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United Finance Services Pty Ltd v C & E Pty Ltd


[2004] QSC 46





United Finance Services P/L v C & E P/L (formerly Terry Seirlis Constructions P/L) [2004] QSC 046


(ACN 074 468 018)


5132 of 2003


Trial Division




Supreme Court


18 March 2004




23-27 February 2004


Muir J


Judgment for the defendant on the plaintiff’s claim with costs.  That the plaintiff pay the defendant’s costs of and incidental to the defendant’s counter-claim


CONTRACT – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the defendant retained the plaintiff to procure offers of finance – whether there was in existence a general retainer which entitled the plaintiff to a commission of 2% on each loan procured by it – whether a liability to commission arose on notification of loan approval – whether a term was to be implied by custom or through usage – counter claim for delivery up of a deed of charge – whether the deed of charge was a sham or, alternatively, held ‘in escrow’

Majeure Carrying Co Pty Ltd v Coastal Rutile Pty Ltd (1973) 129 CLR 48


P Hackett for the plaintiff

D Cooper SC, with D Ryan, for the defendant


Morgan Conley for the plaintiff

Lees Marshall Warnick for the defendant 


  1. The plaintiff finance broker sues the defendant property developer for commission in respect of offers of finance allegedly made to the defendant in the sum of $18,560,000 on 2 July 2002 and in the sum of $20,779,000 in November 2002. The plaintiff claims an entitlement to a commission of 2% on each of those sums under a retainer entered into about 4 April 2001.
  1. The defendant denies the existence of a general retainer such as that alleged and asserts the existence of separate retainers to procure offers of loan on terms acceptable to the defendant and on the basis that the plaintiff’s entitlement to a 2% commission arose on acceptance of the loan offer and draw down of the loan monies.
  1. The defendant counterclaims for, amongst other things, a declaration that a deed of charge dated 27 November 2002 given by the defendant in favour of the plaintiff is a nullity and seeks an order that the deed be delivered up and cancelled.

Dramatis Personae

  1. The plaintiff is a company under the control of Daniella Amore who is its sole director and shareholder. Ms Amore resides in Melbourne which is the plaintiff’s principal place of business.
  1. The defendant shares offices with a firm of public accountants, Saccuzzo Larsen, with whom it enjoys a close relationship. They have common receptionists, phone numbers, facsimile and other services.
  1. In about 1999, the defendant acquired the shares in Financial Investment Services Group Pty Ltd (“FISG”) for the purpose of conducting its finance broking business in Queensland. Ms Amore’s brother, Vincent Amore, who was said to be an independent contractor, was placed in charge of the Queensland operations. It was not clear from the evidence whether Mr Amore’s contractual relationship is with the defendant or FISG, nor is it clear that customers for whom Mr Amore arranges loans are customers of the plaintiff rather than FISG.
  1. Applications for finance made in Queensland by Mr Amore are made in the name of the defendant rather than FISG because the former has accreditation with various lending institutions and FISG does not. It was part of the defendant’s case initially, that any retainer was between the customer and Saccuzzo Larsen. That allegation was not persisted in and it was not alleged that any retainer was between the defendant and FISG.
  1. Sebastian Canzoneri is a management consultant who provides consultancy services to Saccuzzo Larsen and the defendant. He conducts his business through a number of companies, including Ruldina Investments Pty Ltd and Mentrall Pty Ltd. Mr Canzoneri is not a qualified accountant. His role with Saccuzzo Larsen, apart from having assisted with the setting up of that practice, is to introduce clients and foster the relationship between the clients and that firm. He provides advice to Ms Amore and Mr Amore in relation to their business activities and assists in the preparation and presentation of submissions to prospective lenders. He also has “contacts in the finance industry and use(s) these to establish funding for (the plaintiff’s) larger clients”.
  1. Mr Canzoneri’s relationship with Saccuzzo Larsen was such that he was able to send out letters signed by himself on the letterhead of that firm and had a practice of dictating letters to be sent out by the firm under another person’s signature.
  1. Mr Terry Seirlis obtained a Bachelor of Leisure Management degree from Griffith University in 1992 and commenced work at the University as a liaison officer. He subsequently obtained from the University a degree of Masters of Environmental and Community Health. In 1998 he commenced business as a property developer. At relevant times that business was conducted through the defendant which Mr Seirlis controls.
  1. Mr Seirlis was introduced to the defendant by his brother Nick who is also a property developer. By the time of the introduction Mr Amore had procured a number of loans for him.

The plaintiff’s case

  1. The allegation in the final version of the statement of claim may be summarised as follows.

A.On or about 4 April 2001, at level 27 of the Sheraton Hotel, Brisbane, in a meeting between the Amores, Mr Canzoneri and Mr Seirlis, the defendant retained the plaintiff to procure “offers of finance for development of real property”.

B.The retainer was partly oral and partly in writing. The writing was a standard form document headed “Loan Application and Appointment Authority” (“the application” or “application form”) which had been given to Mr Seirlis “in or about March 2001”.

C.The oral communication consisted of Mr Seirlis’ asking Mr Amore to proceed with obtaining “the finance”, Mr Amore’s agreeing to provide the finance if the defendant agreed “to meeting our brokerage fees on the terms nad (sic) conditions … previously discussed” and of Mr Seirlis orally expressing his agreement.

D.The basis of the plaintiff’s remuneration was agreed between Mr Amore and Mr Seirlis as follows:

(a) by Mr Amore giving to Mr Seirlis the application form in about February or March 2001 at Mr Seirlis’ residence;

  1. by representatives of the plaintiff telling Mr Seirlis that “the plaintiff’s brokerage fee to provide the defendant with mortgage brokerage services would be 2% of funds offered plus GST payable upon notification of such an offer”.

E.A number of particulars of this allegation are then provided. They include the following:

  1. Mr Canzoneri, at a meeting at Goodwin Street, Kangaroo Point, attended by Mr Nick Seirlis, Mr Amore, Ms Amore, Mr Seirlis and himself, told Seirlis that “the plaintiff’s fees were 2% of the value of the loan payable on notice of a lender’s offer of finance”;
  1. Mr Amore telling Mr Seirlis at Crew Street, Mount Gravatt, within a week of the meeting referred to in paragraph (a) that the plaintiff’s fees were “2% of the value of the loan payable on notification of a lender’s offer of finance”;
  1. on or about 4 March 2001, in a meeting between Mr Amore, Mr Canzoneri, Ms Amore and Mr Seirlis, Mr Canzoneri repeating his previous advice as to the terms of payment of the plaintiff’s fees and Mr Seirlis orally accepting such terms.

F.The plaintiff procured finance and was paid by the defendant on the above terms.

G.In the alternative, it was a term of the retainer implied by custom that the plaintiff be paid its commission upon approval of finance.

H.On 2 July 2002, pursuant to the retainer, the plaintiff at the request of the defendant procured Bank of Western Australia Ltd (“Bank West”) to offer finance to the defendant in the sum of $18,560,000. The request was made orally by Mr Seirlis to Mr Amore with Mr Seirlis saying words to the effect “I need you to get me a construction loan for $10.5 million so that I can start building the units on that Tryon Street property at Mt Gravatt”. Amore said words to the effect “I will get on to it. Our fees will be 2% on the usual terms”, to which Mr Seirlis agreed. Ms Amore and Mr Canzoneri were said to be present at the time.

I.Because of the terms of the retainer, $210,000 became due and owing.

J.In about October 2002, Mr Seirlis orally requested Mr Amore to procure finance pursuant to the retainer. The request made in the lift and foyer of the office of “Bank West” after a meeting with representatives of the Bank at 1 Eagle Street Brisbane was for a loan “to the tune of $21,000,000 so that I can pay out Bank West and have enough left over to build the units at Tryon Street as well as pay you guys your fees”.

K.On 13 November 2002, pursuant to the retainer, the plaintiff procured Balmain nb (“Balmain”) to offer the defendant finance in the sum of $20,779,000.

L.The offer was contained in a letter from Balmain to the defendant dated 13 November 2002.

M.Upon the making of the offer, there became due and owing to the plaintiff pursuant to the retainer the sum of $457,138.

N.It was an implied term of the retainer that the defendant would do all things necessary on its part to enable the plaintiff to have the benefit of the retainer.

O.In breach of the implied term the defendant “acted in a manner which caused the lenders referred to above to withdraw their offers of approval and thereby deprive the plaintiff of its remuneration …”. This allegation is particularised as follows:

(a)the defendant accepted the offer from Bank West on or about 2 July 2002;

(b)Mr Seirlis delivered a letter to Bank West on the letterhead of Jones & Company, the defendant’s then solicitors, dated 11 July 2002, which had not been prepared by or authorised by that firm;

(c)the conduct referred to in (b) caused Bank West to withdraw its offer of funding;

(d)the defendant accepted the offer of loan funds from Balmain orally in a telephone call with Mr Amore on or about 13 November 2002 but on 14 November 2002 Mr Seirlis, at the offices of Balmain refused to execute the loan documentation prepared pursuant to the acceptance referred to in (c) and sought to renegotiate the terms of the offer;

(e)Balmain refused to renegotiate the terms of the offer of finance and withdrew the previous offer of finance;

   P. Under a deed of charge made between the plaintiff and the defendant on 27 November 2002, the defendant charged its assets as security for payment of the monies referred to above and the plaintiff is entitled to exercise its rights under the deed.

The allegations in the defence concerning the plaintiff’s entitlement to commission

  1. The defendant denies the existence of a general retainer but accepts the existence of retainers in respect of the subject prospective loans. It alleges –
A.The defendant retained the plaintiff in March 2001 to procure the offer of a loan for the purchase and development of 54 Paragon Street on the basis that the terms of the loan be acceptable to the defendant and that a fee of 2% of the amount of the loan would be payable to the plaintiff on its acceptance by the defendant and draw down of the loan.
B.On 2 July 2002, Mr Seirlis, on behalf of the defendant, procured an offer of a loan of $10,410,000 from Bank West. Such loan was not procured by the plaintiff.
C.Bank West withdrew its offer of loan prior to funds being drawn down by the defendant and in such event the plaintiff failed to become entitled to commission.
D.On or about 30 November 2002, the plaintiff procured Balmain to obtain from Secured Mortgage Management Ltd a written approval in principle dated 7 November 2002 of a loan.
E.The terms of such approval in principle were not acceptable to the defendant and the approval lapsed after 14 November 2002.
F.The deed dated 27 November 2002 was not intended to have effect unless and until a debtor-creditor relationship came into existence between the parties and no such relationship arose.
G.The deed is not supported by consideration, was not signed sealed and delivered and, on its true construction, does not charge the assets of the defendant to secure payment of the monies claimed by the plaintiff.


  1. Mr Amore was an implausible witness. Evidence given by him in affidavits in interlocutory proceedings differed substantially from evidence given on trial. I formed the view that, at best for Mr Amore, he took no pains to establish the accuracy of matters sworn to by him. His general recollection appeared to me to be poor. On a number of occasions, when taxed with lying on oath, he claimed privilege against self-incrimination. I concluded that, in some respects, Mr Amore had knowingly sworn to matters which he did not believe to be true. I would not readily accept Mr Amore’s evidence unless corroborated, against interest or unless it was consistent with a conclusion I would otherwise have reached unaided by his evidence.
  1. It was not established that Ms Amore told any deliberate falsehood but I regard her evidence to be generally unreliable. I doubt that her recollection of any of the conversations to which she deposed is better than vague. The impression I have of Ms Amore is that she is not given to precision of thought or of expression. In my view, it is unlikely that she would have concerned herself with the detail of the terms of any engagement by the defendant of the plaintiff.
  1. Mr Canzoneri impressed me as rather more astute than either of the Amores but I found significant aspects of his evidence implausible and concluded that he too was an unreliable witness. Some of his evidence is the subject of subsequent discussion.
  1. The evidence of Mr Seirlis must be regarded also with considerable caution. There was evidence to the effect that a draft letter from the defendant’s solicitors to Bank West sent by those solicitors to the defendant had been materially altered in a way advantageous to the defendant’s loan application. It was then provided to the Bank as a letter from the solicitors without their knowledge or consent. The only persons who were likely to have made or procured the alterations or delivered the altered draft letter were Mr Seirlis and Mr Lawson, who provided accounting services to the defendant.
  1. Mr Lawson denied having any role in assisting Mr Seirlis to amend the draft letter, making the amendments himself or delivering the letter to the Bank. Mr Lawson’s evidence was not the subject of any successful challenge and I accept it. Mr Seirlis, however, when asked if he delivered the amended letter to the Bank, claimed privilege. He also claimed privilege when asked if the letter had been amended and delivered to the Bank.

Rejection of the allegation that the terms of any retainer were partly written

  1. The plaintiff’s contention that there was a written part of the alleged retainer consisting of the authority cannot be sustained. Mr Amore claimed, in his statement of evidence the accuracy of which he swore to orally, that he gave the application to Mr Seirlis in February or March 2001 and that Mr Seirlis “laughed at me” and said words to the effect “mate, we’re buddies, you can trust me”. According to him, Mr Seirlis indicated that “he would have a look at it and get it back to me”. It is common ground that no such document was ever returned. Mr Seirlis swears that he did not see a copy of the application form until the litigation commenced.
  1. There are aspects of the plaintiff’s evidence in relation to the application form which strike me as curious.
  1. Mr Amore swore that it was the plaintiff’s invariable practice to give customers the application form in order to record the terms of the agreement between the plaintiff and the customer. According to Ms Amore, on a number of occasions she asked her brother about whether he had obtained the signed form back from Mr Seirlis. On her evidence, she sent the standard form agreement to her brother by either email or fax, notwithstanding other evidence of hers that such forms were kept by Mr Amore in his Brisbane office. She said that it was the practice of the plaintiff to give the form to all customers “so they can understand the agreement that we have with them”. On her evidence, the practice was to get from the customer a signed copy of the agreement.
  1. Mr Canzoneri, in his statement of evidence, deposes to a conversation with Mr Seirlis in which he said that Mr Amore was to give him an authority for him to sign and that “upon our receipt of that we will proceed”. He too thus placed emphasis on the importance of the authority. He also confirmed in cross-examination that it was his understanding that the authority contained the terms of the agreement entered into between a borrower and the plaintiff. Yet neither he nor the other representatives of the plaintiff ever claimed to have explained the terms of the retainer or retainers to the defendant or other customers by reference to the contents of the authority.
  1. The authority relevantly provides –


C.The Borrower(s) and/or the guarantor(s) has/have requested United Finance Services Pty Ltd (“UFS”) to arrange a loan for the benefit of the borrower(s) of the amount and on the terms set out in schedule 3 (“the loan”).


  1. The borrower(s) hereby instruct(s) and authorise(s) UFS toprocure the loan on behalf of the borrower(s).
  1. In consideration of the above, the borrower(s) agree(s) to pay to UFS the following amounts:

a)All valuation fees, charges and expenses including legal costs relating to:-

(i)the procuring of the loan;

(ii)the preparation of any necessary mortgage or other security documents;

b)brokerage fee at the rate or amount set out in schedule 4 (“the brokerage fee”).

  1. In the event that the loan is procured the borrower(s) authorise(s) UFS to deduct payment of the brokerage fee from the loan monies.
  1. In the event that the borrower(s) for any reason whatsoever do not proceed with the loan procured by UFS for the borrower(s), the borrower(s) agree(s) to pay the brokerage fee within seven days of receiving notification in writing that the loan has been approved.”
  1. The schedules to the form contemplate the insertion of “amount of loan”, “estimated amount of security”, “description of security”, and the brokerage fee to be charged as a percentage of the amount of the loan.
  1. It is apparent that the terms contained in the document differ from those which the plaintiff’s witnesses claim were discussed and agreed. Clause 2 provides for an obligation on the part of the customer to pay a brokerage fee in consideration of the procuration of “the loan”. “The loan” is a defined term. It is a loan for the benefit of the borrower “of the amount and on the terms set out in schedule 3”. Under clause 3, if the loan is procured, the borrower authorise the plaintiff to deduct payment of its fee from the loan monies. It is only if the borrower does not proceed with “the loan procured by (the plaintiff) for the borrower” that the borrower agrees to pay the fee within “seven days of receiving notification in writing that the loan has been approved.”
  1. Some of the matters referred to under the next heading also support the conclusion, which I have reached, without hesitation, that the authority never formed part of the agreement between the parties. In case it is not already plain from my comments under the heading “credibility” I observe that I do not accept the versions of relevant conversations given by the witnesses called on behalf of the plaintiff.

Evidence relevant to the question of whether it was a term of any agreement between the parties that commission be payable upon notification of a lender’s offer of finance

  1. Mr Seirlis swears that in early March 2001, at a meeting at the Sheraton Hotel, he was told by Mr Canzoneri that the brokerage fee was to be paid upon draw down of the loan, and at that he agreed.
  1. Two loans were arranged for the defendant by the plaintiff prior to the loan applications the subject of these proceedings. In neither case was commission paid to the plaintiff on or in response to the lender’s offer of loan. In one case commission was paid on draw down of the loan and, in the other, on draw down of monies under a subsequent loan. There was also a third smaller loan (for $176,000) procured by the plaintiff for the defendant in August to October 2002. An invoice was rendered by the plaintiff in respect of this transaction after draw down and payment of the commission was made the next day.
  1. The evidence of Mr Nick Seirlis, which I accept in this regard, is that in respect of a number of loans procured by the plaintiff for him between mid 2002 and mid 2003 he paid a commission of 2% plus GST (except for the first loan in respect of which he paid 1%). In all cases, the commission was paid on or after draw down of the loan and it was never suggested to him by representatives of the plaintiff that commission was due or that liability in respect of it accrued upon loan approval.
  1. Mr Lawson, of whom mention was made earlier, gave evidence that on three occasions in 2001 and 2002 he obtained finance through Mr Amore. He said that he was not requested to sign any agreement in relation to fees, that invoices for the plaintiff’s commission were rendered to him shortly before draw down of the loan and were paid by him after draw down. His evidence was unchallenged and I accept it.
  1. The defendant’s contention that commission did not become payable until draw down of the loan derives further support from the circumstance that, as both parties would have understood, the defendant lacked the ability to make payment from any other source. It therefore does not appear likely that Messrs Canzoneri and Amore orally stressed or even stipulated that commission was payable on notification of an offer of finance. The versions of such conversations given by the plaintiff’s witnesses would have been more plausible had the relevant explanations allegedly proffered by them included a proviso to the effect that although the legal obligations to pay commission arose at that point, payment could be deferred until draw down of the loan as long as the offer of loan was not rejected or withdrawn or terminated through no fault of the defendant.
  1. Even in that case, however, the defendant would become liable to pay commission even if it, acting reasonably, decided not to accept the loan offer because the terms were uncompetitive, unduly burdensome or unreasonable. It would be liable also if it, through no fault of its own, was unable to comply with conditions imposed by the prospective lender. The plaintiff’s own evidence suggests that Mr Seirlis continually pushed for more favourable terms from the plaintiff and prospective lenders. It is therefore unlikely that he would have accepted a liability on the defendant to pay commission in the absence of a binding loan agreement or in circumstances in which the loan was not made through no fault of the defendant.
  1. The plaintiff sought to draw support for its case from the contents of the following letter from Saccuzzo Larsen to Mr Seirlis dated 24 October 2002–

“We refer to your recent telephone conversation with Sebastian and Vince regarding our fees and the possibility of proceeding with your project on a partnership basis and advise that the majority of partners of the firm are not seeking to be property developers as that is not our field.

Our firms policy has always being (sic) to receive deposits and have a written agreement for payment of fees upon approval of a facility, irrespective of whether or not the client has taken up the loan.

We understand your position regarding the profit outcome of your project but we regret to advise that the projects belong to you and not to us.

We are happy to continue with you but our fees are to be fixed and paid upon drawdown.”

  1. Whilst it is asserted in the letter that the policy of the firm is to have a written agreement for payment of fees “upon approval of a facility”, it does not state that this is the invariable practice. More significantly, it does not assert the existence of a written agreement, demand that a written agreement be entered into or insist that the terms of the application form be incorporated in the agreement between the parties. On the contrary, it accepts that the plaintiff’s fees are to be “paid upon drawdown”.
  1. At or about the time he received the 24 October letter, Mr Seirlis had a conversation with Mr Amore about the plaintiff’s fees and, at Mr Amore’s suggestion, sent him the following letter or fax, the wording of which, at least in a general way, came from Mr Amore –

“I Terry Seirlis have made an allowance for United Finance to receive $500,000 for unconditional finance approval. The above amount is to be paid from the first drawdown from Balmain Finance. Luke McKenzie of Balmain Finance suggested mid November for the initial drawdown. I hope the above meets your requirements.”

  1. That letter thus confirmed that, in respect of the proposed Balman transaction, any commission was to be paid on draw down of the first tranche of the loan and that any approval of finance was to be unconditional. Although the letter states that the payment is “for unconditional finance approval” and not for procuring a loan, its content is more consistent with the defendant’s case than the plaintiff’s. It was not part of the plaintiff’s case that the terms of the alleged retainer were altered in respect of the Balmain transaction.
  1. Both parties do not suggest that part of the $500,000 represented commission payable in respect of the Bank West loan. But the fact that the letter is silent about any commission entitlement in respect of the Bank West transaction is, in my view, significant. It would have been apparent to the parties at the date of the letter that the only realistic source of funding for the payment by the defendant of a large sum of money would have been the Balmain transaction or some transaction in its stead.
  1. The evidence, however, is not entirely one way. In early September 2002, Saccuzzo Larsen prepared a Business Activity Statement for the defendant and included in it an amount of $220,000. The plaintiff contends that this figure comprises $210,000 on account of commission in respect of the Bank West transaction and $10,000 for management fees in relation to management services the plaintiff was to provide for the defendant with a view to their recoupment by Mr Seirlis in a personal injuries action.
  1. On 12 September 2002 the defendant paid Ruldina $20,000 on account of GST. The plaintiff asserts that this represented a reimbursement of GST payable in respect of its commission of $210,000. $20,000 is not 10% of $210,000. Mr Canzoneri ventured an explanation for the discrepancy but I do not accept his explanation.
  1. The defendant claims that the whole of the $220,000 was in respect of the provision of management services by the plaintiff. It is common ground between the parties that at the time of the inclusion of this sum in the BAS statement, negotiations concerning an agreement for the provision of such services had lapsed and no agreement had been entered into. The defendant’s contention therefore does not seem plausible. But the fact that there was no agreement and that no such services were provided did not prevent Mr Canzoneri, through Mentrall Pty Ltd from completing an invoice for them dated 28 June 2002 in the sum of $824,175.00. Mr Canzoneri explained the invoice as a prepayment of project management fees but the invoice is expressed to be for “… fees and charges in attending to the project management as per our agreement”.
  1. The defendant’s 2002 accounts prepared by Sacuzzo Larsen contain an entry “borrowing costs of $210,000”. Mr Seirlis signed as correct a copy of the accounts containing this entry. He later contended that the accounts were erroneously prepared and that he had given them to other accountants to be reviewed.
  1. These financial materials are not, however, entirely unequivocal. The Bank West offer of finance was received on 2 July 2002. If the plaintiff’s contentions as to the incurring of the liability to pay commission are to be accepted, the BAS statements for July and August, which were prepared on an accruals basis, should have contained provision for the commission. They did not. Also, Saccuzzo Larsen prepared a financial statement for the defendant after this time which did not disclose any such commission as a liability.
  1. An unexplained aspect of the plaintiff’s case is why, if there was an obligation on the defendant to pay commission on notification of an offer of finance, the commission was not $371,200[1].  A possible explanation, although I do not recall any witness advancing it, is that tranche A for $8,150,000 represented a replacement of an existing loan.  Even so, one wonders why commission would not have been payable on that sum, a considerable portion of the proposed Balmain loan was to replace existing Bank West borrowings.  On Mr Canzoneri’s version of events, he told Mr Seirlis that $210,000 was owing in respect of the Bank West transaction before the Deed of Charge was signed.  He does not suggest that anything was said about the basis of calculation.  It will be apparent also that $210,000 is not 2% of tranche B which was to be $10,410,00
  1. The plaintiff claims that on 28 June 2002 it raised invoices to the defendant in respect of this liability and that Mr Amore delivered them to the defendant. One of the alleged invoices was on the plaintiff’s letterhead for “Finance with Bankwest” in the sum of $159,620. The other, on the letterhead of Ruldina Investment Pty Ltd in the sum of $55,000, for was “… Professional fees and charges in attending to various consultants from January 2002 to 31 May 2002”. Mr Seirlis denied receiving these invoices and I accept his evidence. It is likely that they were not produced until well after the dates they bear. These findings are far from helpful to the plaintiff given the insistence by its witnesses that the parties’ bargain was that commission became payable immediately on notification of loan approval whether conditional or unconditional.

The events surrounding the entering into stamping and registration of the Deed of Charge.

  1. The execution of the deed of charge by the defendant is relied on by the plaintiff to support its case that commission was payable under the alleged retained upon notification of loan approval. Because of the defendants’ counter claim and the declaratory relief sought by the plaintiff in relation to it, the evidence surrounding its signing, stamping and registration merits particular scrutiny.
  1. Mr Seirlis’ evidence in this respect is that he was told in early 2002 by Mr Amore that Saccuzzo Larsen required an agreement with him concerning “future brokerage for the Mt Gravatt construction”. Some days later, Mr Amore told him that an agreement had been prepared at the office of Noel Barbi solicitor, that he was required to pay approximately $2,000 on account of costs and stamp duty, and that the agreement was needed by the plaintiff to continue with the finance applications.
  1. Mr Seirlis attended Mr Barbi’s office on 8 October 2002 when he was presented with an engrossment of a document headed “Deed of Charge”. He perused the document and signed it believing that he did so pursuant to an arrangement reached with Mr Canzoneri at a meeting on 8 August 2003. At that meeting, Mr Canzoneri spoke to him about the proposed project management arrangement and suggested that the defendant execute a charge in favour of Saccuzzo Larsen which would be used only if the defendant got into financial difficulties. Furthermore, Mr Canzoneri explained that the document would be registered only if the defendant agreed and its effect would be “to give Saccuzzo Larsen and through it (the defendant) a form of control in the event your projects get into difficulty”.
  1. Mr Canzoneri gave a quite different version of the way in which the security came about. He swears that on 8 August 2002, after meeting with representatives of Bank West, he, Mr Seirlis and Mr Amore met at the Sheraton Hotel. Mr Canzoneri told Mr Seirlis that the plaintiff was owed money and that he (Mr Canzoneri) wanted security for its payment. He asked Mr Amore to arrange the security and in October he continued to press Mr Amore to do that. Mr Amore swears also that at the meeting at the Sheraton on 8 August Mr Canzoneri “raised the prospect of a deed as security over the project for the payment of our fees” and Mr Seirlis agreed to it “straightaway”. He then spoke to Mr Barbi, asked him how the plaintiff could secure its fees and was advised to take a charge over the assets of the defendant, Mr Seirlis’ family trust and of Mr Seirlis.
  1. I did not find the evidence of either Mr Canzoneri or Mr Amore in relation to the deed of charge convincing.
  1. On 27 November, Mr Barbi wrote a letter addressed to Mr Amore and Mr Seirlis confirming that the deed of charge had been executed and stating –

“I refer to the advices of Mr Amore on 27th  November 2002 that you do not yet wish the documents to be assessed for stamp duty or registered with the Australian Securities and Investments Commission.”

  1. In the letter it was pointed out that there would be stamp duty penalties if the duty was not assessed within one month of execution and that should the charge not be registered there was a risk that the effectiveness of the charge, against third parties would be diminished. Mr Amore’s explanation for instructing Mr Barbi that he did not want the charge registered was “Because I was flying from Melbourne to Sydney regularly because my dad was in hospital” and that the last thing on his mind was the deed of charge. I accept that Mr Amore was distracted by his father’s illness, but I do not accept that this distraction had anything to do with the stamping or registration of the deed.
  1. On 26 February 2003, Mr Barbi wrote to Messrs Amore and Seirlis informing them that on 27 February they would both be exposed to stamp duty penalties and noting that he held $960 in his trust account. He said that he proposed refunding the money unless he was given instructions for the documents to be stamped and registered. It is highly likely that Mr Amore received a copy of this letter and that he knew that the charge had not been registered.
  1. On 27 February 2003, Mr Seirlis wrote to Mr Barbi asking for a refund of the monies held in his trust account and stating –

“I have spoken with Vincent Amore about the outstanding funds. Please do not proceed with stamping and registering the deed. If you could please refund the monies held in your trust account addressed to myself at the above address.”

  1. The monies in the trust account were refunded that day and I find that Mr Amore was probably aware of this. It is unlikely that Mr Barbi’s office would have released the monies without the consent of the entity on behalf of whom the monies were held.
  1. On 28 February 2003 Mr Barbi’s office sent Mr Seirlis for signature on behalf of the defendant a Notification of Details of a Charge form. It described the liability secured by the charge as –

“Payment for financial consultancy services to Terry Seirlis constructions Pty Ltd, Terry Seirlis and the Terry Seirlis Family Trust.”

  1. The document contained a notation that a duly completed certification of compliance with stamp duty law accompanied the form. A separate certificate, also sent to Mr Seirlis by Mr Barbi’s office for signature, certified that the deed had been duly stamped.
  1. The deed was stamped 20 March 2003 with the notation “Queensland duty not payable”. I infer from that that the Commissioner of Stamp Duties was formally advised that, at the time of stamping, no present indebtedness was secured by the deed.
  1. Neither Mr Barbi nor anyone from his office who was concerned with the stamping of the deed or the giving of instructions in that regard by Mr Amore and Mr Seirlis was called to give evidence.
  1. The deed itself recited that the plaintiff was providing “certain financial consultancy services to the mortgagor” and that the defendant would pay to the plaintiff “fees for the services supported by tax invoices … and the parties have agreed that the liability of the defendant to the plaintiff to pay the said tax invoices is secured inter alia by these presents”. Clause 1 of the deed provided, inter alia –

“(The defendant) HEREBY COVENANTS with the Mortgagee that the Mortgagor will pay or cause to be paid to the Mortgagee –

(a) the sum of $210,000 plus 2% of all transactions negotiated by   the parties.”

The word “transactions” in that clause plainly means transactions of loan which have been procured by the plaintiff but the sum of $210,000 appears to be linked to “provision of certain financial consultancy services.”

  1. The plaintiff alleges in the statement of claim that the sum of $210,000 was payable under the alleged retainer but it was not alleged that the sum was due and owing under the deed or that there was estoppel by deed. If such allegations had been made they could have been met by a rectification claim.
  1. The refunding of monies paid on account of stamp duty and the way in which the deed was stamped support the conclusion that Mr Amore and Mr Seirlis did not understand commission of $210,000 to be owing either when the deed was executed or when the refund was made.
  1. It is possible that the $210,000 figure in the deed represented commission in respect of the Bank West transaction. By the time the deed was executed the bank had purported to terminate the facility. The defendant however was pursuing a claim against the bank for specific performance and there remained the possibility that finance would be forthcoming and commission in respect of it would become payable in accordance with the agreement between the parties. I do not accept however that there was ever an agreement or understanding that the sum be paid regardless of whether the Bank West transaction proceeded.
  1. Mr Seirlis’ evidence to the effect that he did not contemplate that the sum of $210,000 was due and owing at the time of execution of the deed is supported by the fact that no mention of an obligation in this regard was made in statements and affidavits prepared by him in connection with the proceedings against the bank. I also consider that it would have been quite out of character for Mr Seirlis to agree to pay commission regardless of whether the loan in respect of which it was payable was made.

Conclusions as to the terms on which commission was payable

  1. The plaintiff’s case suffers from the grave disadvantage that the evidence of its principal witnesses lacks credibility. There is some objective evidence which supports the plaintiff’s case but it is heavily outweighed by evidence which does not. Even the references to the $210,000 in BAS statements and financial documents prepared by Saccuzzo Larsen are capable of being considered in a light which diminishes or removes their support for the plaintiff’s case. After 30 June 2002 the defendant accounted for GST on an accruals basis and the evidence suggests that the defendant and its accountants would have been all too ready to make and persist in premature claims.
  1. For the above reasons I am not satisfied that it was a term of any agreement between the parties that commission be payable on notification of approval of finance. Nor am I satisfied that the sum of $210,000 referred to in the deed of charge was, as the plaintiff contends, commission due and owing in respect of the Bank West transaction. I am not satisfied either that the sum was understood by either party to be a sum due and owing by the defendant to the plaintiff.

No implication of term by custom or usage.

  1. It is contrary to the plaintiff’s case that things were said which created a liability to pay commission on acceptance by the plaintiff of an offer of loan. Its alternative case is that such a term is to be implied by custom.
  1. No basis for the implication of such a term through custom or usage was made out on the evidence. In order to succeed in this respect the plaintiff had to establish that the term alleged was “notorious, certain, legal and reasonable”.[2] Mr Seirlis denied knowledge of any such term being imposed by finance brokers as a matter of course. It is inconsistent with the terms of the plaintiff’s agreements with Mr Terry Seirlis and Mr Lawson and also with the plaintiff’s own printed documentation.
  1. Not surprisingly, the evidence of Mr Unwin, a retired finance broker called to give evidence in support of the implied term, fell short of showing that the alleged term was “notorious”. He said that most “mandates” of which he was aware provided for acceptance of payment of the broker’s fee out of the loan monies. He also stated that “unless your mandate gives you the right to charge for the work done” “the basis terms in the industry, it is a success fee”. In other words, the broker is paid if the loan is procured and drawn down.

The Balmain application

  1. Mr Amore, on behalf of the defendant, applied to a finance broker, Balmain, for finance in the sums of $11,979,000 and $8,800,000. On 17 October 2002, Mr Amore emailed to Mr Seirlis a document on the letterhead of Balmain, addressed to Mr Amore, headed “Indicative funding proposal”, which stated –

“We refer to our recent conversations and now have pleasure in providing you with a preliminary outline of different funding options which Balmain nb Commercial Mortgages Limited can provide in the refinance and continued construction of the above borrower’s projects at Yeronga and Mt Gravatt.

Please note that these options/terms are only indicative and detail outlines in which under which we believe funding can be provided. You must not rely on being granted finance until a formal Letter of Offer has been issued and accepted by you. …”

  1. There was an acceptance form with the document which called for payment of an application fee of $10,000. Mr Seirlis signed the form and on about 25 October 2002 returned it to Balmain with a cheque in that amount. He also prepared costings on the defendant’s projects at Pargon Street and Tryon Street and sent them to Mr Canzoneri under cover of a letter of 24 October 2002.
  1. Mr Seirlis received a letter dated 1 November 2002 from Balmain which contained the reference “Garden Terraces”, 80 Tryon Street, Upper Mt Gravatt. It provided –

“Further to your instructions, we are pleased to confirm that we have arranged an approval in principle for the development of the above project.

We are currently finalising the facility details and look forward to presenting a formal approval letter on Monday 4 November 2002 for your consideration. …”

  1. The next letter from Balmain, dated 4 November 2002, was headed “Terms of approval”. It referred to a mortgage advance of $11,979,000 and provided –

“As discussed, we are currently finalising an offer in terms of funding proposal, however we are pleased to confirm that we have arranged an approval in principle for a facility in the sum of as requested. The intending mortgagee is Secured Mortgage Management Limited and the terms of the approval in principle are contained in the attached letter of offer. …”

The letter was signed by Mr Luke McKenzie.

  1. Attached to the 4 November letter was a document on the letterhead of Secured Mortgage Management Limited dated 4 November 2002 addressed to “Balmain NB”. It referred to a “total facility” of $11,979,000 and provided, inter alia –

.We are pleased to advise that based on information provided to date, your application for a loan has been approved in principle.

… This letter does not constitute a legally binding agreement to lend and we reserve the right to withdraw for any reason with no liability to us for any resultant cost, damage or loss …”.

  1. There were some further exchanges of documents and negotiations. On 7 November 2002, Mr McKenzie, in a fax to Mr Amore, stated –

“Vince I have spoken to Terry however he wants me to come back with ‘best offer’ tomorrow. Please call to discuss.”

  1. On that date, Balmain sent a further loan approval letter to the defendant in respect of facilities for $11,979,000 and $8,800,000 respectively. It stated –

“We are pleased to confirm that we have arranged approval in principle for the above properties in the sums as requested. The intending mortgagee is Secured Mortgage Management Limited and the terms of the approval in principle are contained in the attached letter of offer.”

  1. The attached letter of offer from Secured Mortgage Management Limited was relevantly identical in its terms to that referred to earlier. A further such letter dated 13 November 2002 was delivered by Balmain to the defendant.
  1. Mr Amore and Mr Seirlis then met with Mr McKenzie on 14 November 2002. At the meeting, Mr Seirlis expressed dissatisfaction with the proposed interest rate, amongst other things, and asked if the lender could do better. The meeting concluded without agreement between the parties. Later in the day, Mr Seirlis sent emails to Mr Amore and Mr McKenzie enclosed a revised cash flow.
  1. Within the next few days, Mr Seirlis concluded that Balmain would be unable to obtain from Secured Mortgage Management an offer on better terms and requested a refund of his application fee. That was refunded by Balmain on 19 November 2002.
  1. Mr Canzoneri swears that in about the middle of October 2002, he had a lengthy telephone conversation with Mr Seirlis in which he discussed the Balmain funding proposal with him in great detail. In the course of that conversation, according to Mr Canzoneri, Mr Seirlis said that he agreed to the proposal and wished to proceed with it. Mr Canzoneri then informed Mr Seirlis that he would need to pay the loan application fee. He asked Mr Amore to inform Balmain that the approval was satisfactory. Balmain then issued its approval letter of 13 November 2002.
  1. It will be recalled that Mr Seirlis paid Balmain’s application fee of $10,000 on or about 25 October 2002.
  1. In cross-examination Mr Canzoneri resiled from his written evidence to the effect that the conversations concerning the defendant’s approval of the application took place in mid October 2002, well prior to the approval letter dated 13 November 2002.
  1. Mr McKenzie, the agent of Balmain with whom the parties dealt in relation to the proposed loan, said of the state of negotiations on 4 November that “there needed to be a lot more work put into it… There was a lot more information required and due diligence process”.
  1. He said, in effect, that the deposit of $10,000 was returned to the defendant because Balmain had not been able to deliver what it had promised in the initial negotiations.
  1. Mr McKenzie recalls a conversation with Mr Canzoneri one evening concerning the proposed loan. His recollection, however, is that it occurred well before 13 November and was part of an attempt by Mr Canzoneri “… to bulldoze me through to make sure they got a conclusion”. His recollection is that at the time of the conversation he was still in the process of eliciting information with a view to “change the structure of the transaction”.
  1. Mr Amore swore that after the receipt of the approval letter of 13 November he was told by Mr Seirlis to accept it and that he communicated the acceptance to Mr McKenzie by telephone. This evidence is inconsistent with that of Mr McKenzie, as is Mr Amore’s assertion that at the meeting with Mr McKenzie on 14 November there were mortgage documents “on the table for Terry to sign”.
  1. I prefer the evidence of Mr McKenzie to that of Mr Canzoneri and Mr Amore. I am not satisfied that Mr Seirlis, on behalf of the defendant, ever accepted any offer of loan by Balmain. Nor am I satisfied that Mr Seirlis communicated to either Mr Canzoneri or Mr Amore his approval of any proposal put forward by Balmain.
  1. Balmain’s offer of loan of 13 November was still described as an “approval in principle” and the accompanying terms made it plain that Secured Mortgage Management reserved the right to withdraw from the transaction at any time.
  1. The defendant incurred no liability to pay commission in respect of the Balmain transaction. No offer of loan was accepted by the defendant, no loan was made and the last “offer”, even if accepted, may not have resulted in a legally binding agreement. There was certainly no unconditional loan approval.

The Bank West Approval of Finance

  1. On 27 June 2002 the bank, by its commercial banking manager Mr Kelly, informed Mr Seirlis in a facsimile transmission that the bank had approved finance and was arranging for its solicitors to prepare “the formal letter of offer document”.
  1. The formal offer was made by the bank in a letter of 2 July 2002 and accompanying documents. Tranche A of the proposed loan was for $8,150,000 in respect of the defendant’s Paragon Street property. Tranche B, for $10,410,000 was in respect of the defendant’s Tryon Street development. The offer was accepted.
  1. On 9 August 2002 the bank wrote to the defendant setting out the conditions of loan which had been satisfied and those which, in the view of the bank had not.
  1. Mr Seirlis verbally asked the bank for an update of the position in relation to satisfaction of the terms and conditions of loan. The bank responded by a letter of 22 August 2002 in which, amongst other things the bank required –
  1. Certification of certain matters by a quantity surveyor;   
  1. The builder to provide an unconditional guarantee in favour of the borrower for a minimum of 5% of the building contract; and
  1. Certification by the bank’s solicitors that pre-sale contracts to Australian residents for the Tryon Street development for a minimum of $8,000,000 had been entered into, that such contracts were unconditional and that 10% deposits were held.
  1. Another such letter in response to a further oral request “for an update on satisfaction of conditions precedent” was sent by the bank on 30 August 2002. That letter stated the conditions referred to above remained outstanding.
  1. Mr Seirlis wrote to Mr Kelly of the bank on 4 September 2002 purporting to confirm a statement by Mr Kelly that the finance was approved conditionally. Mr Kelly responded stating that the approval was not unconditional and that he had advised Mr Seirlis in a telephone conversation the previous day that the bank’s credit manager was looking into the matter.
  1. On 5 September 2002 the defendant’s solicitors wrote to the bank threatening an action for specific performance if finance was not provided. On 9 September 2002 the bank’s solicitors wrote to the defendant’s solicitors asserting “… the conditions precedent to approval of finance had not yet been satisfied”. The defendant commenced proceedings against the bank on 23 September 2002 seeking a declaration that the outstanding condition of the bank’s loan approval had been satisfied and an order for specific performance.
  1. The bank’s solicitors in a notice dated 3 October 2002 gave notice of default of the facility terms accompanying the letter of offer and terminated the bank’s obligation to provide financial accommodation.
  1. No obligation to pay commission in respect of this transaction arose because the loan was not drawn down. Mr Seirlis contended that he and not the plaintiff procured the offer of loan and that no commission would have been payable had the loan been drawn down. I do not accept that the plaintiff did not procure the offer but that finding does not assist the plaintiff.

The implied term that the defendant would do all things necessary on its part to enable the plaintiff to have the benefit of the retainer.

  1. The existence of the implied term is admitted in the defence. The breaches of the term alleged in the statement of claim are that –
  1. the defendant accepted Bank West’s offer of loan on or about 2 July 2002;
  1. Mr Seirlis altered the Jones & Company letter to Bank West, as a result of which Bank West withdrew its offer of funding;
  1. the Balmain loan approval offer was accepted by Mr Seirlis in a telephone conversation with Mr Amore on or about 13 November 2002;
  1. on 14 November 2002 Mr Seirlis refused to execute the loan documentation prepared pursuant to the oral acceptance referred to above, sought to renegotiate the terms of the offer whereupon Balmain withdrew its offer of finance.
  1. In view of the above findings, the allegations in relation to the Balmain transaction cannot be sustained. Nor has it been established that Bank West withdrew its loan offer as a result of the Jones & Company letter. No officer of Bank West was called to give evidence to support that allegation and there is some evidence that the loan offer was withdrawn on the grounds that the requirements of clauses (h) and (k) of the loan offer were not fulfilled. Consequently, if the defendant was in breach of the implied term, the bank was not shown to have had any causative effect.
  1. On 9 August 2002, after the bank became aware of the unauthorised letter, the officer of the bank having the conduct of the loan application wrote to Mr Seirlis indicating, by necessary implication, that the bank was proceeding with the loan. In another letter the same day, the manager wrote to Mr Seirlis setting out those conditions of loan which in the bank’s view were satisfied and those which were not.
  1. The evidence shows that Mr Seirlis was anxious to ensure that the Bank West loan was made. The alteration of Mr Jones’ company letter was a manifestation of that anxiety. It is thus even doubtful that the conduct complained of constituted a failure by the defendant to do all things necessary on its part to enable the plaintiff to have the benefit of the retainer. But, in any event, the allegations lack evidentiary support and cannot be sustained.

Summary of Conclusion in respect of the plaintiff’s claims

  1. The plaintiff’s claims for commission and for damages for breach of contract fail for the reasons given above.
  1. The deed of charge does not secure the payment of any monies claimed by the plaintiff and it is thus inappropriate to make the declaration sought by the plaintiff.
  1. There will therefore be judgment for the defendant on the plaintiff’s claim with costs.

The defendant’s counter claim

  1. The defendant claims –
  1. compensation pursuant to s 130 of the Land Title Act 1994 for damages sustained as a result of  lodgement by the defendant of a caveat over the land;
  1. exemplary damages;
  1. a declaration that the deed of charge is a nullity;
  1. an order that the deed of charge and all copies of it be delivered up and cancelled;
  1. costs on an indemnity basis.
  1. The caveat was removed by order of the court made on 12 June 2003. The defendant’s argument seems to be that it was agreed between the parties that the deed be held in escrow pending the creation of a debtor-creditor relationship between the plaintiff and the defendant. It is further argued that as no such relationship came into existence after the signing of the deed it should not have been registered and was also of no force and effect. It is also argued that it is not supported by consideration.
  1. The consideration for the deed is plain on its face. It is given, in consideration inter alia of the plaintiff agreeing to provide services to the defendant.
  1. I have already found that at material times there was no present indebtedness of the defendant to the plaintiff secured by the deed. It does not follow though that the deed was invalid. It was argued that it was a sham or nullity but the evidence does not support that conclusion.
  1. I have a suspicion that the deed was entered into as part of an arrangement between the parties calculated to thwart the interests of creditors such as Bank West. The evidence, however, does not permit me to make a finding to that effect. I accept that the evidence points to some understanding between the parties as to registration of the deed but as I do not accept the evidence of any witness on either side concerning that arrangement, I am unable to make findings as to its content. In particular, I am unable to find that there was an agreement that registration not take place without the consent of Mr Seirlis. Nor am I able to find that the deed was held in escrow.
  1. The defendant’s argument that the plaintiff had no caveatable interest proceeded on the assumption that the deed of charge lacked contractual force throughout. I have not accepted the correctness of that premise. But even if the plaintiff could show a caveatable interest it was not in a position at any time to resist removal of the caveat and nor is it in a position now to refuse to release the deed of charge. I thus find that the caveat was continued without reasonable cause.
  1. No argument was addressed to me on the relief sought in respect of the caveat beyond the written submission –

“It is submitted that the defendant has proved the factual basis for all the relief claimed in the counter claim.”

  1. Paragraph 20 of the counter claim alleges that $957.72 on account of legal costs and a further sum of $4,462.96 “additional legal fees incurred by Argus Group Pty Ltd and George Taeber Management Pty Ltd” were incurred as a result of the caveat but I am not satisfied that this is established by the evidence. It may be that paragraph 192 of Mr Seirlis’ statement of evidence refers to some evidence upon which the defendant can rely to recover some or part of the claim. The references provided in that paragraph though are not to pages in the agreed bundle of documents and I was unable to locate the documents concerned. No reference was made to them in addresses. But then the address on behalf of the defendant was mainly concerned with an attack on the plaintiff’s pleadings and an attempt to establish that the plaintiff’s claim could not succeed in whole or on part if the agreement or agreements on which the plaintiff needed to rely in order to succeed were not strictly within its particularised case. The plaintiff’s pleaded case was open to criticism in many respects but it did not appear to me, at any stage, that if the plaintiff’s claims had merit there would be any prejudice to the defendant in giving leave to the plaintiff to amend its pleadings to conform to the evidence. As it turned out the plaintiff’s claims were unmeritorious.
  1. I decline to make an award of exemplary damages or an order for costs on an indemnity basis. No case has been made out for either of these claims. Nor does it seem to me to be necessary to make any order on the counter claim apart from the order that the plaintiff pay the defendant’s costs of and incidental to the counter claim to be assessed on the standard basis.


[1] 2% of $18,560,000

[2] Majeure Carrying Co Pty Ltd v Coastal Rutile Pty Ltd (1973) 129 CLR 48 at 61.


Editorial Notes

  • Published Case Name:

    United Finance Services P/L v C & E P/L (formerly Terry Seirlis Constructions P/L)

  • Shortened Case Name:

    United Finance Services Pty Ltd v C & E Pty Ltd

  • MNC:

    [2004] QSC 46

  • Court:


  • Judge(s):

    Muir J

  • Date:

    18 Mar 2004

Litigation History

No Litigation History

Appeal Status

No Status