Memery v Triolgy Funds Management [2012] QCA 160

A lender sued a borrower for a loan application fee, in relation to a loan that was not actually advanced because the borrower elected not to proceed with the loan. The lender won. The borrower appealed arguing that the fee was only payable upon the loan being made.

The appeal turned on the interpretation given to the facility letter.

The facility letter expressly provided that all fees would be “payable immediately upon demand if the loan proceeds or does not proceed as a result of the borrower’s default or withdrawal”. The Appeal Court found the borrower liable to pay the application fee. The court rejected the borrower’s argument that the borrower should not be found liable because these terms were so unusual or surprising. The Appeal Court also found that the lender’s conditional obligation to use its “best endeavours” to advance the loan in all circumstances except certain particular circumstances was valid consideration, for the borrower’s obligation to pay the application fee. It was not a case where the lender had reserved its right to withdraw its loan offer at any time for any reason, and so there was no contract.

Click here for full judgment.

Scroll to Top