Data

Date:: 20-05-2026
Country:: Australia
Number:: [2026] FCA 623
Court:: Federal Court of Australia
Parties:: Angelis v CP Pty Ltd (No 2)

Keywords

LOAN AGREEMENT - BETWEEN AN AUSTRALIAN INDIVIDUAL AND AN AUSTRALIAN COMPANY - REFERENCE TO UNIDROIT PRINCIPLES AND CISG AS MEANS OF INTERPRETING APPLICABLE DOMESTIC LAW (AUSTRALIAN LAW)

INTERPRETATION OF CONTRACT - SUBSEQUENT CONDUCT OF THE PARTIES - RELEVANT CIRCUMSTANCES IN ORDER TO AFFIRM CONTRACT FORMATION - REFERENCE TO ARTS. 4.1-4.3 UNIDROIT PRINCIPLES

Abstract

The case concerned a dispute between an Australian individual (Appplicant) and and an Australian company (Respondent) over the validity of a security interest registered by the latter on the Australian Personal Property Securities Register (PPSR).

The applicant argued that no binding loan agreement had ever been concluded with Respondnet and therefore sought the removal of Respondent’s registered security interest.

On its turn, Respondent, which provided approximately AUD 6.8 million to refinance the Applicant family’s debts and prevent the sale of the his pharmacy business, maintained that these funds were advanced pursuant to a loan agreement secured by mortgages and a general security agreement over the pharmacy business.

The applicants contended that they believed the funding was coming from other financiers and denied having agreed to grant security to Respondent.

The Court therefore had to determine whether, objectively assessed through the documents, communications and subsequent conduct of the parties, a binding loan agreement had been formed.

In this respect, the Court referred to the UNIDROIT Principles of International Commercial Contracts (2004) in the context of the admissibility and relevance of post-contractual conduct when determining whether a contract was formed and when it came into existence.

Justice Derrington cited the observations of Allsop P in Franklins Pty Ltd v Metcash Trading Ltd (2009), noting that Australian jurisprudence contains ongoing debate regarding the scope of the rule governing the use of subsequent conduct in contract law. Allsop P suggested that some of these difficulties could be resolved if Australian law were to adopt the UNIDROIT Principles, particularly Articles 4.1 to 4.3, which allow broader consideration of surrounding circumstances in the interpretation and assessment of contractual relations.

Importantly, the judgment emphasizes that, regardless of the debate concerning contractual interpretation, later conduct remains relevant for other purposes, including determining whether a contract was formed and when formation occurred, providing evidence of relevant surrounding circumstances and supporting claims such as rectification, estoppel, or other legal and equitable remedies.

In her conclusions, Justice Derrington held that a binding agreement had in fact been reached between the Applicant's family and Respondent since the essential terms were sufficiently certain: Respondent was the lender, the Applicant's family were the borrowers, the loan amount was at least AUD 3.8 million (later supplemented by further funds), and the security included mortgages and a PPSR-registered security interest over the pharmacy business.

The Court concluded that the applicants had failed to prove that no security interest existed, while Respondent had successfully established the existence of the alleged agreement through contemporaneous documents and the parties’ subsequent conduct. Consequently, the application to remove the PPSR registration was dismissed.

Fulltext

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Source

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