BANKWEST A DIVISION OF COMMONWEALTH BANK OF AUSTRALIA -v- MANN [No 4] [2018] WASC 370 (30 November 2018)

(4) is liable to give and deliver up possession of land under a mortgage securing the First and Second Home Loans and other borrowing.

1. The defence to the claims is substantially based on relief available under the Australian Consumer Law. Mr Mann raises his own claims against the Bank by counterclaim.
2. In 2015, an application by the Bank for summary judgment was dismissed and Mr Mann was given unconditional leave to defend the claim.
3. In 2017, after the Bank had amended and, to a degree, simplified its claim, the Bank proposed an application which it submitted would resolve the proceedings by separately deciding the claim in relation to the first home loan only. The common expectation is that Mr Mann could not satisfy judgment for that amount.
4. In May 2017, on the application of the Bank, I struck out parts of the defence - in effect, striking out paragraphs by which Mr Mann challenged the validity of the First Home Loan and mortgage.[1] I did not exclude Mr Mann being permitted to replead, but made orders for a process to be followed should Mr Mann seek to replead.

The application to determine separate questions

1. Although described as preliminary questions, the application is in substance to separate one part of the claim which might be separately determined. The questions are:
   1. Does an amount remain outstanding from Mr Mann to Bankwest in respect of the first home loan? If so, how much?
   2. Does any liability on the part of Mr Mann depend on Bankwest making a demand for payment? If the answer is no, is Mr Mann obliged to make payment of the outstanding amount under A21.1 of the first home loan and 3.1 of Mr Mann's mortgage to Bankwest? If the answer is yes, did Bankwest make a valid demand for payment?
   3. Do clauses A15.7 of the first home loan or 9.2(a) of Mr Mann's mortgage (or both) preclude Mr Mann from advancing any of the claims against Bankwest included in his second substituted counterclaim dated 21 October 2016 and the amended substituted defence dated 9 January 2017 until payment is made to Bankwest of the total amount outstanding under the first home loan?
2. The substituted defence was further amended, but the essential questions remain the same.

1. Although the trial of the separate questions was directed to the First Home Loan only, it is necessary to outline the claim as a whole.[2]
2. The Bank pleads that defendant was at all material times a director of:

1. The Bank and Prodale entered a facility agreement (First Advance Facility) in January 2006, under which the Bank advanced a fixed interest rate loan to Prodale for the purpose of Prodale acquiring a property (the Victoria Street Property). The First Advance Facility was secured by a mortgage over the Victoria Street Property, and a registered fixed and floating charge.[4]
2. On 19 January 2006, Mr Mann executed a small business and consumer guarantee and indemnity whereby he guaranteed and indemnified the Bank in respect of Prodale's obligations, including those under the First Advance Facility (the Guarantee).[5]
3. The terms of the First Advance Facility were varied and replaced in their entirety on or about 18 December 2008; on 1 November 2010; and on or about 18 April 2011.[6]
4. Mr Mann executed guarantor's acknowledgements in respect of each variation in the First Advance Facility.[7]
5. The Bank and Prodale entered a facility agreement in December 2007, under which the bank advanced a commercial facility loan for the purpose of Prodale acquiring a hotel freehold and business and a neighbouring nightclub.[8]
6. On or about 27 June 2008, the Bank and Prodale agreed to vary and replace the terms of the facility so that it comprised a commercial advance facility (the Second Advance Facility), and an additional business cheque account overdraft facility.[9]
7. The Second Advance Facility was secured.[10]
8. The terms of the Second Advance Facility were varied and replaced on or about 17 December 2008; on or about 18 October 2010; and on or about 18 April 2011.[11]
9. On each occasion, Mr Mann (and others) executed guarantor's acknowledgements.[12]
10. For the purposes of the present application, I do not need to consider the terms of the First and Second Advance Facilities or the Guarantees, or the plea regarding default in relation to the facilities.
11. The Bank also pleaded two home loans. This application is primarily concerned with the earlier, referred to as the First Home Loan. The defining of that term should not mislead. Mr Mann signed a 'Business Purpose Declaration' on his acceptance of the Bank's offer, thus declaring that the credit was to be applied 'wholly or predominantly for business or investment purposes'.[13]
12. These material facts were pleaded regarding the First Home Loan - the subject of this application:

(1) On or about 24 February 2006, the Bank offered to provide Mr Mann with financial accommodation in the form of a loan in the total sum of $200,000 (First Home Loan).[14]

(2) After 24 February 2006, Mr Mann executed the First Home Loan Agreement.[15]

(3) The Bank advanced funds to Mr Mann pursuant to the First Home Loan Agreement.[16]

(4) The First Home Loan Agreement incorporated the terms contained in a schedule entitled 'Home Loan Terms and Conditions April 2005' and included terms with respect to:

(a) the rate of interest payable by Mr Mann;[17]

(b) the term of the loan and minimum monthly repayments;[18]

(c) the First Home Loan was to be repaid in accordance with its terms;[19]

(d) the security for the First Home Loan by a mortgage over property in Mandurah;[20]

(e) when interest charges would be debited to the Loan Account.[21]

1. Importantly for the present application, the Home Loan Terms and Conditions included a condition that, except to the extent Mr Mann has a right of set off granted by law which the Bank cannot exclude by agreement, Mr Mann is obliged to pay all amounts in full without setting off amounts Mr Mann believes the Bank owes him and without counterclaiming amounts from the Bank.[22]
2. The Home Loan Terms and Conditions also included the common term that, if Mr Mann breached any term or condition of the First Home Loan Agreement or Security he must pay to the Bank the enforcement expenses reasonably incurred by the Bank or its agents.[23]
3. Mr Mann agreed that;

(a) a certificate signed by a Bank officer was admissible evidence of any fact or matter stated in the certificate including, for example that a default has occurred under the First Home Loan or any security stated in the schedule to the First Home Loan (or substituted with the Bank's consent), or that an amount is payable by Mr Mann to the Bank under the First Home Loan; and

(b) unless the contrary is established, that certificate is conclusive evidence of its content.[24]

1. If Mr Mann did not pay any amount due under the First Home Loan Agreement by its due date for payment, or breached any other contract he had with the Bank, he would be in default under the First Home Loan Agreement and the Bank would be entitled, after first giving any notice required by law and waiting the required period to:

(i) demand immediate payment of the Unpaid Balance; and

(ii) exercise any and all of its rights under the First Home Loan Agreement and the Security.[25]

1. Mr Mann also entered a second home loan in late 2007. It is unnecessary for the purpose of these reasons to detail the terms.

1. The Bank alleges that, as at 18 March 2014, Mr Mann had:

(a) failed to pay to the Bank on time an amount due by Mr Mann to the Bank pursuant to the terms of the Guarantee; and

(b) failed to pay repayments due under the First Home Loan Agreement by the due date for payment; and

(c) was in default under the First Home Loan Agreement.[26]

1. On or about 18 March 2014, the Bank's solicitors caused Mr Mann to be served with a Notice of Default under Facility pursuant to the First Home Loan Agreement (and a further Notice of Default under the Second Home Loan Agreement).[27]
2. Mr Mann failed to pay to the Bank the sum specified by the time specified in the First Home Loan Notice of Default, or at all.[28]

1. Both the First Home Loan and the Second Home Loan were secured by a registered mortgage granted by Mr Mann in favour of the Bank over a property in Mandurah, Western Australia.[29]
2. There were express terms of the Mortgage to the effect that:

(1) the Amount Owing was all money which Mr Mann owed the Bank for any reason, under or in relation to the Home Loan Agreements, the Mortgage and the Guarantee;[30]

(2) Mr Mann would be in default under the Mortgage if he did not pay any part of the Amount Owing when it is due for payment;[31]

(i) take possession of all or part of the property;

(iii) exercise any other right that the law gives to a mortgagee in the circumstances.[32]

1. The Common Provisions also provided that, except to the extent Mr Mann has a right of set off granted by law which the Bank cannot exclude by agreement, Mr Mann is obliged to pay the Amount Owing in full without setting off amounts Mr Mann believes the Bank owes to him and without counterclaiming amounts from the Bank.[33]
2. The Bank claims the failure by Mr Mann to pay amounts due by Mr Mann to the Bank pursuant to the terms of the Home Loan Agreements was a default under the terms of the Mortgage.[34]
3. On 18 March 2014, the Bank's solicitors caused Mr Mann to be served with a Notice of Default under Mortgage.[35]
4. Mr Mann failed to pay to the Bank the sum specified by the time specified in the Mortgage Notice of Default, or at all.[36]
5. On 28 April 2014, the Bank's solicitors caused Mr Mann to be served with a Notice of Demand under Mortgage.[37]
6. Mr Mann failed to pay to the Bank the sum required and by the time specified in the Mortgage Notice of Demand, or at all.[38]

1. It is convenient to put the current defence in context.
2. Mr Mann filed his defence to the claim on 20 November 2014. In January 2015, he amended the defence adding a counterclaim. In July 2015, Mr Mann filed a substituted defence and counterclaim. He further amended in March 2016.
3. On 13 September 2016, at a strategic conference, the Bank foreshadowed amendment of its statement of claim. One aspect of the foreshadowed amendment was to reduce the defaults on which it relied. More significantly, the Bank was now to plead that, pursuant to cl A15.7 of the First Home Loan Terms and Conditions and cl 9.2(a) of the Mortgage Common Provisions, Mr Mann is obliged to pay any amount owing to the Bank in full without setting off amounts Mr Mann believes the Bank owes him and without counterclaiming (the suspension clauses).
4. A substituted statement of claim was filed on 30 September 2016.
5. In October 2016, Mr Mann filed a substituted defence and substituted counterclaim. He amended again on 9 January 2017.
6. On 18 January 2017, the Bank requested orders for the preliminary determination of issues, based on the default under the first home loan and the operation of the suspension clauses. In the course of the strategic conference, counsel for the Bank submitted that, on Mr Mann's pleadings, there was no challenge to the efficacy of the two instruments on which the Bank relied.[39] Mr Mann had amended his pleading (after the issue of the suspension clauses was flagged) to assert that the First Home Loan and Mortgage should be declared void for misleading or deceptive conduct. But Mr Mann relied on allegations of conduct long after he entered into the First Home Loan and Mortgage and which did not affect the validity of those instruments.
7. On 3 February 2017, I published reasons for not then setting down the preliminary issue. I held, in substance, that the amendments made to the defence by pleading misleading and deceptive conduct and unconscionable conduct, as purely defensive pleas, meant that the proposed preliminary issues could not be as readily separated as first contemplated by the Bank. I further refused the Bank's application to couple the preliminary issue with a strike out, saying:

What I am concerned with now is whether it should proceed at the same time as the hearing of the preliminary issue, when the effective resolution of the preliminary issue depends upon the court first being satisfied that the defences under the Australian Consumer Law should be struck out and that Mr Mann should not be permitted to re-plead them. That is the step I am not prepared to take. If the preliminary issue is to proceed, the strike out application must be decided first.[40]

1. The Bank then applied to strike out the defence. On 19 May 2017, the defence, as amended on 9 January 2017, was struck out in part.[41]
2. On 23 June 2017, the Bank applied for orders listing the hearing of its application for determination of the preliminary questions. Mr Mann opposed the listing of a preliminary issue. He was given to 21 July 2017 to file and serve a minute of amended defence, with the application to amend to be determined on the papers.
3. The hearing of the Bank's application was then listed for 9 November 2017.
4. In August, Mr Mann filed a minute of proposed amended defence, dated 28 July 2017.
5. Later, Mr Mann gave notice of his intention to seek to further amend. The further amendment did not materialise.
6. On 31 October 2017, Mr Mann applied to vacate the hearing on 9 November 2017. At a hearing of his application on 2 November 2017, Mr Mann advised the court that, after he had prepared his submissions for the hearing on 9 November, he had consulted a legal practitioner. In summary, he told the court that he had been told his pleadings were just not right and had been advised to do it again, starting from scratch. Mr Mann told the court that he had seen a draft that started from scratch. Mr Mann said:

[The practitioner is] going to do some pleadings ... the two relevant sections to this application of Bankwest about the preliminary issues, which was the first home loan, and the mortgage, and he I haven't seen those, and I haven't seen how they're going to be constructed. He hasn't finalised those yet. So the problem I've got is I can't even do my submissions to what the new pleadings are going to be, and as we're getting to a point now where we're a week away, and I just haven't got the documents from [the practitioner] I spoke to him at 9 o'clock this morning, and he suggested that - he said, 'You would be safe to say I would be another seven days.'[42]

1. The practitioner preparing the pleadings was not on the record, and apparently was not going to go onto the record. Mr Mann wanted to have the pleadings done and then prepare his submissions based on what had been pleaded.
2. Mr Mann then advised the court that he still believed he had an arguable point in the proposed amended minute that he had filed, and wished to proceed on that.
3. I refused to vacate the hearing of the preliminary question, but gave leave for Mr Mann to rely on the minute of proposed amended defence, dated 28 July 2017, which, with the existing defence dated 9 January 2017,[43] would stand as his defence.
4. In refusing the further adjournment, the fact that Mr Mann is self-represented was an important consideration. The court's duty with regard to an unrepresented litigant is well established. It was summarised by Beech JA in the Court of Appeal in Stone v Braun:

The challenges in the role of trial judge are increased when one (or more) of the litigants is not legally represented.

I adopt and apply the observations of Pullin, Newnes and Murphy JJA in Moleirinho v Talbot & Olivier Lawyers Pty Ltd:

What a judge ought do to assist a litigant in person depends on the litigant, the nature of the case, and the litigant's intelligence and understanding of the case: Abram v Bank of New Zealand [1996] FCA 635; (1996) ATPR 41-507, 31; Tobin v Dodd [2004] WASCA 288 [14]. The boundaries of intervention are flexible but the lodestar is a fair and just trial. It is clear, however, that a judge must not intervene to such an extent that he or she cannot maintain a position of neutrality or as to give an unrepresented litigant a positive advantage over another party. The advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which that litigant will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which the adversarial procedure offers to the unwary and untutored: Rajski v Scitec Corporation Pty Ltd [1986] NSWCA 1, 14; Minogue v Human Rights and Equal Opportunity Commission [1999] FCA 85; (1999) 84 FCR 438 [26]-[29].

Many cases have recognised the dilemma and delicate balance created by the need to diminish the disadvantages suffered by a self-represented litigant while maintaining the court's neutrality.

Depending on the circumstances, the court may need to take appropriate steps to ensure, so far as possible, that a self-represented litigant has sufficient information about the practice and procedure of the court to mean that there is a fair trial. This duty does not extend to advising the self-represented litigant as to how his or her rights should be exercised. Further, a duty to provide information in order to attempt to overcome the procedural disadvantages faced by a self-represented litigant is not a duty to run the case for him or her.[44]

1. It is also well established that there are limits to the allowance that the court should make where further allowance may deprive the other party of its entitlements. The High Court has recently cited with approval the passage in Rajski v Scitec Corporation Pty Ltd where Samuels JA said:

... the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement ... An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.[45]

1. The procedure adopted in proceeding to the trial of preliminary issues raised some problems for Mr Mann, exacerbated in the lead up to the hearing by a period of ill health. Allowance had been made for that illness in the relaxation of the timetable.
2. But there were significant factors that weighed against an adjournment. The hearing date had been fixed in June 2017. Mr Mann said that he consulted a legal practitioner after he had prepared his submissions. The practitioner who was preparing the pleadings was not on the record, and, as I understood it, Mr Mann did not intend to have him formally act. And, importantly, I took into account the history of the matter including the amendments made on 9 January 2017, and the recent amendments to the defence after I had struck out the January amendments.

1. Mr Mann filed an amended second substituted defence on 9 January 2017. In the strike out application, I summarised his pleading as it related to the First Home Loan and Mortgage.[46] For present purposes, it is sufficient to note that Mr Mann relied on conduct that he alleged to be misleading or deceptive, and the earliest of which was in 2007. While he pleaded that the Bank engaged in acts of deceptive or misleading conduct or that its conduct was unconscionable, he did not plead that his execution of the First Home Loan or the mortgage was procured by unconscionable or other vitiating conduct on the part of the Bank.
2. I held that the plea that the First Home Loan and Mortgage were void did not disclose a reasonable defence. The facts pleaded would not support a finding that any loss suffered or likely to be suffered as a result of Mr Mann entering the First Home Loan, or the Bank enforcing it, was because of conduct that contravened a provision of ch 2, 3 or 4 of the Australian Consumer Law. The plea could not support a finding that the First Home Loan and mortgage were void. Nor, on the facts pleaded, could the relief claimed of refusing to enforce the First Home Loan relate to loss suffered or likely to be suffered because of conduct by the Bank in contravention of the Australian Consumer Law.
3. The pleas seeking to have the First Home Loan and Mortgage declared to be unenforceable for breach of the Australian Consumer Law were set aside.
4. The proposed amendment filed on 28 July 2017 was not in proper form, containing additional paragraphs to be added to the plea of 9 January 2017 but not the whole of the pleading. Having regard to Mr Mann's health issues around the time this was done, I proceeded on the document as it was, with the necessary amalgamation to be done later should the action proceed.
5. Mr Mann inserted eight additional paragraphs. The claim under the Australian Consumer Law alleges, in substance:
   1. The Bank engaged in misleading and deceptive conduct in failing to disclose to Mr Mann:

1. At the time of signing the First Home Loan Contract on 8 February 2006 that the Bank's intention was that the mortgage on that home loan was intended to secure the guarantee given by Mr Mann to secure the loans of Prodale. 2. That the Mortgage executed on 16 March 2006 contained provisions that were different to the First Home Loan documents that he executed on 8 February 2006.

1. That the Mortgage and Consumer Mortgage Memorandum of Common Provisions changed the Home Loan Contract and Terms and Conditions from a home loan that was not related to any other loan to an all monies guarantee.

1. That clause 15.7 in the Home Loan Terms and Conditions and clause 9.2 (a) in the Memorandum of Common Provisions were so similar except that the Mortgage replaced the words 'all amounts in full' with 'Amount Owing in full' after the Home Loan Contract was already entered into. 2. The failure of Bankwest to disclose the variation in the terms and conditions of the First Home Loan removed Mr Mann's ability to avoid entering into the First Home Loan with the Bank or to find an alternative loan from another lender. 3. The enforcement of the suspension clause and the home loan by Bankwest has or will likely cause Mr Mann to suffer losses and damages.
2. Mr Mann filed submissions expanding on the amendment. His complaint is that the Mortgage is security, not only for the home loan, but for 'all the money which you owe the Bank for any reason ... where the money is or becomes owed now or in the future or actually or contingently'. Mr Mann submitted that there was no mention that the Mortgage Common Provisions would apply to the home loan, and he was not provided with a copy of the Common Provisions before he signed the home loan.
3. Mr Mann submitted that the terms of the Mortgage Common Provisions alter the First Home Loan, and it was misleading for the Bank to not disclose that it intended to do so. Mr Mann submitted that, having signed the First Home Loan, he had no alternative but to carry on with the transaction.

1. The Bank called one witness, Robert Charles Ralston who was employed by the Bank as manager, Group Credit Structuring, Group Credit Risk, Risk Management. Mr Ralston had made a witness statement, dated 9 August 2017, and confirmed it on oath at the hearing. His statement was received as his evidencein chief. Mr Ralston was crossexamined.
2. By cl A.20.1 of the First Home Loan, Mr Mann agreed:

that a certificate which has been signed by a Bank officer is admissible evidence of any fact or matter stated in the certificate (including, for example, that a default has occurred...or that an amount is due and payable ..) and that, unless the contrary is established, it is conclusive evidence.

1. Under cl 9.8 of the Mortgage Common Provisions:

(a) The Bank may make a written statement about any matter in relation to this Mortgage, for example;

(i) the amount of the Amount Owing at any particular time;

... and

(iv) whether or not any particular thing has happened.

(b) A statement under clause 9.8(a) is sufficient evidence of the matter and regarded as correct unless you prove it to be incorrect.

1. Mr Ralston, as a Bank officer, made a statement and produced a certificate pursuant to those clauses, dated 9 August 2014, to the effect that:

(1) from 18 March 2014, Mr Mann was and is in default under the First Home Loan because he failed to make the minimum monthly payments required;

(2) as a result, Mr Mann was in default under the Mortgage because he did not pay a part of the Amount Owing when it was due for payment;

(3) as at 18 March 2014, Mr Mann had failed to pay (at least) $8,490.70 in respect of minimum monthly repayments and the unpaid balance was at least $189,148.84;

(4) as at 30 June 2014, the total balance owing under the First Home Loan was $192,144.67 and Mr Mann remained in default under the First Home Loan and the Mortgage;

(5) as at 9 August 2017, Mr Mann remained in default;

(6) as at 9 August 2017, the amount payable was $234,600.99, with interest accruing. [47]

1. Mr Ralston also attached copies of the Bankwest Lite Home Loan letter of offer and Terms and Conditions; the Mortgage and Memorandum of Common Provisions; notices of default under the First Home Loan and Mortgage, dated 18 March 2014; and a notice of demand under the Mortgage, dated 28 April 2014.[48]
2. The cross-examination of Mr Ralston was directed to his knowledge of service of the notices of default. Mr Mann also questioned whether the Bank's claim was made in good faith.
3. Based on Mr Ralston's certificate, and the documents tendered through his witness statement, the Bank submitted that I should find that the amount outstanding from Mr Mann to the Bank in respect of the First Home Loan at 30 June 2014 was $192,144.67, and at 9 August 2017 was $234,600.99.
4. The Bank submitted that the court should give effect to the suspension clauses, and it is entitled to payment.

1. Before dealing with Mr Mann's case, the question of service can be separately considered.
2. As the Bank correctly submitted, Mr Mann's obligation to pay the minimum monthly repayments under the First Home Loan did not depend on demand for payment. Mr Mann was in default on not paying an amount due under the contract by its due date for payment.[49]
3. The Bank accepted that the liability to pay the unpaid balance under the Mortgage required a demand for payment.[50]
4. Mr Mann had, however, admitted service of the demand for payment. In his Further Amended Response, file 29 March 2016, Mr Mann pleaded that he did not dispute the validity of the service of letters of demand in relation to the mortgage over the Mandurah property.[51]
5. Mr Mann said, at the hearing, that his concession regarding validity of service[52] was for the purpose of the summary judgment application only, and he was prepared to withdraw it.[53]
6. The validity of service is, however, admitted on the pleading. Had Mr Mann withdrawn the admission earlier, it was open to the Bank to rely on re-service of the notices of demand. The admission cannot fairly be withdrawn at this stage.
7. In any event, I am satisfied that the Bank has proved that it gave notice to Mr Mann. First, the Mortgage provides that a communication 'is taken to be given ... if sent by post, on the date it bears or the date when it would have been delivered in the ordinary course of post, whichever is the later'.[54] The Transfer of Land Act 1893 (WA) s 106(2), requires the notice to be sent by registered post to the address entered in the Register as the address of the mortgagor. The notice of demand was sent by registered post to the address shown on the Mortgage as Mr Mann's address.[55] The return of the envelopes shows that it was delivered to that address, even if not received by Mr Mann. That is all that the Bank must prove for giving notice to an individual.[56]

1. Mr Mann relied on affidavits filed earlier in the proceedings, being:

(1) his own affidavits, sworn 6 February 2015 and filed 13 February 2015 (the first affidavit) and 8 November 2017 (the second affidavit);

(2) the affidavit of Emma Jane Cavanagh, dated 5 May 2015, which I have referred to above in relation to the issue of service.

1. Mr Mann was cross-examined, but only as to the service issue.
2. There were objections to part of Mr Mann's affidavits. I reserved the questions of admissibility to the final reasons. The issues before the court relate to the First Home Loan and the Mortgage as it applies to Mr Mann's default under the First Home Loan. The Bank does not seek to have answered any questions relating to Mr Mann's liability under the Guarantee for the obligations of Prodale, or to any obligation beyond that of Mr Mann to repay the amount owing under the First Home Loan. For that reason, and having regard to his limited pleadings, Mr Mann's affidavit material was irrelevant.
3. I have considered the defence and counterclaim filed by Mr Mann, his submissions and his affidavits to attempt to discover whether, within those documents, Mr Mann has put forward a case that would either show the statements of fact in Mr Ralston's certificate to be incorrect, or has pleaded a case that would lead the court to rescind in equity the suspension clause on which the Bank relies, or to alter or avoid it pursuant to a statutory power; or whether there is some arguable case that there was no sum due and payable to the Bank.
4. In submissions filed in the application, Mr Mann raised other matters which he said go to the 'current inequity':

(1) he is unrepresented because the conduct of the Bank took away his assets and income;

(2) the Bank abused its fiduciary relationship to him as a customer;

(3) the Bank induced him to spend money on renovations of the Geraldton Hotel by duress, funds that could have been applied to the home loan;

(4) the Bank altered the expiry date of the Facilities by trickery and fraud, and the variations are void as there was no consideration;

(5) the receivers of Prodale became agents of the Bank after the Bank interfered with the sale process of Prodale's assets;

(7) the Banking Code of Conduct applies to the First Home Loan and the Bank acted contrary to the Code by failing to act fairly and reasonably.

The questions Does an amount remain outstanding from Mr Mann to the Bank in respect of the First Home Loan?

1. The fact of the default and the amount owing by Mr Mann are established by the certificate of Mr Ralston unless the contrary is proved.
2. Mr Mann argued that he was not in default. His argument fails on several bases.
3. First, his obligation under the First Home Loan was to make minimum monthly repayments. The Financial Table to the Home Loan Contract specified the rate of minimum monthly repayments and that the first repayment was due one month after the date that the loan is advanced and later repayments are due on the same day in each subsequent month. [57]
4. Mr Mann's argument that there was no default and the First Home Loan was in credit is not sound.[58] Mr Ralston calculated that at 18 March 2014, Mr Mann had failed to pay at least $8,490.70 in minimum monthly repayments.[59] Mr Mann has adduced no evidence to show that calculation is wrong. The Bank was entitled to give notice of default and, when that default was not remedied, to demand immediate payment of the unpaid balance under the First Home Loan.
5. Second, the further argument that Mr Mann was entitled to redraw on the loan is based on a clause permitting redraw of amounts paid 'in excess of the amounts of the minimum repayments which were required to have been made under the Contract'.[60] There was no excess and no entitlement to redraw. Mr Mann was then in default, and the Bank was not required to permit a redraw.[61]
6. The facts stated in Mr Ralston's statement and certificate should be accepted. I am satisfied that, at 9 August 2017, the date of Mr Ralston's certificate, the amount of $234,600.99 was outstanding from Mr Mann to the Bank, with interest continuing to accrue at the rate of 5.95% per annum.

Does any liability on the part of Mr Mann depend on Bankwest making a demand for payment? If the answer is no, is Mr Mann obliged to make payment of the outstanding amount under A21.1 of the first home loan and 3.1 of Mr Mann's mortgage to Bankwest? If the answer is yes, did Bankwest make a valid demand for payment?

1. Under cl A.21.1a), Mr Mann was in default on failing to pay an amount due under the contract by its due date for payment. Paragraph j) provides that the Bank may demand immediate payment of the unpaid balance, there being no notice requirements by law. On the proper construction of that clause, liability arises immediately on default and without demand.
2. The clause does, however, require demand for the unpaid balance.
3. The Bank gave notice of default on 18 March 2014, requiring payment of arrears within 31 days.[62] On the same day, the Bank gave notice of default under the Mortgage and the Transfer of Land Act.[63] Each of those documents is sufficient demand.
4. I am satisfied that the Bank made a valid demand for payment on 18 March 2014.

Do clauses A15.7 of the First Home Loan or 9.2(a) of the Mortgage (or both) preclude Mr Mann from advancing any of the claims against the Bank included in his second substituted counterclaim dated 21 October 2016 and the amended substituted defence dated 9 January 2017 until payment is made to the Bank of the total amount outstanding under the first home loan?

1. Clause A 15.7 of the First Home Loan Terms and Conditions provides:

Except to the extent you have a right of set off granted by law which the Bank cannot exclude by agreement, you must pay all amounts in full without setting off amounts you believe the Bank owes you and without counterclaiming amounts from the Bank.

1. Common Provision 9.2(a) of the Mortgage is in similar terms:

Except to the extent you have a right of set off granted by law which the Bank cannot exclude by agreement, you must pay the Amount Owing in full without setting off amounts you believe the Bank owes you and without counterclaiming amounts from the Bank.

1. The courts have considered clauses of this kind on several occasions.[64] While the construction of any agreement depends on the terms of the particular agreement, the decided cases have established several principles.
2. First, such clauses are enforceable.
3. Second, they are part of a commercial agreement to be construed as such. In Brimstone Resources Ltd v Empire Resources Ltd, the court said:

Clauses of this kind are generally construed as meaning what they say and as precluding reliance on any claim which does not impeach the instrument itself or dispute the primary obligation. The purpose of such clauses is to prevent the commercial purpose of the instrument being defeated by an obligor raising a defence to an action to enforce the security or guarantee by way of a plea of a set-off or counterclaim.[65]

1. Third, the purpose of the clauses is not to prevent crossclaims. The borrower or guarantor who wishes to bring a claim is not prevented from doing so, but is prevented from holding up payment while the disputed cross-claim is litigated.[66]
2. Fourth, the clauses do not exclude claims which are properly characterised as defensive in nature. They do not protect a creditor against the defence that, at relevant times, the debt was not payable. 'They are concerned with reliance by a guarantor on claims of its own to meet a creditor's claim for an undisputed debt'.[67]
3. The distinction between matters properly characterised as defensive, and matters raised by way of set off or counterclaim, may be elusive. In, St George Bank Ltd v Field, McDougall J referred to the 'important distinction to be drawn between a defence that impeaches the guarantee itself, and a defence that impeaches the exercise of rights under the guarantee'.[68] The suspension clause is not effective to preclude a debtor raising a defence that impeaches the loan or security document itself.
4. But the exception to the operation of the clause is not confined to a defence that impeaches the loan document itself. In Brimstone Resources Ltd v Empire Resources Ltd, the court included a defence which disputes the primary obligation. As Ward JA said in O'Brien v Bank of Western Australia Ltd:

whether or not the reference to set-off or counterclaim in the suspension clauses extends beyond monetary cross-demands to claims based on estoppel/misleading and deceptive or unconscionable conduct, the suspension clauses are predicated on an amount being (due and) unpaid and if there is an arguable defence that (by reason of circumstances before or after the date on which, under the facility agreement, the sum was to be due) there was no sum due and payable at the date demand was made of the borrower, then there is no right/liability upon which the suspension clause can operate.[69]

1. Her Honour's reference to an 'arguable defence' is because the court in O'Brien was dealing with an appeal from a summary judgment. The question was whether the appellant had an underlying cause of action or defence with more than a fanciful prospect of success.
2. This is not a summary judgment application. But the way in which the question is posed requires consideration of whether the suspension clauses preclude reliance on the matters pleaded.

1. First, I will consider the claim of abuse of fiduciary relationship. Mr Mann does not plead the fiduciary relationship in his defence. In his counterclaim (a separate document) he alleges that Mr Earl, an employee of the Bank, created a fiduciary relationship with Mr Mann and Prodale 'in his role as financial adviser'.[70]
2. The allegation of breach of fiduciary duty is not related to Mr Mann's liability under the First Home Loan, but to a later time in his relationship with the Bank. Mr Mann does not allege that the Bank, or any employee of the Bank, undertook to act as financial adviser at the time the First Home Loan and Mortgage were made, or that the Bank breached a fiduciary obligation to him in providing advice in relation to those agreements.
3. Mr Mann pleads that the Bank breached the fiduciary duty it owed to him and Prodale by:

1. Acting contrary to their best interests 2. Appointing receivers when not protecting their legitimate security position

1. Failing to disclose alterations to the expiry dates of the Advance facilities

1. Failing to disclose commissions paid to staff.[71]
2. Mr Mann claims damages and compensation.[72]
3. These matters do not go to the liability of Mr Mann to pay the balance of the First Home Loan. They are strictly matters of counterclaim and subject to the operation of the suspension clauses.

Misleading or deceptive conduct: the conduct of Mr Earl

1. Mr Mann also pleads misleading or deceptive conduct attributable to Mr Earl.[73] Although the form of the pleading makes it difficult at times to identify the conduct alleged, reading the whole of the pleading shows that the allegations are in relation to the Second Advance Facility and the Second Home Loan and the purchase of the Geraldton Hotel and nightclub in 2007, as well as later conduct.[74]
2. None of Mr Earl's conduct is related to whether Mr Mann incurred obligations under the First Home Loan and Mortgage or was in default of those obligations. The claims brought by Mr Mann are, in substance, by way of counterclaim.

Misleading or deceptive conduct - alteration of expiry dates

1. Mr Mann also alleges misleading or deceptive conduct by the Bank in altering the expiry dates of the Facilities when they were varied in 2010 and 2011, and tricking him into executing the variation papers.[75] He pleads that the Bank has lost its right of indemnity under the Guarantee in relation to the Advance Facilities.[76]
2. Mr Mann seeks relief by having the Guarantee set aside, and damages.[77]
3. Mr Mann's obligations under the Guarantee do not arise in this application, which is concerned with his primary obligations as the borrower under the First Home Loan.

Misleading or deceptive conduct - the all moneys clause

1. In the amendment to his defence, dated 28 July 2017, Mr Mann pleaded that it was misleading or deceptive for the Bank to not disclose that the Mortgage was (or, at the time of the Home Loan, was intended to be) securing all moneys due to the Bank from Mr Mann, and not only the amount of the First Home Loan. Mr Mann does not allege anything was said to him to that effect. The misleading conduct is pleaded to arise from:

(1) the failure to disclose that intention;[78]

(2) the Mortgage provisions as to the amount secured were different from the First Home Loan provisions;[79]

(3) the Mortgage provisions changed the First Home Loan into an all moneys guarantee;[80]

(4) clause 15.7 in the Home Loan Terms and Conditions and clause 9.2(a) in the Mortgage Common Provisions were 'so similar'.[81]

1. Mr Mann pleads that the Bank was not entitled to alter a term or condition under the Home Loan after it was executed.[82]
2. The plea directly challenges the validity of the First Home Loan. It is, however, patently bad. It is based on the false premise that the 'all monies' clause in the Mortgage alters the borrower's obligations under the Home Loan, or alters its meaning or intent.
3. The signing of the Mortgage could not alter Mr Mann's obligations under the First Home Loan. He remained liable under that contract for only the amount advanced under it. The other obligations secured by the Mortgage were separate obligations that Mr Mann entered into under other instruments. None of those other obligations bear on Mr Mann's liability to repay the loan.
4. Accordingly, while I would answer question 3 that the suspension clauses do not preclude Mr Mann advancing this defence, the amended defence does not disclose an arguable defence to the Bank's claim under the First Home Loan.

1. Mr Mann also relied in submissions on the appointment and conduct of the receivers.
2. The receivers were appointed in December 2012. I have been unable to discern anything in either the defence or the counterclaim which relates their appointment or conduct to the validity of the First Home Loan, or whether there was an amount due and payable under it at the time of the Bank's demand.

1. The claim that the Bank induced Mr Mann to spend money on hotel renovations is not coupled with any plea of facts which would give rise to an estoppel regarding the enforcement of the First Home Loan. While there is a plea of estoppel in both the defence and counterclaim, it is with regard to the enforcement of the Advance Facilities.[83]

1. Question 1: as at 9 August 2017, the amount of $234,600.99 was outstanding from Mr Mann to the Bank, with interest continuing to accrue at the rate of 5.95% per annum.
2. Question 2:

(a) Mr Mann's liability arose immediately on default and without the need for demand;

(b) the Bank was required to make demand for the unpaid balance and did so by notice of default on 18 March 2014.

(a) Clauses A15.7 of the First Home Loan and 9.2(a) of the Mortgage both preclude Mr Mann from advancing any of the claims against the Bank pleaded in his second substituted counterclaim dated 21 October 2016 and the amended substituted defence dated 9 January 2017 until payment is made to the Bank of the total amount outstanding under the First Home Loan;

(b) Those clauses do not preclude Mr Mann from advancing the defence in his minute of amended defence filed 28 July 2017;

(c) The minute of amended defence, filed 28 July 2017, does not disclose an arguable defence to the Bank's claim under the First Home Loan and Mortgage.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Bankwest v Mann [No 3] [2017] WASC 135.

[2] In these reasons I will simply refer to the statement of claim and the defence when referring to the current pleadings, the amended substituted statement of claim filed 21 December 2016 and the minute of proposed amended defence, dated 28 July 2017 to be read with the amended second substituted defence, filed 9 January 2017.

[20] Schedule to First Home Loan, and cl A12.1.

[22] Statement of claim [39(f)]; First Home Loan Terms and Conditions, cl A15.7.

[24] Statement of claim [39](h); First Home Loan Terms and Conditions; cl A20.1.

[26] Statement of claim [43], [44].

[27] Statement of claim [45], [47].

[30] Statement of claim [50]; Common provisions, cl 1.1

[31] Statement of claim [50]; Common provisions, cl 8.1.

[32] Statement of claim [50]; common provisions, cl 8.3, 8.4, 8.5.

[33] Statement of claim [50(h)]; common provisions cl 9.2(a).

[34] Statement of claim [51]; common provisions, cl 8.1.

[40] Bankwest v Mann [No 2] [2017] WASC 23 [14].

[41] Bankwest v Mann [No 3] [2017] WASC 135.

[43] The two need to be read together, the July documents not being a complete pleading but replacing only those paragraphs that had been struck out.

[44] Stone v Braun [2015] WASCA 103 [62] - [65].

[45] Rajski v Scitec Corporation Pty Ltd (Unreported, NSWCA, 16 June 1986) [27]; Nobari v Mariconte [2018] HCA 36, [47].

[46] Bankwest v Mann [No 3] [2017] WASC 135 [11] - [13].

[47] Exhibit 1. For the validity and effect of such a certificate, see Dobbs v National Bank of Australasia Ltd [1935] HCA 49; (1935) 53 CLR 643, 651 - 654; St George Bank Ltd v Emery [2004] WASC 35 [30] - [38].

[52] Also made in emails to the solicitors for the Bank on 17 February 2016, 18 February 2016.

[55] See affidavit of Emma Jane Cavanagh, sworn 5 May 2015. Witness statement of Robert Charles Ralston, documents 3, 6 and 7.

[56] Irving v Commissioner of Titles [1963] WAR 67, 68; Perpetual Trustee Company Ltd v Burniston [No 2] [2012] WASC 383.

[58] Written submissions [74] - [77].

[64] See Brimstone Resources Ltd v Empire Resources Ltd [2018] WASCA 107; Palaniappan v Westpac Banking Corporation [2016] WASCA 72 [73] [85], [130] - [141], [151] - [160]; George 218 Pty Ltd v Bank of Queensland Ltd [2015] WASC 434; (2015) 303 FLR 231 [288]; Oswal v Commonwealth Bank of Australia [2013] WASCA 58 [45], [54] [55]; Commonwealth Bank of Australia v Shannon [2013] NSWSC 1076.

[65] Brimstone Resources Ltd v Empire Resources Ltd [46].

[66] Hausman v Abigroup Contractors Pty Ltd [2009] VSCA 288; (2009) 29 VR 213 [24]; Oswal v Commonwealth Bank of Australia [45].

[67] O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71 [14]; Capital Finance Australia Ltd v Air Star Aviation Pty Ltd [2003] QSC 151; [2004] 1 Qd R 122, 127.

[68] St George Bank Ltd v Field [2007] NSWSC 902 [18].

[69] O'Brien v Bank of Western Australia Ltd [94].

[73] Counterclaim [23] - [33]; Defence [12].

[74] Counterclaim [26], [59], [60], [224]; Defence [12], [21].

[75] Defence [21], [22]; counterclaim [63], [72].

[83] Defence [20], [26]; counterclaim [11], [90] - [99].