New South Wales Supreme Court CITATION : Perpetual Limited v Karen Treloar [2009] NSWSC 386 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 23 March 2009, 24 March 2009 JUDGMENT DATE : 18 May 2009 JUDGMENT OF : Schmidt AJ CATCHWORDS : MORTGAGES - mortgages and charges generally - claim by mortgagee for possession of land following default by mortgagor - section 170 of the Conveyancing Act 1919 - error in postcode - service of notice given under Conveyancing Act 1919 effected - Consumer Credit Code - form of declaration given - Regulation 10 of the Consumer Credit Regulation 1995 - construction of section 11(3) of the Consumer Credit Code - plaintiff entitled to rely on defendant's declaration that purpose of loan was investment purposes - purported payment by bank cheque - plaintiff not bound to accept such payment - no estoppel or waiver of plaintiff's rights under the mortgage established - order for possession Consumer Credit (Queensland) Act 1994 Consumer Credit (New South Wales) Act 1995 LEGISLATION CITED : Consumer Credit Regulation 1995 (QLD) Conveyancing Act 1919 Real Property Act 1900 CATEGORY : Principal judgment Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150 Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83 Cook and Anor v Permanent Mortgages Pty Ltd [2007] NSWCA 219 Connor v Blacktown District Hospital (1971) 1 NSWLR 713 Deputy Commissioner of Taxation v BK Ganter Holdings Pty Ltd (2008) FCR 385 George v Cluning (1979) 28 ALR 57 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 CASES CITED : Hraiki v Beljon [2008] NSWSC 775 Moore v Lean (1905) SR NSW 671 National Australia Bank Limited v Landy Chen-Conway and Anor [2008] NSWSC 485 Neuendorf v Rengay Nominees Pty Ltd [2003] VCAT 1732 Permanent Mortgages Pty Ltd v Michael Robert Cook and Karen Cook [2006] NSWSC 1104 Stirling Properties Ltd v Yerba Pty Ltd (1987) 74 ACTR 1 SZLBR v Minister for Immigration & Citizenship [2008] FCAFC 85 SZLBR v Minister for Immigration and Citizenship [2008] FMCA 154 Wallville Pty Ltd v Liristis Holdings Pty Ltd [2001] NSWSC 894 PARTIES : Plaintiff - Perpetual Limited Defendant - Karen Treloar FILE NUMBER(S) : SC 12049/07 COUNSEL : Plaintiff - Mr SW Aspinall, counsel Defendant - Mr R Stoyev, solicitor SOLICITORS : Plaintiff - Henry Davis York Defendant - Mount Druitt and Area Community Legal Centre - 40 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION POSSESSION LIST SCHMIDT AJ Monday, 18 May 2009 12049/07 PERPETUAL LIMITED v KAREN TRELOAR JUDGMENT 1 HER HONOUR: By amended statement of claim of 13 August 2008, the plaintiff seeks possession of land comprised in certificate of title folio identifier 4441/1074165, being the land situated at XX Road Hebersham in the State of New South Wales. The possession is sought on the basis of alleged mortgage default. 2 The claim is defended. 3 The parties agreed as to the matters of fact and law genuinely in dispute and requiring the Court's determination, as follows: 1. Whether the property described in Lot 4441 of DP 1074165 secures the defendant's indebtedness to the plaintiff (paragraph 3 of the Amended Defence). 2. Whether clause 5.2 of the Memorandum of Mortgage has any effect on the plaintiff's claim for relief. 3. Whether the plaintiff served the s 57(2)(b) notice referred to at paragraph 8 of the amended statement of claim in accordance with s 170 Conveyancing Act and if not, what effect, if any, that has on the relief claimed. 4. Whether s 85 of the Consumer Credit (NSW) Code applies to the Loan Contract and Mortgage and, if so, whether it has been complied with. 5. Whether the defendant is in default under the Loan Contract and Mortgage. 6. Whether the defendant was entitled to tender payments by bank cheque after 22 February 20089(sic), and whether return of bank cheques constituted an election between inconsistent rights. 4 During the course of the hearing further discussions between the parties led to the resolution of some of these matters, as well as various underpinning factual issues. The result was that there was no dispute that the land the subject of the proceedings, secured the sums advanced to the defendant by the plaintiff under the mortgage. It was also not in dispute that the defendant is in default under the loan contract and mortgage. 5 On the evidence, Mrs Treloar and her family were living in a house at Oakhurst prior to 1993. In 1993, she and her husband purchased a property at 47 XX Road Hebersham, with the assistance of a loan obtained from another lender. In 1995, they began renovating the house, where they lived, with the assistance of another loan from another lender. In 2001, with the assistance of further loans from another lender, Mrs Treloar built a dual occupancy residence at the rear of the family home. 6 Mrs Treloar then moved into that residence while the original house was renovated. When complete, the two residences were known as 47 and 47A XX Road, however, the land was never subdivided. 7 In May 2002, Mrs Treloar refinanced her borrowings with a loan from the plaintiff of $285,000, the loan being secured by the property at 47 XX Road. In March 2003, she obtained a further loan, increasing her borrowings from the plaintiff to $396,796.30. Again, the loan was secured by 47 XX Road. 8 In April 2003, Mrs Treloar then purchased a house and land at 43 XX Road, with further borrowings advanced by the plaintiff, secured by the property at 43 XX Road. 47 XX Road then remained her family home. Mrs Treloar was represented by a solicitor and signed a business purpose declaration indicating that the purpose of the loan was for investment. 9 In June and July 2003, Mrs Treloar obtained further advances, again each secured by the property at 43 XX Road. In September 2003, Mrs Treloar sought a further loan from the plaintiff, to refinance the property at 43 XX Road. It is the mortgage and loan which resulted from the approval of this last application which is the subject of these proceedings. Again, Mrs Treloar signed a business purpose declaration, stating that the credit was to be applied predominately for investment or business purposes. In October 2003, she received an advance of $520,000 from the plaintiff. The loan contract executed by Mrs Treloar on 3 October, provided in clause 4 that the purpose of the loan was to 'assist you in refinancing an investment property and constructing an investment property.' 10 In August 2003, Mrs Treloar had made a development application in relation to 43 XX Road, seeking permission to subdivide the land and to build a new dwelling on each block. Approval was granted and subsequently two certificates of title were issued, and the plaintiff's mortgage over the land was recorded on both certificates. 11 Mrs Treloar sold 47 XX Road in September 2003 and went to live elsewhere. Two residences were built at 43 XX Road and the land was later subdivided. Mrs Treloar and her family moved into one of the new residences at 43 XX Road in 2005. This remains her family home and is the subject of these proceedings. Later in 2005, the second block and residence were sold to Mrs Treloar's son. 12 By February 2005 the loan was in default. A default notice was issued, both in 2006 and 2007, but there were further defaults. After the second default notice was issued in February 2007, there were some payments made and attempts to make further payments by way of bank cheques, which were refused. There were further defaults and proceedings for possession were then commenced in April 2007. A further default notice was issued in June 2008. Service of notices required by s 57(2)(b) of the Real Property Act 1900 13 The defendant relied on clause 5.2 of the mortgage to argue that the plaintiff was not entitled to commence proceedings against Mrs Treloar for possession of the land, without serving a s 57(2)(b) notice and that the notice on which the plaintiff relied had not been served on Mrs Treloar as s 170 of the Conveyancing Act 1919 required. It was also claimed that Mrs Treloar had never received the 2007 notice on which the plaintiff relied. 14 It was the plaintiff's case that the notice had been served on and received by Mrs Treloar and that, in any event, a s 57(2)(b) notice was not required to be served until the plaintiff sought to exercise a power of sale. The notice could be served even after possession had been obtained, but before the power of sale was sought to be exercised. The plaintiff relied on clause 24.3 of the loan contract to support this proposition. 15 The parties' contest thus initially turned on whether or not the s 57(2)(b) notice had been served on Mrs Treloar. Given the conclusions which I have reached, it is not necessary to consider the arguments advanced in relation to clause 5.2 of the mortgage. 16 Section 57(2) of the Real Property Act 1900 provides: 57 Procedure on default … (2) A registered mortgagee, chargee or covenant chargee may, subject to this Act, exercise the powers conferred by section 58 if: (a) in the case of a mortgage or charge, default has been made in the observance of any covenant, agreement or condition expressed or implied in the mortgage or charge or in the payment, in accordance with the terms of the mortgage or charge, of the principal, interest, annuity, rent-charge or other money the payment of which is secured by the mortgage or charge or of any part of that principal, interest, annuity, rent-charge or other money, (a1) in the case of a covenant charge, default has been made in: (i) the payment, in accordance with the terms of the judgment to which the covenant charge relates, of the principal, interest or other money the payment of which is secured by the covenant charge, or (ii) the payment, in accordance with the terms of that judgment, of any part of that principal, interest or other money, (b) where: (i) the default relates to that payment, or (ii) in the case of a mortgage, the default does not relate to that payment and notice or lapse of time has not been dispensed with under section 58A, a written notice that complies with subsection (3) has been served on the mortgagor, charger or covenant charger in the manner authorised by section 170 of the Conveyancing Act 1919, (b1) where a notice is required to be served under paragraph (b), a copy of that notice has been served (in the manner authorised by section 170 of the Conveyancing Act 1919 ) on: (i) each mortgagee, chargee or covenant chargee (if any) of the land mortgaged or charged under a registered mortgage, charge or covenant charge which has less priority than that of the person intending to exercise the power of sale, and (ii) each caveator (if any) who claims as an unregistered mortgagee or chargee to be entitled to an estate or interest in the land mortgaged or charged, and (c) where such a notice is so served, the requirements of the notice are not complied with within the time notified pursuant to subsection (3) (d). 17 There was no issue between the parties that a s 57(2)(b) notice dated 8 February 2007 had been sent to Mrs Treloar by post. For some time the plaintiff's mortgage manager, Royal Guardian Mortgage Corporation Pty Ltd ('Royal Guardian'), had been addressing correspondence and other documents sent to Mrs Treloar to the correct residential street address, but to the wrong postcode. The postcode used was 2779, the postcode for Hazelbrook, rather than 2770, the postcode for Hebersham. On the evidence, despite this error, Mrs Treloar received correspondence which the plaintiff sent to her from time to time, so addressed, both before and after February 2007. 18 Mrs Treloar's evidence was, however, that she never received the February 2007 s 57(2)(b) notice. That evidence was challenged. Also in issue was whether an error in the postcode was relevant to the question of service in accordance with the requirements of s 170 of the Conveyancing Act. It is convenient to deal with that question initially. Section 170 of the Conveyancing Act 1919 19 It was the defendant's case that the error in the postcode of the address to which the notice was sent meant that the notice had not been served as s 170 of the Conveyancing Act required. The section relevantly provides: 170 Regulations respecting notices (1) Any notice required or authorised by this Act to be served shall be in writing, and shall be sufficiently served: (a) if delivered personally, (b) if left at or sent by post to the last known residential or business address in or out of New South Wales of the person to be served, ... 20 It was the plaintiff's case that a postcode is not a part of a person's 'address'. It also argued that, in any event, the evidence established that Mrs Treloar had received the notice, despite the incorrect postcode used and that accordingly, there could be no question that the notice had been left at the address, as 170(1)(b) contemplated. It was irrelevant who had effected such delivery. 21 The defendant argued that in order for service to be effected, as s 170(1)(b) required, the residential address to which the notice was sent by post, had to include the current postcode of the suburb in question. The defendant relied on what Bryson J had observed in Wallville Pty Ltd v Liristis Holdings Pty Ltd [2001] NSWSC 894: 19 Circumstances relating to Exhibit 2 received some attention in the hearing, as I understand it in support of a suggestion that the lessor's evidence that the letter of 25 May was not received was unsatisfactory and that that letter, or letters generally, may have been refused in the mail. There is no support for this possibility in the evidence. Events affecting Exhibit 2 are no more than an illustration of the obvious possibility that postal articles may not be duly delivered. One matter that consideration of Exhibit 2 did raise is that, as appears by an extract from a map book (Exhibit C) Parraweena Road runs for several kilometres, the eastern part where the premises 16-18 Parraweena Road are situated is in Taren Point and served by Caringbah Post Office with Post Code 2229, but the western part is served by Miranda Post Office with Post Code 2228. This points, but not in any definite way, to the possibility that mail addressed to an address in Parraweena Road with Post Code 2228 might not be delivered in the ordinary course of post for a postal article with a correct post code, and might go astray in some way. However this raises no more than consideration of possibilities and does not point to any definite conclusion. The fact that the address was not correct, or was not completely correct, has a bearing on the application of s.170 of the Conveyancing Act 1919. When s.170 is addressed in a literal way it has not been complied with. Assuming that the address in the letter was the address written on the envelope, it should of course be found that 16-18 Parraweena Road Taren Point was the last known business address of the lessor, but in the postal context the business address included the post code and the post code was wrongly stated. 22 The plaintiff argued that in so far as his Honour concluded that a person's address included the postcode for the purposes of s 170 of the Conveyancing Act, his Honour's approach would not be followed. Attention was drawn to the approach of the Full Federal Court in SZLBR v Minister for Immigration & Citizenship [2008] FCAFC 85. There, it was concluded that: 15 Even if the conclusion expressed in [14] is not correct, we rely on the views we expressed in SZKGF where we said at [11] - [12]: In any event there are cogent reasons for concluding that the postcode is not part of the address and therefore the use of the incorrect postcode did not result in non-compliance with s 424A(2)(a). On this point see the views expressed by Emmett FM in S ZLBR v Minister for Immigration and Citizenship [2008] FMCA 154 at [39] - [40]. Even if the postcode is properly to be regarded as part of the address, the question would arise as to whether the use of the incorrect postcode constituted a jurisdictional error. In Tasker v Fullwood [1978] 1 NSW LR 20 at 24, the NSW Court of Appeal said that in such circumstances it is relevant to consider the extent of the failure to observe the statutory requirement. Moreover in Victoria v Commonwealth [1975] HCA 39; (1975) 134 CLR 81 at 179 Stephen J pointed to the need to examine the extent of non-compliance in the particular case "to determine whether what has in fact occurred nevertheless gives effect to the general object of the statute". Relying on these authorities, Mr Lloyd advanced persuasive arguments that use of the incorrect postcode would not result in jurisdictional error however it is not necessary to decide that issue and, in the absence of a contradictor, we do not do so. 23 The observations of Emmett FM in SZLBR v Minister for Immigration and Citizenship [2008] FMCA 154, to which attention was drawn by the Full Court were: 39 In considering the meaning of address, I have regard to the definition of "address" in the New Shorter Oxford Dictionary as, inter alia, "the name of the place to which anyone's letters etc are directed; ones place of residence". The use of the word " place " in that definition, to my mind, signifies a physical location. The Macquarie Dictionary defines " place " as, inter alia, " an open space, or square, in a city or town; an area, especially one regarded as an entity and identifiable by name, used for habitation, as a city, town, or village ". 40 In light of those definitions, the address of "one's place of residence" is properly identified by the street name and number, where relevant, and suburb. The postcode is not an essential part of the identification of that physical location. 24 In evidence were documents produced on subpoena by Australia Post, which explained the system under which Australia Post dealt with errors in postcodes on correspondence sent by mail. Those documents explained how it came to be that other correspondence sent to her by the plaintiff had been received by Mrs Treloar at her home, despite the plaintiff's error in relation to the Hebersham postcode. While it was submitted for the defendant that no reliance could be placed on this evidence, because it was hearsay and because of the views of the Court of Appeal in Connor v Blacktown District Hospital (1971) 1 NSWLR 713, in my view neither submission assisted the defendant. 25 The evidence as to the Australia Post system had been admitted without objection, correctly it seemed to me in the light of the provisions of s 69 of the Evidence Act 1995 and the approach of the Court of Appeal in Connor. Asprey JA, with whom Mason JA agreed, there took the view, at 721, that: 'To prove that an act has been done, it is admissible to prove any general course of business or office, whether public or private, according to which it would ordinarily have been done, there being a probability that the general course will be followed in the particular case'. 26 On the evidence, Australia Post has a computerised matching system which deals with errors in the way mail is addressed. Relevantly, when the only error made in an address is an incorrect postcode, with all other parts of the address being correct, a barcode reflecting the correct postcode is then assigned to the correspondence and delivery is then effected by Australia Post to the address, in the correct postcode area. 27 In this case, the only error made in the address to which the default notice was sent was in relation to the postcode of Hebersham. There is only one suburb in Australia called Hebersham and no street called XX Street in the suburb, the postcode of which was used in error by the plaintiff. This explains how Australia Post came to correctly deliver other of the plaintiff's correspondence to the defendant's residence at XX Street Hebersham, despite the error in relation to the postcode. 28 That evidence lends support for the view reached by the Full Federal Court in SZLBR and that of Emmett FM there referred to, that the postcode is not a part of a person's 'address'. That word is not defined in the Conveyancing Act and accordingly, must be given its ordinary meaning. As Emmett FM observed, the dictionary definition of the word does not encompass the concept of the postcode assigned to the place in question. 29 On the evidence, an error in the postcode of the address to which correspondence is sent by post, will not result in Australia Post not delivering that correspondence to the address to which the correspondence is directed, if it is otherwise correctly addressed, given the system of mail delivery which Australia Post operates. Under that system, an error in the postcode will not result in a failure to deliver a notice sent by post to a person's address, as s 170 (1)(b) of the Conveyancing Act envisages. 30 Also to be considered is that s 170(1)(b) does not differentiate between notices which are 'left at or sent by post', to a person's residential or business address. There could be no question that a notice which had the wrong postcode on the address to which the notice was directed, but which was physically left at that address, had been served as s 170 required. Can there be any different conclusion if the notice which contains the wrong postcode is sent by post, but is delivered, in any event, by Australia Post to the correct address, under the system which it operates? 31 At the least, in such a case, it would have to be concluded that the notice had been 'left at' the person's address, as s 170(1)(b) contemplates. That it had been left there by an Australia Post employee, would not be relevant to whether or not the service had been effected as the section requires. Receipt of the notice would certainly evidence service, as the section contemplates. Once that is accepted, logically it must follow that a postcode cannot be regarded as comprising a part of a person's 'address'. 32 It appears to me, for this additional reason, that it must be concluded that the 'address' with which s 170 of the Conveyancing Act is concerned, does not include the postcode assigned to the place in question and that the error made in relation to the Hebersham postcode, did not have the result that the notice was not served in accordance with the requirements of s 170(1)(b) of the Conveyancing Act. Did Mrs Treloar receive the notice? 33 I am satisfied, on the evidence, that it cannot sensibly be doubted that Mrs Treloar received the February 2007 s 57(2)(b) notice, despite her denial. She was plainly mistaken. 34 That conclusion was unavoidable when consideration was given to the records maintained by the mortgage manager of its communications with Mrs Treloar. Those computerised Customer Call Log records, also admitted without objection, showed that in 2006, a default notice dated 14 March had been sent to Mrs Treloar, incorrectly addressed, as was the 2007 notice. Two days after the 2006 notice was sent, on 16 March, Mrs Treloar phoned the mortgage manager and advised Ms Mathey, that she had received the notice, that she was going to refinance, and that a payment would be made. A certain payment was received on 21 March, but when the default notice expired in April, Mrs Treloar remained in default. 35 In 2007, the mortgage manager's Customer Call Log records again showed that on 14 February, two days after the February 2007 default notice was sent, Mrs Treloar again contacted the mortgage manager and spoke to Mr Andre El Baghd to advise that she proposed to make two payments to rectify her default. Together those amounts comprised the amount specified in the February default notice as being outstanding. In her initial affidavit sworn in September 2007, Mrs Treloar's evidence was that she could not recall having received this notice. In her later affidavits sworn in August and October 2008, her evidence was that she had checked her records and was then certain that she had not received the notice. That evidence cannot be accepted. 36 In cross examination, Mrs Treloar explained that she had kept all of the correspondence which she had received and that while she could remember contacting the mortgage manager and having the conversation recorded by the mortgage manager in February 2007, she remembered that she had not then been responding to a default notice, but rather to another letter sent to her by the mortgage manager, from a person called 'Andre'. There was no record of such correspondence having been sent to Mrs Treloar on the mortgage manager's records and Mrs Treloar was unable to produce such a letter when it was called for, despite making a search. The default notice itself mentioned the name 'Andre'. After her phone call to Mr Andre El Baghd on 14 February, Mrs Treloar then made the first of the payments she had indicated that she proposed to make, but not the second. 37 The proper inference from all of this evidence was that when Mrs Treloar contacted the mortgage manager on 14 February to speak to Mr El Baghd, she was responding to the February 2007 default notice which had been posted to her at her residential address, which, like other correspondence sent to her, she had received, despite the incorrect postcode used. The mortgage manager sent her no other correspondence at that time, to which she could have been responding. 38 Given what was recorded by the mortgage manager as to what Mrs Treloar said to Mr El Baghd on 14 February 2007, it is apparent that she was responding to the notice, promising to make payment of what was thereby notified to her as being outstanding, by two instalments. Mrs Treloar's evidence in cross examination was that when she received a notice, she always tried to clear what was owed. She recalled having this conversation. Mrs Treloar must have been mistaken in her recollection of what document it was that she was then responding to. On her evidence, at that time, she was distracted with other difficulties in her personal life. The only document which could have drawn her attention to the default in question at that time, was the default notice. 39 It follows that it has to be concluded that the notice was served on Mrs Treloar as s 170 of the Conveyancing Act required. Mrs Treloar received and responded to that notice. Does the Consumer Credit Code apply to the loan? 40 The defendant next relied on non compliance with s 85 of the Consumer Credit Code ('the Code'), (which is an appendix to the Consumer Credit (Queensland) Act 1994, given force by s 5 of the Consumer Credit (New South Wales) Act 1995), as a reason for relief being refused to the plaintiff in relation to the 2007 default notice. 41 It was the plaintiff's case that the Code did not apply and, even if it did, a second s 57(1)(b) notice had been served on the defendant in June 2008, which had cured any deficiency in compliance with the Code. This notice was served by the plaintiff, after Mrs Treloar had put on a defence in these proceedings, claiming that she had never received the 2007 notice. The second notice was served personally. It referred to further defaults between March and June 2008. The plaintiff was given leave to amend its statement of claim to rely on the second notice. There was no issue between the parties that the second notice had been served, but the defendant also disputed that the second notice complied with the Code. 42 Section 85 of the Code required that: 85 Requirements to be met before credit provider can enforce an acceleration clause (1) An acceleration clause is to operate only if the debtor or mortgagor is in default under the credit contract or mortgage and-- (a) the credit provider has given to the debtor and any guarantor, or to the mortgagor, a default notice under section 80; and (b) the default notice contains an additional statement of the manner in which the liabilities of the debtor or mortgagor under the contract or mortgage would be affected by the operation of the acceleration clause and also of the amount required to pay out the contract (as accelerated); and (c) the default has not been remedied within the period specified in the default notice (unless the credit provider believes on reasonable grounds that the default is not capable of being remedied). (2) However, a credit provider is not required to give a default notice under section 80 or to wait until the period specified in the default notice has elapsed before bringing an acceleration clause into operation, if-- (a) the credit provider believes on reasonable grounds that it was induced by fraud on the part of the debtor or mortgagor to enter into the contract or mortgage; or (b) the credit provider has made reasonable attempts to locate the debtor or mortgagor but without success; or (c) the Court authorises the credit provider not to do so; or (d) the credit provider believes on reasonable grounds that the debtor or mortgagor has removed or disposed of mortgaged goods under a mortgage related to the credit contract or the mortgage concerned, or intends to remove or dispose of mortgaged goods, without the credit provider's permission or that urgent action is necessary to protect the goods. (3) This section is in addition to any provision of any other law relating to the enforcement of real property mortgages and does not prevent the issue of notices to defaulting mortgagors under other legislation. 43 Once the Code is raised, matters dealt with in s 6, s 11 and s 176 of the Code arise for consideration. (See Neuendorf v Rengay Nominees Pty Ltd [2003] VCAT 1732 at [36] to [49].) Section 11 provides: 11 Presumptions relating to application of Code (1) In any proceedings (whether brought under this Code or not) in which a party claims that a credit contract, mortgage or guarantee is one to which this Code applies, it is presumed to be such unless the contrary is established. (2) Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes). (3) However, such a declaration is ineffective for the purposes of this section if the credit provider (or any other relevant person who obtained the declaration from the debtor) knew, or had reason to believe, at the time the declaration was made that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes. For the purposes of this subsection, a relevant person is a person associated with the credit provider or a finance broker (or a person acting for a finance broker) through whom the credit was obtained. (4) A declaration under this section is to be substantially in the form (if any) required by the regulations and is ineffective for the purposes of this section if it is not. 44 Section 6 of the Code provides: 6 Provision of credit to which this Code applies (1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of pre-contractual obligations) is proposed to be entered into-- (a) the debtor is a natural person ordinarily resident in this jurisdiction or a strata corporation formed in this jurisdiction; and (b) the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and (c) a charge is or may be made for providing the credit; and (d) the credit provider provides the credit in the course of a business of providing credit or as part of or incidentally to any other business of the credit provider. (2) If not all the debtors under a credit contract ordinarily reside, or are strata corporations formed, in this jurisdiction, this Code applies only if credit is first provided under the contract in this jurisdiction. (3) If this Code applies to the provision of credit (and to the credit contract and related matters)-- (a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and (b) this Code continues to apply even though the debtor ceases to be ordinarily resident in this jurisdiction. (4) For the purposes of this section, investment by the debtor is not a personal, domestic or household purpose. (5) For the purposes of this section, the predominant purpose for which credit is provided is-- (a) the purpose for which more than half of the credit is intended to be used; or (b) if the credit is intended to be used to obtain goods or services for use for different purposes, the purpose for which the goods or services are intended to be most used. 45 Section 176 of the Code provides: 176 Conduct of agents and related matters (1) The conduct of an officer, agent or employee of a credit provider acting within his or her actual or ostensible authority will be imputed to the credit provider and taken to be conduct of the credit provider. (2) A person cannot authorise a credit provider, or a person associated with a credit provider, to enter into a credit contract, mortgage or guarantee on the person's behalf. This subsection does not prevent a credit provider from authorising a person associated with the credit provider to enter into a credit contract on behalf of the credit provider. (3) A credit provider or person associated with a credit provider that purports to act as agent of a debtor, mortgagor or a guarantor in entering into a credit contract or a mortgage or guarantee is guilty of an offence. Maximum penalty--50 penalty units. (5) A credit provider is not, for the purposes of this Code taken to know or have reason to believe something because an officer, agent or employee of the credit provider does so, unless the knowledge or reason to believe that thing is acquired by the officer, agent or employee acting in that capacity and in connection with the transaction concerned. The form of the declaration 46 It was common ground that a presumption arises under s 11(1) that the Code applies, unless it is shown that Mrs Treloar had made the declaration contemplated by s 11(2), in the form required by Regulation 10 of the Consumer Credit Regulation 1995 (QLD), before entering into the mortgage and loan agreements. 47 Such a declaration was in evidence, indicating that the moneys sought to be borrowed by Mrs Treloar were to be applied wholly or predominantly for business or investment purposes. Section 11(4) of the Code required that the declaration be substantially in the form specified in the regulation. The defendant's case was that the declaration was not in the required form and that, in any event, the plaintiff was not entitled to rely on the declaration, given the circumstances in which it was made (see s 11(3)). 48 It is convenient to contrast the form of the declaration required by the Regulation and that provided in the document executed by Mrs Treloar. They were not identical. The Regulation provided: 10 Declaration of purposes for which credit provided (1) For the purposes of section 11 of the Code, the form of the declaration is as follows-- 'I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes).'. (2) The declaration is to contain (immediately below the above words or, if the declaration is to be made by electronic communication, prominently displayed when (but not after) the person signs) a warning in the following form-- IMPORTANT You should not sign this declaration unless this loan is wholly or predominantly for business or investment purposes. By signing this declaration you may lose your protection under the Consumer Credit Code. (3) The declaration is to contain-- (a) the signature of each person making the declaration; and (b) either the date on which the declaration is signed or the date on which it is received by the credit provider. Note-- The Code applies only to credit provided or intended to be provided for personal, domestic or household purposes. Section 11(2) of the Code provides that credit is conclusively presumed not to be provided for those purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes). The declaration is not effective unless it is substantially in the form required by the regulations 49 The declaration provided in the plaintiff's standard form executed by Mrs Treloar was relevantly in the following form: DECLARATION AS TO PURPOSE OF CREDIT (For Investment Business Loans ONLY) This declaration must be signed by all Borrowers for it to be effective. I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for investment business purpose (or for both purposes). IMPORTANT: You should not sign this declaration unless this loan is wholly or predominantly for business or investment purposes. By signing this declaration, you may lose your protection under the consumer credit code. SIGNATURE (1) KAREN TRELOAR PRINT NAME KAREN TRELOAR DATE 11/9/03 50 There were four differences identified by the defendant between the declaration signed by Mrs Treloar and that required by the Regulation. Three of them, it was initially submitted, were crucial. A transposition of the words 'business or investment purposes', was accepted as being of no moment. The three other departures were the placement of the word 'important' at the outset of the declaration; the failure to print the words 'not' and 'lose' in bold and the shading of the box. Together, these differences were argued to be such as to result in the conclusion that the declaration was not substantially in the required form. 51 I am unable to accept the submission. 52 In Permanent Mortgages Pty Ltd v Michael Robert Cook and Karen Cook [2006] NSWSC 1104, Patten AJ had to determine whether the declaration there in question was substantially in the required form. His Honour did so by considering whether the declaration provided 'less information than the form requires or to have operated to confuse or mislead the Defendants' (at [60]). While there was an appeal from his Honour's decision, the correctness of his Honour's approach on this issue was not questioned. (See Cook and Anor v Permanent Mortgages Pty Ltd [2007] NSWCA 219). That approach, when applied to the declaration here in question, must lead to the conclusion that the declaration was substantially in the form required. 53 The declaration did not provide less information than that required to be given by the Regulation. Nor did the form in which the required information was provided, leave open the conclusion that Mrs Treloar could have been confused, or misled by what was there advised to her. 54 In Permanent Mortgages it was also concluded by Patten AJ that the lack of bolding of the words here in question, namely the words 'not' and 'lose', did not make the declaration ineffective. That conclusion was accepted for Mrs Treloar as being applicable in this case, but it was still argued that the placement of the word 'important' at the beginning of the declaration and the shading of the box in which the declaration appeared, was still a sufficient basis for the conclusion that there had not been substantial compliance with the requirements of the Regulation. I do not agree. 55 The word 'important' is used at the beginning of the declaration, albeit its placement is altered from the middle of the page. Nothing can turn on this. The shading used in the printed form drew attention to the declaration appearing immediately before the signature. It did not obscure the declaration, as was suggested at one stage for Mrs Treloar, when the original document was not in evidence and the photocopy reproduction of the shading was poor. The original document, when tendered, made it clear that this submission was not sensibly available to be accepted. 56 Reliance was also placed on the approach of McDougall J in Hraiki v Beljon [2008] NSWSC 775 at [19], where his Honour said: 19 In circumstances where s 11 is a key provision for the purposes of the Code - it determines, in effect, whether a transaction is or is not one to which the Code applies - I do not think that there ought be room for any doubt in relation to a certificate. Nor do I think that it is appropriate for a certificate to be given in blank, so that it can be completed at some later time, as might happen if, for example, application were made to several credit providers. In my view, the purpose underlying s 11 (bearing in mind that it appears in legislation that is enacted for the benefit of consumers and that it should be given, so far as possible, a beneficial construction in the interests of consumers) would be undermined if the s 11 certificate did not on its face apply to the specific transaction that was intended to be exempted from the operation of the Code . 57 The declaration Mrs Treloar here made did not suffer from such difficulties. It follows that the defendant's submissions as to the problems with the form of the declaration, must be rejected. The time at which the matters arising under ss 6(1)(b) and 11(3) of the Code are to be determined 58 The time at which the matters arising under ss 6(1)(b) and 11(3) of the Code are to be determined has been considered in a number of cases, although it was submitted by both parties that the proper construction of the Code in this respect remains unclear, on the existing case law. 59 In Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150 the Court of Appeal had to consider how Associate Justice Harrison had approached the question of what ss 6(1) and 11(3) of the Code required. The conflicting case law was dealt with, Tobias J, with whom Campbell JA agreed, observing: 132 The Tribunal noted that there had been a divergence of judicial opinion as to the correct approach to s 11(3). Reference was made to two tests. The first was that adumbrated by Shaw J in Johnson v Arkway Pty Ltd [2003] NSWSC 815; (2003) 58 NSWLR 451 where his Honour preferred the approach taken by Gillard J in Linkenholt Pty Ltd v Quirk [2000] VSC 166; (2000) ASC 155-040 over that adopted by Brabazon DCJ in Rafiqi v Wacal Investments Pty Ltd (1998) ASC 155-024 (Queensland District Court) and applied by Master Harrison in Park Avenue Nominees Pty Ltd v Boone [2001] NSWSC 700; (2001) ASC 155-052. 133 The passage from the judgment of Gillard J in Linkenholt, adopted by Shaw J, was in the following terms: "It is appropriate to consider what the money was used for in order to determine the purpose of the provision of the credit. In considering the question it is important to look at the substance of the transaction in the context of its performance …" 134 Shaw J then concluded (at [30]) in the following terms: "His Honour's [that is, Gillard J in Linkenholt ] emphasis was that the Court should consider the substance and reality of the transaction …" 135 The test adopted by Associate-Justice Harrison in Park Avenue Nominees (at [46]) was as follows: "If the correct objective test is applied, the relevant intention will be that which a reasonable person standing in the shoes of a credit provider would have understood the predominant purpose for which credit was provided." 136 The Tribunal determined to follow the decision of Associate-Justice Harrison in Park Avenue Nominees rather than that of Shaw J in Johnson . The Tribunal then said: "Further, they [the remarks of Shaw J] are not directed to the question of what is the substance and the reality of a transaction. In a case like this, the debtors may well take the view that the substance and reality of a transaction is that the purpose to which they intend to apply the money is personal – the refinancing of a mortgage over their house where the money originally borrowed was for a purely personal reason. The mortgagees may take the position that the loans were for an investment purpose as that was the notification to them on the loan applications and on the declarations under s 11(2)." 137 The Tribunal then asked itself the question "what then did either of the credit providers in this case know, or what did they have reason to believe"? It answered that question in the following terms: "ee. The evidence before me as to knowledge was that whilst the Applicants may well have told both Super City (their broker and agent) and their solicitor that the purpose of the loans was personal, all that the credit providers were told was that the purpose was investment. There is no evidence that the purpose made known to Super City was ever made known to the mortgagees. I accept the evidence from each of the Applicants that they did not write the word 'investment' on any of the loan applications, and that they do not know in whose writing the word appears. To a lay eye, there appears to have been at least two scribes. However, there is no evidence that any of the handwriting appearing on the loan applications and other documents was added after signature by the applicants. ff. The only other evidence which may have alerted the mortgagees is that the security for the loans was a residential property, and that most of the money was to be used to discharge an existing mortgage. I consider these facts to be at best inconclusive, and given the declarations not to be ones which should have set the mortgagees off on a line of enquiry. In this regard I accept the submission by Mr Titterton that the remarks set out in Beatty et all at paragraphs 11.30 of their commentary on the Code are correct. There was no other argument put to me." 138 The relevant remarks in Beatty and Smith, Annotated Consumer Credit Code Regulations 3rd Ed, Butterworths (2006) at para 11.35 dealing with the expression " knew, or had to reason to believe " states as follows: "Section 11 renders a business purpose declaration ineffective if the person who obtains it 'knew, or had reason to believe' that it was untruthful. This formulation suggested the word 'knew' refers to actual knowledge and the words 'reason to believe' deals with a situation of constructive notice. … Cases do not establish conclusively whether there is any difference in substance between the various tests, but they do tend to suggest, without resolving the issue, that the tests are probably objective rather than subjective; i.e. they rely on the standard of behaviour expected of an outsider acting reasonably, rather than on the facts and circumstance which are subjectively known to the outsider. In Park Avenue Nominees Pty Ltd v Boon … it was said that the relevant test involves an objective consideration of what a reasonable person in the shoes of the credit provider would have understood as the predominant purpose. In Daimler Chrysler Services Aust Pty Ltd v Berckelman [2004] NSWSC 447, the New South Wales Supreme Court stated that the credit provider's knowledge can be actual or implied. It was held that the Tribunal had not erred by finding that: '… a reasonable person making an objective determination in respect of the use of this contract would conclude that the contract was wholly or predominantly for personal, domestic or household purposes.' " 60 Tobias JA went on to observe that: 148 As to the third ground, her Honour set out the various tests which had been the subject of judicial authority and to which I have already referred at [132]-[138] above. She considered (at [36]) that there were five possible ways in which s 6(1)(b) could be interpreted. They were as follows: "… Firstly, objectively from the viewpoint of the lender at the time the contract is entered into; secondly, objectively from the viewpoint of the borrower at the time that the contract is entered into; thirdly, by the objective facts known to both parties at the time of entering into the contract; fourthly, on the subjective knowledge of either the lender or borrower; and finally on the test in Johnson of the actual use of the funds." 149 Having rejected the fourth test, her Honour noted that the first approach was that adopted by her in Park Avenue Nominees and by the Queensland District Court in Rafiki . It contemplated an objective test as to what a reasonable person standing in the shoes of the credit provider would have understood to be the predominant purpose for which the credit was to be provided. This reflected, her Honour considered (at [37]), the phrasing of s 6(1)(b) which seemed to suggest through the express words " provision of credit ", that it be interpreted from the viewpoint of the lender. 150 Her Honour dealt with the second approach at [38] and [39] of her judgment noting that that approach was consistent with the more recent decision of the Queensland District Court in Dale v Nicholls Construction Pty Ltd [2003] QDC 453 where McGill DCJ accepted in part what Shaw J had said in Johnson. His Honour in Dale agreed that what is actually done with the money once it is borrowed could be an indication of its intended use although stating that the test was an objective one. Her Honour continued (at [39]): "A reasonable person in the shoes of the borrower would always believe that they are receiving the money for the purpose for which they are actually borrowing it (except if they are being dishonest). If that is so, the objective outcome would always be the same as the actual one." 151 At [40] her Honour considered that the third approach would be to consider the objective facts known to both parties as to the purpose for which the credit was to be provided at the time at which the credit contract was entered into or proposed to be entered into. She likened that approach to " the interpretation of a contract where an implied term was ambiguous ", referring to Codelfa Construction at 352 per Mason J. 152 Her Honour concluded that the test adumbrated by Shaw J in Johnson should be applied. However, she had a reservation that if one considers what the money was used for in order to determine the purpose of the provision of the credit and in doing so considers the substance of the transaction in the context of its performance, it may involve facts that occurred after the transaction was entered into. Rather than looking at it from the point of view of the credit provider, it looks at the reality of the transaction. Her Honour considered (at [41]) that that course of reasoning went beyond what s 6(1)(b) contemplated. 153 Accordingly, factors that occurred after the transaction was entered into should not, in her Honour's view, be considered. In her judgment the section required that the intended purpose of the legislation be discerned at the time the contract is entered into or proposed to be entered into. 61 In resolving this aspect of the appeal, Tobias J observed: 177 In the foregoing circumstances it is strictly unnecessary to consider the appellants' subsidiary argument founded on s 11(3) of the Code that Permanent and Conway or persons associated with them such as Kremnizers and/or La Trobe, knew or had reason to believe that at the time the s 11(2) declarations were made, the loans being sought by the appellants were in fact to be applied wholly or predominantly for personal, domestic or household purposes. However, as the issue was fully argued I shall express my views thereon. 178 Permanent and Conway submitted that one could not go past various documents signed by the appellants in which they had stated that the purpose of the respective loans was wholly or predominantly for business or investment purposes. In this respect, much reliance was placed upon passages from the joint judgment of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 182 [47] where reference is made to the significance which the law attaches to the signing of a contractual document so that where a person signs a document knowing that it is a legal document relating to an interest in property, that person is in general bound by the act of signature and that to undermine that assumption "would cause serious mischief". 179 The principles so adumbrated by the High Court in Toll relate to the proposition that a person who signs a document which is known by that person to contain contractual terms and to effect legal relations, is bound by those terms, it being immaterial that the person has not read the document. In my opinion this has little relevance to the issue to which s 11(3) of the Code is directed. That is not to say that the signed assertions of the appellants that the subject loans were for business or investment purposes carry no weight. But the weight to be attributed to those assertions depends on the circumstances known to the credit provider or its agent at the time they were made. 180 In the present case Kremnizers were aware from some time in October 2002 that the appellants only needed to borrow $30,000 for a term of two years. The amount of the loan increased as a consequence of the refusal of Perpetual to permit the registration of a second mortgage to secure a loan of $30,000. A loan was therefore sought to enable Perpetual to be repaid the amount owing to it in circumstances where it held a first mortgage over what Permanent, Conway and their agents knew to be the appellants' home. Furthermore, the applications for finance to which I have referred at [121] to [123] above to support a finding which, in more neutral terms, I made at [124] to [126] above that both Permanent and Conway had reason to believe at the time the s 11(2) declarations were made on 15 November 2002 that the appellants' assertion that the loans were to be applied wholly or partly for business or investment purposes, was clearly not the case. 181 Accordingly, in my view the requirements of s 11(3) of the Code have been made out with the result that the s 11(2) declarations were ineffective. 62 Giles JA agreed with his Honour's conclusions, also observing that: 5 Permanent and Conway have not established that the credit was in fact provided or intended to be provided wholly or predominantly for business or investment purposes, and s 6(1)(b) of the Code is satisfied. That is so on any understanding of those words in s 6(1)(b). When the credit contract was entered into the appellants' purposes were plainly personal, despite the declarations; as described by Tobias JA, Permanent and Conway were on notice of matters which objectively showed the loans were for personal purposes, despite the declarations, and they did not give evidence of belief in the declarations despite the objective circumstances. 63 These observations, albeit strictly obiter, are of some moment in this case. The Court of Appeal resolved the issues raised by s 6(1)(b) and s 11(3) of the Code by having regard to what was known to the credit provider at the time the credit contract was entered, not by assessing what the evidence showed as to 'the substance of the transaction in the context of its performance', at some later time. What was known included what was contained in the declaration signed by the borrower, as well as other matters about which the lender had knowledge when the declaration was made, which had revealed to the lender that loan was for personal purposes, despite the terms of the declaration which had been made. 64 Approaching the issue in that way, namely by considering all that was known to the credit provider at the time the declaration was made, before the loan contract was entered, it seems to me, is consistent with an objective consideration of what a reasonable person in the shoes of the credit provider would have understood as the predominant purpose of the loan, given all that was actually or impliedly known by the credit provider at the time the declaration was made. 65 That approach is consistent with the express words of s 11(3) of the Code which makes a declaration ineffective 'if the credit provider (or any other relevant person who obtained the declaration from the debtor) knew or had reason to believe, at the time the declaration was made that the credit was in fact to be applied predominantly for personal, domestic or household purposes'. 66 How those words are to be interpreted is a question of statutory construction. As the Chief Justice recently observed in Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83: 86 It is now well established that the contemporary approach to statutory interpretation requires a court to have regard to the context in which words appear in the first instance and not merely after some ambiguity has been identified. (See eg CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 405; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273 at [11].) 87 As Justice Learned Hand once put it (Helvering v Gregory (1934) 69 F 2d. 809 at 810-811): "The meaning of a sentence may be more than that of the separate words, as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create". 88 Judges no longer approach a statute with scissors in one hand and a dictionary in the other. 67 In the case of this aspect of the Code, it is apparent that it was intended that the presumption arising under s 11(1), that the Code applies to a particular credit contract, mortgage or guarantee, may be displaced by a declaration given by the borrower in the required form, before the credit contract is entered, that the credit is to be used wholly or predominantly for business or investment purposes (s 11(2)). Such a declaration displaces the presumption, unless, at the time the declaration was made, the credit provider, or those who obtained the declaration from the borrower, had reason to believe that despite the declaration, the credit was to be used wholly or personal, domestic or household purposes. 68 Evidence as to what a borrower subsequently did with the money borrowed, is likely to shed relatively little light on what the credit provider knew at the time that a declaration was given, that is, before the credit contract was entered. It will be evidence going to what was known to the credit provider at that time, upon which the question of what the credit provider then knew or had reason to believe, in relation to the purpose of the loan will turn. That is what s 11(3) of the Code concerns itself with. Could the declaration be relied on by the plaintiff? 69 It was common ground that the onus fell on Mrs Treloar to establish that the plaintiff, or its mortgage manager, Royal Guardian, or its officers or employees knew or had reason to believe that the loan was to be used wholly or predominately for domestic purposes, notwithstanding the terms of the declaration Mrs Treloar had signed. 70 The personal details provided on the form signed by Mrs Treloar in September 2003 indicated that Mrs Treloar then resided at 47 XX Road; that her assets included the property at 43 XX Road; that she was in receipt of both income and rental income; that she was offering security on 43 XX Road and that the purpose of the proposed loan was to finance the construction of a property for investment purposes and to refinance a property for investment purposes. The loan contract which the parties later entered reflected that declaration. The declaration was to similar effect to the declaration which Mrs Treloar had made earlier in 2003, when she obtained the original loan on purchase of 43 XX Road. 71 Mrs Treloar's evidence as to the circumstances in which she came to sign this form were: 20. On 3 September 2003 I attended at the office of Royal Guardian Mortgage Management Pty. Ltd in Burwood, and spoke to Beth Nguyen. I then signed the Loan Purpose/Declaration Checklist. I did not fill in the amounts given on that document or tick the boxes in that document. Beth Nguyen did not explain to me anything about that document, other than saying: " Just sign here and we will increase your loan ". 72 Mrs Treloar also claimed that the first time she attended the mortgage manager's offices in 2002, when borrowing in relation to 47 XX Rd 'I said to Beth Nguyen: "Do I need a solicitor?" Beth Nguyen said to me: "No, I will be your solicitor, it will save you money'".' 73 Mrs Nguyen was not called, but it was Mr Stariha's evidence that there had been no record made by Ms Nguyen that she had met with Mrs Treloar on 3 September 2003. Ms Nguyen was then employed as general manager of a sales division of the plaintiff's mortgage manager. She was not a solicitor; she was not employed to give advice and the mortgage manager had no practice of having its employees give such advice. The loan document signed by Mrs Treloar was dated 11 September. 74 Mrs Treloar's evidence about Ms Nguyen's role seems rather improbable, particularly in the face of Mr Stariha's evidence. Even if Mrs Treloar's evidence as to the circumstances in which she came to make the September 2003 declaration is accepted, what must also be considered is that Mrs Treloar did not claim in her evidence that she had ever told the plaintiff, the mortgage manager, Ms Nguyen or anyone else on behalf of the plaintiff, that the purpose of the proposed 2003 loan was personal, domestic, or household, or indeed that it was anything other than what the document which she signed on 11 September 2003 disclosed, namely, that the purpose of the loan was to finance a construction for investment purposes and to refinance a property for investment purposes. It was not even her evidence that she told Ms Nguyen or anyone else on behalf of the plaintiff that the declaration was incorrect. As was conceded in submissions, the highest her evidence went was that she did not complete the declaration and it was not explained to her, she simply signed it. 75 This is of some moment in this case. As Tobias J observed in Bahadori, at [178], attention must be paid to the fact that even if Mrs Treloar did not read the declaration, plainly she signed it, knowing that it was of legal significance, so far as the loan she was seeking was concerned. 76 The declaration Mrs Treloar made in September 2003 was in similar terms to the declaration which she had earlier made in 2003, when she obtained the loan in order to purchase 43 XX Road. At that time, she was represented by a firm of solicitors, Nugent Nooma and Carter. Her solicitor, Mr Carter witnessed the mortgage documents which she then executed. Plainly, Mrs Nguyen was not then acting for, or advising Mrs Treloar about the loan transaction. 77 Also to be considered is that even though on her evidence Ms Nguyen filled in the form on 3 September, Mrs Treloar did not sign it until 11 September. There was no suggestion that she had any difficulty reading the form. Nor was it Mrs Treloar's evidence that the form was incorrectly completed and that the information provided on the form was inaccurate, in any respect, when she signed it. What her evidence amounts to is simply a statement that the declaration was not explained to her by Ms Nguyen. 78 Mrs Treloar had given a similar declaration in relation to funds earlier borrowed when 43 XX Road was purchased, at a time when she did have a solicitor advising her on the transaction. The later 2003 borrowing was sought at a time when she was proceeding to subdivide the land and build two residencies on it. That cannot have given rise to any inference that the purpose of the loan was something other than what was disclosed. 79 Also to be considered is that it was Mrs Treloar's evidence that she was residing at 47 XX Road, when 43 XX Road was purchased in March 2003. In August 2003, an application was made to Council for approval to subdivide the land at 43 XX Road and for permission to build a residence on each lot. There was no evidence of any intention existing when the declaration was signed on 11 September 2003, of Mrs Treloar using the loan for personal, domestic or household purposes. An investment or business purpose was consistent with what had been undertaken in relation to 43 XX Road to that point. 80 When the decision to sell No 47 was made was not revealed, although No 47 was sold on 26 September and the proceeds were used to discharge the mortgage over that property. It follows that the decision to sell must have been some time beforehand. There was no evidence, however, that Mrs Treloar had disclosed anything about this sale before giving the declaration, which would have put the plaintiff on notice that the declaration which she later gave in relation to the loan sought for No 43, was incorrect. Mr Stariha's evidence in cross examination, as to what he would have assumed from the fact that Mrs Treloar was not living in No 43 when she applied for the loan, did not establish that the plaintiff or those who represented it, had any information that Mrs Treloar intended to use the loan for domestic, personal or household purposes. 81 After the sale, Mrs Treloar and her family moved and lived elsewhere, while the two residences were constructed at No 43. Whether they owned or rented the property where they then resided, was not explored in the evidence. 82 The two residences were built at No 43 and it was later subdivided. It was not until May 2005 that No 43A was sold to Mrs Treloar's son. There was no evidence as to the terms of that sale. When Mrs Treloar moved into No 43 was also not clear, although the evidence showed that in October 2003, and in respect of the period July to December 2004, the plaintiff was writing to her elsewhere and that it was not until during the period January to June 2005, that the plaintiff wrote to her at 43 XX Road. The inference is that it was not until January 2005 that Mrs Treloar moved to 43 XX Road. 83 On all of the evidence, I can find no basis for concluding that the plaintiff was not entitled to rely on the declaration which Mrs Treloar signed in September 2003. That it was inaccurate at the time it was provided by Mrs Treloar was not established and even if it was, that of itself is not a basis upon which it may be inferred that the plaintiff or its agents had other information from which it was known by them in September 2003 at the time that Mrs Treloar made the declaration, that she did not intend to use the loan for the stated business or investment purposes, but rather for personal, domestic or household purposes. There was no evidence from which it can be inferred that Mrs Treloar ever conveyed such an intention to the plaintiff, the mortgage manager or its employees or officers, before, or at the time of giving the declaration. 84 The case advanced for Mrs Treloar rested on the fact that she later resided in one of the residences at 43 XX Road and sold the second residence to her son. This, it was argued, evidenced that her purpose in obtaining the loan in 2003 was in fact personal, domestic or household. It was finally acknowledged, however, to be a weakness in the defendant's case that there was no evidence that Mrs Treloar had ever conveyed to any relevant person that her purpose in obtaining the loan was personal, domestic or household. 85 While it has been held that the words used in the Code 'personal, domestic or household purposes' must be given a wide meaning, sufficient, for example to include purposes such as providing a home for parents, and I accept for the sake of the argument, providing a home for a child, there has to be evidence upon which it may be concluded that such a purpose existed at the relevant time. 86 Here, there was evidence that a property at 43 XX Road was acquired in March 2003 at a time when Mrs Treloar lived elsewhere; a loan was obtained in September 2003, using the property at 43 XX Road as security, for the stated purpose of business and investment; two residences were later built on the property at 43 XX Road, which was then subdivided. It was not until January 2005 that Mrs Treloar moved into one of the new residences and in May 2005, the other property was sold to a son. In my view, that evidence cannot establish that in September 2003 a 'personal, domestic or household purpose' existed, let alone that Mrs Treloar then communicated that purpose to the lender or its representatives. 87 Mr Stariha's evidence was that there was nothing on the file which contradicted the advice given by Mrs Treloar in September 2003, that the purpose of the loan was business or investment and nothing else was known to the mortgage lender which could have revealed that Mrs Treloar's declaration was false. That evidence was not challenged and must be accepted. 88 Despite Mrs Treloar's evidence that it was Ms Nguyen who completed the declaration which she signed on 3 September, there was no evidence from which it could be concluded that the plaintiff or Ms Nguyen or the mortgage manager, knew from any other information provided by Mrs Treloar, or which was otherwise known to them, that the loan was, in fact, to be wholly or predominantly used by Mrs Treloar, for personal, domestic or household purposes, rather than for the purpose which she had disclosed. 89 There is nothing from which it could be concluded that in September 2003, when Mrs Treloar made her declaration, that there was any reason to believe that Mrs Treloar proposed to apply the loan for other than the stated purpose. It follows on the evidence that this case is quite different to that considered in Bahadori. There is no basis upon which the declaration signed by Mrs Treloar may be questioned. I am satisfied that the plaintiff is entitled to rely on it. The second s 57(2)(b) notice 90 This notice does not strictly require consideration, given the conclusions which I have already reached. It is convenient, nevertheless, to note that the defendant's case was that the notice was adequate for the purpose of the Real Property Act, but otherwise deficient, because it did not explain the effect of the acceleration clause, as required by s 85(1)(b) of the Code, which states: 85 Requirements to be met before credit provider can enforce an acceleration clause (1) An acceleration clause is to operate only if the debtor or mortgagor is in default under the credit contract or mortgage and-- ... (b) the default notice contains an additional statement of the manner in which the liabilities of the debtor or mortgagor under the contract or mortgage would be affected by the operation of the acceleration clause and also of the amount required to pay out the contract (as accelerated); and 91 This was accepted for the plaintiff, but it relied on what was advised in a subsequent notice given on 28 July 2008, which said: 1. You have not complied with the notice under section 57(2)(b) of the Real Property Act 1900 dated 20 June 2008 served on you. The notice specified your failure to pay the Mortgagee amounts due under the registered mortgage numbered 9607545 ( Mortgage ). 2. As a consequence the Mortgagee had declared the whole of the moneys owing the Mortgagee under the Mortgage, immediately due and payable. 3. The Mortgagee demands payment of all moneys due by you to the Mortgagee. 4. The amount due by you as at 28 July 2008 was $379,819.00. 5. If this amount is not paid to the Mortgagee by 4.00 pm on 4 August 2008, then the Mortgagee will take action for recovery of the moneys. 92 This information was accepted for the defendant as being adequate to satisfy the s 85(1)(b) requirement, but was argued as not being available to be relied on by the defendant. That argument, it seems to me, is difficult to accept, unless it is concluded that the notice was not a 'default notice', because it was not so entitled, but, nothing finally turns on it, given the conclusions I have otherwise reached. The refusal of bank cheques 93 In the face of the concession that Mrs Treloar was in default under the mortgage, as she undoubtedly was, this issue is not strictly relevant to the question of whether the plaintiff is entitled to possession. 94 Nevertheless, the defendant argued that the plaintiff's refusal to accept certain payments sought to be made by Mrs Treloar by bank cheque, put it into a position where it was not entitled to pursue an order for possession. Reliance was placed on various cases, 'without pinpointing particular expressions used by individual judges', to argue that there was a 'procurial attitude' against mortgagors who refused reasonably made payments. I can see no basis upon which such a conclusion could rest and even if such an approach were available, having in mind the evidence as to the parties' respective conduct in light of the agreements which bound them, I cannot see that Mrs Treloar could make out such a case. Even if all the cheques she proffered had been accepted, she would still be in default. 95 The defendant also relied on the approach of Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 to advance an estoppel argument, although conceding candidly that Mrs Treloar's argument would have been a stronger one, if she had ever offered more than partial payment of the amounts in default. 96 There was no question that for a period between 2005 and early 2008, Mrs Treloar made certain payments by bank cheques and others by way of direct deposit. Bank cheques were accepted by the plaintiff during this period, even though that was not a method of payment prescribed by the loan contract. The method of payments to be made was dealt with by clause 14.4 of the loan contract, which provided: 14.4 Scheduled repayments or, if you have elected to make repayments more frequently than monthly, your elected repayments are to be made in Australian dollars by either (or both): (a) direct debit from an account at a bank or financial institution acceptable to your Mortgage Manager ; or (b) salary deduction, unless another method of payment is approved by Perpetual , in its discretion, in which cases those repayments may be made by that other method. Perpetual may, at any time, decide to no longer allow you to make your repayments by salary deduction. Salary deduction may not be used to make any repayments in relation to the construction loan during its construction period . 97 Mrs Treloar first fell into default under the loan in February 2005. In her evidence she claimed that in January 2005 she had spoken to a person she knew as 'Dian' and had instructed that repayments being taken from her bank account should cease. She asked whether payments could be made by bank cheque and was asked to put her request in writing. She did so, but did not keep a copy of the letter. This evidence was disputed. No such correspondence was in evidence and in cross examination Mrs Treloar explained that she could not remember who she spoke to and agreed that she had not sent such a letter. 98 Ms Dianne Downes' evidence was that she had first been employed by the mortgage manager in August 2005. As Mrs Treloar accepted in cross examination, she could not have had a conversation with Ms Downes in January, but explained that she must have spoken to some other employee. The mortgage manager's system involved computer records of such discussions being maintained. There was no record of such a conversation in evidence. 99 It was common ground nevertheless, that various payments were made by bank cheque after February 2005, which were accepted. In February 2008, the plaintiff's solicitor advised that bank cheques would no longer be accepted and asked Mrs Treloar to set up a 'direct debit request'. The mortgage manager's records also showed that Mrs Treloar had earlier been asked to establish such a payment system. 100 There were various communications and discussions between Mrs Treloar and the mortgage manager about the continuing defaults. On 14 March 2006, a default notice was issued to Mrs Treloar. On 16 March, Mrs Treloar spoke to a Ms Mathey about the default notice and informed her that she was refinancing. A payment was made on 21 March, but not of a sufficient amount and Mrs Treloar remained in default. 101 On 11 January 2007, Mrs Treloar spoke to Mr Andre El Baghd and claimed that she had not received the March 2006 default notice. Mr El Baghd said that he would send her a copy. On 12 February 2007, the default notice dated 8 February was sent to Mrs Treloar and on 14 February she rang Mr El Baghd again, to indicate that two payments would be made, which would address the total amount in default. The second payment was not made as Mrs Treloar had indicated and there were further defaults up to March. 102 These proceedings were commenced on 26 April 2007. On 20 June 2008, a second default notice was served, referring to further defaults between March and June 2008. Payment of $13,471.39 was required within one month and payment of the loan under the acceleration clause of the mortgage in the sum of $375,427.39 was also required. No payments were made. On 28 July 2008, a demand for payment of the accelerated sum was issued, but it too, was not complied with. 103 The plaintiff's solicitor had also advised Mrs Treloar's solicitor on 22 February 2008, that mailing bank cheques to the mortgage manager was an unacceptable means of payment under the loan agreement and would not be accepted. Mrs Treloar was asked to set up a direct debit request, or to arrange for direct transfers from her account to make loan payments. There is no question that this advice was conveyed to Mrs Treloar, but still on 1 May 2008 she mailed a bank cheque for $1,800 to the mortgage manager. 104 There was a question as to whether on 1 May, Mrs Treloar then also sent an undated direct debit request to the mortgage manager, as was her evidence. On the plaintiff's evidence, such a request was not received by the mortgage manager, although it is, of course, conceivable that it was sent, but misplaced. That this is what occurred seems rather unlikely, given that it was common ground that no direct debit payments were ever made pursuant to such a request and it seems, Mrs Treloar made no enquiry to discover why such direct debit payments were not being made, in accordance with her request. Nor did she attempt to rectify the resulting default, for example by making payments by direct transfer, as she had been asked to do and had done, on some occasions. 105 The $1,800 cheque was returned, the plaintiff's solicitor advising again on 6 May 2008 that payment by cheque would not be accepted. No reference was made in that correspondence to the direct debit request Ms Treloar claims to have earlier sent, but a proposal for repayments which would settle the matter was made and Mrs Treloar was again asked to set up a direct debit request, or to make payments direct by electronic funds transfer from her own account. 106 Even if the bank cheque then proffered had been accepted, Mrs Treloar would still have been in default on 1 May 2008, the amount then due being $3,000 and Mrs Treloar already being in arrears. There were further defaults subsequently. 107 On 7 August 2008, Mrs Treloar's solicitor advised the plaintiff's solicitor that she would pay the sum of $12,600 the following day by bank cheque, claiming that she had the right to make the payment in that way, given the terms of the loan contract. This payment was also refused. Mrs Treloar did not take steps to make payment of what was outstanding by other available means, although she did then provide a direct debit form for certain future payments. On Mr Stariha's evidence as at 21 November 2008, the total arrears, had the debt not been accelerated, was $22,932,87, with interest accruing daily at 9.40% and the total amount owing on the loan account being $383,530.88. 108 The defendant's arguments in relation to the refusal of bank cheques rested on the idea that there had been a waiver by the plaintiff, or an estoppel of its rights under the loan agreement; that a bank cheque was as good as legal tender and that the plaintiff had waived its contractual right to insist on payment on the basis specified in the loan contract and was bound to accept the bank cheques Mrs Treloar had offered. 109 In Stirling Properties Ltd v Yerba Pty Ltd (1987) 74 ACTR 1, Miles CJ observed at 6 that 'generally speaking, a creditor is under no obligation to accept a negotiable instrument, even a bank cheque, in payment of a debt', although parties might agree to modes of payment other than by legal tender. Reference was there made to the High Court's judgment in George v Cluning (1979) 28 ALR 57, of the effect of accepting a cheque, where it was observed at 62-3, that: The practice of giving and accepting personal cheques in payment of debts and liabilities is now so widespread that there is a general expectation on the part of persons making payments that a personal cheque, given in payment of a debt or liability, will be accepted unless the payee objects before or at the time of receipt that the cheque does not constitute legal tender. To my mind the law was correctly stated in two Canadian decisions - Wexelman v. Dale (1917) 35 DLR 557 and Laidlaw v. Rehill (1943) 4 DLR 429 - where it was decided that a personal cheque, though not legal tender, was a sufficient payment if not objected to on that account." 110 A similar approach was followed in Deputy Commissioner of Taxation v BK Ganter Holdings Pty Ltd (2008) FCR 385 at pp 389 - 390. For the plaintiff it was argued that its acceptance of bank cheques was a matter within its discretion. Clause 16.5 of the loan contract provided that it could waive any of its rights, but that its rights were not reduced, unless it gave the borrower written notice of such a change. It was apparent that Mrs Treloar had never received written approval for payment by bank cheque and that she had never even made a request for such approval. It followed that the plaintiff was entitled to reject a payment by bank cheque as it did and to insist on payment by the methods agreed in the loan contract. Mrs Treloar had no right to ignore the plaintiff's insistence on payment in accordance with the terms of the loan agreement. 111 I am satisfied, on the evidence, that the defendant's argument that any estoppel or waiver arose from the plaintiff's conduct may not be accepted. Payment by cheque and even bank cheque is, undoubtedly, still commonplace. Even though the law recognises no general obligation to accept payment by such means, unless there is an objection before or on receipt of a cheque, such a payment will be treated as sufficient. In this case there was such objection, no doubt because nowadays, there are other convenient and perhaps more secure methods of making payments available to parties such as these. Indeed the loan contract contemplated payment by such means and such payments were made and accepted, as the loan contract contemplated. The fact that, from time to time, the plaintiff also accepted payment by bank cheque did not bind it to accept such payments, whenever proffered. In the circumstances, the plaintiff was entitled to insist on its contractual rights in that respect. There is no evidence upon which it could be concluded that any estoppel or waiver of the plaintiff's rights arose, as between it and Mrs Treloar. 112 The plaintiff also argued, that at best, the refusal of the proffered payment could only have given rise to a reduction of the amount upon which interest was calculated. That argument was well founded, it seems to me. In Moore v Lean (1905) SR NSW 671, it was held that in order to stop interest running, there must be a tender of the amount due, complying with 'all the legal formalities which the law attaches to a tender' (at 674). If there is such a tender which is refused, some account must still be taken of the interest earned on the money by the mortgagor. No such tender was here established and even if accepted, the bank cheque payments refused would not have rectified all of the defaults under the loan. 113 In this case, while there had been an acceptance of bank cheques for a period, as the loan agreement permitted, there was no written agreement between the parties that payment would be accepted on that basis, as the loan contract required, if Mrs Treloar was to be given the right to insist on making payment by that means. To the contrary, the plaintiff insisted that it was entitled to payment in accordance with the terms of the loan agreement and that it would not accept payment by bank cheque any longer. Mrs Treloar was asked to provide a direct debit request, or to make a payment by direct deposit, but she continued to provide bank cheques from time to time, while also making payment by other means. 114 Although it was her evidence that at one stage in May 2008, she did provide such a request, albeit that it was undated, the plaintiff's evidence that it was not received, must be accepted. Mrs Treloar certainly did not complain that the request had not been acted on and she subsequently persisted in providing bank cheques, instead of making payment by other available means, as the loan contract required, or the plaintiff was prepared to accept. 115 It follows that this aspect of the defendant's case must fail. As observed by Miles CJ in Stirling Properties, Mrs Treloar's non payment cannot be converted into a payment. Her proffered payment by bank cheque was refused and she did not pay what was due by other agreed and available means, with the result that she was in default. Even if the payments had been accepted, Mrs Treloar would still have been in default. The plaintiff is accordingly entitled to an order for possession. Order 116 Costs were sought on an indemnity basis, as provided in the mortgage documents. This was not in issue, in the event that the plaintiff succeeded in obtaining possession (see National Australia Bank Limited v Landy Chen-Conway and Anor [2008] NSWSC 485 at [3]). There was finally also no argument advanced by the defendant, in relation to the amount of the money orders sought, in the event that the case advanced in relation to bank cheques failed. 117 In those circumstances, for the reasons given, I make the following orders: 1. An order that the defendant gives the plaintiff possession of all the land comprised in certificate of title folio identifier 4441/1074165 being the land situated at and known as 43 XX Road, Hebersham in the State of New South Wales. 2. Leave to issue a writ of possession. 3. An order that the defendant pays to the plaintiff the sum of $381,661.89 together with interest at various rates charged by the plaintiff to customers of the plaintiff on like accounts (compounded monthly) from 13 August 2008 to repayment or judgment, whichever is earlier. 4. An order pursuant to section 101 of the Civil Procedure Act 2005 that interest be payable on the judgment at the prescribed rate or at various rates charged by the plaintiff to customers on like accounts (compounded monthly), from the date of judgment on so much of the money as is from time to time unpaid, whichever is higher. 5. Costs on an indemnity basis. ********** 19/05/2009 - Spelling error - 'Stahira' amended to 'Stariha' - Paragraph(s) [73], [74], [80], [87] and [107] 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.