Preheat Oven & Grease Pan: Preheat the oven to 356ºF (180ºC) fan-forced. Grease an 8×8 inch square baking pan with butter and line with parchment paper.
Note: For non-stick pans, line the base with parchment paper and grease just the sides with butter and dust with flour for smooth cake sides. Set aside.
Prepare the Milk: Pour the white vinegar into a 1-cup (240 ml) measuring cup. Pour in the milk and stir with a spoon until well combined. Let the mixture sit for 5 minutes while you continue with the batter, no longer. This allows the milk to slightly curdle, giving it a buttermilk-like texture and tangy flavor. Use the milk mixture when adding the liquids to the batter.
Mix Dry Ingredients: In a medium-sized mixing bowl, sift together the flour, cornstarch, baking powder, baking soda. Add the salt and whisk until well combined. Set aside.
Cream Butter & Sugar: In a separate large mixing bowl, using an electric hand mixer or stand mixer with the paddle attachment, add the softened butter and sugar. Beat for 1 minute until pale and creamy, scraping down the sides as needed.
Add Eggs: Add the two whole eggs one at a time, beating for 10 seconds after each addition. Add the egg yolk and beat for a further 10 seconds until well combined. Scrape down the sides of the bowl.
Add Liquids: Pour the prepared milk-vinegar mixture into the batter along with the oil and vanilla extract. Beat on low-medium speed for 15 seconds until just combined.
Combine with Dry Ingredients: Add half of the dry flour mixture to the wet batter and beat until just combined, leaving some flour visible. Add the remaining flour and beat on low speed until just incorporated. Ensure not to over-beat; once the flour is combined, turn off the mixer. If some excess flour is still visible around the sides of the bowl, gently fold it in with a spatula. Over-beating can make the cake tough and dense.
Prepare for Baking: Pour the batter into the prepared pan and smooth the top with a rubber spatula.
Bake: Bake for 30–33 minutes, or until a skewer inserted into the centre comes out clean.
Cool: Allow the cake to cool in the pan for 15 minutes, then carefully transfer it to a wire rack to cool completely before frosting.