reading the FCA as a whole, would have understood clause 15 of “The T’s & C’s” to mean that all of the fees listed in the “Bedrock Funding Fee” clause of the FCA became due and payable in full upon Bedrock delivering an Indicative Letter of Offer/Term Sheet, or a Final Letter of Offer, whichever happened earlier. That would make commercial nonsense because there is no facility in existence when an indicative offer is issued, and “the facility limit” that must be known in order to calculate the amount of a Final Payment cannot be quantified. That is illustrated by the facts of the present case where the amount of the indicative facility limit remained to be determined by reference to a valuation. Whether or not any Expansion Payment may become payable is dependent on future events within a period of three years after the date of the FCA, and that fee cannot be calculated in full or become payable in full before that three year has expired.

21. [90]

    SSA did not contend that clause 15 of “The T’s & C’s”, construed in the manner explained at [87]-[88] above, is “unfair” within the meaning of s 12BG of the Australian Securities and Investments Commission Act.

22. [91]

    If I had upheld Bedrock’s construction of the FCA and found that the Indicative Offer Payment and the Final Payment were due and payable by SSA and secured by an equitable charge over the Property, I would have declined to permit Bedrock to “defer” its claim for orders for judicial sale and possession of the Property. As counsel for Bedrock correctly acknowledged, it could not have succeeded in its claim for that relief in circumstances where it had not joined the registered first mortgagee as a party to the proceedings. [19] Contrary to Bedrock’s submission, it is not open to a party to proceedings in the Real Property List of the Equity Division of this Court to unilaterally decide not to join a necessary party in order to achieve short-term cost savings for itself, and to expect the Court to allocate further resources to the matter by entertaining a “stage 2” hearing if and when it decides to join that party, without having first sought the imprimatur of the Court in the form of an order for separate determination of questions or other appropriate procedural orders. The overriding purpose in s 56 of the Civil Procedure Act 2005 (NSW) does not support the Court yielding to one party’s request made at the commencement of a final hearing to defer some part of that hearing merely because that party has not put itself in a position to prosecute all of its claims for relief and considers it convenient to do so in a piecemeal fashion.

23. [92]

    The proceedings must be dismissed. It would ordinarily follow that the Court would make an order discharging with immediate effect its interim order extending the plaintiff’s caveat. In the circumstances referred to at [59] above, the appropriate order is an order pursuant s 74MA of the Real Property Act 1900 (NSW) requiring the plaintiff to withdraw its replacement caveat AU8XXXX3.

Conclusion and orders

1. [93]

   For all of the foregoing reasons, the order of the Court is as follows:

   1. (1)

      Proceedings dismissed.

   2. (2)

      Pursuant to s 74MA of the Real Property Act 1900 (NSW), order the plaintiff to withdraw within 14 days of the date of this order caveat AU8XXXX3 lodged against the title to the land described in folio identifiers 3XX/XXXX7 and 3XX/XXXX7.

   3. (3)

      Pursuant to s 74MA of the Real Property Act 1900 (NSW), dispense with the requirement for prior service on the plaintiff of an application for or an order in terms of order 2 above.

   4. (4)

      Reserve the question of costs.

2. [94]

   I will hear the parties in relation to costs.