CONTRACT - third party mortgages given over time to bank by former solicitor and his wife as security for loans to them in connection with progressive purchase of portfolio of real estate and for financial accommodation to him for his legal practice - funding by bank of advances by solicitor for his clients' disbursements - also mortgage by solicitor and his mother over townhouse occupied by her and later by them, as security for loan by bank for its acquisition and for financial accommodation to him for his legal practice - wife and mother seeking setting aside of mortgages for breach of duty of disclosure and unconscionable dealing by bank and pursuant to Contracts Review Act 1980 (NSW) - wife also relying on Yerkey v Jones

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

GENERAL INTRODUCTION.................................................................................................... 1 INTRODUCTION TO FACTS.................................................................................................... 2 michael's claim.................................................................................................................. 7 MICHAEL'S PLEADED CASE AGAINST THE BANK........................................................ 7 MICHAEL'S SUBMISSIONS................................................................................................ 16 MICHAEL'S PRE-MAY 1991 CAUSES OF ACTION......................................................... 17 The suggested "duty … to inform"........................................................................................... 17 Any duty to inform was superseded.......................................................................................... 20 Alleged breach of the duty to inform......................................................................................... 23 The "instructions" from Zone to Branch................................................................................... 24 Was Michael aware of the matters of which he complains he was not informed?..................... 29 Reliance.................................................................................................................................... 33 Loss and damage...................................................................................................................... 35 Contributory negligence............................................................................................................ 36 TP Act....................................................................................................................................... 37 Time bar................................................................................................................................... 37 MICHAEL'S POST-MAY 1991 CAUSES OF ACTION....................................................... 38 Misrepresentation as to time constraints on refinancing generally........................................... 39 Elements of the fraudulent misrepresentation case................................................................... 40 (1) That there was a representation of fact, however made.................................... 41 (2) That the Representation was false..................................................................... 41 (3) That the maker of the Representation did not believe that it was true in the sense in which the maker intended it to be understood.............................................................................. 45 (a) Who made the representation?........................................................... 45 (b) Did the maker of the Representation (Doyle) believe that it was true?48 (4) That the maker of the Representation intended a person or class of persons to act in reliance on it 48 (5) That the person, or a person belonging to the class of persons, acted in reliance on the Representation 48 (a) Did Parker give Judith the Advice?.................................................... 50 (b) Did Judith rely on the Representation?.............................................. 51 (c) Judith's awareness of the letters of 29 and 30 July............................ 55 (d) Judith did not cease to cooperate with Michael in his attempt to refinance .....................................................................................................................................56 (6) That loss or damage was suffered as a result of the reliance on the Representation 59 (a)Was there a possibility of a refinancing as at 1 October 1991 or 1 June 1992? 60 (b)Was there a possibility of a partial refinancing as at 1 October 1991 or 1 June 1992?........... 63 (c)Loss and damage generally.......................................................................... 71 The Bank's letter of Monday 29 July 1991 to McGuire............................................................ 72 James's alleged instructions to Doyle....................................................................................... 74 CONCLUSION IN MICHAEL'S PROCEEDING................................................................. 77 VLADIMIRKA'S CLAIM.......................................................................................................... 78 VLADIMIRKA'S PLEADED CASE AGAINST THE BANK............................................... 78 FACTUAL BACKGROUND RELEVANT TO VLADIMIRKA'S CASE............................. 84 Events prior to the Norman Street Mortgage dated 1 May 1984............................................... 84 The Norman Street Mortgage................................................................................................... 86 Did the Bank improve its security position while Vladimirka received no benefit from the Bank?89 The acknowledgments.............................................................................................................. 91 Refinancing.............................................................................................................................. 93 Vladimirka's relationship with her son..................................................................................... 93 FURTHER REASONING....................................................................................................... 94 Duty of disclosure..................................................................................................................... 94 Was the Norman Street Mortgage "unjust" for the purposes of the CR Act?............................ 99 Unconscionability.................................................................................................................... 107 Time bar................................................................................................................................. 110 Estoppel.................................................................................................................................. 110 No offer to do equity............................................................................................................... 111 CONCLUSION IN VLADIMIRKA'S PROCEEDING........................................................ 112

JUDITH'S CLAIM................................................................................................................. 112 JUDITH'S PLEADED CASE AGAINST THE BANK........................................................ 113 Breach of duty of disclosure................................................................................................... 114 CR Act.................................................................................................................................... 118 Unconscionable conduct......................................................................................................... 119 Misleading or deceptive conduct............................................................................................. 119 Fraud, negligence and misleading or deceptive conduct in relation to the Bank's reply to Parker's letter of 17 July 1991....................................................................................................................................... 120 Negligent Advice.................................................................................................................... 120 Relief...................................................................................................................................... 121 GENERAL FINDINGS OF FACT........................................................................................ 121 Judith's general understanding and ability to understand...................................................... 121 The five mortgage transactions in respect of which Judith seeks relief.................................. 125

1. Theresa Park................................................................................................. 126
2. 87 Foreshore Drive....................................................................................... 130
3. William Street................................................................................................ 137
4. Appian Way.................................................................................................... 138
5. 92 Foreshore Drive....................................................................................... 143 Joint purchases of further properties in late 1988............................................................... 148 (a) Port Kembla.................................................................................................... 148 (b) Wanda Beach.................................................................................................. 148 Joint Cheque Account Number 147-056................................................................................. 149 Meeting at the Bank on 22 February 1991............................................................................. 153 Settlement agreement between Michael and Judith in September 1991.................................. 154 Letters of demand of 27 August 1992 and subsequent meetings with the Bank...................... 155 Auction of Port Kembla on 12 December 1992....................................................................... 156 Appointment of receiver (Brown) by the Bank on 8 January 1993......................................... 157 Meeting at the Bank on 22 January 1993.............................................................................. 158 Auction of Wanda Beach on 30 January 1993....................................................................... 158 Withdrawal of McGuire's retainer on 3 February 1993......................................................... 159 Meeting at the Bank on 16 February 1993............................................................................. 160 Judith's facsimile to Brown in late February 1993................................................................. 160 Letter from McGuire to Judith dated 2 March 1993............................................................... 160 The acknowledgments............................................................................................................ 160 First acknowledgment - 12 November 1984......................................................................... 161 Second acknowledgment - 9 September 1985...................................................................... 162 Third acknowledgment - 14 October 1985........................................................................... 163 Fourth acknowledgment - 1 October 1986........................................................................... 164 Fifth and sixth acknowledgments - 8 December 1986.......................................................... 164 Seventh acknowledgment - 6 January 1988.......................................................................... 165 Eighth acknowledgment - 6 November 1988........................................................................ 167 Ninth acknowledgment - 10 July 1989.................................................................................. 168 Tenth acknowledgment - 8 February 1990........................................................................... 169 Eleventh acknowledgment - 22 August 1990....................................................................... 171 Conclusions relating to the acknowledgments..................................................................... 171 Allegations of threats and of violence..................................................................................... 172 Michael and Judith as "business partners"............................................................................ 175 FURTHER REASONING..................................................................................................... 176 Credit...................................................................................................................................... 176 Inconsistency between present evidence and documents in Family Law proceeding......... 177 Knowledge of a "home loan"................................................................................................ 177 Awareness of nature of an "overdraft"................................................................................. 178 Evidence as to impact of letter of 17 July 1991 from Bank to Parker................................. 178 Occasions on which mortgages signed at the Bank............................................................. 179 Evidence as to independent advice....................................................................................... 179 Judith's "what if" evidence................................................................................................... 180 Understanding of a mortgage................................................................................................ 180 (1) Purchase of a motor vehicle by means of a secured personal loan in February 1979...... 182 (2) Purchase and mortgage of Bullaburra.............................................................................. 183 (3) Purchase and execution of two mortgages of Myall Street................................................ 188 (4) Purchase and grant of first mortgage of Theresa Park..................................................... 190 (5) Other Bank loans.............................................................................................................. 190 (i) Secured personal loan to assist Michael to purchase the practice from Menart 190 (ii) Personal loan to assist purchase of Renault motor car.............................. 191 (iii) Overdraft on account number 147-056.................................................... 191 Breach of duty of disclosure................................................................................................... 191 The duty of a creditor to an intending guarantor.................................................................. 191 What did Judith know of the matters allegedly not disclosed?............................................ 194 (1) Returning of cheques........................................................................................................ 195 (2) Exceeding of limits of accounts......................................................................................... 195 (3) Increasing indebtedness.................................................................................................... 196 (4) Problems with cash flow of practice.................................................................................. 196 (5) Correspondence received from the Bank......................................................................... 196 Would Judith have acted differently if she had known of the matters particularised?........ 197 (1) Mortgage dated 27 July 1983 over Theresa Park............................................................. 199 (2) Two mortgages signed on 14 October 1985 over William Street and 87 Foreshore Drive. 199 (3) Mortgage dated 2 January 1988 over Appian Way........................................................... 200 (4) Two mortgages signed on 7 July 1989 over 92 Foreshore Drive and Wanda Beach......... 200 Discharge of the third party mortgages as a result of implementation of the litigation loan facility 202 Misleading or deceptive conduct............................................................................................. 206 Michael as agent of the Bank................................................................................................. 206 Undue influence or duress...................................................................................................... 208 Judith's claim based on Yerkey v Jones (1939) 63 CLR 649 ("Yerkey") and Garcia v National Australia Bank Ltd (1998) 155 ALR 614 ("Garcia")............................................................................................. 208 Unconscionable dealing.......................................................................................................... 215 CR Act.................................................................................................................................... 220 The "business exception"..................................................................................................... 220 Application of the CR Act..................................................................................................... 221 Falinski.................................................................................................................................. 221 Breach of contract.................................................................................................................. 223 FURTHER ISSUES............................................................................................................... 223 Time bar................................................................................................................................. 224 Estoppel.................................................................................................................................. 224 Admission............................................................................................................................... 225 No offer to do equity............................................................................................................... 225 Relief...................................................................................................................................... 225 CONCLUSION IN JUDITH'S PROCEEDING................................................................... 225 GENERAL CONCLUSION IN RELATION TO ALL THREE PROCEEDINGS................... 226

AND: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

AND: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

ng 437 of 1996 BETWEEN: MICHAEL RADIN (also known as milosh radin)

AND: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

GENERAL INTRODUCTION These three proceedings have been heard together, the evidence in each being evidence in the others. In proceeding NG 437 of 1996 (which commenced life in June 1993 as proceeding number 12233 of 1993 in the Common Law Division of the Supreme Court of New South Wales prior to its transfer to this Court), the applicant is Michael Radin, also known as Milosh Radin ("Michael" - for convenience, and without disrespect, I will refer to the Radins by their first names). In that proceeding, as in the others, the respondent is the Commonwealth Bank of Australia ("the Bank") which is the successor in title to the Commonwealth Savings Bank of Australia ("CSB") and the Commonwealth Trading Bank of Australia ("CTB").In proceeding NG 984 of 1995, the applicant is Michael's mother, Vladimirka Radin ("Vladimirka"). In proceeding NG 985 of 1995, the applicant is Judith Radin ("Judith") who is Michael's former wife. In all three proceedings, the applicants seek to be relieved of mortgages which they gave to the Bank or its predecessor entities, as well as various forms of monetary compensation. By cross claims in the respective proceedings, the Bank seeks to enforce its securities.

INTRODUCTION TO FACTS The saga which gives rise to the litigation is an unfortunate one. The purpose of the present section of these Reasons is to give an introduction to certain factual themes which emerge from the evidence. Vladimirka was born on 6 June 1926. According to her evidence, her father was a very wealthy Yugoslav industrialist, with interests in mining, factories, farming, real estate and the hotel industry. He had a "Croatian property on the sea, a hotel and villa and too many house [sic]". Following the Communist takeover and expropriation of private property, Vladimirka came to Australia in 1961 with her husband and with Michael who was seven years old. Michael was born on 13 January 1954. Judith was born on 25 November 1955. Her father was an accountant. In 1973, Michael and Judith met. At that time Michael was working at the Rural Bank of New South Wales ("the Rural Bank"), Liverpool, as was Judith's sister, Gail. Michael was studying for the Higher School Certificate ("HSC") at evening college. Judith sat the HSC twice (in 1973 and 1974) and completed a Diploma of Teaching (Primary) in 1977. In the period 1978 to 1980, she taught full-time at St John's Primary School, Campbelltown.During 1981 and 1982 she privately tutored students at home in English and Mathematics. She later attended the Australian Catholic University on a part-time basis and was awarded a Graduate Certificate TESOL (a qualification in teaching English as a second language) in 1992, and a Bachelor of Education degree in 1994. In 1974, Michael became articled as a law clerk to the late Vladimir Menart ("Menart"), solicitor, of Fairfield. In 1975, Vladimirka and her husband separated and were divorced.The husband returned to Yugoslavia.His half-interest in their home at 3 Amelia Crescent, Canley Heights ("Canley Heights") was sold to Michael, who became a joint owner with his mother of the home. In 1977, Judith married Bruce Avnell, but they separated after about two years and the marriage was dissolved in 1980. In the meanwhile, on 19 September 1979, Judith had moved into Canley Heights where she lived with Michael and his mother. Not long afterwards, on or about 31 November 1979, Michael and Judith agreed to purchase what was to be the first of numerous properties bought by one or both of them. The property was vacant land.It was Lot 26, Theresa View Road, Theresa Park ("Theresa Park"). They still own this property which is one of several involved in the present proceedings. Less than a year later, on 1 August 1980, Judith contracted to purchase a house at 43 Bullaburra Road, Bullaburra ("Bullaburra"), in the Blue Mountains. Even at this early stage, Judith demonstrated a propensity to make diary notes relating to various tasks which she had to undertake in relation to property matters and otherwise.The notes were to be of some significance on the hearing. The next property which Michael and Judith purchased was a house at 76 Myall Street, Concord West ("Myall Street"). The price was $78,000. For the purpose, they borrowed $30,000 from the CSB. The transfer and mortgage were dated 17 February 1981. A little over a month later, they borrowed from the CTB on the security of a second mortgage over the property. Apparently, it was a few months later that Michael and Judith moved into Myall Street - their first home.They were married a little later, on 22 November 1981. After completing the examinations set by the Solicitors' Admission Board, Michael was admitted to practise as a solicitor of the Supreme Court of New South Wales in September 1982. He purchased Menart's practice and practised as a sole practitioner under the name "Radin & Associates" as from 1 January 1983. Important aspects of the present case have been the nature of Michael's legal practice, the relationship between him and Judith, the building up of their real estate portfolio, and the connections between these three elements. Throughout the 1980s, Michael developed a busy and expanding legal practice. Although he came to employ a sizeable staff, including solicitors, he always remained a sole practitioner. He opened branch offices in Wollongong, Port Kembla, Newcastle and the City, but the head office was always at Fairfield. The work of the practice was almost entirely personal injury litigation arising out of industrial and road accidents. Michael built up a large following in the Yugoslav community. He was fluent in the Yugoslav languages and had the support of Yugoslav community leaders. An important feature of the practice was that Michael acted for people of modest means who found it difficult to fund the disbursements usually associated with litigation of the kind described, in particular, such expenses as court filing fees, expert witnesses' fees, process servers' fees and counsel's fees. Although, according to his evidence, few cases were lost, he would be out of pocket for long periods until cases were settled or decided. The clients and the ethnic leaders who had introduced them, looked to Michael to see the cases through to the end, that is, to fund the litigation. No doubt, Michael derived satisfaction from the growth of his practice and the respect which he was accorded. But there was a problem. Although Michael was the immediate source of funds for his clients, the ultimate source was the Bank. It was because of financial accommodation provided by the Bank to Michael that he was able to support his clients and to develop his practice. In connection with his practice, Michael had two accounts with the Bank: an "office" or "general" or "current" account, and a trust account.He had other non-practice accounts too, such as a joint cheque account with Judith.At first the accounts were maintained at the Ware and Spencer Streets, Fairfield branch, but in mid-1989 that branch was combined with the branch at The Crescent, Fairfield, after which the various accounts were maintained at the combined branch.I will use the word "Branch" to refer to the branch where Michael's various accounts with the Bank were maintained at any time and from time to time. The Branch was in the Western Metropolitan "Division", "Region" or "Zone" of the Bank. I may use all three of these words. Over the years, the Bank supported Michael.Eventually, however, and after tolerating many "excesses" on his accounts and extending him many indulgences, it declined to do so any longer. Branch was more indulgent towards Michael than was Zone. A particular reason was that he brought business to the Bank - both to Branch and to other branches. Yet the extent of his indebtedness to the Bank and his continuing failure to adhere to constraints were causes of concern within the Bank over a long period. Zone applied pressure to Branch to dishonour cheques and to insist that Michael's accounts be brought into order. However, Branch Senior Manager, Maxwell Flanders Williams ("Williams"), was reluctant to do so, perceiving it to be in Branch's interest not to do anything which would cause Michael's practice to collapse. A further dimension to the events of the 1980s was the ever-increasing portfolio of real estate that Michael and Judith were building up. Many of the purchases were also funded by the Bank. Some of the properties are no longer held, but it is noteworthy that Michael seeks to restrain the Bank from exercising its rights as mortgagee under mortgages over more than eight properties, as well as to restrain it from exercising its rights under a "bill of sale and equitable mortgage" over his legal practice. Judith is the owner with Michael of five properties and Vladimirka is the owner with him of one of them. That one is a townhouse at 5/17-19 Norman Street, Concord ("Norman Street") in which Vladimirka and Michael live. That is the only mortgage the subject of Vladimirka's proceeding. By the late 1980s, the marriage between Michael and Judith was in difficulty. They separated on 24 November 1988, and were divorced in 1989. The two children of the marriage remained with Judith. Judith makes serious allegations of violence against Michael. In particular, she alleges that she signed mortgages and other documents in favour of the Bank because of her fear of what Michael would do to her if she did not sign. While admitting some violence, Michael has, in substance, denied the allegations. In the Family Court of Australia, Judith previously sought a property settlement (the "Family Law proceeding"). In that connection she swore that she had contributed substantially to the building up of the portfolio of real estate, not so much financially but, for example, by negotiating purchases. Before me, however, her case is, in substance, that she did Michael's bidding and had little or no understanding of commercial and legal matters.Similarly, and as noted below, there is a tension between, on the one hand, the position which Judith took in her property settlement negotiations with Michael as part of the Family Law proceeding, and, on the other hand, the attitude which she, Michael and Vladimirka ask me to accept that she took to a request by Michael that she cooperate with him in refinancing the indebtedness to the Bank. Michael came under increasing pressure from the Bank to refinance. A time came when the Bank selectively dishonoured his cheques, paying only those which it thought were essential to allow his legal practice to survive. Eventually, the Bank thought that it was paying too high a price for the Radin "connection". By about January 1991, the Bank had determined to cease further "litigation lending" to Michael. It told him he must pay out the Bank and take his business elsewhere. Refinance proposals were discussed in 1991 and early 1992. A refinancing would necessitate the cooperation of Judith as co-owner of most of the properties mortgaged to the Bank. Michael sought her cooperation but it was not always given. There has been an issue in the case as to the reason for Judith's reluctance at times to cooperate with Michael. The Bank's case is that she deliberately and advisedly withheld her consent at times as a means of extracting a more satisfactory settlement from Michael in the Family Law proceeding. Judith was legally represented in that proceeding by Adrienne McGuire ("McGuire") of McGuire Rosso & Co. As well, an accountant, Jean Parker ("Parker"), provided certain advice to her. Both sought and were given information from the Bank as to the properties over which Judith had given mortgages and the amount which they secured. The case put by Michael, Judith and Vladimirka is that the Bank fraudulently (or, in the alternative, negligently or in a misleading and deceptive manner) misinformed Parker to the effect that there was no urgency from the Bank's viewpoint for a refinancing, and that in reliance on that advice she (Judith) withheld her cooperation. I will need to return to this issue in some detail in due course. It suffices to say at this stage that a refinancing did not occur. The Bank issued letters of demand in late August 1992.On the application of the Law Society of New South Wales, the Supreme Court of New South Wales appointed Jean Sayer as receiver to Michael's practice on 11 September 1992.The Bank appointed Martin Russell Brown ("Brown") of Coopers and Lybrand as receiver of Michael's practice pursuant to the Bank's registered bill of sale and equitable mortgage on 8 January 1993.Ultimately, as a result of a disciplinary proceeding, Michael's name was removed from the roll of solicitors. Michael, Judith and Vladimirka say that if the Bank had conveyed to Parker the urgency of a refinancing, Judith would or might have cooperated, the Bank would or might have been paid out, and Michael's practice would or might have survived, to the advantage of them all.

MICHAEL'S PLEADED CASE AGAINST THE BANK Michael pleads his case against the Bank in a further amended statement of claim filed on 2 October 1997.The following is an account of that pleading and does not represent any finding of fact. Michael practised between 1982 and 1989 at 22 Harris Street, Fairfield, and between 1989 and 7 September 1992 at that address and at 99 Elizabeth Street, Sydney, under the name "Radin & Associates". The Bank lent money to Michael to enable him to pay, on account of his clients, court filing fees, medical and other expert witnesses' expenses, service fees, barristers' fees, court appearance fees for expert witnesses, and other expenses of litigation, as well as general living expenses.The Bank knew, as was the fact, that it was not uncommon for six years to pass between receipt of instructions and the settlement, hearing or other disposition of the litigation. Michael made the Bank aware, whenever he advanced money for his clients' disbursements, by drawing cheques on his general account, depositing the amount in his trust account and paying the disbursements out of the trust account, that he was making such payments.The Bank knew that Michael's indebtedness to it could not be reduced unless: (a) he ceased practising law and found someone to take over his obligations to his clients; or (b) he was given adequate notice by the Bank that he should cease taking instructions from clients who were unable to fund their own disbursements; or (c) he found another financier willing to continue to finance him as the Bank had been doing; or (d) he ceased taking instructions from clients who were unable to fund their own disbursements. At all material times down to January 1991, Michael continued, to the Bank's knowledge, to take instructions from clients who were unable to finance their own disbursements. Far from instructing him to cease doing so, the Bank represented to him that if he continued to do so it would support him so as to enable him to complete his clients' cases.At various times down to 7 September 1992, Michael gave the following securities to the Bank: "a. Mortgage Registered No V.449514 made between [Michael] and [Vladimirka] as Mortgagors and [the Bank] as Mortgagee (Security: [Norman Street] - Folio Identifier 5/8491). b. Mortgage Registered No T.709151 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: [Theresa Park] - Folio Identifier 26/252899). c. Mortgage Registered No W.254834 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: 87 Foreshore Drive, Salamander Bay - Folio Identifier 84/26610). d. Mortgage Registered No W.254833 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: 5 William Street, Fairfield - Folio Identifier 4/3035). e. Mortgage Registered No Y75562 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: 11 Appian Way, Burwood - Folio Identifier 1/304076). f. Mortgage dated 19th February 1991 made between [Michael] as Mortgagor and [the Bank] as Mortgagee (Security: 24/4 Ithaca Road, Elizabeth Bay - Folio Identifier 26/SP13189). g. Mortgage Registered No Y.907647 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: 92 Foreshore Drive, Salamander Bay - Folio Identifier 544/27353). h. Mortgage Registered No Y.907647 made between [Michael] and [Judith] as Mortgagors and [the Bank] as Mortgagee (Security: 187 Soldiers Point Road, Salamander Bay - Folio Identifier 377/28192). i. Between 1982 and 1993 [Michael] mortgaged other real estate in which [he] held an interest and the properties have since been sold and the mortgages discharged. j. On 3rd November 1988 [Michael] executed a document entitled 'Bill of Sale and Equitable Mortgage' (hereinafter referred to as the 'Bill of Sale') made between [Michael] therein referred to as the mortgagor and the Debtor and [the Bank] therein referred to as the Bank. PARTICULARS A. The Bill of Sale was registered on 10th November 1988 No. 805629. B. The Bill of Sale secures inter alia the sum of $851,972.75." The Bank owed Michael a duty of care to ensure that its lending policies did not damage him. In breach of that duty the Bank: "negligently, carelessly and unskilfullymanaged and controlled the accounts and the lending of [the Bank] to [Michael] so that [Michael] suffered damage." The following "particulars of negligence" are given: "a. Allowing [Michael] to substantially exceed overdraft limits previously set by [the Bank]. b. Failing to ensure that [Michael] was aware within a reasonable time that [the Bank] would not continue to support [him] by lending further funds to enable [him] to advance money to existing clients of [his] business to pay the disbursements. c. Representing to [Michael] that if [he] gave to [the Bank] all of [his] assets as security for moneys borrowed that [the Bank] would continue to advance moneys to [Michael] to pay the disbursements so that litigation already commenced by [him] could be finalised. d. Failed to advise [Michael] that [the Bank] intended to stop lending to [Michael] in such a way that [he] could not finance the continuing obligations of [his] business to support clients of [his] business to the finalisation of the personal injuries litigation. e. Returning cheques 'refer to drawer' and 'present again' which had been drawn on [Michael's] General Account and deposited in [his] Trust Account. f. Withdrawing [Michael's] lines of credit when [the Bank] well knew of the obligations of [Michael's] business to clients of [Michael's] business. g. Withdrawing [Michael's] lines of credit without sufficient notice. h. Requiring [Michael] to reduce his loans to [the Bank] when [the Bank] well knew that it was impossible to do so unless [the Bank] allowed further loans to [Michael] to continue litigation already commenced. i. Withdrawing litigation lending facilities when [the Bank] had already approved same to an amount of $ 1,200,000 and [Michael] and/or [Michael's] business had only drawn $400,000. j. Encouraging [Michael] to personally lend the disbursements to clients of [his] rather than using traditional litigation lending schemes. k. Indicating by its conduct and orally that [the Bank] would continue to support [Michael's] scheme of lending the disbursements to clients of [Michael's] business. l. In January 1991 withdrawing further credit. m. In January 1993 appointing a receiver pursuant to the Bill of Sale." The following particulars of loss and damage are given: "a. By reason of the withdrawal of credit from [Michael] and the withdrawal of the litigation lending limit previously approved by [the Bank] [Michael] used moneys that [he] should have used to pay income tax and group tax to lend to clients for the disbursements and penalties have been imposed on [him] and [he] is threatened with Bankruptcy proceedings. b. By reason of the conduct referred to in paragraph 21(e) a receiver was appointed to [Michael's] business by the Law Society of New South Wales and [Michael] has been prohibited from practising as a Solicitor and [he] is unable to continue to earn his livelihood as a Solicitor. c. By reason of [Michael] being prohibited from practising as a Solicitor [his] reputation has been damaged. d. By reason of [Michael] being prohibited from practising as a Solicitor the goodwill of [his] business has been damaged and the value of the business has become thereby reduced. e. By reason of the matters referred to above and in particular paragraph 21(e) [Michael] is a party to disciplinary proceedings being conducted by the Law Society of New South Wales. f. By reason of the appointment of a receiver pursuant to the Bill of Sale [Michael] has no funds to obtain legal representation to defend the said disciplinary proceedings. g. [The Bank] has become liable to pay substantial expenses to the receivers appointed by the Law Society of New South Wales and the receiver appointed by [the Bank]." In addition or in the alternative, the Bank engaged in misleading or deceptive conduct which caused Michael loss. At all material times up to about January 1991, the Bank represented to him by its conduct in the management and control of his accounts that if his business continued to expand, the Bank would continue to lend him sufficient funds to pay his clients' disbursements, while knowing the matters touching his practice referred to earlier. The Bank's "conduct" is pleaded as follows: "a. [The Bank] at all material times between 1982 and 1991 allowed [Michael] to exceed overdraft limits previously set. b. [The Bank] held regular reviews of [Michael's] overdrafts and at all material times increased overdraft and loan limits at the request of [Michael] upon being provided by [him] particulars of moneys advanced to clients of [his] business. c. [The Bank] discouraged [Michael] from borrowing on fixed term loans and d. [The Bank] encouraged [Michael] to personally lend to his own clients rather than obtain litigation loans for his clients. e. [The Bank] failed to ensure that [Michael] was aware within a reasonable time that [the Bank] would not continue to support [him] by lending further funds to enable [him] to advance money to existing clients of [his] business to pay the disbursements. f. [The Bank] represented to [Michael] that if [Michael] gave to [the Bank] all of [Michael's] assets as security for moneys borrowed that [the Bank] would continue to advance monies to [Michael] to pay the disbursements so that litigation already commenced by [Michael] could be finalised. g. [The Bank] failed to advise [Michael] that [the Bank] intended to stop lending to [him] in such a way that [he] could not finance the continuing obligations of [his] business to support clients of [his] business to the finalisation of the personal injuries litigation. h. [The Bank] approved a litigation lending facility to an amount of $1,200,000.00 and withdrew the approval when [Michael] had drawn down $400,000. i. [The Bank] encouraged [Michael] to lend the disbursements to clients of [Michael's] rather than using traditional litigation lending schemes. j. [The Bank] represented by its conduct and orally that [it] would continue to support [Michael's] scheme of lending the disbursements to clients of [his] business. k. [The Bank] represented to [Michael] that it was agreeable to [Michael] exceeding overdraft limits previously set as that enabled [the Bank] to charge to [Michael] penalty rates of interest which was a financial benefit to [the Bank]." The Bank affirmed its representations by continuing to support Michael's business and his funding of his clients from 1982 to 1991, and by its silence prior to and after 3 November 1988, when Michael executed a bill of sale and equitable mortgage to the Bank over his practice. The Bank had no reasonable grounds for making the representations, its conduct was misleading and deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the TP Act"), and Michael was misled and continued to take new instructions from clients who were unable to pay their own disbursements. In January 1991 and subsequently, the Bank failed to "honour" its representations, in that: "a. [The Bank] failed to ensure that [Michael] was aware within a reasonable time that [the Bank] would not continue to support [Michael] by lending further funds to enable [him] to advance money to existing clients of [Michael's] business to pay the disbursements. b. [The Bank] failed to advise [Michael] that [the Bank] intended to stop lending to [Michael as the Bank] had done since 1982. c. [The Bank] returned cheques 'refer to drawer' and 'present again' which had been drawn on [Michael's] General Account and deposited in [his] Trust Account. d. [The Bank] withdrew [Michael's] lines of credit when [the Bank] well knew of the obligations of [Michael's] business to clients of [Michael's] business. e. [The Bank] withdrew [Michael's] lines of credit without sufficient notice. f. [The Bank] required [Michael] to reduce his liabilities to [the Bank] when [the Bank] well knew that it was impossible to do so unless [the Bank] allowed further loans to [Michael] to continue litigation already commenced. g. [The Bank] withdrew the litigation lending facility when [it] had already approved same to an amount of $1,200,000.00 and [Michael] had only drawn $400,000. l. In January 1991 [the Bank] withdrew further credit. m. In January 1993 [the Bank] appointed a receiver pursuant to the Bill of Sale." The particulars of loss and damage are, with necessary adjustments, those mentioned above. An agreement was made in or about early 1984 between Michael and Williams, the then manager of Branch, that the Bank would make advances to Michael for the purpose of allowing him to pay expenses and outgoings of the clients for whom he was conducting litigation. It was a term that the Bank would not demand payment until completion of each piece of litigation. This was stated by Williams and it was implied from the Bank's making the advances, knowing that Michael would not be able to pay until completion of the proceedings. The contract was "remade" each time the Bank paid cheques drawn by Michael on his general account payable to his trust account, the Bank being aware that the amounts were to be used for the purpose of advances to his clients out of his trust account. In breach of the contract, the Bank demanded payment from Michael prior to completion of his clients' cases, as a result of which he suffered loss and damage. In the alternative, in various conversations between 1984 and December 1989 Williams represented that Michael could continue to make advances in the manner in which advances had been made since 1983, knowing that they would be repaid only upon successful completion of proceedings. In reliance on the representations, Michael continued to make advances to or on account of his clients for the purpose of payment of expenses of litigation.The Bank's representations were misleading and deceptive in contravention of s 52 of the TP Act, in that at all material times Williams knew that Region did not approve of the making of the advances to Michael and had directed Williams to cease to make them, yet Williams did not make Michael aware of this. Inconsistently with the representations, the Bank demanded repayment before completion of his clients' cases, and, as a result, Michael suffered loss and damage. Further or in the alternative, the representations were made by implication from the Bank's conduct in continuing to make advances to Michael for the purpose only of ensuring that his practice did not collapse, as it would do if the Bank failed to meet his cheques drawn in favour of his trust account to fund his clients' disbursements. The Bank continued to make the advances for the purpose of preserving its security over Michael's practice pursuant to the bill of sale, yet without any intention of waiting until completion of litigation before demanding recovery and enforcing the bill of sale. Williams' representations from 1984 to December 1989 were made in breach of a duty of care owed by the Bank. Williams was negligent in continuing to represent to Michael that the cheques drawn on his current account in favour of the trust account would continue to be met by the Bank, when he knew that at any time it could stop them. Michael suffered loss and damage in that he continued to draw such cheques, whereas if he had been aware of Region's attitude, he would have arranged alternative finance, and, as a result, a receiver would not have been appointed either at the instigation of the Law Society or by the Bank. Further or in the alternative, in or about September 1988, the Bank, through Williams, represented to Michael that it would not demand repayment before a client's litigation was completed.In reliance on that representation, Michael granted to the Bank the bill of sale and equitable mortgage over his practice. The Bank owed him a duty of care in making that representation, but in breach of it the Bank knew that Region wanted Williams to cease to make advances to Michael. By May/June 1991 the Bank determined that it did not wish to retain Michael as a customer. In May 1991, it determined that unless Michael paid out his indebtedness by the end of June 1991, it would enforce its securities. As at May 1991, the Bank knew that Michael and Judith were divorced and that Judith had commenced a proceeding against Michael for a property settlement. The Bank also knew that Michael would be unable to obtain alternative finance to pay out the Bank without the consent of Judith, who was a co-owner with Michael of many of the mortgaged properties.During the period June 1991-March 1992, Judith enquired of the Bank as to any time limit the Bank had placed on Michael to pay it out. The Bank had a duty to take care in answering her enquiries, but in breach of that duty wrongly informed her accountant, Parker, by letter dated 17 July 1991, that there were no such time constraints on Michael. The representation was false, in that the Bank was requiring Michael to pay out his loans immediately, in default of which it intended to realise its securities. The Bank was negligent in responding to Judith in the way in which it did. As a result, Michael suffered loss, in that Judith was caused to conclude that a statement that Michael had made to her that the Bank required a refinancing to be completed urgently was only a ploy by him in connection with the property settlement in the Family Law proceeding.Accordingly, she refused to assist him to refinance . She would not have refused to cooperate if the Bank had informed her, as was the case, that the Bank had determined in May 1991 that unless Michael paid his debt by the end of June, it would enforce its securities. If Judith had cooperated with Michael, he could have paid out the Bank and avoided the appointment of receivers to his trust account and to his practice. The Bank's reply to the inquiry on behalf of Judith was also misleading and deceptive conduct in contravention of s 52 of the TP Act. Michael's loss was the appointments of the receivers and their sequelae. The Bank's response to the inquiry was fraudulent. Further, the Bank, through its Regional Manager, Geoffrey Ian James ("James") instructed its Branch Loans Manager, Tony Doyle ("Doyle"), not to inform Judith or Vladimirka that the Bank required Michael to pay out his indebtedness, under penalty of a realisation by the Bank of its securities.From May 1991 to September 1992, the Bank deliberately withheld from Judith the information that the Bank was requiring Michael to discharge his debt, in default of which it would enforce its securities. The withholding of this information was fraudulent.The Bank's motivation was to avoid the possibility that Judith might seek to set aside the Bank's securities in so far as they related to properties co-owned by her with Michael. Further, by an agreement made in late 1989 between Michael and Williams, the Bank agreed to make advances to clientsof Michael's for the purpose of enabling them to pay litigation expenses and outgoings. It was a term of the agreement that the Bank would not require payment until the clients' cases were completed. In breach, the Bank demanded payment prematurely, as a result of which Michael suffered loss. The loss was that he continued to draw cheques on his current account, whereas, if he had been aware of Region's attitude, he would have arranged alternative finance and this would have avoided the appointments of the receivers. Finally, by reason of the Bank's conduct referred to, the Bank deprived Michael of the opportunity to refinance. Michael claims damages for negligence, an order that the amount of damages awarded to him be set off against moneys owing by him to the Bank, "damages for fraud including equitable compensation", damages under s 82 of the TP Act for contravention of s 52 of that Act, and an injunction restraining the Bank from taking possession of land or taking any further action pursuant to the respective mortgages and the bill of sale.

MICHAEL'S SUBMISSIONS Michael's written submissions have substantially reduced the scope of the issues to be resolved. His case falls into two parts: the pre-May 1991 causes of action and the post-May 1991 causes of action.

MICHAEL'S PRE-MAY 1991 CAUSES OF ACTION Michael's pre-May 1991 causes of action are based upon an alleged duty of care on the part of the Bank to Michael to inform him of certain instructions given by Zone to Branch in relation to the conduct of his account. Michael submits: "3. It was foreseeable to [the Bank] through [Williams] and indeed the management at Zone level that there was a foreseeable risk of economic loss to [Michael] if the directions of management at Zone were ignored and [Michael] allowed to continue to borrow funds as Zone might eventually enforce the instructions. 4. It is submitted that by refusing to carry out the management instruction from Zone level to dishonour cheques and bring the account out of excess and within limits,[the Bank] through [Williams] adopted and assumed responsibility for the way that [Michael] was allowed to operate outside of limits. 5. Such assumption or adoption of responsibility brought with it a duty of care on the part of [the Bank] to [Michael] to inform him of the instructions of Zone as to the conduct of the account and of the prospect of economic loss to [Michael] should the management at Zone level insist that its instructions be carried out as was known to [the Bank]." (emphasis supplied) The Bank submits that this "duty of care … to inform" has not been pleaded. It is true that Michael's further amended statement of claim does not clearly correspond to this duty. The pleaded duties of care "to ensure that the lending policies of [the Bank] did not cause damage to [Michael]" (par 20) and "not to cause [Michael] loss by making negligent representations" (par 52) are not pressed.

The suggested "duty … to inform" I understand the submission to refer to a duty of care which could have been performed only by informing. It is convenient to refer to it elliptically as a "duty to inform". The duty and breach alleged are in respect of a duty, and failure, to inform Michael of the instructions Zone was giving to Williams. Accordingly, the duty propounded is a duty of a bank to inform its customer of instructions from an upper to a lower level in a hierarchy within the Bank. The Bank submits that there is no such duty as a matter of law and that there are no special facts in this case which give rise to such a duty, for the following general reasons: "(1) The duty asserted is inconsistent with the contractual nature of the banker/customer relationship. There cannot be a duty to inform a customer of matters which are inherently internal to the Bank. In this case it is asserted that the information not passed on were instructions from the Zone to the Branch. (2) The rights of a customer and the Bank are determined by what passes between the customer and the bank officer with whom the customer deals. For example if the Zone advises the Branch to decline a request for funding but the Branch, nevertheless, sends an approval letter the Bank can be held to the approval letter. Here [Michael] sought various temporary excesses which were approved by the Branch. (3) At no stage did the Bank seek to depart from any arrangement made between the Branch and Michael ..." The Bank submits, and I accept, that the relationship between the Bank and its customer is essentially contractual; cf Weaver & Craigie, The Law Relating to Banker and Customer in Australia, 2nd ed, The Law Book Co Ltd, 1990, at 2511-3; and Foley v Hill (1848) 2 HLC 28; 9 ER 1002. It submits that there is Privy Council authority against the extension of a general law of duty of care to the banker-customer relationship, and refers to China and South Sea Bank Limited v Tan [1990] 1 AC 536 (PC), esp at 543H-544A and Tai Hing Cotton Mill Limited v Liu Chong Hing Bank Limited [1986] AC 80 (PC).In the latter case, Lord Scarman, delivering the judgment of their Lordships, said: "Their Lordships do not believe that there is anything to the advantage of the law's development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. Though it is possible as a matter of legal semantics to conduct an analysis of the rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and necessary for the avoidance of confusion in the law to adhere to the contractual analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other, and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tort, eg. in the limitation of action." (at 107) The Bank submits that Michael's submissions do not advance a satisfactory basis for the suggested duty to inform. The Bank points out that once Branch permitted excesses, there could be no question of Zone's enforcing an instruction not to do so. It suggests that the only situation in which a duty of the kind relied on might arise is between the time of the making of an agreement for a temporary excess and the actual allowing of it. In such a case, if Michael had committed himself to a particular course of action in reliance on the promise, the Bank might arguably not be free to withdraw. However, that is not this case. Michael initially put, but no longer presses, a case that the Bank gave insufficient notice before ceasing to advance funds. Further, if Williams should ignore Zone's directions, what was foreseeable to him was a financial benefit, not a loss, to his customer.I accept the thrust of these submissions. Paragraph 4 of Michael's submissions (set out earlier) is also problematical. The Bank submits, and I accept, that it could only be said that "Williams adopted and assumed responsibility for the way that [Michael] was allowed to operate outside of limits" if there had been some communication to that effect from Williams to Michael.But none is referred to in Michael's submissions.On the evidence, Williams simply never did adopt or assume that responsibility. The relationship between Michael and the Bank was never anything other than a commercial one in which Michael sought and accepted indulgences in the form of financial accommodation in excess of previously agreed limits. Williams' conduct did not entitle Michael to understand that the Bank was assuming some responsibility in granting him the indulgences. It is beside the point that Williams was, to some extent, motivated by his belief that Michael was a "valuable connection" for the Bank.One of the findings of fact specifically sought by Michael is that "Williams tolerated [Michael's] excesses over limits because he considered [Michael] was good for the business of the [Bank]". He submits that Williams ignored Zone's instructions because "he considered [Michael] to be good for [the Bank's] business and it was prestigious to have a local Solicitor of [Michael's] standing as a customer at his branch". It may be accepted that these considerations did affect Williams.But the indulging of Michael for the sake of what Williams considered to be in the Bank's best interests is not to be equated with an assumption of responsibility to Michael.It is clear that Williams tried to keep Michael to his limits and communicated Zone's attitude to him, as discussed below. That Michael continued to operate beyond limits notwithstanding, is a course of conduct for which he alone was responsible.The Bank granted him what he asked for and had no duty to save him from himself. There is no substance in Michael's submission that the Bank owed the suggested duty to inform.Michael knew that he would become indebted to the Bank for the amounts of the excesses and interest on those amounts; that the Bank was entitled to cease granting indulgences; and that if he did not pay the Bank, it would be entitled to exercise its rights as a creditor, and, in this case, a secured creditor, to recover the amount due. No scope remains for saying that Williams assumed responsibility for "the way that [Michael] was allowed to operate outside of limits." It was not, and could not have been, suggested that Williams assumed responsibility to ensure that the uses to which Michael put the excesses did not cause him loss.

Any duty to inform was superseded The Bank submits that any duty to inform was "superseded" by the arrangements and further loans negotiated by Michael with Branch after Williams left the Bank in mid-1989.The documents on which Michael relies to establish Zone's instructions to Branch and Branch's disobedience of them range from May 1984 to July 1987.But after that period, Michael restructured his facilities with the Bank on at least three occasions. The first restructuring was approved by a letter from Williams dated 29 August 1988. It was headed "APPLICATION FOR INCREASED ACCOMMODATION." It referred to a "Bills Endorsement Facility" of $210,000 as the only "existing facility", and approved an increase in that facility to $300,000, as well as an overdraft of $150,000 and a fully drawn loan of $300,000 (the letter also notified approval of a "home improvement loan" of $100,000 to Michael and Judith to reimburse Michael's office account in respect of "costs associated with the recent additions to [the] property at Burwood"). The letter noted that: "[t]he original intention of the increased facilities was to place the existing debts to the Bank onto a formal reduction programme and for the overdraft to provide the firm with additional working capital. In the interim period however, since initially discussing this proposal, the debts have increased to the extent that the above arrangement will now simply formalise the current indebtedness to the Bank." (emphasis supplied) Accordingly, the new arrangement marked a new point of departure by conveying formal approval of the existing excesses. The second restructuring was approved by a letter from the Bank dated 10 April 1989. The letter notified the Bank's approval of the practice's overdraft limit from $150,000 to $250,000.As well, on 2 May 1989, Branch wrote to Michael referring to recent discussions and confirming that a "fully drawn loan number 2" of $500,000 had been recently funded by deposit of that sum to Michael's overdraft account 214-984.Williams retired by mid-1989 and John Lee Kilburn ("Kilburn") succeeded him as Branch Senior Manager. Soon afterwards, in mid-1989, the two branches at Fairfield merged under Kilburn's management. Accordingly, the second restructuring just described appears to have been approved a little before Williams was succeeded by Kilburn, which was itself a little before the merger. Third, in November 1989 Michael approached Branch to approve a litigation loan facility and general rearrangement of his facilities. This was negotiated at Branch by Gino Joseph Coiera ("Coiera"). Although Coiera had been at the Ware and Spencer Streets branch prior to the merger, he had become involved with Michael's accounts only after the merger, in late 1989.Application was made by Branch to Zone and was then considered further at a higher level. Ultimately, the Bank approved a rearrangement of Michael's facilities and a new litigation loan facility by letter dated 15 January 1990. The approval was of a litigation loan facility of $1,300,000 to refinance Michael's debts to the extent of $820,000 incurred in paying disbursements on behalf of existing clients and $480,000 to cover disbursements on behalf of "new litigants"; reduction of the formal limit on the overdraft account to $150,000 and funding of the current excess above this figure of $556,000, as to $290,000 by "Fully Drawn Loan No. 1" and as to $266,000 by "Fully Drawn Loan No. 2"; an increase in Fully Drawn Loan No. 1 by $290,000 to $570,000; and an increase in Fully Drawn Loan No. 2 by $266,000 to $820,000.The letter also stated various terms and conditions.In agreeing to this, Michael was agreeing to a comprehensive restructuring of his facilities with the Bank. In my view, these various "renegotiations", "rearrangements" and "approvals" demonstrate that any earlier assumption by Williams of responsibility for the manner in which Michael operated outside of limits and any resultant duty incumbent on the Bank, were rendered legally insignificant, because they negate reliance and break the chain of causation of loss. Michael's critical submissions in relation to reliance are: "17. [Michael] should also be accepted when he says what he would have done had he been aware of the Zone's instructions and its attitude towards him as set out in his affidavit of 26th March 1997 in paragraphs 7, 10, 13 and 16. 17A. [Michael] continued to lend to his client's [sic] and incur increasing borrowings based on the continual support given to him by Williams." Michael's submissions in relation to causation of loss, are: "... the ultimate loss suffered by [Michael] was the loss of his practice which would not have been lost if the Zone's instructions were followed" and "... an appropriate measure of damage contributed by [the Bank] is all of the interest and charges debited by [the Bank] to the account of [Michael] from January 1986 to the present time." In substance, the effect of Michael's affidavit evidence is that if he had known of Zone's instructions to Branch, he would have renegotiated a different limit with the Bank or refinanced elsewhere. But he did renegotiate his facilities (including the amounts of their limits) with the Bank, and he did refinance, not elsewhere admittedly, but by way of a restructuring of those facilities with the Bank itself.And he obtained the litigation loan facility, pursuant to the letter dated 15 January 1990, which stipulated "limit not to be exceeded".Moreover, he did these things because he knew that Zone, if not Branch, was insisting that his accounts be brought into order and the excesses on them be eliminated. If, contrary to my view expressed earlier, the Bank did owe Michael the duty to inform, that duty did not continue beyond the making of the new agreements between Michael and the Bank.

Alleged breach of the duty to inform Michael's submission on breach of the supposed duty to inform is as follows: "13. The breach of the duty to inform [Michael] of the foreseeability of economic loss due to [Williams'] continuing refusal to carry out the instructions of Zone which might have been enforced at any time continued from 1984 to mid 1989." This paragraph is not a model of clarity. It asserts that breach continued throughout the period specified. But the breach alleged is a failure to inform Michael that it was foreseeable that Williams' disobedience would cause Michael loss.Why Williams would have known this is a mystery.It seems from Michael's later submission on contributory negligence that what he alleges to have been the Bank's breach of duty is its "fail[ure] to inform him that Max Williams was refusing to carry out the instructions of the management at Zone level". However, Michael's submission on loss seems to contemplate a breach of duty consisting of a failure to implement Zone's instructions by returning cheques: "20. It is submitted that the ultimate loss suffered by [Michael] was the loss of his practice which would not have been lost if the Zone's instructions were followed, but Williams assumed a responsibility to allow [Michael] to exceed limits and failed to carry out instructions which would have avoided [Michael] exceeding his bank limits." This is also perhaps reflected in the following finding of fact sought by Michael: "7. Williams did not comply with directions from Zone, to dishonour [Michael's] cheques and bring the account back within limits." The submissions reveal much confusion. The Bank submits, rightly, that a failure to dishonour cheques (a bizarre complaint for a customer to make) cannot be a breach of a duty to inform, as a dishonouring of them would not have informed Michael that Williams had received or was implementing instructions from Zone. The Bank says that, in any event, Branch did dishonour Michael's cheques on his practice account in, inter alia, March 1987. That was after the "instructing" of Branch by Zone and prior to Williams' leaving the Bank in mid-1989 and also prior to Michael's renegotiation with the Bank.

The "instructions" from Zone to Branch The Bank submits that many of the alleged "instructions" from Zone to Branch identified in Michael's submissions, were not "instructions" at all. The following documents on which Michael relies do not satisfy that description: (1) Memorandum dated 27 August 1984 from Branch (Williams) to Zone (on which Williams was cross-examined) referring to continuing excesses on accounts notwithstanding Michael's assurances, and to the fact that the excesses had been tolerated in view of the substantial credit funds in the trust account; (2) Memorandum dated 28 August 1984 internal to Zone, not shown to have been passed on to Williams, recording comments by L B Hogan that: "Manager was asked to apply firm control over accounts after he approved bridging [Fully Drawn Loan] 26/4/84", that the writer 'Would inform Manager we do not wish to see Bank's exposure increased beyond the current level and are now looking for a reduction programme to be implemented', and that 'Cheques may need to be returned to enforce the Bank's attitude and to obtain a favourable response to reductions from debtors'"; (3) Memorandum dated 15 October 1984 from Branch (Williams) to Zone (concerning which Williams gave evidence and on which he was not cross-examined), reporting that Michael had called at Branch in response to a request and had been told of Zone's "concern at the weak security backstop position" and informed of the need to reduce his debt in the shortest term and that further cheques were not to issue unless authorised by Branch; (4) Memorandum dated 18 April 1985 from Branch (McHugh, Acting Manager) to Zone (on which Williams was not cross examined) recording that financial statements promised by Michael had still not been received and that his accounts were out of order; (5) Memorandum dated 8 July 1985 from Branch (Williams) to Zone (upon which Williams was not cross examined) reporting that Michael proposed to transfer funds from his trust account to his office account and was "close to achieving substantially improved liquidity", and requesting Zone's "indulgence for a further few weeks"; (6) Memorandum dated 17 July 1985from Branch (Williams) to Zone, seeking Zone's direction as to whether fresh forms of third party consent were required in view of substantial increases in excesses; (7) Memorandum dated 14 November 1986 wholly internal to Zone (on which Williams was not cross examined) beginning: "This connection has been troublesome for some years with escalating debt structure principally through excesses. The branch has made all the right comments of concern and control but despite instructions to contain debt levels and return paper if necessary, Manager continues to ignore direction." (emphasis supplied) (The memorandum recorded a recommendation that Zone respond to Branch in strong terms.The result was a "firm" memo dated 24 November 1986 from Zone to Branch referred to below); (8) Memorandum wholly internal to Zone dated 15 July 1987 (upon which Williams was not cross examined) referring to an increase in excesses on the overdraft of approximately $50,000 since 10 June 1987, and recommending that Branch be told that no further excesses were to be permitted. An examination of the document referred to in (3) above establishes that Williams did communicate to Michael the position being taken by Zone. That memo, from Branch to Zone, reported: "At our request Mr Radin interrupted his busy court schedule and called for a brief discussion. [Region's] concern at the weak security backstop position which is of course shared by us was discussed and special emphasis was directed to an overall reduction of indebtedness in the shortest term to the point where further cheques were not to issue unless authorised by us. ... ... It is felt that his reliance on the Bank must lessen from now on in and he is mindful of our past support and aware of our concern that the debts should not increase further." (emphasis supplied) Williams gave evidence in relation to that document (on which he was not cross examined).He states that he said to Michael on many occasions words to the following effect: "Michael, head office is very worried about the level of your indebtedness. Because of this it's putting considerable pressure on me. I want to support you but if my support is going to continue, you are going to have to bring your accounts into order and reduce your level of indebtedness." I accept this evidence. In document (4), Branch refers to a letter from Branch (Williams) to Michael dated 30 April 1985, in which Williams communicated to Michael the attitudes and "instructions" from Zone: "Our Administration recently called for a report on your accounts because of the considerable and consistent limit excesses and because financial statements to 30/6/84 have not been provided despite our frequent requests. You will also recall that early this month we asked you to transfer any personal funds to reduce the overall indebtedness but this appears to have been overlooked. ... The Bank has therefore now decided to take a firm line and we have been instructed to inform you that your accounts are to be brought into order within a week from the date of this letter. Failure to comply or to make any alternative arrangement acceptable to the Bank could result in your cheques being returned." (emphasis supplied) The remaining documents relied on by Michael are as follows: (1) Memorandum from Zone to Branch dated 1 May 1984, which stated, in part, "[i]n view of the history of excesses on the overdraft accounts of the applicants [Michael and Judith] and business ... we wish to see firm control maintained over these accounts." (emphasis supplied) (2) Memorandum from Zone to Branch dated 12 October 1984, seen and initialled by Williams, which stated, in part, "[d]ebtors' cash flow appears insufficient to meet commitments and the funds from sale of the Canley Heights property are urgently required to reduce outstanding debts". It also states, relevantly, "We again emphasise the need to reduce the current level of indebtedness to a more manageable level. In this regard a firm stand will need to be taken with cheques being returned to achieve a suitable result. These accounts are to now come under State Manager's [Zone] control." (emphasis supplied) (3) Memorandum from Zone to Branch dated 19 October 1984, seen and initialled by Williams, in which Zone states, in relation to the accounts: "The continued acceleration of debts is unacceptable and the control measures indicated in our memorandum 12/10/84 are to proceed. [Michael's] finances are out of control..." (emphasis supplied) Following this, there was a significant debt reduction by Michael. The Bank asks me to infer that the thrust of this instruction was passed on to him.Incross examination, Williams said that he "probably did" tell Michael that Zone thought that his finances were "out of control". I accept that Williams did communicate to Michael that the position was unacceptable to Zone, that Zone thought his finances were "out of control", and that Zone was requiring Branch to take action to ensure that his accounts were brought into order. (4) Memorandum from Zone to Branch dated 15 July 1985 (on which Williams was not cross examined), in which Zone outlined several factors of concern to it in relation to Michael's liquidity problem, including a concern that "provision is not being made for taxation". The following passage also appeared: "No doubt you will keep these factors in mind when controlling excesses which should not be allowed to exceed the present level. The need for arrangements which will oblige debtor to adopt a responsible approach is patently clear and will need to be addressed as soon as possible." (emphasis supplied) (5) Memorandum from Zone to Branch dated 15 September 1986 (on which Williams was not cross examined), which included the following: "[Michael's] problems are little different to any other under-capitalised business over trading its resources and irrespective of his personal lifestyle it is up to him whether the Bank proceeds to return paper. We have reached a stage where no further tolerance will be afforded particularly when taking into account the inadequate security position. We will now look to a steady decrease in indebtedness and if there is no real improvement we expect cheques to be returned." (emphasis supplied) (6) Memorandum from Zone to Branch dated 24 November 1986 (on which Williams was not cross examined), which included the following: "We are very concerned to note that despite directives and your own misgivings expressed in memoranda you persist in allowing rising exposure levels without prior reference to this point of control. Your experience would readily emphasise the demand for managerial responsibility in branch/administration relationships. We are not disposed to further restructuring persistently rising debt levels without the following matters being addressed ..." (emphasis supplied) (7) Memorandum from Zone to Branch dated 27 April 1987 which included the following passage: "With regards to Litigation Loan facilities a selective approach continues to be adopted for provision of the facility to valued solicitors clients [sic]. From past performance this connection [Radin & Associates] would not be considered valued. Overall, and given the extent of exposure against security held there is no scope to approve further facilities of any type. In the event that proposed reductions significantly reduce debt level over say next 7/8 months we will reconsider the matter of a Litigation facility for this connection. Please review the position once again in 3 months." The Bank submits that (7) is not an "instruction".I agree.The memo merely informed Branch that litigation loan facilities were approved only for "valued" solicitor-clients of the Bank and that Michael was not so regarded.In cross examination, Williams agreed that at that time (April 1987) he knew or suspected that no-one in the Bank apart from Williams himself considered Michael a valued client. I accept that Zone instructed Williams, not only to inform Michael of the necessity of bringing his accounts into order, that is to say, within previously agreed limits, but also, if necessary, to take positive action to ensure that this happened by dishonouring cheques.But I also accept that Williams informed Michael regularly of Zone's instructions, yet indulged him to an extent inconsistent with them.But this leads nowhere.Michael knew that Williams was his advocate at the Bank and was under pressure from Zone.If there was any particular occasion when Williams did not advise Michael of an instruction from Zone (I do not accept that there was), Michael was content for Williams to ignore any such instruction by continuing to honour his cheques.

Was Michael aware of the matters of which he complains he was not informed? The Bank submits that Michael was well aware of Zone's attitude to his accounts, and, in particular, knew that Zone was insisting that Branch cause the excesses above agreed limits to be eliminated, in default of which cheques were to be dishonoured. The Bank submits that Michael was so aware from a time before Williams became Branch Senior Manager down to mid-1989 when he retired. As early as February 1984, prior to Williams' arrival, Branch wrote to Michael requesting that he contain excesses on accounts to stated amounts. By letters dated 21 and 28 February 1984, Branch threatened that cheques might be returned if Michael failed to comply with the request. The former letter expressly stated "Head Office" was insisting that the debts be contained. Williams also acted upon Zone's statement in the memorandum dated 1 May 1984, (see (1) above), that Zone wished to see Branch maintain "firm control" over the accounts. Branch (Williams) sent to Michael and Judith letters dated 30 May 1984 and 29 June 1984 requesting them to bring their accounts into order. In the latter, Williams said: "it is most disappointing that you continue to issue cheques with complete disregard for arrangements". In cross examination, Michael volunteered that the concerns expressed in the letter of 29 June were directives that Williams had received from Zone which were being passed on.Indeed, his evidence more generally was that Williams understood his business whereas Zone did not, and that he understood Williams' expressions of concern and remonstrances to be a relaying of Zone's position rather than a spontaneous statement of Williams' "own" position. Williams' evidence-in-chief, on which he was not specifically cross examined, was that although he could not recall the precise conversations, he was certain he told Michael that "head office wants your accounts brought in order". His evidence in cross examination was that "every time" he received a memorandum from Zone he would speak to Michael by telephone about the "unenviable position" in which he (Michael) had placed him (Williams). He also gave evidence that the threats from Zone made it easier for him to inform Michael that he (Michael) could not continue to "carry on like this". Williams gave evidence that he recalled on many occasions saying to Michael words to the following effect: "Michael, the Region is still very concerned at your overall financial position. They consider that its [sic] deteriorating each week. Your debt does appear to be escalating. The Region doesn't think you're making any serious attempts to contain the level of your debt. Because of their concern head office is taking control of your accounts. Michael you've really got to reduce your debts immediately otherwise the Region are telling me I've got to dishonour cheques." The Bank submits that Williams was not cross examined on these conversations and that his evidence of them must be accepted. Whether or not it must be, I do in fact accept that Williams had numerous conversations with Michael to the general effect of this passage. Michael attended a meeting at the Bank to discuss his accounts on 15 October 1984. He said that Williams told him that Zone was concerned about the level of his overdraft account. This is consistent with Williams' evidence-in-chief.Michael did not say, when asked, that he had any reason to doubt the accuracy of Williams' diary note recording the meeting.According to the diary note, at the meeting "Head Office" concerns were discussed and "special emphasis was directed to an overall reduction of indebtedness in the shortest term to the point where further cheques were not to issue unless authorised by [the Branch]". Following the meeting, Michael did in fact reduce his debt. By the end of November 1984, the bill discount facility of $25,000 had been repaid and the Radin & Associates overdraft had been reduced from $53,022 as at 10 October to $10,152. Williams wrote to Michael on 30 April 1985. According to the Bank, the letter is very important to dispel any notion that Michael was not aware of Zone's attitude in relation to his accounts. It clearly states that the accounts were to be brought into order, in fact within one week, and that if this did not happen cheques might be returned. Michael agreed that he understood that in the letter Williams was passing on the attitude of Zone which could lead to his cheques being "bounced".Michael said in cross examination: "Well, Mr Williams was giving me the region's concern over my account, yes." Williams wrote again to Michael on 23 August 1985, warning him that the level of indebtedness was again causing concern to the Bank and stating "the position has been reached where the payment of cheques in excess of the above debt levels cannot be guaranteed". In cross examination, Michael agreed that he interpreted the letter as being a passing on by Williams of Zone's view. Later, Branch (Williams) again advised Michael of its concerns about reduction of the debt by letters dated 24 October 1985 and 29 January 1986. By letter dated 19 August 1986, Branch (Williams) advised Michael: "Control of your accounts has now passed to our Head Office [Zone] and we have been firmly informed that the debts on both accounts ["Radin & Associates" and "M & JA Radin"] must be reduced forthwith. We have also been instructed to dishonour cheques to achieve this result. We cannot therefore justify the past practice of allowing the overdrafts to increase notwithstanding our advices to you to the contrary." I find that Michael knew that his accounts were under Zone control, contrary to his assertion. Michael alleges that Williams did not communicate to him the instructions he received from Zone in memoranda dated 15 September 1986 (document (5) earlier) and 24 November 1986 (document (6) earlier) but I do not accept his evidence in this respect. Branch (Williams) sent Michael and Judith a letter dated 26 November 1986, advising them that the Bank had no alternative but to cease paying monthly amounts payable to "various finance institutions" and to return cheques for any thing other than "normal living expenses". Branch (Williams) sent Michael a letter dated 5 January 1987, which referred to the fact that Zone was "closely monitoring" his position; was placing pressure on Branch to reduce the Bank's exposure; was placing pressure on Branch in respect of any further drawing of cheques by Michael; and was asking for cover for all cheques drawn in the short term. Michael agreed that he understood the letter to mean that he was at risk of having cheques dishonoured as a result of an initiative of Zone. In March 1987, cheques were dishonoured on the practice account and the joint account of Michael and Judith. During cross examination on a memorandum from Branch to Zone dated 17 September 1987, and, in particular, on the paragraph: "Reluctantly we therefore support him in this instance to protect his investment on the strict understanding that his overall indebtedness continues to decrease as it has in the last few weeks". Michael agreed that he recalled from time to time discussing the need to reduce his indebtedness because of Zone's concern. Branch (Williams) wrote Michael on 4 March 1988, a letter which included the following passage: "... we cannot continue to pay cheques that are not provided for and in this context we would not like the present No 2 account debt to increase. In fact we are now looking to you to reduce this debt below $100,000 in the shortest term and progressively reduce to clear this indebtedness in the foreseeable future." Michael agreed that he understood this letter to be a clear indication that his cheques might be dishonoured, and accepted that he had previously given assurances to the Bank that the particular account in question would operate on a credit basis. Branch (Williams) wrote again to Michael by letter dated 1 March 1989, warning him that the Bank could not continue to guarantee payment of cheques. In cross examination, Michael said that he understood from this letter that Zone regarded him as having placed the Bank in an "untenable situation", and that the letter was "from Region indicating it was considering bouncing [his] cheques". If the Bank was subject to a duty to inform of the nature asserted by Michael, the evidence does not establish a breach of it. On the contrary, Williams made Michael well aware of Zone's attitude to his accounts throughout the whole period when Williams was Branch Senior Manager.

Reliance Michael states that if he had been aware of Zone's attitude to his accounts, he would: (i) "have either formally negotiated a maximum limit with the bank which [he] considered sufficient for [his] practice or [left] the bank"; (ii) "not have given a mortgage over unencumbered property to the bank"; (iii) "not have given an equitable mortgage over [his] practice"; and (iv) "have refinanced the whole of [his] indebtedness to the bank and applied to take out larger litigation loans facilities through the Westpac Banking Corporation or some other bank". As noted above, in my view, Michael was aware of the attitude of Zone to his accounts. It is therefore unnecessary for me to address the issue of reliance.It is also difficult for me to do so, because I would be required to assume, contrary to the fact as found by me, that Michael's actual state of mind was one of ignorance of Zone's attitude.I will approach the issue of reliance by assuming that Williams had more zealously and emphatically informed Michael, and ask myself whether Michael would have followed the courses of conduct described in pars (i) to (iv) above. In relation to par (i), Michael did negotiate increased limits with the Bank as part of the restructurings referred to earlier. By 1988, he had made requests for finance he said he needed. He did so again in April 1989, and in January 1990 he sought a litigation loan facility in relation to which he had also approached another Bank. There is no scope for a finding that Michael would have done anything other than what he in fact did. The Bank submits that the claims made in pars (ii) and (iii) should not be accepted, as Michael provided security to the Bank at later points of time after the Bank had refused to make any further litigation loan. The evidence establishes that after becoming aware of Zone's attitude, Michael granted a mortgage dated 19 February 1991 to the Bank over the property at 24/4 Ithaca Rd, Elizabeth Bay ("Elizabeth Bay") and mortgages dated 4 March 1993 over properties at Lot 38 Stafford St, Gerroa, 15 Morton Ave, Lemon Tree Passage, and 34 Stockton St, Nelson Bay. The Bank also submits that the claims are inconsistent with par 17 of Michael's further amended statement of claim: "17. At all material times up to 7th September 1992 [Michael] assigned by way of mortgage to [the Bank] all of the assets of [Michael] as security for moneys borrowed by [Michael] from [the Bank]: ... f. Mortgage dated 19th February 1991 made between [Michael] as Mortgagor and [the Bank] as Mortgagee (Security: [Elizabeth Bay] - Folio Identifier 26/SP13189). ... i. Between 1982 and 1993 [Michael] mortgaged other real estate in which [Michael] held an interest and the properties have since been sold and the mortgages discharged. j. On 3rd November 1988 [Michael] executed a document entitled "Bill of Sale and Equitable Mortgage" (hereinafter referred to as the "Bill of Sale") made between [Michael] therein referred to as the mortgagor and the Debtor and [the Bank]. PARTICULARS A. The Bill of Sale was registered on 10th November 1988 No. 805629. B. The Bill of Sale secures inter alia the sum of $851,972.75." The Bank also submits, correctly, that Michael was bound, pursuant to the terms of the loan, to provide such further security as the Bank required.For example, clause 5 (b) of an "Application for Advance and/or Bills Facility" signed by Michael and Judith dated 12 January 1983 contained an undertaking by them to "execute such form or forms of security as the Bank may require", and clause 2 (b) (i) of "Application for Accommodation" by Michael trading as "Radin & Associates" dated 5 March 1986 provided that the accommodation applied for should be "secured by such securities as may from time to time be required by the Bank which securities [should] be in such form or forms as required by the Bank".A similar clause was enforced in Fountain v Bank of America National Trust and Savings Association (1992) 5 BPR 11,817 (CA) (Gleeson CJ and Kirby P, Meagher JA dissenting).I accept the Bank's submissions in relation to pars (ii) and (iii). Finally, in relation to par (iv), even if Michael's assertion that he would have refinanced is to be accepted (I do not say that it is), Michael would have owed the same amount of debt to a different financial institution.Assuming he could and would have refinanced, the Bank submits that the maximum conceivable loss is any interest rate differential. None has been proved and there is no evidence as to lower interest rates which Michael would have obtained at the relevant time. The Bank submits that certain attachments to Michael's submissions, which relate to interest rates, are, inter alia, not related to interest rates available at a time relevant to this aspect of Michael's claim.The Bank also submits that attempting to refinance is not something that Michael did until he was prodded to do so by the Bank itself, and that his evidence that he would have done so earlier voluntarily should not be accepted.I accept the Bank's submissions. Michael clearly devoted insufficient time and resources to financial management and would not have attempted to refinance, with the attendant diminution of time available for attracting more business, unless he accepted that there was no alternative. In my mind, so long as Branch was in fact honouring his cheques, his attitude was that there was an alternative. The Bank also submits that Michael's unsuccessful attempt to refinance much later (discussed below) establishes that he could not have done so earlier. But this does not necessarily follow: there are too many intervening circumstances. However, as noted above, I accept the Bank's submission that it is not shown that if he had succeeded in refinancing, he would have been better off and would not have avoided the losses suffered.

Loss and damage Michael submits: "18. The losses are difficult to quantify. 19. However if a breach of duty is proved, then the Court must find some basis for the assessment of damage. 105 ALR 51; 169 CLR 638; 49 ALJR 350; [1979] 2 NSWLR 155; 19 ALR 607; 13 ALR 447 and [1979] 1 NSWLR 733. 20. It is submitted that the ultimate loss suffered by [Michael] was the loss of his practice which would not have been lost if the Zone's instructions were followed, but Williams assumed a responsibility to allow [Michael] to exceed limits and failed to carry out instructions which would have avoided [Michael] exceeding his bank limits." Paragraph 20 is difficult to follow. Michael's complaint appears to be that if Williams had not yielded to his (Michael's) supplications for funds, his legal practice would have been saved, and so the Bank is liable to him in respect of the loss of his practice.The proposition is absurd, quite apart from its leaving out of account the role of Michael's professional misconduct in the loss of his practice. The most that could result from the alleged breach of duty is that the Bank might be estopped from acting inconsistently with any representations that Williams might be found to have made.That was how Michael originally put his case.But he now claims damages because the Bank granted the temporary excesses that he sought.Michael could never be said to have been caused loss by the Bank.The Bank merely gave him, a solicitor and businessman, the financial accommodation for which he asked, and, as noted earlier, the use to which he put the money was something for which he, not the Bank, was responsible.

Contributory negligence Michael's submissions suggest that the Bank contributed to its own loss: "21. ... [the Bank] was in breach of its duty to [Michael] by failing to inform him that [Williams] was refusing to carry out the instructions of the management at Zone level. 22. It was foreseeable by [the Bank] that [Michael] would lose his practice if the instructions of the Zone were not put into effect. 23. Williams ignored or largely ignored the instructions of the Zone. 24. The Zone knew that Williams was ignoring or largely ignoring their instructions. 25. Instructions were ignored by Williams because he considered [Michael] to be good for business and it was prestigious to have a local Solicitor of [Michael's] standing as a customer at his branch. 26. It is submitted that an appropriate measure of damage contributed by [the Bank] is all of the interest and charges debited by [the Bank] to the account of [Michael] from January 1986 to the present time." Perhaps it was intended to allege "contributory negligence".I accept the Bank's submission that it is a misconception to assert contributory negligence by a creditor as a defence to an action for debt.

TP Act Michael submits: "28. ... the conduct of Williams in ignoring the Zone's instructions and failing to inform [Michael] of the Zone's instructions, was conduct which was misleading or deceptive. 29. [Michael] was mislead [sic] in relation to the extent to which [the Bank] would tolerate the excesses of limits in his account. 30. [Michael] repeats the submissions made in paragraphs 15-17A above. 31. As to the loss occasioned by the misleading and deceptive conduct, [Michael] repeats the submissions in paragraph 21-27 above."

I find that Williams' conduct was not misleading and deceptive.In the alternative, if it was, Michael was not in fact misled by it.I have outlined earlier my reasons for reaching these conclusions.

Time bar The Bank submits that if the cause of action to which Michael's submissions have been directed had been specifically pleaded, the Bank would have pleaded a limitation defence. It says that the omissions and breaches of duty, if established, would have occurred in the period 1984 to July 1987, and that the same conduct is said to give rise to contraventions of the TP Act.The proceeding by Michael was not commenced until June 1993.The Bank submits that if particular items of loss had been established, they, or the first of them to be suffered, would have occurred prior to June 1987, with the result that the claim is now time barred.In the light of my several conclusions above, it is unnecessary for me to deal with this submission.

MICHAEL'S POST-MAY 1991 CAUSES OF ACTION The post-May 1991 causes of action are essentially based upon an allegation that the Bank misled Judith as to the time which it was allowing Michael to refinance before proceeding to realise its securities, and that but for being misled, she would have immediately and continually cooperated with Michael in his attempt to refinance, which would or might have been successful. The allegation turns on a letter dated 17 July 1991 from the Bank to the accountant, Parker, who was advising Judith in connection with her Family Law proceeding against Michael. The present allegation is common to the claims of Michael, Judith and Vladimirka.The following issues are raised: (1) Whether the Bank, in its dealings with Judith in June and July 1991, misrepresented fraudulently, negligently or so as to constitute misleading and deceptive conduct in contravention of s 52 of the TP Act, that there were no time constraints for the refinancing to be arranged; (2) If so, whether that misrepresentation caused Judith not to cooperate with Michael in circumstances in which, and to an extent to which, otherwise she would or might have done so, to enable him to refinance and to pay out the Bank; (3) If so, whether Michael, Judith and Vladimirka suffered loss of the kind particularised. The Bank's defence to the applicants' pleadings raises the following additional issue: (4) Whether the cause of action is time barred.

Misrepresentation as to time constraints on refinancing generally Michael, Judith and Vladimirka all rely on the Bank's having misled Judith in the respect mentioned.The pleadings are elaborated upon by Michael's written submissions headed "Applicant's causes of action after May 1991". These have been adopted by Vladimirka, and, to a large extent, by Judith. The Bank's letter to Parker dated 17 July 1991 was a response to a letter from Parker to the Bank of the same date, which was as follows: "Mrs. Judith Radin has sought my advice in relation to her Property Settlement with her ex-husband, Michael Radin. I understand from Mrs. Radin that your Bank is pressing for the re-financing of the various properties owned by Mr. M. and Mrs. J. Radin. So that she may be better informed as to her exposure at the present time and before signing any documents for re-financing, I would be obliged if you would provide (in detail) the properties which are: 1. Owned in whole or part by Mrs. Radin. 2. In each case the amount of encumbrance on each of these properties. Further, I would appreciate your Bank's timing requirements for the repayment of the mortgages. Mrs. Radin, ... needs to be fully informed of her financial exposure both before and after the signing of the documents for refinancing. ... Your provision of this information is both urgent and absolutely necessary and I would appreciate your faxing the information to me today." (emphasis supplied) This letter was faxed to Branch and received by it at 1:36 pm. Kilburn, Branch Senior Manager, wrote a note on the fax cover sheet to Doyle, Loans Manager, reading: "Tony, Information is readily available. Could we reply by say 3 pm. JK" Kilburn says he left the fax transmission on Doyle's desk to await his return from lunch. The Bank (Doyle) faxed a reply to Parker the same day at 3:45 pm.The reply identified the properties owned, in whole or in part, by Judith which were mortgaged to the Bank; advised that no specific amounts were apportioned to the individual properties and that each was security for the total indebtedness; and stated Judith's "aggregate exposure at any one time and from time to time" as $2,321,400 (the amount of the then latest "acknowledgment" signed by Judith).Then came a final paragraph which lies at the heart of this part of the Radins' cases: "For the present, there are no time constraints for the refinance arrangements." I will refer to this sentence as "the Representation."The Radins claim that the Representation was untrue, that is, that there were in place as at the date of the letter, 17 July 1991, time constraints for refinancing arrangements to be made.They submit that the Bank was requiring Michael to "pay out his loans immediately".The Radins claim that if Judith had been aware of this, she "may" have cooperated with Michael to refinance.Judith does not assert in her pleading that she "would" have done so.The Bank submits that this omission alone means that the case fails on causation grounds.

Elements of the fraudulent misrepresentation case In order to prove fraudulent misrepresentation, the Radins must prove: (1) That the Representation constituted a representation of fact; (2) That the Representation was false; (3) That the maker of the Representation did not believe that it was true in the sense in which the maker intended it to be understood; (4) That the maker of the Representation intended a person or class of persons to act in reliance on it; (5) That the person, or a person belonging to the class of persons, acted in reliance on the Representation; and (6) That loss or damage was suffered as a result of the reliance on the Representation. In substance, all of these requirements except (3) and perhaps (4) also apply in respect of the causes of action in negligence and for contravention of the TP Act.

(1) That there was a representation of fact, however made

The Bank concedes that the Representation constituted a representation of fact, but submits that it formed part of a series of communications and that its true meaning cannot be understood in isolation. Its construction will be discussed below.

The words "[f]or the present" allowed that the Bank might alter its position after 17 July.They signified that once it ceased to be "the present", there might be time constraints for the refinancing arrangements. The true significance of the Representation must be understood in context.Judith and Parker knew that the Bank was pressing for payment out of the mortgages over the properties owned by Michael and Judith.Parker's letter of inquiry, set out above, makes this clear.They knew that Michael did not have infinite time to pay.In this sense, at least, they knew that there were some time constraints on the refinance arrangements.The Bank knew that Judith and Parker knew these things.Against this background, Parker's inquiry and the Bank's reply were both directed to the question whether there was subsisting a particular time constraint imposed by the Bank on Michael within which the refinancing must be arranged, in default of which the Bank would, or might, exercise its powers as mortgagee. In succeeding pages, I will discuss the further elements of fraudulent misrepresentation.But it is worth observing immediately that the Bank did not in fact exercise its rights as a secured creditor until January 1993, a period of some 18 months after the making of the Representation.This at least suggests, and subsequent events show it to be the fact, that even if there was in place as at 17 July 1991 a time constraint, in the sense mentioned, in contradiction of the Representation, by the time of the Bank's exercise of its powers, the Representation had long since become a "spent force" and of no causal effect. Were there, as at 17 July, "time constraints for the refinance arrangements" in the sense explained above?The Radins submit that there was a time constraint of 15 August and that the Bank had an intention as at 17 July to proceed to sell the mortgaged properties if the refinancing had not been arranged by that date. In order to consider this factual issue, it is necessary to discuss earlier events.On 20 May, a meeting was held at Zone, attended by Michael Joseph Foley (Zone Regional Manager) ("Foley"), Coiera (Zone Branches Officer), Kilburn, Michael Griffin ("Griffin") of Spencer Morgan & Associates (Michael's accountant) and Michael. Michael was told that the Bank required the debts to be paid in "total".He was told that by 30 June "firm" refinancing arrangements had to be in place and evidence of this provided to the Bank in the form of a letter from the financial institution concerned.Draft letters of demand which had been prepared were not to be issued until Zone advised further. Subsequently, Michael told Kilburn that he (Michael) had put forward a number of refinancing proposals to other institutions.Kilburn informed Zone.On 30 May, Zone instructed Kilburn to arrange an interview with Michael and Judith, preferably no later than 15 June. On 31 May, Michael assured Kilburn that refinancing arrangements were under way and that he was confident of a decision by 15 June. The Bank had made no decision to sell.Foley's evidence under cross examination was that "all the way along we would have been maintaining contact with the client, the borrower, and so to see what progress was being made". On or about 26 June, Michael called on the Bank and advised that a finance broker had approached four lending institutions on his behalf in an attempt to refinance. On 3 July, Foley gave instructions that a meeting be arranged at Zone before 31 July. Doyle subsequently confirmed with Zone that a meeting with the Zone General Manager had been fixed for 22 July. By letter dated 4 July from Michael's broker,Victor Andrew Moody ("Moody") of First Liberty Finance Corporation Pty Ltd ("First Liberty"), Michael and Judith received indicative approvals of a refinancing in a sum of $2,686,500. On or about 8 July, Michael provided a copy of the letter to Branch.Branch forwarded a copy to Zone under cover of a memorandum dated 8 July prepared by Doyle and signed by Kilburn.In the memorandum, Branch referred to the fact that refinancing would involve numerous valuations and could "take some time to achieve". Kilburn advised that he would "monitor progress regularly and report to [Zone] in mid-August should arrangements for settlement not be known by then" (emphasis supplied). Kilburn also proposed, subject to Zone's confirmation, to cancel the meeting with the Zone General Manager, Michael and Judith, that had been arranged for 22 July. It is clear that Branch was advising Zone that the Bank should 'wait and see'.As at 17 July, the 30 June deadline had already been treated as overtaken by events, and Branch had proposed to monitor progress of the valuations and of Michael's refinancing proposal generally, and to report to Zone by mid-August if arrangements for settlement were not known by then.That is, as at 17 July, there was no subsisting time constraint in the sense explained earlier, imposed by the Bank on Michael. Zone did not respond to Kilburn's memo of 8 July until 11 days later, on 19 July, which was after Doyle's faxed letter of 17 July to Parker. On 18 July, the day following the exchange of faxes between Parker and Doyle, Vlad Adamcewicz ("Adamcewicz"), Manager Branches at Zone, prepared a "report on limit excesses" for Foley.It concluded: "Refinance of CBA debt to be evidenced by 30/6/91 and since extended. Realisation action to be commenced if satisfactory arrangements not in place by 12/8/91. We are now advised that refinance of $2,686,500 has been approved." (emphasis supplied) The words "and since extended" no doubt refer to the fact that the 30 June deadline had passed into history.Adamcewicz's recommendation was that a new deadline of 12 August be introduced. On the same day he penned a note to Foley recommending that Branch be requested to seek a more concrete approval from the proposed financier and that if this was not forthcoming by 5 August, the interview previously scheduled for 22 July should be held no later than 12 August.Foley wrote "NO" and added that the letter from First Liberty was "sufficient for now", but added that the Branch Senior Manager, Kilburn, was to ascertain what debts were to be cleared from the sum of $2,686,500 mentioned in First Liberty's letter, and if there was to be a "residual debt left", what security was to remain with the Bank in respect of it.There is no suggestion in the evidence that Adamcewicz's recommendation, rejected by Foley, was ever communicated to Kilburn, let alone to Michael. On 19 July, Foley (at Zone) wrote numbered comments at the foot of Branch's memorandum to Zone of 8 July.The first confirmed cancellation of the meeting set down for 22 July.Foley wrote: "Yes for now provided clearance/settlement is confirmed by 15/8/91 (Snr Mgr [Kilburn] informed)." Literally, this meant that Zone's response to Branch was that the meeting scheduled to take place on 22 July was cancelled provisionally, that is, subject to its being confirmed by 15 August that the indebtedness to the Bank was to be paid out.This, of course, is nonsense.No doubt what was meant was that the 22 July appointment was cancelled, and if, by 15 August, "clearance/settlement" was not confirmed, a new appointment would be made or some other course of action followed. In my view, the final sentence of the 17 July letter was not false.As at 17 July, the 30 June deadline of which Michael had been informed at the meeting on 20 May had passed and been overtaken by the events of early July.As already noted, in his memorandum to Zone dated 8 July, Kilburn, in addition to cancellation of the meeting fixed for 22 July, proposed a monitoring of progress of the refinancing and a reporting back to Zone in mid-August "should arrangements for settlement not be known by then".But this did not amount to a "time constraint [upon the Radins] for the refinance arrangements".Nor was it, in terms of Parker's letter of 17 July, a "timing requirement" of the Bank for payment out of the mortgages.It was no more than an undertaking by Kilburn to Zone to monitor the position and to report to Zone if "arrangements for settlement [should] not be known by [mid-August]."Consistently with Kilburn's note, if arrangements for settlement should not be known by mid-August, a time constraint might then be imposed by the Bank.The Bank had been willing to accord Michael and Judith some flexibility to enable a refinancing to be consummated, even when a strict deadline, such as that of 30 June, was in place.There is no indication that the Bank was proposing to proceed differently and not be accommodating, if the proposed refinancing had progressed to a satisfactory stage by mid-August.Nor had the Bank decided to refuse further time to complete the refinancing arrangements or to sell, in the absence of satisfactory evidence by mid-August that a firm arrangement was in place. It is true that as at 17 July, Zone had not responded to Kilburn's memo dated 8 July.But this does not mean that the earlier time limit of 30 June was still a "time constraint … for the refinance arrangements."I noted earlier the state of affairs as at 17 July.Foley, Zone Regional Manager, had been told of Michael's call on 26 June and had given instructions on 3 July that a meeting be arranged at Zone before 31 July, to follow up the position.That state of affairs did not relevantly alter once Zone replied on 19 July.Zone then agreed to Kilburn's suggestion that the meeting fixed for 22 July be cancelled and that Branch monitor the position and report to Zone by mid-August. In my view, the Representation was not false or misleading or deceptive, and therefore the claims based on it must fail.

(3) That the maker of the Representation did not believe that it was true in the sense in which the maker intended it to be understood

(a) Who made the representation? There has been an issue as to who was the true author of the Representation.In an attempt to establish their fraud claims, the Radins rely on the evidence of Doyle that a conversation took place between himself and Kilburn on 17 July in the following terms: "KILBURN: Tony can you sort out and answer the part [of Parker's facsimile letter of 17 July] that refers to the securities and the properties but when it comes to answering about whether the bank is pressing for the refinancing, say that there are no time constraints for the refinancing arrangements. ... DOYLE: What about the 30th June 1991 deadline that has been set for refinance? ... KILBURN: No just do as I told you about that." As noted earlier, Branch received Parker's facsimile letter of 17 July at 1.36 pm on that day. This was during Doyle's usual lunch hour which was from 1.00 pm to 2.00 pm at that time. Kilburn's evidence was that he recalled the events immediately following receipt of the fax.Because he could not speak to Doyle at the time, he wrote the note referred to earlier, which in fact appears on the facsimile cover sheet, and placed the facsimile bearing the note on Doyle's desk, to await Doyle's return from lunch.It will be recalled that the note was: "Tony, Information is readily available. Could we reply by say 3 pm. [Kilburn's signature]" Kilburn denied the conversation alleged by Doyle and said that he neither discussed the contents of Doyle's reply with Doyle nor saw it before it was sent. There is therefore an outright conflict between the evidence of Doyle and Kilburn on the present matter.It is clear from what I have already said, however, that the instruction that Doyle attributes to Kilburn was a short summary statement that accorded with the factual position in any event.The 30 June deadline had been superseded; there was, as was understood by everyone concerned, pressure from the Bank on Michael to refinance; but no new time constraint had yet been imposed.No doubt the statement in the letter could have been more detailed.It could, for example, have repeated a reference to the "pressing for the refinancing" mentioned by Parker in her letter of inquiry; the overtaking of the 30 June deadline by developments of late June and early July; Branch's proposal to Zone of 8 July; and, in particular, Branch's proposal that Branch report to Zone in mid-August.But to instruct Doyle to say that there are "no time constraints for the refinancing arrangements" was an appropriate shorthand response to Parker's inquiry as to the Bank's "timing requirements" as distinct from the general pressure for a refinancing to be arranged also referred to in her letter. Although it is unnecessary for me to choose between Kilburn and Doyle, lest it should become significant, I note that I prefer Kilburn's evidence.He was an impressive witness who did his best to assist the Court. Even Doyle said that in his experience, Kilburn had always been "a pretty straight shooter". Kilburn's evidence is consistent with the writing on the facsimile cover sheet and the imprint record of the time of its receipt.As one would expect of a truthful retired bank manager asked to recall in some detail events which took place over six years earlier, his recollection of some matters was better than of others. He displayed disinterest in the outcome of the case by the facts that: he could not recall some matters of which it would have been of assistance to the Bank's case for him to have given evidence (for example, the telephone conversation with McGuire on 25 July referred to below); and he conceded that he believed, with the benefit of hindsight, that he might have composed the Bank's reply of 17 July differently from the way in which Doyle had done, such as by making some reference to mid-August and by referring to "no formal arrangements at this time" rather than "[f]or the present, there are no time constraints" (although, he also said that he was not able to put himself back into his frame of mind as at 17 July 1991). Doyle, on the other hand, had an interest in supporting Michael. He acknowledged that Michael had found him employment at "Bankstown Radiology" for which he was grateful, and that he had recently (that is, in the week prior to giving evidence in the case) asked Michael to help him to find referrals of business.He described Michael as a "friend" of five or six years, and said that he would see him socially two or three times a year.He also agreed that he had been reprimanded by Kilburn for drinking during lunch time and "on the job".Further, there was some measure of inconsistency in Doyle's evidence. He claimed to have remembered the conversation with Kilburn for the reason that Kilburn was asking him to write something "wrong", that is, that there were no time constraints for the refinancing arrangements.However, when cross examined, he conceded that he considered the letter to be true and accurate, and that it would have been an untruth to say as at 17 July there was a firm deadline fixed.These concessions undermined his evidence as to the reason why he could remember the conversation. I do not think that Doyle was deliberately giving false evidence.Moreover, the instruction which he attributes to Kilburn is not an improbable one: much had happened since the 30 June deadline had been superseded, and the instruction was, in any event, an appropriate one for Kilburn to give to Doyle.It is impossible to be sure whether Kilburn's or Doyle's recollection is correct and on my construction of the letter, there is no need to choose.But I prefer the evidence of Kilburn for the reasons given above.

(b) Did the maker of the Representation (Doyle) believe that it was true? As noted above, the composer of the letter, Doyle, admitted that he believed it to be true and accurate. The claim of fraud, though not that of negligence or that of misleading or deceptive conduct in contravention of the TP Act, must therefore fail, if only for this reason. Judith submits that I must "address the state of knowledge of the Bank as a whole".As it happens, no-one at the Bank could have known the Representation to be false, because it was not. In any event,for the purposes of fraud, it is the belief of the maker of the representation, or, in the agency situation, of a person who authorises the making of it, that matters.The state of mind of others does not have the connection with the making of the statement that is required for fraud to exist: there must be a concurrence in the one human mind of responsibility for the representational conduct and the required state of belief: see Balkin and Davis, Law of Torts, 2nd ed, Butterworths, 1996, at 692-693; Fleming, The Law of Torts, 9th ed, LBC Information Services, 1998, at 700, and cases referred to in those works.

(4) That the maker of the Representation intended a person or class of persons to act in reliance on it

Doyle intended Parker (and through her, Judith) to act in reliance on the information that he provided on behalf of the Bank. He knew that she was proposing to do so, that the information was required urgently for this purpose, and that he was directed by Kilburn to attend to it as a matter of priority. He knew that Judith would have to cooperate in any refinancing, and that the information was being sought in that context.

(5) That the person, or a person belonging to the class of persons, acted in reliance on the Representation

The Radins seek, in effect, the following findings of fact: (1) that prior to the letter of 17 July, Judith was prepared to cooperate with Michael to effect a refinancing; (2) that the Representation caused her to change her mind and withhold her cooperation; (3) that nothing happened after 17 July to affect that impact of the Representation on Judith; (4) that but for the Representation, Parker would have advised Judith to cooperate with Michael in attempting to refinance;and (5) that if Parker had so advised her, Judith would have cooperated with Michael in attempting to refinance. The Radins' case is that Parker would have given certain advice to Judith, but for the Bank's letter of 17 July. Parker stated in her affidavit of 19 August 1997: "... had I been aware that the bank was contemplating taking legal action to recover the amount of the debts I would have told Judith Radin that it would seem that unless refinancing was arranged the bank might sell off the properties and that in my view that would not necessarily be in her best interest." (emphasis supplied) Judith said, for the first time in her affidavit sworn three days later on 22 August 1997: "Had I been advised by Jean Parker, that unless refinancing was arranged then it was the intention of the bank to commence legal action to recover the amount of the debts owing by a mortgagee sale of the properties and that in her view such action would not necessarily have been in my best interest, then I would have acted on her advice to allow the re-financing to take place." (emphasis supplied) It is apparent that Judith's affidavit was designed to complement Parker's. However, it does not follow that her evidence should be rejected.I reject the Bank's submission to the contrary. To be successful, the Radins' case requires me to accept that: (1) Parker did not advise Judith that it would not necessarily be in her best interests for the Bank to sell off the mortgaged properties and that it was preferable in her interests that she should cooperate with Michael by facilitating the refinancing ("the Advice"); (2) the Bank in fact intended to take legal action to recover the amount of the debts by selling off the mortgaged properties; and (3) Parker would have given the Advice if she had known of (2). I have already found that as at 17 July, the Bank did not have an intention of selling off the mortgaged properties at any particular time or following the expiry of any particular period.

(a) Did Parker give Judith the Advice? Judith informed Parker on 17 July that Michael had told her (Judith) that it was necessary for a refinancing to take place on an urgent basis.In her key letter to the Bank of that date, Parker stated that she understood from Judith that the Bank was "pressing" for the refinancing.In cross examination, she said that the Bank's letter of 17 July confirmed in her mind that the Bank wanted Michael to refinance.She said, further, that she understood the letter, while indicating that there was "no precise deadline in place as at the 17th", to create a "sense of urgency" in relation to the refinancing. She said that she understood that the position described in the last sentence of the letter was a "temporary" one and that the letter was saying, "for the present there are not any time constraints but get re-financed". She said that she had advised Judith that, regardless of the Bank's attitude, she believed that the refinancing should be promptly resolved in Judith's interest. The following exchanges took place during her cross examination: "... your advice to her, I take it, was that whatever the attitude of the bank was you believed that the matter should be promptly resolved in her interest?---Absolutely." "As you understood this letter it was saying for the present there are not any time constraints but get re-financed. That is how you understood it?---Yes, that is how I understood. That is part of your thinking as it were and that is part of why you believed you told Mrs Radin, it is really better to do your deal sooner rather than later?---I would always say that in any of those circumstances. You would probably give that advice every time would you not?---Exactly." This evidence alone shows that, in substance, Parker gave Judith the Advice. On 29 July, twelve days after writing to Parker, the Bank wrote to Judith's solicitor, McGuire, in the following terms: "We refer to our recent telephone conversations and confirm there are no formal time constraints at this stage for the refinancing of facilities at this office in the names of Mr & Mrs Radin. However, it has been agreed, following discussions between Mr Radin and the Bank, that refinance arrangements are to be made and become effective as soon as possible." (underlining in original) (Doyle composed the letter, and Kilburn confirmed its contents with Michael and signed it.)In the witness box Parker was shown this letter.At first she said that the letter of 17 July had conveyed a greater sense of urgency and that the letter of 29 July allowed more latitude.It is not clear that she departed from this position, but at least her evidence was that she did not understand the letter of 29 July to convey any greater urgency than that which she had previously understood to exist. Further, she said that she would not have changed her advice to Judith as a result of knowledge of the contents of the later letter or as a result of knowledge of those contents and of a conversation between Kilburn and McGuire on 25 July referred to below, in which Kilburn had told McGuire that the Radins were required to refinance "as a matter of urgency".It is not, and could not be, suggested that this state of knowledge which Parker was asked to assume she had possessed on 17 July, understated the true position as at that date. The Bank asks me to find either that Parker gave the Advice, or, alternatively, that full knowledge of the "true" position would not have caused her to advise Judith differently from how she in fact did.I make both findings.The Radins have failed to establish that Parker relied on the Representation in the manner alleged.

(b) Did Judith rely on the Representation? Judith claims that she saw the Bank's letter to Parker of 17 July and noted its last sentence. Parker said that Judith was in her office when she (Parker) received the letter, and that she said to Judith, "There does not appear to be the same sort of urgency about refinancing as Michael is saying." Apparently she understood Michael to have asserted that a particular time constraint (date or period) was in place.Judith's pleading alleges that because of the letter, she refused to cooperate with Michael.The Bank submits that there is no evidence in chief which directly supports this allegation, and points out that in cross examination Judith stated that the Bank's letter was only one factor among others which caused her not to cooperate in the refinancing. The Bank submits that because of inconsistencies in her evidence in chief, there must be doubt as to whether Judith did actually read the Bank's letter.Even if she did, in my opinion, on the evidence discussed below, Judith did cooperate in Michael's attempts to refinance after 17 July, to the same extent, no more and no less, as she would have done if the Bank's letter had not been written, or if a more ample letter of the kind discussed above had been written instead. In sum, the Bank's letter of 17 July had no significant effect on her. In the alternative, the Bank submits that if the letter had any impact on Judith, that impact did not last beyond 24 July, or, at the latest, 30 July, because of intervening events.Judith's evidence in cross examination, on the other hand, was that the letter had an impact on her for at least a year.She said that it ceased to have an impact only when a receiver was appointed to Michael's practice 14 months later in September 1992.This claim is inconsistent with other evidence and I reject it. Particular intervening events to which I refer are: (i) a meeting at the Bank on 24 July, attended by Michael and Judith; (ii) a telephone call from Kilburn to McGuire on 25 July; (iii) a letter from Kilburn to McGuire dated 29 July 1991; and (iv) a letter from McGuire to Kilburn dated 30 July. I will address these in turn below.They show that if the letter of 17 July affected Judith at all, it did so for, at most, one week, if not, two weeks. In cross examination, Judith conceded that her evidence in her affidavit sworn 2 April 1997 that: "No one informed me of any such requirement to refinance elsewhere as a matter of urgency" "may be incorrect".As appears below, it clearly was incorrect.Moreover, as also appears below, Judith knew that it was incorrect before she swore her affidavit.

(i) The meeting at the Bank on 24 July 1991 On 24 July there was a meeting between Michael, Judith and officers of the Bank. Although there was some dispute over whether this meeting occurred, that it did occur is supported by contemporaneous evidence in the form of a file note of McGuire and a Bank memorandum signed by Kilburn, both dated 24 July. On the morning of 24 July, Judith had a telephone conversation with McGuire, as recorded in a file note by McGuire of that date, which recorded: "She went to CBA with H - was advised that they had until 18/8/91 to refinance." This was Judith reporting to her solicitor on 24 July, that the Bank had told her and Michael that day that they "had until" 18 August, a period of 25 days, in which to refinance.According to the file note, McGuire was to contact the Bank and Michael's solicitor and then get back to Judith.Item 156 of McGuire's bill also records that Judith "had been to Bank with Husband and was advised that they had until 18/08/91 to re-finance". It is clear from this evidence alone that by 24 July, only seven days after Doyle's fax to Parker, Judith understood that the Bank's position was that if refinancing was not effected by 18 August, the Bank would take some unidentified further step (perhaps the making of a formal demand or service of a formal notice of intention to sell) or, at least, would treat itself as being at liberty to do so. Judith did not refer to this meeting in her affidavit.She swore to the truth of her affidavit in the witness box. She was evasive when cross examined about the meeting.Yet she had seen McGuire's file note, having inspected McGuire's files shortly before giving evidence.She did not annex the note to her affidavit or refer to it or to the matters in it, and reswore to the truth of her affidavit account. She had extracted photocopies of documents from McGuire's file which supported her case, and annexed a part of one to her affidavit so as not to annex another part detrimental to her case. The part annexed purported to be McGuire's summary of a telephone conversation between McGuire and Doyle on 24 July.The part of the document she did not annex recorded the following discussion between McGuire and Michael's solicitor on 24 July concerning settlement of the Family Law proceeding: " - Appian Way to her unencumbered

• A Beach house (held in trust by him for the children)
• car
• money then will sign any documents." (emphasis supplied) This evidence contradicts Judith's assertion that she was simply not prepared to cooperate with Michael in a refinancing. The fact of the matter is that Judith was utilising Michael's need for her cooperation, to extract from him a satisfactory settlement of the Family Law proceeding.At all material times, she correctly understood that Michael was under pressure from the Bank to discharge his indebtedness in order to avoid a Bank realisation.She understood that a refinancing was Michael's only way out, and that for this her cooperation was necessary.Although her understanding as at 17 July was, correctly, that the Bank did not have a particular time limit in place with Michael, her understanding as at 24 July was that the Bank had imposed a time limit of sorts, being 18 August.From time to time, the dynamics of the relationship between Michael and Judith may have varied, but one consistent feature of it is that Judith wished Michael to survive financially, because only this would enable her to achieve a property settlement that would satisfy her. The matters to which I have referred earlier reflect poorly on Judith's reliability as a witness. It is clear that her attitude and efforts towards refinancing were influenced predominantly by her concern to achieve a satisfactory property settlement.I do not say this as a matter of criticism.But I reject the case that Judith wishes me to accept, that is, that she stood ready, willing and able at all relevant times to assist Michael to refinance, but was dissuaded, even to any extent, from doing so by the conduct of the Bank.

(ii), (iii) and (iv) Telephone conversation between McGuire and Kilburn on 25 July and letters of 29 and 30 July between McGuire and Kilburn There was a telephone conversation between McGuire and Kilburn on 25 July.It is referred to in a letter from Kilburn to McGuire of 29 July and in a letter from McGuire to the Bank of 30 July. The conversation concerned "time constraints" for refinance. Kilburn's letter of 29 July was as follows: "We refer to our recent telephone conversations and confirm there are no formal time constraints at this stage for the refinancing of facilities at this office in the names of Mr & Mrs Radin. However, it has been agreed, following discussions between Mr Radin and the Bank, that refinance arrangements are to be made and become effective as soon as possible." (underlining in original) Michael agreed that the last sentence correctly set out his agreement at the time with the Bank. The first paragraph in McGuire's letter of 30 July was as follows: "We refer to telephone conversation between the writer and Mr Kilburn on 25 July, 1991. We confirm your advice that Mr and Mrs Radin are required to refinance elsewhere as a matter of urgency." According to Kilburn's letter, Kilburn had said "as soon as possible" and according to McGuire's letter, he had said"as a matter of urgency". The difference is inconsequential: from the exchange of letters Judith's solicitor knew that the Bank required Michael to conclude a refinancing arrangement "as soon as possible" or "as a matter of urgency".

(c) Judith's awareness of the letters of 29 and 30 July Judith denied being aware of these communications relevant to refinancing. She said that she did not see either of the letters just mentioned.She said further that she was not aware of any requirement that the refinancing take place as a matter of urgency.It follows that she implicitly denied knowledge of the content of the telephone conversation between McGuire and Kilburn on 25 July. Even so, the fact is that the Bank wrote to McGuire as Judith's solicitor and agent.She had appointed McGuire to represent her in relation to the property settlement and to obtain information on her behalf relevant to that end.McGuire's knowledge of the Bank's position was Judith's knowledge.In any event, I find that Judith's knowledge acquired at the meeting of 24 July that she and Michael "had until" 18 August to refinance amounted to knowledge on her part as at the end of July that the Bank was requiring Michael to refinance "as soon as possible" or "as a matter of urgency". In my view, whatever the effect of the Bank's letter of 17 July on Judith, it became irrelevant once she was informed by the Bank on 24 July that it required evidence of arrangements for refinance by 18 August.She took that information seriously. She informed her solicitor of it on the same morning, and instructed her to contact the Bank and Michael's solicitor, then "get back" to her (Judith).Judith received an itemised bill of costs from McGuire which included a specific reference to this conversation and its content.At the time, she analysed the bill carefully and disputed many of its items.She did not, however, dispute the item in question. I also infer, notwithstanding Judith's denial, that in fact McGuire did indeed "get back" to her and inform her of her understanding as to the urgency of the position gained from her telephone conversation with Kilburn on 25 July, and from their subsequent exchange of letters on 29 and 30 July.

(d) Judith did not cease to cooperate with Michael in his attempt to refinance A central factual issue in all three claims (Michael's, Judith's, and Vladimirka's) is that of Judith's suggested unwillingness to cooperate with Michael in facilitating a refinancing. The case made against the Bank is along the following lines.Michael was informing Judith that the Bank was applying pressure, and, in effect, seeking an urgent discharge of the debts owed to it.Judith and Michael were engaged in a Family Law proceeding, a key issue in which was that of property settlement, and, in particular, the nature and extent of property to be vested in Judith. Judith retained Parker to advise her in relation to that issue.When Judith was informed of the Bank's reply of 17 July, she believed that Michael had been lying to her about the pressure on him to refinance, and, as a result, refused to cooperate with him further in that respect.If, instead of making the Representation, the Bank had spoken truly, Judith would have cooperated with Michael.The result would have been a refinancing on terms more favourable to Michael and Judith than the subsisting terms of the Bank's finance, and the Bank would have been paid out and the collapse of Michael's practice avoided. The Bank attacked the case described above in numerous, if not all, respects.I find that Judith did not, after 17 July, refuse to cooperate with Michael in attempting to arrange refinance.Accordingly, the Radins have not established causation. My immediate purpose is to deal with the facts in July 1991 to which detailed submissions were addressed. On 24 July, Judith discussed with McGuire the refinance proposal submitted by Moody of First Liberty, and McGuire advised her in relation to it.McGuire's file note, which Judith cut off and omitted from her affidavit of 2 April 1997 concerning McGuire's conversation with Michael's solicitor on the same day, recorded that, once assured of a satisfactory property settlement in the Family Law proceeding, Judith would "sign any documents".McGuire wrote to Judith on 29 July advising her against signing the refinance documents. On 30 July, McGuire requested the Bank to supply pay out figures.This was consistent with a continuing consideration of refinance, as Judith acknowledged in cross examination. On 10 September, Judith discussed with McGuire the valuation of the properties, a task which Judith appreciated had to be done in respect of any refinancing. A telling incident occurred in early September.In the Family Law proceeding, McGuire issued a subpoena to First Liberty. The broker complained to Michael, who, in turn, complained to Judith, that she was jeopardising the proposal for refinance. That was something which Judith did not want to have suggested about her at that time.She did not want to frustrate, impair or impede the refinance proposals. She was angry with McGuire because McGuire had "gone beyond [Judith's] instructions in directing the subpoenas to Liberty" and because she might have jeopardised the refinance proposal. Accordingly, she complained to McGuire and instructed her to take considerable steps to rectify the position. On or about 25 September, Michael and Judith reached a property settlement, as a result of which they jointly purchased a house at 60 O'Connor St, Haberfield ("Haberfield"). Judith knew that funding for that purchase was to come from a refinancing. By letter dated 14 October to Michael and Judith, Forward Mortgages Group ("Forward") made an "Indicative Offer of Finance" of $2,286,500.By letter dated15 October, Morlend Finance Corporation (Vic) Pty Ltd ("Morlend"), which was associated with Forward, offered "mortgage finance" of $400,000.The $400,000 related to the purchase of Haberfield.Judith knew this at the time that these offers were made.She accepted in cross examination that she had understood from July 1991 to the end of 1991 that Michael needed to refinance in order to settle the outstanding Family Law proceeding with her. On 30 October, Judith discussed with McGuire a request by Michael that she (Judith) sign papers for refinance. McGuire advised Michael's solicitor by letter dated 6 November, in terms with which Judith was then content, that Judith was "happy to sign [refinance] documents" upon either one of two conditions: simultaneous execution of consent orders upon terms indicated in McGuire's letter of 15 October (which related to the property settlement in the Family Law proceeding) or a "full and complete indemnity … indemnifying [Judith] in respect of all and any costs associated with the refinance". In late 1991, First Liberty organised for the properties, including 11 Appian Way, Burwood ("Appian Way") where Judith lived, to be valued in connection with the refinancing.She knew that this had to happen and allowed the valuer to inspect the property in order to provide an updated valuation for the purpose.On 16 December, Michael wrote to Moody at First Liberty enclosing "fully executed hard copy personal and business financial returns of both borrowers". Finally, Judith signed the "acceptance forms" at the end of a letter of Indicative Offer of Finance dated 8 January 1992 from Forward of $1,400,000, and a letter of offer of mortgage finance also dated 8 January 1992 from Morlend of $790,000. Judith admitted in cross examination that she "had been concerned with and had been considering refinancing on the part of [Michael] for at least six months by the time [she] came to sign" these documents. In the light of the events after 17 July 1991 discussed above, I have no hesitation in rejecting Judith's evidence that the Bank's letter of 17 July continued to cause her to refuse to cooperate with Michael. She cooperated until at least late April 1992, to the extent and in the respects that she perceived to be in her interests. In so far as she did not do so after April 1992, this was due to reasons other than the Representation, which had been made nine months earlier. On 7 April 1992, Judith conferred with her solicitor (McGuire) and counsel (Mr Mater).They discussed whether or not Judith should continue to cooperate with Michael.Towards the end of April, McGuire advised Judith not to consent to a refinancing, on grounds relating to the Contracts Review Act 1980 (NSW) (the CR Act).The Bank submits that this gives the lie to the claims based on the Representation.It was only at the end of April 1992, after accepting McGuire's advice, that Judith ceased, at least until about October 1992, to cooperate with Michael.From that time, she resumed cooperation with him, again because of the assessment she made of where her best interests lay.

(6) That loss or damage was suffered as a result of the reliance on the Representation

The Radins argue that by reason of the Representation, Judith did not cooperate with Michael, with the result that the opportunity to refinance was lost. I have already found that: (a) the Representation was not false; (b) the Representation had no relevant effect on Judith; and (c) Judith cooperated with Michael in an attempt to refinance to the same extent and in the same respects as she would have done if the Representation had not been made or if a more ample and detailed representation had been made. I conclude below that the Radins could not have refinanced at the relevant times, that is, that the opportunity to refinance said to have been lost was of no value. The Bank also submits that even if Michael had been able to refinance, no loss was suffered because the same amount would have been owed to a different financier.In response, the Radins submit that if Michael and Judith had been able to refinance, they would have avoided loss in the form of the difference in interest rates as between the Bank and the substitute financier.The Bank contests this. It is unnecessary for me to consider this issue further, because I conclude below that refinance was not a possibility. The Radins submit that there was the loss of an opportunity to refinance wholly or partially.According to their submissions, the refinancing could have been effected either on or about 1 October 1991, or on or about 1 June 1992.

(a) Was there a possibility of a refinancing as at 1 October 1991 or 1 June 1992? Judith cooperated with efforts to refinance at least up to the end of April 1992, but there was no unconditional refinance approval until June 1992, a time after Judith had ceased to cooperate for reasons unconnected with the Representation.

1 October 1991 The Radins submit that a letter of 4 July 1991 from First Liberty (Moody) to Michael's accountant, Griffin, is evidence that Michael could have borrowed $2,686,500 by 1 October. However, that letter was not an offer of finance. Rather it was a letter by which Moody advised Griffin that First Liberty had "received approvals for the amount of $2,686,500" from Forward and Morlend together, enclosed documents for signature, and requested cheques for valuation fees, loan establishment fees and First Liberty's brokerage.Subsequent events demonstrated that nothing of the kind was achievable.Of the amount of $2,686,500 mentioned in the letter, $400,000 was dedicated to the purchase of Haberfield and was therefore to be unavailable to the Bank, although the Bank did not know this at the time and it was not specifically referred to in the letter. As noted earlier, Michael received two letters of offer from Forward and Morlend dated 14 and 15 October 1991 respectively.Forward's letter provided an indicative offer of $2,286,500.The offer was conditional on an independent valuation to an amount of $2,875,000.Morlend's letter conveyed a conditional offer of $400,000. Both offers were subject to satisfactory valuations by an independent valuer.The fact that these letters were not forthcoming until mid-October means that the Radins' submission that a refinance could have been achieved by 1 October cannot be accepted.But there is more. As already noted, Morlend's offer of $400,000 related to the purchase of Haberfield as part of Judith's property settlement with Michael, and, according to Moody, "had nothing to do with the refinancing of the Commonwealth Bank loan".Michael did not supply these letters to the Bank, showing the break-up of the aggregate amount of $2,686,500.Accordingly, the Bank did not know that of this sum, $400,000 was not to be available to it. The Bank submits that this suggests that Michael led the Bank to believe that refinance was possible when it was not. In order to achieve a total refinance, Forward and Morlend required first registered security over the properties listed in Forward's letter of 14 October.As the Bank did not receive a copy of this letter, it was unaware of a major problem:four of the properties listed were mortgaged to financiers other than the Bank.Those other financiers were Suncorp Finance Ltd ("Suncorp") and Mercantile Mutual Finance Corporation Ltd ("Mercantile Mutual"). The mortgages to them would have to be discharged. Therefore not even Forward's amount of $2,286,500 would be wholly available to the Bank.The Radins did not attempt to demonstrate how much was owing under the first mortgages to Suncorp and Mercantile Mutual.The evidence reveals that the following amounts were owing secured by the following mortgages as at the following dates: (a) 113-115 Wentworth St, Port Kembla ("Port Kembla") - $72,412.60 owed to Mercantile Mutual as at 10 March 1992; (b) 187 Soldiers Point Rd, Salamander Bay ("Wanda Beach") - $205,193.51 owed to Mercantile Mutual as at 10 March 1992 (the amount had been $197,842 as at 22 January 1992);and (c) Elizabeth Bay - $206,123 owed to Mercantile Mutual as at 22 January 1992. These three amounts total $483,729.11.In addition, money was owing to Suncorp secured by a first mortgage over 92 Foreshore Drive, Salamander Bay ("92 Foreshore Drive"). It seems clear that the Bank was granting indulgences in its belief, fostered by Michael, that a refinancing of around $2,686,500 was possible and that the whole of this sum would be available to the Bank.In fact, only around $1,686,500 would have been available to it, approximately $1,000,000 less than Michael had represented, due to $400,000 being earmarked for the purchase of Haberfield, and, say, $600,000 being required to pay out the first mortgagees, Suncorp and Mercantile Mutual (as noted later, Moody's evidence and Michael's submissions refer to the latter amounts as being $647,000). The Bank submits that this erroneous assumption on which it proceeded in considering the refinance proposals renders irrelevant certain speculation to be found in the internal Bank documents as to the possibility of a partial refinance.I agree. As noted above, the indicative offer from Forward was conditional on the independent valuation of the security properties to an amount of $2,875,000. The valuations of those properties (and of others to support the Morlend offer) were received by letter dated 17 December 1991.The total value of the eight security properties listed in the offer from Forward was only $2,320,000; more than $500,000 less than the stipulated amount.Moody conceded that in these circumstances the amount of money indicated in the offers of 14 and 15 October was not likely to have been available. In the light of these matters, it is clear that the Radins could not have refinanced so as to pay out their indebtedness to the Bank as at 1 October 1991.

1 June 1992 After receipt of the valuation letter dated 17 December just mentioned, Forward and Morlend reviewed their previous offers and considered a rearrangement of securities which would be acceptable to mortgage insurers.By letters dated 8 January 1992, Forward and Morlend conveyed amended offers. Forward offered $1,400,000 and Morlend, $790,000, being a total amount of $2,190,000.Obviously, the shortfall was now even greater than before. The problems that $400,000 was required for the purchase of Haberfield, and, say $600,000 was required to payout other first mortgagees remained.Deduction of the aggregate of $1,000,000 would have left only $1,190,000 for the Bank. The first "unconditional" approvals from Forward and Morlend were not received until 1 June 1992. Both Peter McKay ("McKay"), a consultant with Forward and Morlend, and Moody agreed that these offers were the first unconditional offers from Forward and Morlend. The total sum of $2,190,000 offered was the most that was able to be raised using the properties identified as securities. Inevitably, Michael accepted in evidence that there was a considerable shortfall in the amount needed to pay out the Bank and the other mortgagees.Plainly, as at 1 June 1992 also, refinance to pay out the Bank was impossible.

(b) Was there a possibility of a partial refinancing as at 1 October 1991 or 1 June 1992? Faced with the difficulty just referred to, the Radins raised for the first time in the course of submissions a new alternative case which had never been pleaded.This was that they might have partially refinanced.The partial refinance submission was put in writing after the conclusion of oral elaboration on the parties' original written submissions, in the course of which it was conceded that it would not have been possible for the Radins to have refinanced in full as at either 1 October 1991 or 1 June 1992. There is a fundamental difficulty in the Radins' having raised this matter for the first time in the course of submissions.How, it might be asked rhetorically, could the Radins hope to prove that the Bank would or might have agreed to a "partial refinance" which had never been put to it and had not been defined in the evidence?It should be noted that even since raising the question, the Radins have not defined the partial refinance which, they submit, Michael lost the opportunity of effecting.In order for the alternative submission to be intelligible, the partial refinancing arrangement would have to be defined in terms, not only of identification of the reduced amount to be paid to the Bank, but also of those properties to be released and those to be retained as security, and the adjusted terms of payment to the Bank.The Radins' partial refinance submission has not descended to such detail. Michael's further amended statement of claim alleged in par 68: "Had [Michael] obtained the said refinance with the co-operation of [Judith] he could have paid out [the Bank] and avoided having Receivers appointed to his trust account and to his practice." (emphasis supplied) That paragraph is repeated in pars 72 and 81.Paragraph 4 of Michael's affidavit sworn 27 August 1997, read on that day, states (in relation to refinancing by 1 September 1991) that "... the bank would have been paid out all the money owing to it ..." (emphasis supplied).It is quite clear that the relevant allegation made by Michael, on which the Bank joined issue, was that the refinance would have been sufficient to pay out the Bank entirely. The Bank successfully met that allegation and submits that Michael's new alternative case of partial refinance ought not to be entertained.I agree.It would be unjust to permit the case of partial refinance to be put, in circumstances in which the Bank might have led evidence to meet it and now lacks the opportunity to do so. In support of his contention that a partial refinance could have been achieved in October 1991 or June 1992, Michael relies on the Bank's failure to call anybody to give evidence that the Bank would not have agreed to a partial refinance.This is an astonishing submission.Since the present contention was never part of Michael's pleaded case or the subject of any evidence led by him, it was not incumbent on the Bank to lead evidence touching it. I rule that the Radins are not permitted to put an alternative case of partial refinance. Although this is sufficient to dispose of the matter, there are further reasons why, even if that case had been properly formulated and alleged in proper time, it would not be established by the existing evidence.

1 October 1991 Michael submits, on the following basis, that as at 1 October 1991, the Bank would probably have agreed to a partial refinance: "(i) the [Bank] was a commercial institution; (ii) it knew [Michael] could not service the debts; (iii) the amount of the partial refinance was greater than the estimated sale value on a forced basis by approximately $400,000; (iv) the [Bank] could retain the first registered charge over the practice which the [Bank] itself had valued at $680,626; (v) [Michael] had the ability to service the debt to the new financier and to the [Bank]. The annexure MR2 to the affidavit of 24 February 1997 shows [Michael's] profit and loss statement for the years ended 30 June 1991 and 1992. Net profits were $57,868 and $457,294 respectively after paying interest of $413,654 and $323,714 respectively; (vi) the interest rate on the new loans was to be 13.85%. ... This was a considerably lesser rate than was being charged by the [Bank]. ... (vii) additionally the [Bank's] rates of interest were compounding which made it a much higher rate of interest. (viii) [Michael] clearly had a good cash flow as set out in the amounts paid to the receiver ... and to the joint solicitor's account ... being $750,619 and $217,731 respectively. This is of course only a portion of the fees recovered as the receiver only takes the first $2,000 of any fees received on a file." (references to evidence omitted) ("Annexure MR2" referred to above is a set of financial statements in respect of "Radin & Associates" as at, and for the year ended, 30 June 1992, which showed comparable figures for the immediately preceding year.) As the Bank submits, pars (i), (vi), (vii) and (viii) do not advance the proposition that the Bank would probably have agreed to a partial refinance as at 1 October 1991.The Bank submits that par (ii) must be understood on the basis that Michael did not sell any of his properties to reduce the amount of his indebtedness to the Bank.As to par (iii), the Bank submits that once account is taken of the fact that $400,000 was to be applied to purchase Haberfield, it would have received an amount slightly less than the total estimated amount of its realisation on a forced sale basis as at 26 August.As to par (iv), the Bank points out that it had valued its registered bill of sale over Michael's practice in April 1991 at $772,280. At the end of May 1991, Foley considered that the Bank was adequately secured when account was taken of the real property security held by it and the registered bill of sale. As to par (v), the Bank submits, and I accept, that I should not find that Michael would have been able to service both a borrowing from a new financier and the amount that would have remained owing to the Bank, in view of his proven inability to service the total amount which he had owed to the Bank. At no time prior to 1 October 1991 did the Bank apprehend the magnitude of the shortfall of the proposed refinance. Nor does Michael's partial finance submission overcome the following matters relied upon by the Bank: (1) Judith cooperated at least up to the end of April 1992, but Michael had not been able to arrange a refinancing by that time; (2) There was, as Michael admitted, a considerable shortfall in the amount needed to pay out the Bank and other mortgagees; (3) No proposal for a partial refinance was ever put to, considered by, or agreed to by, the Bank; (4) Any partial refinance contemplated ignored the amounts owing to Suncorp and Mercantile Mutual; and (5) No unconditional approval of finance was given until June 1992, at a time when Judith had ceased to cooperate. For the reasons discussed earlier, in my view Forward and Morlend would not or could not have settled the refinancing by 1 October 1991.Nothing in the further submissions detracts from that conclusion. As discussed previously, the Bank was unaware of two very important matters in its consideration of refinance: (1) that prior mortgagees, Suncorp and Mercantile Mutual,would have to be paid (say) $600,000;and (2) that $400,000 of the funds to be advanced was intended to be used to purchase Haberfield, as part of Michael's settlement of his Family Law proceeding with Judith before she would sign refinancing documents. The Bank first became aware of the purchase of Haberfield at an interview with Michael as late as 24 March 1992.It is obvious that the partial refinance now contended for by the Radins was not considered by the Bank. The Radins submit that there is no indication in the Bank's diary notes as to whether a partial refinance proposal would have been entertained by the Bank in late 1991. In fact, there is evidence that the Bank would not have accepted a partial refinance proposal at that time if one had been put to it. As at September 1991, Zone was insisting that the "total facilities" be refinanced.By a memo of that date from Zone (Foley) to Branch, Foley referred to the "refinance approval" of $2,686,500 and stated "the current level of CSB/CBA debt (ex interest accrued and litigation loan) stands at $2,652,923" and that it had "always been [Zone's] understanding that apart from [those] debts, the litigation facility … would also be fully cleared at settlement."The memo stated that it had been on that basis that the Zone General Manager had agreed to postpone the interview with all parties and realisation.I reject the Radins' contention that Foley supported a partial pay-out of the Bank's indebtedness (not including the litigation loans).Foley was under the direction of the Zone General Manager, Ken Reid ("Reid"), who required that the litigation loan facility be fully cleared in any settlement. The Bank was not giving the slightest encouragement to the idea of a partial refinance as at 1 October 1991. When Steve Nelson took over Foley's position as Zone Regional Manager in early 1992, his primary position was that he also required that the litigation loan facility be included in the refinancing, as appears, for example, from a memorandum from him to Branch dated 9 January 1992. That memo included the following: "∙ Documented evidence confirming payout of CBA/CSB facilities ($2,715,699) is to be produced within 7 days; ∙ Litigation facilities are also to be refinanced. However if this is not done, CBA will be looking to retain the [registered bill of sale] and personal guarantee." In view of the Bank's insistence that the litigation loan facility be paid out, and the absence of any evidence that this had changed prior to 1 October, all the evidence points to the conclusion that a partial refinance proposal would not have been entertained for a moment.I do not find that the Bank would have accepted a partial refinance as at that date.Zone's position is clear: it was insisting upon a refinancing of all facilities.

1 June 1992 The Radins make particular submissions in relation to a meeting at Zone on 24 March 1992 between officers of the Bank, being Ray Saunders (Regional Manager) ("Saunders"), James (Manager Branches) and Tim Kennedy (Senior Branch Manager, Fairfield) ("Kennedy"), and Michael, Griffin and Moody, in support of the proposition that the Bank was then receptive to the idea of a partial refinance.A proper reading of the memorandum of that meeting demonstrates that Moody asked whether the Bank would consider a partial refinance.The Bank said that before it would do so, a written proposal would have to be made by 1 April, incorporating "written confirmation of approval from [the] respective lenders" and "up to date financial statements along with comprehensive cash flow projections to enable serviceability to be assessed." The memo continued: "All present were informed that any offer put to the Bank will need to be commercially sound, comprehensive and supported by detailed financial data including cashflows. They were also informed that this was their last chance to get it right and to get the firms and Radins [sic] personal banking on a basis acceptable to the CBA, as at the expiration of 28 days CBA would look to its securities to recover the debts. Our preference though was for [Michael] to refinance and/or take his banking elsewhere. [Michael] had already obtained a $50,000 overdraft from the Advance Bank." The conditions stipulated at the meeting were not met by Michael. A letter which he wrote to the Bank on 28 April was not a proposal of the kind described, but, rather, included requests for yet further finance from the Bank! The Bank did not agree. The Bank did not agree to a partial refinance on the basis of the "unconditional approvals" by Forward and Morlend of 1 June 1992.Michael relies on a Bank memorandum relating to a meeting on 1 June 1992 between Michael and three Bank officers (Saunders, Kennedy and James) to show that the Bank was actively encouraging a partial refinancing and that it was aware that prior mortgagees had to be paid out. However, it is not clear from the memorandum that the Bank understood that the funds to pay out other first mortgagees were to come out of the amount of the refinance. It appears to have envisaged that the first mortgagees would be paid out of some $500,000 of "moneys, which [Michael] states are available at call from some [number of] clients (representing funds advances by [Michael] for compensation matters)". The Bank submits that it should be inferred that it was still not even aware of the magnitude of the shortfall after the proposed refinancing, and was conducting itself on the basis that it would receive all the amounts to be advanced by Forward and Morlend, or a sum very close to the total.It is clear from the memorandum of 1 June that the Bank was expecting a reduction of $1.7 million after clearance of the first mortgages to the CSB by payment to it of $440,000.Accordingly, the Bank was contemplating receipt of a total amount of at least $2,140,000 and was not aware that a substantial part of the refinanciers' advances would be used to pay out other mortgagees and to complete the purchase of Haberfield. Moody's evidence and Michael's further written submissions give the amount of $647,000 as due to other mortgagees. The Bank was not aware that the shortfall after refinance would be about $1,500,000, that is, nearly half of the amount owed to the Bank (excluding the litigation loans).It is clear from the memorandum that the Bank was expecting to be left with indebtedness of only some $720,000, secured by second mortgages over the existing freehold securities and the registered bill of sale over Michael's practice, and excluding the litigation loans which then stood at $433,000. The Bank's memorandum of 1 June recorded that Michael was "not directly liable" for this amount of $433,000. The memorandum discloses that the Bank was considering, but not that it had agreed to, or was even near to agreeing to, partial refinancing. It makes obvious the fact that before it could reach a decision, it had to receive information from Michael as to how the residual debt would be repaid.Payment of $750,000 over five years and "full servicing of interest" were discussed. Michael was to discuss this with his accountant, and instruct the accountant to draft a "comprehensive cash flow" which was to be made available to the Bank. The memorandum finally noted that it was envisaged that "completion of the refinance through to formality [would] take some time" and that Branch was "to monitor progress and advise." Michael did not provide further information to the Bank prior to expiry of the terms imposed on the approval of refinance by the letter of 15 July 1992 from Forward.That letter was as follows: "In order to clarify the position relating to the above facilities, please note the following: Morlend Finance Corporation (Vic.) Pty Ltd facility is approved unconditionally in the name of [Michael] and is ready to be instructed for documentation pending your clearance. Application Fees of $5,300.00 are outstanding on this Offer and Morlend Finance Corporation (Vic.) Pty Ltd is prepared to extend this approval for thirty (30) days upon receipt of the outstanding fees. Once you confirm that the securities the subject of this Offer are in your ownership alone, we can document the advance. Forward Mortgages Limited facility $400,000.00 remains undrawn due to complications with the Vendor. In this instance, we require a cheque for $3,835.63 being Interest to the 25th June, 1992. We also need clarification as to when you think this facility will be drawn down. If the problem with the Vendor is not rectified in the short term, what alternatives do you have? Will you purchase another property for [Judith] and utilise this facility? We are able to fund any acquisition you may contemplate using this facility and should a higher amount be required, this also can be considered. Please give us your action plan in this matter and your cheque for $3,385.63 as a matter of urgency. Forward Mortgages Limited facility $1,400,000.00 remains approved and ready for instruction to document subject to your clarification as to who will be signing the documents. Should [Judith] not form part of this transaction, CO-AMIC require clarification that all the securities will be owned by yourself and that [Judith] will not have any call on properties as part of the family court settlement. Application fees of $7,000.00 remain outstanding on this Offer. Forward Mortgages Limited is prepared to extend this approval for a further thirty (30) days on receipt of the outstanding fees. We must emphasise that we are coming under extreme pressure from the following sources to bring this transaction to a head:

1. Morlend Finance Corporation (Vic.) Pty Ltd Management
2. Morlend Finance Corporation (Vic.) Pty Ltd Mortgage Insurer
3. ANZ McCaughan Dyson
4. HLIC
5. CU-AMIC
6. Puma Management Limited
7. Bill Hennessy - Mercantile Credits We feel that we have met every obligation to you but have yet to see a real effort from your side to sort this matter out. We can only keep this deal alive if you contribute to the input in a timely and efficient manner. We will not support this transaction further unless the following is adhered to: 1. Action plan as to timing for rectifying outstanding matters so that we can proceed to settlement.
8. Receipt of outstanding Application Fees by 22nd July, 1992.
9. Interest payment on ANZ facility by 22nd July, 1992. In closing, I would like to assure you that Morlend Finance Corporation (Vic.) Pty Ltd and Forward Mortgages Limited support your facility 100% however, we can no longer tolerate the inordinate delays in meeting the requirements of the facility. Should we not be in receipt of the action plan and outstanding fees by 22nd July 1992, we will withdraw the approvals from all sources and close our file." The suggestion that the Bank was encouraging a partial refinance must be considered in the light of the facts recounted above.It is clear that at no relevant time did the Bank agree to accept a partial refinance, and that as at both 1 October 1991 and 1 June 1992, the Bank understood that it was to receive more funds than was in fact the case.

(c) Loss and damage generally In his written submissions, Michael sets out three heads of damage flowing from the fraudulent, negligent or misleading and deceptive conduct of the Bank: (1) Additional interest paid to the Bank over and above what would have been paid to the new financier; (2) Loss of goodwill of the practice and loss of profits; and (3) Loss of opportunity to deal with the properties mortgaged to the Bank. Michael did not press (3) in oral submissions. In relation to (1), the Bank submits that Michael was in fact better off staying with it than he would have been by refinancing.It submits that Michael's submissions actually support this proposition, once errors of approach and assumption are allowed for.The Bank also makes detailed submissions in relation to (2). It is convenient to refer here to certain submissions made by Vladimirka and Judith. Vladimirka relies on Michael's submissions as to loss alleged to have been caused by the Representation. Judith submits that she is entitled to be released from liability under the mortgages, to have them set aside, and to an order for the costs of her proceeding on an indemnity basis, as the measure of her loss and damage.But even if the Representation had given rise to a cause of action, this occurred after the securities were provided by Judith and would constitute no ground on which to set them aside. The only relief to which Judith could possibly be entitled would be damages.No damages are particularised other than the "indemnity costs of this suit".Judith's costs of her present proceeding for damages do not form part of the loss for which those damages may be awarded.The contrary view would seem to count the full legal costs actually incurred by every plaintiff suing to recover damages, as part of the loss for which those damages are recoverable.But such costs have never been regarded as themselves a loss caused by the injury done, and further, such loss or damage must precede the commencement of proceedings.I reject Judith's submission. In the light of my finding that, for the various reasons mentioned earlier, the Representation did not give rise to a cause of action, I do not need to consider further the competing submissions made in relation to loss or damage.

The Bank's letter of Monday 29 July 1991 to McGuire Michael's further amended statement of claim allegesthat the Bank: "deliberately during the period May 1991 to September 1992 withheld [sic] from [Judith] information of the requirement that [Michael] pay out his indebtedness to [the Bank] or it would enforce its security". Michael points to the Bank's letter to McGuire dated Monday 29 July 1991 signed by Kilburn.The terms of this letter were set out earlier, but, for convenience, I set them out again as follows: "We refer to our recent telephone conversations and confirm there are no formal time constraints at this stage for the refinancing of facilities at this office in the names of Mr and Mrs Radin. However, it has been agreed, following discussions between Mr Radin and the Bank, that refinance arrangements are to be made and become effective as soon as possible." (underlining in original) Michael submits that Kilburn knew that the statement "no formal time constraints at this stage for the refinancing of facilities ..." was false. In my view, the letter is factually accurate for the reasons given earlier in relation to the Bank's letter of 17 July. It was not misleading or deceptive. The letter was prepared by Doyle who believed that its contents were true, as did Kilburn.Kilburn understood a formal time constraint to be a letter of demand, and he knew that none had been issued and that no decision been made to send one. The underlining of the word "formal" gave notice of the fact that there were or might be "time constraints" but not ones of a "formal" nature.The fact that Michael and Judith had been told on 24 July that they "had until" 18 August to arrange a refinancing was appropriately conceived of as an "informal" time constraint. I accept Kilburn's evidence that he had no recollection of underlining the word "formal" in the letter.He also gave evidence that he could not recall if there was any reason why he did not draw McGuire's attention to the mid-August date for Branch to report back to Zone.I accept, however, his denial of the suggestion that it was because he did not want McGuire to know about that arrangement between Zone and Branch.The suggestion is unlikely for the following further reasons: on Wednesday 24 July, the Bank had already informed Judith of the 18 August date; McGuire had spoken to Kilburn on Thursday 25 July as a result of learning of the 18 August date from Judith the previous day; and it is reasonable to infer that Kilburn and McGuire discussed the informal 18 August date, and that Kilburn was aware that McGuire had knowledge of it when he signed the letter in question of 29 July. This may explain why, only two working days later, Kilburn did not specifically refer to it in his letter to McGuire. It is also reasonable to infer, as I do, that, in the light of the information from Judith, McGuire asked Kilburn whether there were "any formal time constraints" on refinancing. Kilburn's first sentence of his letter of 29 July to McGuire refers to their "recent telephone conversations" and "confirms" the information provided therein (McGuire's bill of costs indicates no other telephone conversation between herself and Kilburn between 25 and 29 July). Michael submits that the letter was false in the additional respect that there was no "agreement" with Michael that there would be a refinancing as soon as possible. Kilburn wrote a note on the document, on the same day, stating "Contents confirmed by 'phone with Mr. Radin". I have no reason to reject the note.I accept it as establishing that the letter was discussed with Michael and that Michael agreed that refinancing arrangements were to be made as soon as possible.Kilburn frankly conceded that he could not recall the conversation with Michael, and could not recall whether a mid-August date for settlement, or arrangements for settlement, had been agreed upon with him.His understandable inability to recall such a matter does not detract from the effect of his contemporaneous note.I find that Michael knew that the Bank was calling for any refinancing to be arranged as soon as possible. The claim in relation to the Bank's letter of 29 July 1991 to McGuire is not made out.

James's alleged instructions to Doyle Michael's further amended statement of claim alleges fraud arising out of the instructions given by Assistant Manager, Branches (at Zone) and later Manager, Branches (Zone), James, to Doyle in relation to the way in which he was to deal with enquiries by Judith concerning Michael's account: "75A. ... [the Bank] through its regional manager [James] instructed its officer [Doyle] not to inform [Judith and Vladimirka] of the requirement that [Michael] pay out his indebtedness to [the Bank] in default of which the securities would be sold in order to preserve its interests ..." It is alleged that James was concerned that if Judith knew that the Bank was to execute on its securities, she might institute a proceeding to have those to which she was a party set aside, and so reduce the Bank's security. Michael's submissions refer to par 2 of Doyle's affidavit sworn 11 July 1996, which is in the following terms: "2. During the period that [Judith] was attending meetings with the Fairfield Branch of the Commonwealth Bank to ascertain information about [Michael's] account with the Bank, I remember having discussions with [James], processor at the Zone Office who on two (2) or three (3) occasions said to me words to the following effect: James 'When you see Judith, handle her carefully. We don't want to alarm her about the situation. We don't want her trying to challenge the securities. Just don't get stuck into her.' Doyle 'If that's the way you want it.'" No dates are given in Doyle's affidavit as to when the supposed conversations occurred. In a later affidavit, sworn 18 February 1997, Doyle states that he "clearly recalls" such a conversation taking place on 16 September 1992.Doyle's account of such a conversation in September 1992 is not probative of fraud in mid-1991. James denied giving Doyle the alleged instruction.James impressed me favourably as a witness.He answered questions straightforwardly and gave me no reason to think that he was not trying to answer them truthfully to the best of his recollection.I have referred earlier to the reasons Doyle has for supporting Michael.Doyle resented certain aspects of the treatment he had received from the Bank. Asked about this, he said that the Bank had shown kindness to him on an occasion of family bereavement. Over all, however, he was sympathetic with Michael's position in the dispute with the Bank and did not agree with the way in which the Bank had treated Michael.In the witness box Doyle was defensive and antagonistic to the Bank and to the cross examiner, and, generally, unimpressive.I do not say that he knowingly gave false evidence, but I think that his recollection was affected by a sense of obligation to, and sympathy with, Michael and some feelings of hostility towards the Bank. As at 16 September, as Doyle and James were aware, letters of demand had already been issued to each of the Radins.It must have been clear to Judith then that the Bank required Michael to pay it out.The fact of the issue of the demands makes it unlikely that James would tell Doyle not to inform Judith of the Bank's requirement that Michael pay it out.It was obvious to both of them that she already knew that Michael was under pressure from the Bank to do so. It is also pleaded that James instructed Doyle not to tell Judith that the Bank would realise its securities. The Bank submits, and I accept, that there is also this difficulty: the thrust of the cross examination of James was to show that the Bank was encouraging Michael to refinance in preference to its enforcing its securities.It would not have been in the Bank's interest for James to have given Doyle the suggested instruction, and for Judith to be unaware that the mortgaged properties were in jeopardy. If it is intended that the allegation should relate to July 1991, there is the problem that there is no evidence of communication between James and Doyle as at that time. If it is intended that the allegation relate to September 1992, there is the difficulty that demands had been issued in August 1992 to James's knowledge.There is a further difficulty in that it was Kennedy, Branch Senior Manager, rather than Doyle, who responded to Judith's enquiries in September 1992, albeit after discussions with James at Zone.James's evidence was that he had no specific or clear recollection of any such discussion.Nor is there any pleading or written submission of Michael's asserting fraudulent conduct of James in relation to any conversations with Kennedy. Understandably, there is no evidence from Kennedy before me. There is no evidence to suggest that Doyle did anything consistent with the alleged instructions from James.Doyle's own evidence is that what he alleges James told him had no particular effect on him.In fact, Doyle's own diary note of 16 September 1992 records that Judith had called at the Branch that day accompanied by McGuire, and that they asked the Bank to explain the second issue of letters of demand, and that the Bank officers informed them "of our dissatisfaction with the conduct of accounts and that the Bank was looking for all debts to be repaid".This evidence, which I accept, is directly contrary to the instruction which, it is put, Doyle received from James.Doyle said, for the first time in the witness box, that Kennedy conducted the meeting on 16 September, and that, prior to the meeting, he (Doyle) told Kennedy of James's instruction.I do not accept Doyle's evidence in this respect.Doyle conceded that in his view the interview would probably have followed the same lines, even if James had never spoken to him.His diary note also included the following relevant paragraph: "Mrs Radin may require details of debts, repayment arrangements etc and was informed we would refer any written request for information from either herself or her solicitor to our legal representative for determination and subsequent reply." Doyle confirmed the accuracy of his diary note, despite its giving an account contrary to the instruction which he alleges he received from James on the same day. The diary note was sent to James the following day.If it was inconsistent with the supposed instructions given by James to Doyle only the previous day, James would probably have responded accordingly, such as by making a note on the memorandum or communicating with Doyle about it, but there is no evidence that he did so. Even if James had the alleged conversation with Doyle on 16 September, Doyle said that it had no particular effect on him, and that, in any event, he acted inconsistently with it.The alleged instruction can have no relevant effect in these proceedings. Judith also gives no evidence as to what effect the alleged fraudulent conduct by James had on her.During a meeting with the Bank and Michael, conducted by Kennedy and Doyle on 14 October, Judith conceded that on the rare occasions she had contacted the Bank she has been given the information that she sought. Doyle wrote and signed the Bank diary note of this meeting and agreed that it was correct and "was an accurate summary of what [Judith had] said". He also gave evidence that it would have been seen by Kennedy, and that he would have expected that if it had been inaccurate, Kennedy would have brought the suggested inaccuracy to his (Doyle's) attention. I reject this further allegation of fraud. The Bank submits that the allegation of fraud against James should have been withdrawn. As it was pressed, the Bank asks that I expressly reject any finding of fraud on the part of James.I do so.Indeed, I reject all charges of fraud made against the Bank officers.

CONCLUSION IN MICHAEL'S PROCEEDING Michael's application is dismissed with costs.It was not submitted that if I should reach this conclusion, the Bank is not entitled to succeed on its cross claim.There will be a direction that the Bank bring in short minutes of the orders to be made in proceeding NG 437 of 1996.

VLADIMIRKA'S PLEADED CASE AGAINST THE BANK Vladimirka's amended application filed on 14 February 1997 and further amended statement of claim filed on 1 September 1997 relate to only one mortgage: that dated 1 May 1984, No. V449514, from her and Michael to the CTB over Norman Street where they live (the "Norman Street Mortgage"). On 1 May 1984, the Bank advanced $80,000 to Michael to enable him and Vladimirka to purchase the townhouse for $100,000. Although Vladimirka was a co-purchaser and co-mortgagor, she was not a co-borrower: Michael was the sole borrower from the Bank, but the amount borrowed was applied to the benefit of him and his mother who both provided the security for the borrowing. From time to time, the Bank forwarded to Michael, and later to Vladimirka directly, documents for Vladimirka to sign acknowledging the increasing amounts secured by the Norman Street Mortgage. The following seven acknowledgments ("the acknowledgments") are referred to in Vladimirka's pleading: "Letter from the Bank to Radin & Associates dated 16 June 1986. Letter from the Bank to Radin & Associates dated 8 July 1986. Letter from the Bank to Radin & Associates dated 1 October 1986. Letter from the Bank to V. Radin dated 22 September 1987. Letter from the Bank to V. Radin dated 13 October 1988. There are two further acknowledgments that are undated." Vladimirka challenges both the Norman Street Mortgage and the acknowledgments on grounds dependent upon the CR Act,the equitable principles according to which relief is granted in respect of unconscionable dealings, misleading and deceptive conduct, negligent misrepresentation, fraud and breach of a creditor's duty of disclosure to an intending guarantor. The following is a summary account of Vladimirka's further amended statement of claim and does not represent any finding of fact. The Norman Street Mortgage was "unjust" within the meaning of the CR Act because Vladimirka signed it: "(a) without receiving independent advice or any explanation or any proper or sufficient explanation; (b) without being warned by the Bank to receive independent advice or explanation; (c) in circumstances where there was a material inequality of bargaining power between [Vladimirka] and the Bank; (d) in circumstances where there was no reasonable opportunity for negotiation of the provisions of the mortgage; (e) in circumstances where the documents were expressed in complex legal language not properly intelligible to a lay person such as [Vladimirka] whose primary language was not English; (f) [Vladimirka] derived no benefit or no benefit reasonably proportionate to the burden imposed by the mortgage; (g) [Vladimirka] was not advised of the contents of the Memorandum deemed by the mortgage to be incorporated as part of the mortgage document." (par 6) The Norman Street Mortgage was also unjust because the Bank was aware of the 32 matters particularised in subpars 41(i) - (xxxii), set out below, of which Vladimirka had no knowledge. She asks that the Norman Street Mortgage be set aside pursuant to the CR Act. Further and in the alternative, the Norman Street Mortgage is "unconscionable". Vladimirka was in a position of special disability due to the matters set out above; the Bank knew or had reason to know of the special disability; and, accordingly, it would be unconscionable for the Bank to enforce that mortgage. The following particulars of the Bank's knowledge or reasons for knowledge are given: "[Vladimirka] signed the mortgage in the presence of a Bank officer. The Officer knew or ought to have known [Vladimirka] was [Michael's] mother and that she did not have a solicitor or other independent adviser to provide independent advice in relation to the mortgage and her native language was not English." Further the Bank was, and Vladimirka was not, aware of the following 32 matters concerning Michael's accounts: "(i) The current account of [Michael] was continuously in excess of limits; (ii) The position in (i) above was only tolerated by the [Bank] because of substantial credits in [Michael's] trust account; (iii) [Region] by August 1984 had instructed [Williams] to return cheques dishonoured on [Michael's] account if limits continued to be exceeded; (iv) The [Bank] was concerned as at August 1984 as to how [Michael] could make a part payment of $60,000.00 for the purchase of the practice; (v) By October 1984 [Branch] had returned cheques dishonoured and was of the view that [Michael's] cash flow was insufficient to meet his commitments; (vi) By October 1984 the [Bank] required the account to come under the state manager's control; (vii) As of October 1984 [Michael] had not supplied financial statements and accounts for the years ended 30th June 1983 and 1984 to the [Bank] for its consideration; (viii) By October 1984 [Region] had directed [Branch] not to pay any further cheques unless authorised by [Region]; (ix) That [Michael's] reliance upon the [Bank] must lessen; (x) By October 1984 the [Bank] was of the view that [Michael's] finances were out of control; (xi) That [Michael's] cash flow analysis was doubtful; (xii) That if the cash flow was as predicted by [Michael] he would have tax problems; (xiii) That as at October 1984 the [Bank] was exposed on its security for the lending made to [Michael]; (xiv) By April 1985 [Region] was concerned that [Branch] had continued to extend credit to [Michael] and ignored its advice of 12th October 1984 to return cheques dishonoured; (xv) By April 1985 [Region] had instructed that [Branch] not to [sic] increase debt levels to [Michael] and cheques would have to be returned dishonoured; (xvi) By 16th May 1985 [Region] insisted upon cheques being dishonoured to bring account within limits and that account remain under [Region] control; (xvii) By July 1985 [Region] again directed [Branch] to return cheques dishonoured due to excess over limit. (xviii) By October 1985 [Region] suspected [Michael] of directing funds away from his account with the [Bank]; (xix) By February 1986 [Region] instructed [Branch] that there were to be no more increases in [Michael's] advances and that cheques were to be returned dishonoured; (xx) On 7th May 1986 [Region] advised [Branch] to inform [Michael] that he was running the risk of having all his cheques bounced; (xxi) By 7th May 1986 [Region] complains to [Williams] that he has disregarded [Region's] directions to return cheques dishonoured; (xxii) [Williams] selectively decides which cheques of [Michael's] he will pay; (xxiii) By 15th September 1986 [Region] again instructed [Branch] to return [Michael's] cheques dishonoured; (xxiv) On 17th March 1987 [Branch] informs [Region] that unable to apply repayment program to [Michael] as he cannot repay due to long term loans to clients being repaid only after litigation completed or matter settled; (xxv) By 24th April 1987 [Region] directed [Branch] that there was no scope for any further lending to [Michael]; (xxvi) In July 1987 [Region] was of the view that there was no evidence that [Michael] would be able to service his borrowing and that [Branch] should return cheques; (xxvii)By 29th March 1989 [Williams] dishonoured cheques on current account; (xxviii) On 23rd October 1989 [Kilburn] paid a tax cheque of [sic-for] [Michael] of $60,000.00 which had originally been returned dishonoured but paid on representation only after negotiation with [Michael]; (xxix) 13th December 1989 [Branch] directed by [Region] to return cheques dishonoured. (xxx) As at 27th February 1984 (a) The [Bank] was unsuccessful in numerous attempts to talk to [Michael]; (b) The [Bank] was of the view that [Michael] was avoiding talking to the [Bank] about his overdraft; (c) The Radin account had been troublesome for some time with constant substantial excesses over limits; (d) The [Bank] had inadequate security for the advances made; (e) [Michael] had ignored all arrangements temporary or permanent; (f) Branch sought Region's approval to dishonour cheques. (xxxi) As at 1st March 1984 (a) Limits on [Michael's] general account and personal accounts were overdrawn; (b) The [Bank] had written to [Michael] requesting funds be deposited to reduce balances outstanding; (c) If deposits were not made cheques would not be met on presentation; (d) [Michael] was relying on the [Bank] to pay wages cheques; (e) Any cheques which overdrew the general account in excess of $40,000.00 would not be met; (f) Any cheques which overdrew the personal account over $16,000.00 would not be met; (g) [Michael's] inability to produce financial statements for the year ended 30th June 1983 did not inspire confidence in the [Bank]; (h) [Michael's] attitude generally did not inspire confidence in the [Bank]; (i) Region informed [Branch] that CTB was not prepared to allow present situation to continue; (j) Region considered Radin connection as trouble due to little or no regard for arrangements. (xxxii)As at 30th April 1984 (a) Region were concerned that allowing a bridging loan to purchase the unit at Concord would place further pressure on an already thin security position; (b) Branch has to maintain firm control over firm's working accounts and [Michael's] personal drawings; (c) Region required [Michael] to give a firm undertaking to the bank that he would meet the market in respect to sale of Canley Heights house; (d) If Canley Heights house was not sold within six (6) months the [Bank] would have its valuers inspect Canley Heights house to assess sale price and prospects of sale; (e) [Branch] would sell Canley Heights if not sold within six (6) months". (par 41) The further amended statement of claim turns from the Norman Street Mortgage to address the acknowledgments. The pleading in relation to them is not entirely clear. In particular, the allegation of unconscionable dealing contains confusing references back to the Norman Street Mortgage. The following is a faithful account of the pleading. The acknowledgments were also unjust because Vladimirka signed them: "(a) without receiving independent advice or any explanation or any proper or sufficient explanation; (b) without being warned by the Bank to receive independent advice or explanation; (c) in circumstances where there was a material inequality of bargaining [sic - power; and] (d) [she] derived no benefit or no benefit reasonably proportionate to the burden imposed by the mortgage." The acknowledgments were also "unconscionable": (a) Vladimirka was in a position of special disability in respect of signing the Norman Street Mortgage [sic - the acknowledgments] by reason of the matters referred to immediately above; (b) the Bank knew or had reason to know of the special disability; and (c) it would be unconscionable if the Norman Street Mortgage [sic - the acknowledgments] were not to be set aside. Of the matters (a) to (d) referred to immediately above, only (c) could, in any event, possibly be a particular of special disability. And if (c) is a sufficient particular of special disability, virtually every individual dealing with a bank suffers from a special disability. The particulars given in par 11(b) of Vladimirka's further amended statement of claim of the Bank's knowledge and reason for knowledge, are that: "the Bank made advances ... to [Michael] for the purpose of paying expenses and outgoings on behalf of clients for whom [he] was conducting litigation as a solicitor. The Bank made the advances in the full knowledge that [Michael] would not be in a position to make repayment of the advances until completion of the litigation ... The advances were authorised or alternatively allowed to be made to [Michael] by [Williams] an employee servant or agent of the Bank. The advances were made to [Michael] in circumstances where Williams knew that the Regional offices of the Bank did not approve of the advances and [had] directed Williams to cease making advances to [Michael]. Williams at no time made [Vladimirka] aware that the Regional offices of the Bank did not approve of the advances and directed that [they] not be made." These are not proper particulars of the Bank's knowledge and reason for knowledge of Vladimirka's alleged special disability. The Bank's conduct constituted conduct in trade and commerce that was misleading and deceptive in contravention of s 52 of the TP Act. Vladimirka relies on the Bank's conduct particularised in pars 11(b) and 41(i) - (xxxii) set out above. This aspect of Vladimirka's case can be disposed of shortly. In my view, the Bank did not engage in misleading and deceptive conduct as particularised in par 11(b) substantially for the reasons I gave above in relation to Michael's pre-May 1991 causes of action. In my opinion also, the matters particularised in par 41(i) - (xxxii), are not capable of constituting misleading and deceptive conduct. Those 32 paragraphs do no more than particularise earlier matters of fact. Next, the Bank's conduct was in breach of a common law duty of care which it owed to Vladimirka in respect of each acknowledgment, which required that it disclose to her any matter that would have allowed her to make an informed decision as to the signing of the acknowledgment. Vladimirka pleads that the particulars in par 11(b) set out above are particulars of such matters. The Bank's misleading and deceptive conduct and negligence caused Vladimirka loss. The loss is that if she had been aware of the attitude of Region towards the advances made by Branch to Michael, she "would not have signed the acknowledgments and would have taken steps to limit her liability pursuant to the mortgage and any subsequent increase in the indebtedness of [Michael] to the Bank." The Bank also negligently advised her on or about 1 May 1984 (the date of the Norman Street Mortgage), by failing to inform her of the 32 matters particularised in par 41(i) - (xxxii). However, only three of those subparagraphs (subpars (xxx) - (xxxii)) relate to a time at or before 1 May 1984! Next, at all material times Vladimirka was in the position of a third party mortgagor or guarantor or both in respect to Michael's borrowing and her relationship with the Bank was that of guarantor and creditor; the Bank had a duty to explain to her all matters in connection with Michael's accounts in respect of which she was guarantor, which were of an unusual nature or which a guarantor would not be likely to expect; and in breach of this duty the Bank failed to inform her of the 32 matters particularised in par 41(i) - (xxxii), set out above. Vladimirka was entitled to direct the Bank at any time that she would not authorise further drawings by Michael secured by any property in which she had an interest; and if she had been made aware of the 32 matters particularised, she would have done so; but as a result of the Bank's conduct, she lost the opportunity or chance of doing so. Finally, Vladimirka pleads a case of negligent misrepresentation, misleading and deceptive conduct, fraud and loss of opportunity in relation to the Bank's letter dated 17 July 1991 to Parker. The pleading is in the same terms, with necessary adjustments, as those in which the comparable claim by Michael is pleaded, and she relies on Michael's submissions in this respect. I have previously rejected this claim under the heading "Michael's Post-May 1991 Causes of Action" and do so in Vladimirka's proceeding for the same reasons.

Events prior to the Norman Street Mortgage dated 1 May 1984 In 1964, Vladimirka and her husband Radojica, bought Canley Heights. It was vacant land. They obtained finance for the purchase from Bellevue Finance Company Pty Ltd on the security of a mortgage over the land. This was the first of several mortgages signed by Vladimirka. In February 1965, Vladimirka and her husband borrowed Ł3,500 from the CSB, again on the security of a mortgage over Canley Heights, and built a brick veneer house on the land. Vladimirka recalled doing so. Importantly, her evidence was that she "knew what a mortgage was" from this time. In particular, she understood that when she and her husband borrowed, the amount borrowed would have to be repaid, that if the money borrowed was not repaid there would be a problem, and that in such a case the CSB could sell. In November 1971, Vladimirka and a friend, Mrs Nola Hough, took a three-year lease of a fish and chip shop at Fairfield West. Mr Kevin Hough, Mrs Hough's husband, signed as guarantor. Vladimirka was cross examined about his guarantee, in the following passage: "Well, you understood that she did not have dollars and there was a guarantee necessary for the least [sic - lease] to go ahead, did you?---Yes. And did you understand that Mr Hough was going to guarantee or stand as guarantor for the lease, her husband was going to help?---Yes." In September 1975, Vladimirka separated from her husband. It was agreed that Michael be substituted for his father as joint co-owner with Vladimirka of Canley Heights. This was implemented by a transfer dated 22 September 1975 by Vladimirka and Radojica to Vladimirka and Michael as joint tenants. The price was $17,600. A first mortgage of the same date was given by Vladimirka and Michael to the CSB for $18,000. Michael was then an articled law clerk in Menart's practice. Vladimirka made the repayments under the mortgage, although Michael was joint borrower and mortgagor. At the time Vladimirka understood that unless some other arrangement came into existence, the mortgage had to be paid off. The Bank submits, and I accept, that this is one of several examples of Vladimirka's being prepared to support Michael's advancement in life. By 1982, Michael had completed his law clerkship and was in the process of purchasing a share of the partnership from Menart. In April 1982, he and Judith applied to the CTB for a secured personal loan of $22,680 to assist him to do so. The CTB notified its approval by a letter to them at Myall Street dated 7 April 1982. The approval was subject to the provision of a second mortgage over Canley Heights. The second mortgage was dated 13 April 1982. It was an "all monies" mortgage which secured all indebtedness of Michael and Judith to the CTB. Vladimirka does not submit that she did not understand that at the time. Indeed, she said that she recalled she had given a mortgage to assist Michael to open his practice as a solicitor in about 1982. In early 1983, Michael and Judith sought an overdraft on the practice account. It was approved, subject to existing security, that is, the second mortgage over Canley Heights by Michael and Vladimirka and the second mortgage over Myall Street by Michael and Judith. Vladimirka specifically consented to the additional facility (an overdraft limit of $10,000), as recorded in an acknowledgment by her dated 14 March 1983. She was cross examined on this acknowledgment. She said that she knew Michael was borrowing money from the Bank, that the letter of acknowledgment was connected with that borrowing, and that Michael was asking her to sign it to assist him. She added that in 1983 she did not believe that anything was "going wrong" and believed that he was successful.

The Norman Street Mortgage In early 1984,Michael and Judith and their first child, Eleanor, were living at Myall Street, while Vladimirka was living at Canley Heights. Vladimirka wished to be closer to her son and his family. She decided to sell Canley Heights and to purchase a house closer to Michael, Judith and Eleanor. She selected Norman Street. As at 1 May 1984, Michael and Judith owed the CTB approximately $81,000. On that date the Bank advanced $80,000 to Michael towards the purchase of Norman Street. As noted earlier, the purchase price was $100,000. Of the remaining $20,000, $10,000 was paid in "cash" and $10,000 by cheque. The Bank submits that I should infer that these two amounts came from Michael and indirectly from the Bank. I am not prepared to do so on the evidence. The transfer was dated 30 April 1984 and was to Michael and Vladimirka as joint tenants. The loan was of a bridging nature pending the sale of Canley Heights. The reason why the borrower was Michael, not Michael and Vladimirka, may have been that Vladimirka did not have the capacity, or at least as much capacity as Michael, to make the repayments. According to the documents, therefore, so far as Vladimirka was concerned, the Norman Street Mortgage was in the nature of a third party security for an advance to Michael. However, in substance, it was to secure an advance which would provide 80% of the purchase price enabling them to purchase Norman Street as joint tenants, and thereby to provide a more valuable and convenient residence for Vladimirka than that which they owned at Canley Heights. The Norman Street Mortgage was witnessed by Lynda Elizabeth Zsilinszky (nee Mabbutt) ("Zsilinszky"), a Bank officer. It is not clear on the evidence what was said when Vladimirka executed the mortgage. She gave no evidence of the words spoken. Zsilinszky could not recall Michael and Vladimirka attending at the Bank on 1 May 1984. However, she said that she would have adopted her "usual practice" in relation to the execution of such a mortgage. She gave evidence that she would only sign as witness to a mortgage if both mortgagors had attended at the Bank and she had explained the mortgage to them. Her evidence was that she had a regular practice as to what she would say to mortgagors as follows: " 'You are mortgaging your property to the Bank as security for the loan and are personally responsible for the debt to the Bank.' I would then specifically explain the current liability of the loan at that point in time by saying words to the following effect: 'The mortgage secures ... (I would then specify the loan or loans). The Bank is entitled to charge interest on the loan and to charge interest on the loan [sic] (I explained that the interest rate on personal loans was fixed, housing loans and overdraft rate of interest would fluctuate). Further, the Bank is entitled to charge normal bank fees on the loan. The mortgage will secure ... (I would then mention the loan or loans again) ... together with interest and bank fees.' I would then hand to each mortgagor the memorandum of mortgage referred to in the mortgage and say words to the following effect: 'Please read the memorandum of mortgage carefully and please let me know if you have any questions arising out of it.' It was only if I was satisfied that the mortgagors had no questions arising out of the memorandum of mortgage that I would say words to the following effect: 'Do you understand that the mortgage secures the loan?' If they said words to the following effect 'Yes, we understand.' I would then say words to the following effect: 'If you do not repay the loan the Bank may take possession of the property and sell it. This would be a matter of last resort and normally prior to taking possession and selling the property the Bank would invite you to enter into an appropriate arrangement to repay the loan. However, if you are not willing to enter into an arrangement to repay the loan which is satisfactory to the Bank it may ultimately take the property and sell it to repay the loan. You would also be personally liable for any shortfall, if there was a shortfall in the repayment of the debt after the sale of the property. There is a life policy inbuilt into the secured personal loans in Michael Radin's name. Should he die prematurely the insurance policy will repay the secured personal loan.' ... I would then ask each mortgagor whether they understood the explanations which I had provided. If they said words to the effect of 'Yes, I understand,' I would then say words to the following effect: 'If you understand your obligations under the mortgage, please execute the mortgage.' I would witness their signatures. In each case I would ensure that each mortgagor had a copy of the memorandum of mortgage to take away with them at the conclusion of the interview." She was not shaken on this evidence in cross examination and was an impressive witness. Vladimirka did not have the benefit of independent professional advice when she signed the Norman Street Mortgage. She submits that she was not given any proper or sufficient explanation of that mortgage and the transaction of which it formed part, nor any reasonable opportunity to negotiate its terms. Other than these facts, nothing about the circumstances attending its execution is relied upon as a ground for setting it aside. Vladimirka did not say otherwise in her evidence in chief. She said in her affidavit, "I can recall I signed the mortgage to help my son Michael with his business" and, "I knew when I signed the mortgage that if Michael could not repay money lent to him by the bank that my house could be sold." She agreed that she knew, when signing the Norman Street Mortgage, that it secured, not only the sum of $80,000 advanced by the Bank towards its purchase, but also money which Michael owed to the Bank in respect of his legal practice. Much later, on 27 February 1985, Michael and Vladimirka completed the sale of Canley Heights for $73,000. Upon settlement, $15,000 was paid to discharge the first mortgage to the CSB. The second mortgage to the CTB was also discharged, but the two discharges (dated 27 and 28 February 1985) reserved the liability of the mortgagors, Vladimirka and Michael, on their personal covenants. The Bank was therefore not acknowledging an end to Vladimirka's personal obligation under the second mortgage. On 4 March 1985, $51,690.31 out of the proceeds of sale was paid off the Norman Street Mortgage. On 6 March 1985, a further $4,875 was received from the selling agent (perhaps a 10 per cent deposit of $7,300 minus agent's commission of $2,425) and this amount was also paid off the Norman Street Mortgage. Vladimirka points out that by virtue of the Norman Street Mortgage, Norman Street became security for the debts of Michael and Judith. The Bank does not dispute this, but suggests that the only relevant debt of Judith's was that on the joint cheque account with Michael, that is, a debt of Michael's too, and the Bank is not claiming against Vladimirka in relation to that joint cheque account.

Did the Bank improve its security position while Vladimirka received no benefit from the Bank? Vladimirka asserts further that in taking the Norman Street Mortgage, the Bank improved its security position, while she received no benefit from the Bank: "Because no monies were advanced to [Vladimirka] to assist in the purchase of [Norman Street], she received no benefit from [the Bank]." The Bank, on the other hand, submits that although Michael was the borrower, Vladimirka's submission does not address the proper question which is whether Vladimirka "receive[d] a benefit from the transaction of which the mortgage was part". Vladimirka benefited from the borrowing in that the whole of the advance of $80,000 was applied to the purchase of Norman Street by her and Michael jointly. The loan to Michael secured by the Norman Street Mortgage not only enabled her to acquire a proprietary interest: it provided her with a more valuable and convenient residence. To the possible argument that Michael was making a gift to his mother, the Bank replies that this is too restrictive a view of the facts. The Bank would not have advanced $80,000 to Michael, absent the knowledge that the funds would be applied in settlement of the purchase of Norman Street and that the Bank was to receive a first mortgage over it as security. The Bank's funding of the purchase was a benefit to Vladimirka in my view. It is an artificial and unrealistic view to think that there was no benefit to her only because, in the present respect, Michael was sole borrower. I accept the Bank's submission in the present respect. Vladimirka submits that she had no income which would have justified the Bank's making an advance to her. The Bank rejects this suggestion, submitting that she was still working and that it had lent to her previously. It is not disputed, of course, that Michael's capacity to pay exceeded Vladimirka's. Vladimirka also asserts that she had no equity in Norman Street at the time of the mortgage. The argument seems to be that: the property had a value of $100,000; it was security for the borrowings of Michael and Judith; these borrowings comprised $81,000 of existing debt and $80,000 for the purchase of Norman Street, totalling $161,000; therefore Norman Street was security for debts greater than its value. The Bank submits that this analysis overlooks two matters. The first is that according to the same reasoning, Vladimirka had no equity in Canley Heights. The second is that the approach of applying all the debt against Norman Street is inappropriate, as it ignores the fact that Michael was the primary debtor, that he had an expanding practice out of which to repay the loan, and that Myall Street constituted further security for the debts secured by the Norman Street Mortgage. The Bank received a mortgage over a more valuable property worth $100,000 as opposed to the $73,000 value of Canley Heights. Moreover, unlike Canley Heights, Norman Street was unencumbered by a first mortgage to the CSB. Against these considerations, however, is the fact that the Bank had to provide additional funds of $80,000. It was not contemplating holding both Canley Heights and Norman Street as securities for long. It was always understood that Canley Heights would be sold. The Bank submits that it did not improve its net security position against the total funds advanced, and that even if it is seen to have done so by a comparison of dollars lent to dollar value of security, that is no reason to attack the grant of the later security. It says that in a normal home loan, the value of the security would be greater than the funds advanced by some 20-40%.

The acknowledgments In the period March 1983 to February 1990Vladimirka executed at least twelve acknowledgments of rising amounts of indebtedness against the security provided by her. The last was dated 8 February 1990 and acknowledged that indebtedness of Michael not exceeding $2,321,400 was secured by the Norman Street Mortgage. Vladimirka submits that the acknowledgments are irrelevant to the issue whether the Norman Street Mortgage itself was unconscionable or unjust, were of no contractual force, and were signed by her when she lacked knowledge of particular unusual matters relating to Michael's accounts. The Bank, on the other hand, submits that the acknowledgments are relevant to the enforceability of the Norman Street Mortgage, because of Vladimirka's assertion that she would not have executed it had she been aware of particular things. It submits that her execution of the acknowledgments shows that she would have executed the Norman Street Mortgage in any event. According to the Bank, the acknowledgments are relevant to the question whether the Norman Street Mortgage was unjust when executed because they go to Vladimirka's frame of mind and likely conduct. It submits, further, that they are also relevant to the issue of what relief is available. The acknowledgments are also relevant, it says, to Vladimirka's loss of opportunity claim. Vladimirka's evidence relating to the acknowledgments can be summarised as follows: (1) she knew that by signing them she was helping Michael in relation to Bank loans; (2) she knew that each one linked loans to Michael and Judith, to the Norman Street Mortgage; (3) she knew that the Norman Street Mortgage was used for Michael's business and that she was a guarantor and that her interest in Norman Street provided security; (4) at least from October 1987, the acknowledgments were sent to her home address; (5) she could read and appreciate the amounts recorded on the acknowledgments as owed to the Bank; and (6) she understood that executing the acknowledgments affected her financial interests and that they were connected with the Norman Street Mortgage. Asked whether, when signing a particular acknowledgment, she knew that there was a connection between the loan to Michael and Judith and the Norman Street Mortgage, Vladimirka replied: "They took the mortgage and used it for the business and I signed as guarantor. I signed my house as guarantor." Later there was the following exchange: "MR SACKAR: Again, you knew that your mortgage in respect of the Norman Street property was connected by way of assisting or guaranteeing those debts [of Michael and Judith], did you not? THE WITNESS: How many times I say yes." Prior to her signature of the last acknowledgment on 8 February 1990, Vladimirka received at Norman Street a letter from the Bank dated 30 January 1990. It informed her that the Bank had approved increased facilities for Michael and enclosed a form of acknowledgment in the form of a letter from Vladimirka to the Bank, which the Bank requested her to sign and return. The letter also informed her that the level of debt was $2,321,400. It then stated: "Prior to signing the document you should satisfy yourself that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position." There is no evidence that Vladimirka obtained such advice prior to signing and returning the consent.

Refinancing At a time after she had signed the acknowledgments, and when Michael was having real difficulties with the Bank to her knowledge, Vladimirka was prepared to cooperate in attempts to refinance. She made this explicit in her pleading ("The applicant would have cooperated with Radin and his wife in any refinancing proposal".) In her affidavit evidence in chief, she stated: "... I would have co-operated with my son and daughter-in-law in seeking refinance and would have willingly executed any security documents which would have affected a refinancing of the moneys due to the Respondent Bank." In fact, Vladimirka signed a refinance proposal in June 1992, indicating to Morlend and Forward her acceptance as guarantor of their offers.

Vladimirka's relationship with her son In order to consider whether or not Vladimirka would have executed the Norman Street Mortgage and the acknowledgments if informed or independently advised of certain matters, and whether or not she would have given any notice to the Bank terminating its authority, it is necessary to understand her attitude towards her son. Michael was Vladimirka's only child and family in Australia. She was very proud of his achievements in studying law and in running his practice. She believed that he was very successful. She always trusted him and believed him. She always wanted to assist him in his business. She believed that she was doing so when she signed mortgages, acknowledgments and refinancing documents. Her cross examination included the following: "MR SACKAR: ... if Milosh had [given] you an explanation to the effect that there were no problems with the [Bank] and that he would sort everything out you would accept him would you not? THE INTERPRETER: Yes, I would believe him." An issue central to both Vladimirka's claim to have the Norman Street Mortgage set aside, and her claimed loss of the opportunity to request the Bank not to make any further advances, is the question whether she would have acted any differently if she had been aware of the numerous matters referred to in the pleading as not disclosed to her. In my view, on the evidence, she would not have done so. She always was prepared to support Michael unequivocally. The mutual support between Michael and his mother is still evident. Some time after 1992, Michael sponsored the appointment of Vladimirka as a director of Lane Cove West Medical Practice Pty Ltd and negotiated for her to be issued shares in the company (about 33% of the capital) in return for his providing management expertise to it. At the time of the hearing he was living with Vladimirka at Norman Street, as he apparently has done since he separated from Judith.

FURTHER REASONING I have already made certain findings of fact above. It is appropriate to record here my general impression of Vladimirka. Although she was assisted in the witness box by an interpreter, she responded to many questions spontaneously and without the interpreter's intervention. It is true that her oral evidence was littered with broken sentences and "false starts", as a reading of the transcript demonstrates. But the transcript may well mislead as to the extent of Vladimirka's comprehension. Close attention to her in the witness box convinced me that in fact she was reasonably astute. She had had a wide range of experiences in life. After beginning life nestled in a wealthy family in Yugoslavia, she had migrated to Australia, apparently with little financial backing, and had made her way here relying on her own resources and strength of purpose. Money matters had touched her life throughout. In my opinion, she had always, of necessity if not through choice, had an interest in financial matters. I do not go so far as to say that her knowledge and experience of them were sophisticated. But it seems to me that Vladimirka well understood basic kinds of commercial transactions, including the general nature and effect of a third party mortgage. She did not suggest otherwise, and, in substance, frankly conceded that she did.

Duty of disclosure The Bank submits that there is no duty of disclosure which required it to bring to Vladimirka's attention the many matters, particulars of which were set out earlier. As noted earlier, most of these matters relate to events or states of affairs subsequent to 1 May 1984and therefore could not have been disclosed prior to execution of the Norman Street Mortgage. In substance, the matters relate to Michael's creditworthiness. Examples are that his account was "troublesome", that the Bank thought it had "inadequate security" for its exposure, that his accounts were "well above limits", that he had "financial problems", that the Bank did not have confidence in his attitude towards his responsibilities and obligations to it, and that Branch sought Zone's approval to dishonour his cheques. The creditor/guarantor relationship is not one uberrimae fidei, and the creditor must disclose only those circumstances touching the principal transaction between creditor and debtor which are not naturally to be expected, and the non-disclosure of which would, in the circumstances, effectively constitute a misrepresentation of material aspects of the principal transaction: Goodwin v National Bank of Australasia Ltd (1968) 117 CLR 173 esp at 175 (per Barwick CJ) ("Goodwin"); Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 ("Amadio") esp at 455 (per Gibbs CJ); Westpac Banking Corporation v Robinson (1993) 30 NSWLR 668 (CA) ("Robinson") esp at 688E, 689E-F (per Clarke JA with whom Handley JA agreed). In Robinson (at 696D) Clarke JA (with whom Handley JA agreed) noted Wythes v Labouchere (1859) 3 DeG & J 593 at 609; 44 ER 1397 at 1404 (which was also approved of by Gibbs CJ in Amadio (at 455)) and National Provincial Bank of England Ltd v Glanusk [1913] 3 KB 335 at 339. The relevant passage in Wythes v Labouchere is as follows: "... unless the non-disclosure amounts to a fraud upon the surety, he is not entitled to relief. The concealment, too, must be of some material part of the transaction itself between the creditor and his debtor, to which the suretyship relates. The creditor is under no obligation to inform the intended surety of matters affecting the credit of the debtor, or of any circumstances unconnected with the transaction in which he is about to engage, which will render the position more hazardous. As Lord Campbell says in Hamilton v Watson, with reference to the proposition that everything should be disclosed by the creditor which it was material for the surety to know: 'If such was the rule it would be indispensably necessary for the bankers, to whom the security is to be given, to state how the account has been kept, whether the debtor was in the habit of overdrawing, whether he was punctual in his dealings, whether he performed his promises in an honourable manner, for all these things were extremely material for the surety to know.' It is unnecessary to go through the authorities to show that all of them, where the question of concealment arose, were cases in which it related to the transaction itself, and amounted to a fraud upon the surety." ((1859) 3 DeG & J 593 at 609; 44 ER 1397 at 1404, references to authority omitted). In Amadio, the facts of which are well known, Gibbs CJ thought that the third party mortgage given by the parents should be set aside on the ground of breach of the Bank's duty to disclose unusual features (see especially at 454-460). The Chief Justice reviewed the law relating to disclosure by a creditor to an intending guarantor (at 454-457) and said: "A surety who guarantees a customer's account with a bank will not expect that the account has not been overdrawn or that the bank is satisfied with the customer's credit, for the probable reason why the bank requires a guarantee is that the customer has been overdrawing his account, and wishes to do so again, and that the bank is not satisfied with his credit: cf. London General Omnibus Co Limited v Holloway [1912] 2 KB at p.83. The general rule therefore is that a bank is not obliged to disclose to the surety matters affecting the credit of the customer: Wythes v Labouchere (1859) 44 ER 1397, at p.1404. Indeed, a bank might well commit a breach of the duty of confidence which it owes to its customer if it did disclose matters of that kind." (at 455) His Honour indicated (at 456) that the cases to which he referred "all support the view that at least in the case of banker and customer the duty of disclosure arises only where there is a special arrangement between the bank and the customer of a kind which the surety would not expect." The passage set out above was followed by the majority of the New South Wales Court of Appeal in Robinson (at 697D per Clarke JA, with whom Handley JA agreed). Gibbs CJ dealt (at 457-8) with the special facts in Amadio which, for him, activated the duty of disclosure. His Honour said: "First, and perhaps most important, was the arrangement made between the bank and Vincenzo Amadio on behalf of the company on 24 March. Although pursuant to that arrangement the company was to obtain an immediate overdraft limit of $270,000 (which was about $35,000 more than the sum of its existing overdraft and the amount of the outstanding cheques), it was a condition of the arrangement that the limit would be reduced to $220,000 within a week, with a further reduction to $180,000 within a fortnight. In other words, within three weeks the overdraft limit was to be reduced below the debit balance which already existed. Then it was intended that the entire overdraft should be cleared; the evidence suggests that this was to be done within a short time although it does not precisely appear when the clearance was to be effected. I find it impossible to suppose that a surety who undertook to meet the past and future liabilities of the company, and to give substantial security, would have expected that the arrangement between the bank and the company included such unusual terms, which meant that the company was given merely a temporary respite, whereas the bank improved its existing and inadequate security. Further, there was the circumstance that the bank had not merely dishonoured the cheques, but had made itself a party to their selective dishonour, in an endeavour to maintain the facade of prosperity that the company, although insolvent, had erected - a facade which, the bank should have expected, may well have deceived the respondents, since, as Mr Virgo knew, Mr Amadio was present at his son's ostentatious Christmas party [for over 2,000 people]. Cheques held pursuant to those arrangements, and amounting, as I have said, to about $44,000, were held at the time when the guarantee was given. There were indeed unusual features relating to the account which was to be guaranteed, and the bank was in my opinion bound to disclose them. For these reasons I have concluded that the failure by the bank to make disclosure of these circumstances amounted to a misrepresentation (albeit unintended) of a material part of the transaction between the bank and the company, and that the memorandum of mortgage, including, of course, the guarantee which it contains, is not binding on the respondents." (emphasis supplied) In my view, the facts of the present case are distinguishable from those of Amadio. There was not here a comparable unusual arrangement between Michael and the Bank whereby, for example, Michael was to be given immediate additional financial accommodation on terms that there was to be a reduction in the overall level of indebtedness in a larger amount very shortly afterwards. The special arrangement in Amadio enables the case to be seen as one in which the provision of the additional finance was unimportant except for its role of concealing the substance of the special arrangement, which was that the bank was increasing its security against imminent and certain default and the need to exercise its powers. It is also not alleged here, nor could it be supported on the evidence, that the Bank was a party to selective dishonour of cheques on Michael's practice account "in an endeavour to maintain the façade of prosperity that the [debtor], although insolvent, had erected", as was the case in Amadio. Nor can it be maintained that the Bank had reason to believe that it may have deceived Vladimirka. In Robinson, the New South Wales Court of Appeal considered whether the bank should have disclosed to a guarantor certain "credit facts" relating to the debtor. They were as follows (at 696-697): "(1) Details of how Brass Imports [the debtor company] had exceeded its overdraft limit from time to time in the past; (2) The dissatisfaction of the regional office with the way in which the Oak Flats branch had allowed the account to be conducted; (3) That certain cheques had been dishonoured; (4) That the account was being closely monitored." (emphasis added - a fifth "credit fact" was not considered for certain reasons and is not presently relevant) The majority in the Court of Appeal held that as at the signing of the guarantee, there was no implied representation by the bank to the contrary of the credit facts, and no obligation to disclose them. Clarke JA (with whom Handley JA agreed) said: "The fact that the [debtor] company was in financial difficulties and was consistently exceeding its overdraft limit, and that its cheques were being dishonoured in themselves did no more than throw light on the credit of the company (Commercial Bank of Australia Ltd v Amadio (at 456)). In addition, they were completely consistent with a growing company that was short of working capital. In my opinion [the guarantor] failed to establish the existence of a duty to disclose the relevant facts and was not entitled to avoid the guarantee." (at 697-698) In substance, the "credit facts" not disclosed in Robinson are of the same general nature as the facts not disclosed in the present case. There is no evidence upon which it can be found that on 1 May 1984, when the Norman Street Mortgage was executed, or subsequently when the acknowledgments were signed, there was an implied representation by the Bank to the contrary of any of the numerous matters particularised. Those matters were also "credit facts" and the Bank was not obliged to disclose them. The facts that Michael had financial difficulties, that he was exceeding his overdraft limit, and that the Bank was seeking to bring him into line, and that it was considering dishonouring his cheques (or later, from March 1987, that it actually dishonoured some), did no more than illuminate his credit situation (see Amadio at 456, Robinson at 697). Moreover, those facts were consistent with the nature of Michael's practice which was a new and expanding one, short of working capital, in which payment of fees was received long after Michael had rendered services and paid disbursements for the client. In my view, the Bank was not subject to a duty to disclose the particularised matters at the time of the Norman Street Mortgage or subsequently.

Was the Norman Street Mortgage "unjust" for the purposes of the CR Act? The CR Act defines "unjust" to include "unconscionable, harsh or oppressive" (subs 4 (1)). Relief may be granted under the Act "[w]here the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made" (subs 7 (1), emphasis supplied). In determining whether a contract or contractual provision is unjust in the circumstances relating to the contract at the time it was made, the Court is to have regard to the public interest and to all the circumstances of the case (subs 9 (1)). Without affecting the generality of subs 9 (1), subs 9 (2) lists certain matters to which the Court must have regard, to the extent to which they are relevant. Subsection 9(2) includes as a factor: "(k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party". Subsection 9 (5) states: "(5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made." Section 15 provides: "15. In any proceedings in which relief under this Act is sought in relation to a contract, the Court may, if it thinks it proper to do so in the circumstances of the case, and it is of the opinion that the contract forms part of an arrangement consisting of an inter-related combination or series of contracts, have regard to any or all of those contracts and the arrangement constituted by them." The CR Act's provision for relief from unjust contracts and contractual provisions is to be viewed as part of a larger picture to which Gleeson CJ referred in Baltic Shipping Company v Dillon (1991) 22 NSWLR 1 (CA), where the Chief Justice said (at 9C), in relation to the CR Act: "The general policy of the law is that people should honour their contracts. That policy forms part of our idea of what is just." In Collier v Morlend Finance Corporation (Victoria) Pty Ltd (1989) ASC 55-716; NSW ConvR 55-473, Meagher JA said: "... the circumstances would be rare indeed when a Court should, in the exercise of its duty to make a just order, deprive an innocent party of the benefit of its contract, particularly when, as here, the party seeking to have the transaction set aside does not offer terms. The lender, after all, had lent the moneys in question and the borrowers had utilised the greater part of those moneys for their own purposes in discharging a prior mortgage. In these circumstances it would seem to me to be monstrous to suggest that the Court should exercise a discretion to set aside the transaction in question so far as Morlend [the lender] is concerned." (at ASC 58,433-434, NSW ConvR 58,444) In West v AGC (Advances) Ltd (1986) 5 NSWLR 610 (CA) ("West"), McHugh JA said (at 621 F-G): "If a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a contract and the terms of the contract are reasonable as between the parties, I do not see how that contract can be considered unjust simply because it was not in the interest of the claimant to make the contract or because she had no independent advice." and (at 622 A-B): "... under this Act, a contract will not be unjust as against a party unless the contract or one of its provisions is the product of unfair conduct on his part either in the terms which he has imposed or in the means which he has employed to make the contract." The Act does not impose on a lending institution a duty to ensure that a decision to guarantee is prudent, or that the debtor is able to pay, or that the guarantor receives independent commercial advice, although if such advice is proffered the financier may become subject to a duty of care: Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 (CA) per Meagher JA at 276-7; Gough v Commonwealth Bank of Australia (1994) ASC 56-270 (NSW CA) per Mahoney JA at 58, 847 and 58,854-5; Younan v Beneficial Finance Corporation Ltd [1995] ANZ ConvR 213. The circumstances prevailing when the Norman Street Mortgage was executed on 1 May 1984, have been recounted above. Vladimirka was a person for whom English was not her native tongue. She entered into the Norman Street Mortgage without independent advice, that is, any advice independent of the Bank and of Michael. I have already discussed and rejected her submission that she derived from the transaction no benefit or no benefit proportionate to the burden imposed by the Norman Street Mortgage. In substance, she did derive such a benefit: joint ownership with Michael of what became her home, since Norman Street was purchased substantially as a result of the Bank's loan. It is unlikely that the Bank would have lent to enable the purchase of Norman Street, if she had not joined with Michael in mortgaging it (cf Akins v National Australia Bank (1994) 34 NSWLR 155 (CA) at 174A-F per Clarke JA). Her entry into the Norman Street Mortgage was not a relevant "financial" contribution. She made none of the repayments. Vladimirka also submits that there was an inequality of bargaining power in the transaction and that she had no opportunity to bargain. However, she could have declined to execute any of the documents. As I have said above, she does not allege that pressure was brought to bear on her or that she was tricked or deceived. On the contrary, her evidence shows that she understood what she was doing. In virtually any contractual dealing between an individual and a bank or other substantial financial institution there is an inequality in bargaining power, but this alone does not make the dealing "unjust". I find that Zsilinszky witnessed execution of the Norman Street Mortgage in accordance with her standard practice. In any event, by 1 May 1984, Vladimirka had already entered into four mortgages, and a lease of a shop for which a guarantor had been required. It is clear from Vladimirka's own evidence that as at 1 May 1984, she understood that she was giving a mortgage over Norman Street, that the Norman Street Mortgage was to assist Michael's business by securing his indebtedness to the Bank, and that, in the event of default by Michael, the Bank would be entitled to sell Norman Street. The Bank did not engage in conduct which deprived Vladimirka of a real or informed choice as to whether to enter into the mortgage. As noted earlier, in January 1990, when the Bank wrote to Vladimirka enclosing the twelfth and final consent, the covering letter advised her to satisfy herself that she understood the full nature and effect of her liability and urged her to obtain "appropriate advice, legal or otherwise, if [she was] at all uncertain of [her] position". It is not clear whether Vladimirka obtained independent advice at that stage or not. The Bank submits that her evidence of the circumstances surrounding the signing of the Norman Street Mortgage and the acknowledgments is internally inconsistent. In par 9 of her affidavit sworn 11 July 1996, she said that when she attended the Bank and executed some documents, she "was not advised as to the nature of the transaction nor was it suggested to [her] that [she] should seek independent legal advice prior to signing documents which [she had then] come to learn was a mortgage in favour of the bank over [her] home" (emphasis supplied). In her later affidavit sworn 1 September 1997, she stated: "3. I can recall I signed the mortgage [in May 1984] to help my son Michael with his business. That is what I understood when I signed the mortgage over my house. It was a town house at Concord. 4. I knew when I signed the mortgage that if Michael could not repay money lent to him by the bank that my house could be sold." (emphasis supplied) The same affidavit also included the following paragraph: "10. I refer to my first affidavit where I said that I could recall signing acknowledgments from time to time which my son would give me. I knew they were bank documents. I can recall that Michael was always in a hurry and he would come to me with those letters and say: 'Come on Mum sign these I need them in a hurry'. I never asked my son what these documents were because I trusted him." (emphasis supplied) Her earlier affidavit evidence of signing at the Bank is also inconsistent with the fact that at least three consents were mailed to her at her residence. In re-examination, Vladimirka was shown the last consent of 8 February 1990, her signature on which purported to have been witnessed by Martin Konda ("Konda"), an employee of Michael's. She said she thought she signed that last consent in Michael's office. If she did sign it there, she may or may not have been given advice by Konda as to the nature and effect of the acknowledgment. Importantly, in my view, the evidence shows that Vladimirka believed that she did not need advice other than that of Michael, would not have gone elsewhere, would not have believed or trusted anyone whose opinion conflicted with Michael's, and would have executed the documents in any event if that is what he asked her to do, because she desired to support him in his professional and commercial activity. Indeed, I think that disclosure of any difficulty he was having in meeting the Bank's requirements would have served to strengthen, not to weaken, that desire. Vladimirka does not assert either that the Bank or Michael put any pressure on her, or that any term of the Norman Street Mortgage itself was misrepresented to her, or that there was anything unconscionable in the terms of the transaction. That she had a limited understanding of English is, of course, not determinative: see, for example, Commonwealth Bank of Australia v Rekes (unreported, NSW SC, Giles J, 11 May 1994, at 30). A mortgage is not unjust for the reason only that it is not in the commercial interest of the mortgagor to enter into it or because the mortgagor had no independent advice. Perhaps the giving of a "purely" third party mortgage is never in the commercial interest of the mortgagor. At no point in the period over which she signed the acknowledgments, which she understood to be linked to the Norman Street Mortgage, did Vladimirka indicate to the Bank or to anyone else that she did not consider herself to be bound by the mortgage or the acknowledgments, or that she had any complaint or grievance over the giving and taking of the mortgage or the acknowledgments. The Norman Street Mortgage is not "unjust" for the purposes of the CR Act, unless it, or one of its terms, "is the product of unfair conduct on [the Bank's] part either in the terms which [the Bank] has imposed or in the means which [the Bank] has employed to make the contract": West at 622 per McHugh JA. In my opinion, neither of these alternatives has been made out on the evidence. The Norman Street Mortgage was not rendered unjust by the fact, assuming it to be the fact, that the Bank knew, while Vladimirka did not, the matters particularised in par 41(xxx)-(xxxii). Those matters go to issues of Michael's creditworthiness and banking history. As already noted, the Bank had no general law duty to inform Vladimirka of those matters, and may have breached an obligation of confidence to Michael if it had done so. This consideration goes a long way to point to the conclusion that the Bank's taking the Norman Street Mortgage without attempting to ensure that Vladimirka knew of those matters is not "unjust" conduct of the Bank. The position of Vladimirka is also not relevantly distinguishable from that of Mrs Falinski in Falinski v Commonwealth Bank of Australia (unreported, NSW CA, 6 February 1998) ("Falinski"), in which the New South Wales Court of Appeal held that her awareness of the purpose and nature of her guarantee and of her potential financial exposure defeated her claim under the CR Act, and rendered irrelevant her submission that she did not know, and was not informed, of those risks inherent in the debtor's business which were material to her exposure (at 25-26). In my view, moreover, Vladimirka would have executed the Norman Street Mortgage and signed the acknowledgments, even if she had been fully informed of the matters particularised. In her affidavit sworn 1 September 1997, Vladimirka gives the following evidence to the contrary: "6. I say that I would not have placed my town house at risk of being sold if I thought that there was a possibility that Michael could not repay the [Bank] and it would have to be sold. My town house was the only piece of property that I had and I would not have put it at risk of being sold if I knew the matters set out in paragraph[s] (xxx)-(xxxii)." (emphasis supplied) Paragraphs (xxx) to (xxxii) were set out earlier. They were introduced into Vladimirka's case by means of her further amended statement of claim filed in Court on Monday 1 September 1997, the day on which she was due to enter the witness box to give evidence. The Bank submits that her affidavit evidence was considerably weakened by her cross examination. On the first day of her cross examination, 1 September 1997, Vladimirka was asked by senior counsel for the Bank, after being directed to pars (xxx) - (xxxii), whether she had ever seen those paragraphs previously. She replied that she had not. When asked whether she had seen any document with words typed on it in the same manner, again she said 'no'. The Bank submits that at that point her evidence as to what she would have done given knowledge of the matters particularised, fell away. However, she gave further evidence on the matter in re-examination. When shown the same document by her counsel on Tuesday 2 September 1997, she said that she had seen it the preceding Saturday, 30 August. The Bank submits that this is not to the point and that her case that she would have acted differently was an afterthought, having been introduced as late as 1 September, when her third affidavit, sworn on the same day, was also filed in Court just prior to her being called as a witness. The Bank submits that between Vladimirka's first and second days in the witness box "an event happened overnight". It suggests that in an early part of her cross examination on 2 September, there was "a difference in the tenor of some of her answers". Senior counsel for the Bank asked her whether she had spoken to her son on the intervening night about the case, to which she answered 'no'. Pressed about whether she had spoken to him on the ground floor of the Law Courts Building, she said: "My son doesn't want to discuss those things with me. He told me you have your own solicitor, you can get advice from your own solicitor but I can only tell you one thing, to tell the truth." Her evidence was that after she returned home on the evening of 1 September, she read some papers connected with the proceeding that had been given to her by her solicitor. She said she read them to refresh her memory. The Bank submits that she would have read an account of her "what if" case, that is, her case as to what she would have done if she had known of the matters allegedly not disclosed to her. This appears to be correct: when asked what the papers were, Vladimirka said: "It is concerning 1984 and documents that I wasn't aware of, documents concerning troubles that my son had with the [Bank] that I wasn't aware of." It is not essential that I express a view on the Bank's suggestion that the tenor of Vladimirka's evidence changed in suspicious circumstances. I do not accept her "what if" evidence for the other reasons mentioned. I am, however, fortified in that conclusion by the lateness of the allegation, and, more importantly, by the generally unsatisfactory nature of Vladimirka's evidence in relation to it. The Bank submits that a further reason why the Court should not accept Vladimirka's evidence that she would not have provided security to the Bank if she had known of the undisclosed matters, is that there is a tension, if not an inconsistency, between that evidence and the evidence she gave to support the case based upon the alleged misrepresentation by the Bank to Judith via Parker in July 1991. Vladimirka's evidence was that she had been prepared to cooperate in the refinancing. This would have involved offering Norman Street as security. The Bank does not dispute that she would have cooperated in the attempt to refinance to the extent of mortgaging Norman Street to a new financier, but submits that this is inconsistent with an unwillingness on her part to provide Norman Street to the Bank as security on 1 May 1984 in the circumstances hypothesized. In fact, Vladimirka did cooperate by signing the Forward and Morlend letters of offer and also urged Judith to cooperate. Vladimirka gave the following evidence in chief as to a conversation between herself and Judith in late 1991: "In late 1991 I telephoned my daughter-in-law, [Judith]. I did so at my son's request. At this time they were living apart. I said to her, words to the effect: 'Judy, why are you not signing the papers for the refinance. This is very urgent, otherwise we are all going on the street and will lose everything'. [Judith] replied, words to the effect: 'Mum, I have been to the Commonwealth Bank and I was talking in there and they say - 'No problem, everything is fine'. If everything is fine, why do I have to sign the refinance?' I said words to the effect: 'OK Judy, do you believe the Bank or do you believe Milosh? Are you sure the Bank says that there is no problem?' [Judith] then replied, words to the effect: 'Look, I have been down to see them and they tell me there is no problem and I am not going to sign any refinance papers.' I said, words to the effect: 'Well OK Judy, if you don't want to, you don't want to.'" (emphasis supplied) I accept the thrust of the Bank's submission on the present issue. There is no reason to assume that Vladimirka's attitude to information from the Bank would have been different earlier in 1984, when she signed the Norman Street Mortgage or subsequently when she signed the respective acknowledgments. By late 1991, she had signed twelve acknowledgments and was aware of the escalating indebtedness, its magnitude ($2,321,400), and the fact that it was secured by the Norman Street Mortgage. In 1984, on the other hand, Michael had been conducting his practice for only some two years. In 1991, Vladimirka knew that Michael was in financial difficulty with the Bank, yet she stood ready, without hesitation, to come to the rescue by again mortgaging Norman Street. This suggests it to be improbable that in 1984 or in the intervening period, when his circumstances were not so dire as they were in late 1991, she would have withheld her support. In the light of all the facts showing her relationship and attitude to her son over the years, including her execution of two third party mortgages, twelve acknowledgments and the refinance documents, I do not accept her present assertion that had she known the matters particularised, she would have declined to execute the Norman Street Mortgage or the acknowledgments, or directed the Bank not to provide further financial accommodation to her son.

Unconscionability Where (i) a party to a transaction suffers a special disability in dealing with the other party, with the consequence that there is a significant inequality between them in their capacity to safeguard their own interests; and (ii) the special disability was sufficiently evident to the stronger party to make it prima facie unfair or unconscientious that it procure or accept the weaker party's agreement in the circumstances in which it did so; the stronger party bears the onus of showing that the transaction was fair, just and reasonable: Amadio at 474, per Deane J. Did Vladimirka suffer a "special disability" when giving the Norman Street Mortgage? She pleads that she did by reason of the same matters as are pleaded in relation to her CR Act claim. In sum, these are to the effect that she did not know the allegedly important matters whereas the Bank did. The Bank submits that this unawareness does not qualify as a "special disability", and that if it does, all third party guarantees and mortgages in favour of banks would be made contracts uberrimae fidei, which, of course, they are not. I accept the substance of this submission. Moreover, the considerations that I discussed in the context of Vladimirka's CR Act claim show that she was not in a position of special disability. She understood that she was executing a mortgage and that under it Norman Street could be sold in the event of default. She knew that the Norman Street Mortgage was to secure Michael's business debts. She did not need any explanation as to its effect because she already understood its nature and effect, although she was in fact given an explanation by the attendant Bank officer. There is not evidence that Vladimirka suffered from any inadequacy of understanding. Moreover, if she did, the Bank did not know of it. Therefore the Bank could not have taken advantage of it. The Bank was not to have known what she might have been told by Michael in relation to his financial affairs. It is not alleged that she was subjected to pressure by the Bank or by Michael. She received a real benefit from the transaction by which Norman Street was purchased and mortgaged, to which, so far as the evidence reveals, she contributed no "equity". It is not clear that the transaction was, ex facie, improvident at the time. Her claim has no greater strength than that of the appellant in Falinski, referred to above, in which the New South Wales Court of Appeal held that unconscionable dealing was not established. The substance of Mrs Falinski's claim to suffer from a special disability were the following features: her financial position vis-a-vis that of the Bank; her need to maintain her relationship with and to assist her husband; her belief that his business was profitable; and her lack of knowledge of the financial circumstances of the business. Mrs Falinski also relied on the risk involved in guaranteeing the debt because the solvency of the debtor was suspect. She also claimed that her execution of the guarantee was not to her advantage, and that the Bank had constructive notice of her alleged special disability. The Court of Appeal accepted that the guarantee was, ex facie, improvident but held, in the following terms, that Mrs Falinski's CR Act and unconscionability claims failed: "Mrs Falinski's claim is met by the findings, which, in my opinion, are beyond challenge, that she understood the document was a guarantee, that [the Bank] never telephoned her nor put any pressure on her to sign the document, that she full well understood the nature and effect of the guarantee and did not need any explanation as to its effect, that she did not suggest in her evidence that she was pressured by Mr Falinski to sign the document, that she understood the guarantee was for the indebtedness of Osborne, which then stood at $5 million, and that if she signed the guarantee, as she did, and returned it to [the Bank] the Belrose property would be put in jeopardy." (at 29, per Sheller JA, with whom Mason P and Cole JA agreed) These observations apply, in substance and with necessary adjustments, to Vladimirka in relation to the Norman Street Mortgage. The Bank had also sent Mrs Falinski a letter, in identical terms to the letter dated 30 January 1990 sent to Vladimirka, discussed above, which said: "Prior to signing the document/s you should satisfy yourself that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position". The Court of Appeal held that "... in the circumstances of the case, [the Bank] was not in conscience required to do more". Their Honours also held that this consent gave rise to an estoppel which precluded Mrs Falinski from disputing her liability under the guarantee for the amount recorded in the consent signed by her. She was held to be estopped from denying the relationship between herself and the Bank based upon the continuance of the guarantee, and from denying her liability to the Bank in accordance with its terms (at 41, per Sheller JA, with whom Mason P and Cole JA agreed). Vladimirka submits, as did Mrs Falinski, that the Bank's knowledge of the matters referred to in pars (xxx) - (xxxii) placed her in a position of special disability in relation to the Bank. She submits that without knowledge of the same matters, she was not able to make an informed decision in relation to the execution of the Norman Street Mortgage, and that the Bank took advantage of its position by taking Norman Street as additional security and thereby increasing its security by the difference between its price and the amount advanced by way of bridging loan. The Bank submits that its own knowledge and Vladimirka's ignorance of the matters particularised are not capable of constituting special disability; that the Bank had no duty to disclose those matters to Vladimirka; and that the Court could not safely conclude that Vladimirka would have refused to execute the documents if she had known of them. I have previously found that she would in fact have executed the documents if she had known of the matters in question. I accept all three of the Bank's submissions. In Bradbury v AGC Ltd (unreported, NSW CA, 1 July 1997), Meagher JA, with whom Beazley and Stein JJA agreed, said: "Whilst there is jurisdiction under the Act to make orders in favour of a party merely upon proof of a relevant disability, irrespective of the knowledge of that disability on the part of the other contracting party, the circumstances must be extraordinary for that jurisdiction to be exercised: Beneficial Finance Corp v Karavas (1991) 23 NSWLR 256. In any event, his Honour found that no relevant disability existed; and even if it did there were no extraordinary circumstances which would justify any order against AGC." (at 5) I find no extraordinary circumstances which would justify any order against the Bank in favour of Vladimirka. Her decision to trust and support Michael to the extent of mortgaging her home to support his business does not have the effect that transactions into which she entered with others who acted fairly towards her must or should be set aside.

Time bar The Bank's defence pleads that in so far as Vladimirka claims damages for the "loss of opportunity", her claim is time barred. In the light of my several conclusions above, it is unnecessary for me to deal with this issue.

Estoppel In its defence the Bank pleads that Vladimirka is estopped from contending that she is not liable to the Bank for the amounts recorded in the acknowledgments. It submits that by signing them, Vladimirka represented to the Bank that she was content for the Norman Street Mortgage to secure the amounts mentioned in those acknowledgments, that she realised the consequences of doing so, and that these circumstances give rise to an estoppel against her. As mentioned above, in January 1990 when the Bank wrote to Vladimirka enclosing the twelfth and final acknowledgment, the covering letter advised her to satisfy herself that she understood the full nature and effect of her liabilities and urged her to obtain "appropriate advice, legal or otherwise, if [she was] at all uncertain of [her] position". Vladimirka signed and returned the acknowledgment. A letter in identical terms was considered by the New South Wales Court of Appeal in Falinski, at 33 ff on the question of estoppel. Sheller JA, with whom Mason P and Cole JA agreed, accepted that the letter of acknowledgment gave rise to an estoppel, precluding Mrs Falinski from disputing her liability under the guarantee for the amount recorded in the acknowledgment. Sheller JA concluded (at 41) that Mrs Falinski was estopped from denying that the relationship between her and the Bank was based upon the continuance of the guarantee, and from denying her liability to the Bank in accordance with its terms. In my view, the same reasoning applies to Vladimirka.

No offer to do equity Again, I refer to the passage in Collier v Morlend Finance Corporation (1989) ASC 55-716 (at 58,433-58,434); NSW ConvR 55-473, where Meagher JA said (at 58,444) that: "... the circumstances would be rare indeed when a Court should, in the exercise of its duty to make a just order, deprive an innocent party of the benefit of its contract, particularly when, as here, the party seeking to have the transaction set aside does not offer terms. The lender, after all, had lent the moneys in question and the borrowers had utilised the greater part of those moneys for their own purposes in discharging a prior mortgage. In these circumstances it would seem to me to be monstrous to suggest that the Court should exercise a discretion to set aside the transaction in question so far as Morlend [the lender] is concerned." As the Bank submits, Vladimirka has not offered to do equity, or offered terms, for the purposes of the CR Act. Counsel for the Bank submits, referring to Ishac v David Securities Pty Ltd (No 9) (unreported, NSW SC, Young J, 5 June 1992, at 23-27) that this should defeat any claim against the Bank. I need not discuss this issue in view of my other conclusions expressed earlier.

CONCLUSION IN VLADIMIRKA'S PROCEEDING Vladimirka does not seek, in her application or submissions, any "intermediate" form of relief, such as an order that she be relieved from personal liability, although the Bank itself touched on this matter in its submissions. Zsilinsky's evidence, which I have accepted, was to the effect that, in accordance with her usual practice, she would have explained to Vladimirka that she would be "personally responsible for the debt to the Bank" and "would ... be personally liable for any shortfall" after a sale of Norman Street. Vladimirka did not give evidence one way or the other as to whether she understood this to be the case, although, as noted earlier, she did give evidence that she knew that if Michael defaulted, Norman Street could be sold. I do not think that any intermediate form of relief is supported by the evidence or by Vladimirka's case as put. It may be, however, that the Bank will not press for a personal judgment against Vladimirka, in which case, the short minutes of orders to be brought in by it will be able to accommodate that position. Vladimirka's application is dismissed with costs. There will be a direction that the Bank bring in short minutes of the orders to be made in proceeding NG 984 of 1995.

JUDITH'S CLAIM The dispute between Judith and the Bank related to three claims. The first related to the home loan and home improvement loan. That was the subject of my Reasons for Judgment dated 8 May 1997. I need not refer to it further. The second claim is found in the Bank's cross claim to recover the amounts of other loans in respect of which Judith was a co-borrower with Michael, and to enforce its securities over five properties in respect of which she was a co-mortgagor with him. I will deal with the Bank's cross claim below. The third claim, related to the second, is found in Judith's application for relief from the securities the subject of the Bank's cross claim. I will also deal with this third claim below.

JUDITH'S PLEADED CASE AGAINST THE BANK Judith's case against the Bank is pleaded in her further amended statement of claim filed on 2 April 1997 along the following lines (the following account is a paraphrase and includes no finding of fact). Judith was the co-owner with Michael of the following five properties (amongst others): (a) Theresa Park; (b) 87 Foreshore Drive, Salamander Bay ("87 Foreshore Drive"); (c) 5 William Street, Fairfield ("William Street"); (d) 11 Appian Way, Burwood ("Appian Way"); and (e) 92 Foreshore Drive. [The Bank does not admit that Judith contributed any "equity" in respect of them.] On 26 July 1983, 14 October 1985, 2 January 1986 [sic-1988] and 7 July 1989, Judith executed the following mortgages over the five properties to the Bank to secure Michael's indebtedness: "(a) Mortgage - Registration No. T709151 over [Theresa Park]. (b) Mortgage - Registration No. W254834 over [87 Foreshore Drive]. (c) Mortgage - Registration No. W254833 over [William Street]. (d) Mortgage - Registration No. W254833 [sic] over [Appian Way. (e) Mortgage - Registration No. Y907647 over [92 Foreshore Drive]." The relationship between the Bank and Judith, at all material times between July 1983 and the end of 1991, was that of "creditor and guarantor". [The Bank admits that this is a general description of Judith's position with respect to certain borrowings of Michael, but says that she was also a borrower, with Michael.]

Breach of duty of disclosure The Bank was under a duty to explain to Judith all matters in Michael's accounts for which she was a guarantor which were of an unusual nature, and which a guarantor would not be likely to expect, yet in breach of this duty the Bank failed to inform Judith of the following matters (par 9): "[Paragraphs (i) - (xxix) are identical to those particularised in par 41 of Vladimirka's pleading, set out above, except for the substitution of 1985 for 1984 in (xiii)] (xxx) As at 8 July 1985: (a) Region had instructed [Branch] not to pay any further cheques; (b) Williams of the [Branch] had ignored Region's instructions and paid cheques for [Michael]; (c) Arrangement of facilities to [Michael] was necessary as there was no reduction on outstanding advances; (d) Firm control had to be exercised by [Branch]; (e) Region was of the view that re-arrangement of facilities was not likely to be of any assistance without firm [Branch] control; (xi) As at 15 July, 1985: (a) Region considered that [Michael's] liquidity problems would continue; (b) Region was aware that taxation would cause further liquidity problems; (c) additional working capital would be necessary for [Michael's] newly opened Newcastle office. (d) Region knew that sale of [Canley Heights] would not clear excesses; (e) Region was of the view that [Michael] could not contribute $120,000.00 from debtors for equity contribution to the construction of office premises. (xxxii) As at July 1985: (a) the Bank was suspicious that [Michael] may have been depositing the Bank's funds advanced in Switzerland and out of reach of the [Bank]. (xxxiii) As at 5 September, 1985: (a) the Bank would not allow the excesses to continue at the level at that day without further security; (b) [Michael] questioned by the Bank as to possible Swiss bank account. (d) [sic] the Bank was aware [Michael] was undercapitalised and that Bank was unwittingly in a position of having provided financial support; (e) the Bank was continuing to apply pressure to [Michael]; (f) additional securities were to be taken; (g) [Branch] was to give a further report to Region by 30 September, 1985. (xxxiv) As at 16 September, 1985: (a) The Bank did not consider [Michael] to be a sufficiently valued customer to offer litigation loan facilities. (xxxv) As at 9 October, 1985: (a) the Bank was aware that excesses could not be cleared in the short term; (b) overall indebtedness had to be reduced and realistic over limits set; (c) [Michael] had not been able to bring financial affairs into order over the past six (6) months; (d) the Bank considered it doubtful that he was able to bring his financial affairs into order; and (e) history of the account indicated [Branch] may not be able to achieve firm control over the account. (xxxvi) As at 10 October, 1985: (a) the Bank suspected that [Michael] was diverting cash away from the business; (b) the Bank was of the view that [Michael] had no cash flow although figures indicate there should have been a cash flow; and (c) the Bank was still suspicious about [Michael] investing overseas. (xxxvii) As at 18 November, 1985: (a) the Bank was concerned at cash withdrawals by [Michael] on his trust account. (xxxviii) As at 20 February, 1986 the present indebtedness as at that date was as far as the Bank was prepared to go and [Branch] was to return cheques which would further increase the excess. (xxxix) As at 25 February, 1986 the Bank was considering placing [Michael's] accounts in reduction which would prevent [him] from drawing any further cheques on his accounts. (xxxx) As at 7 May, 1986: (a) the [Branch] had totally disregarded Region's instructions not to allow [Michael] to increase drawings from Bank; (b) the Bank was at a danger level in regard to security backing for the advances and drawings made; (c) Region wanted the accounts placed in reduction which meant no further cheques to be paid; (d) Region wanted the [Branch] to establish a new working account to operate on a credit basis only and cheques were to be returned if no funds [were] available to meet them. (xxxxi) As at 11 September, 1986: (a) Region was of the view that [Michael's] financial survival depended upon his ability to get his accounts in order; (b) the Bank would not continue to support him at the current excesses; and (c) if there was no decrease in the indebtedness, cheques were to be returned. (xxxxii) As at 26 November, 1986: (a) the Bank refused to pay monthly amounts to other financial institutions and advised [Michael] that it would return cheques other than for normal living expenses; (b) the Bank advised [Michael] that he had a standard of living beyond his income. (xxxxiii) As at 5 January, 1987: (a) the Bank protected [Michael's] interests by paying outstanding cheques over the Christmas holidays; (b) Head Office was closely monitoring [Michael's] account; (c) Head Office was pressuring [Branch] to reduce the Bank's exposure in line with security back stop available; and (d) all cheques drawn had to be covered by deposits. (xxxxiv) As at 17 March, 1987 the Bank had dishonoured a number of cheques on [Michael's] practice and his private accounts. (xxxxv) As at 15 July, 1987: (a) Region considered conduct of accounts at [Branch] had not been satisfactory; (b) the level of excesses were alarming; (c) no further excesses were to be permitted on overdraft accounts; and (d) cheques were to be returned in order to achieve no further excesses. (xxxxvi) As at 17 September, 1987: (a) the Bank had had enough of [Michael]; and (b) the Bank had considered [Michael] had siphoned funds off to improve his station in society without telling the Bank. (xxxxvii) As at 29 March, 1989: (a) the Bank dishonoured a number of cheques to contain the account within current figures; (b) the Bank was aware that [Michael] had an outstanding tax commitment of $130,000.00; (c) three properties would need to be sold if excesses were to be repaid; (d) the Bank had advanced more to [Michael] than the value of the security backing; and (e) the limits to be set as per 29th March 1989 [Bank] memo being B186, were not to be exceeded and all cheques in excess of that level were to be returned. (xxxxviii) As at 5 April, 1989: (a) [Michael's] total accommodation set at $1,376,950.00; (b) the whole of that accommodation had been drawn; (c) security held by the Bank was less than the total accommodation of $1,376,950.00; (d) total accommodation limit not to be exceeded and any cheques in excess were to be returned; (e) additional securities were to be provided to support the total accommodation of the $1,376,950.00 already drawn." By reason of the Bank's non-disclosure of these matters, Judith is discharged from all liability under her third party securities. As a result of the non-disclosure, Judith was prevented from instructing the Bank that she would not authorise any further advances to Michael against the security of properties of which she was a joint owner with him. She was entitled to inform the Bank at any time that she would not authorise any further drawings in favour of Michael secured by any property in which she had an interest. Due to the Bank's breaches of its duty of disclosure, Judith lost the chance to give such a direction to the Bank. As a result, Judith has suffered loss and damage and loss of chance. Further, or in the alternative, Judith would not have entered into any of the mortgages after July 1983 if she had known of the matters set out above. If she had been aware of them, she would have directed the Bank to cease making advances to Michael secured against any property of which she was a joint owner. Further, the Bank knew, or ought to have known, that Michael would not have informed Judith of the matters mentioned, and was therefore under a duty itself to advise her of them.

CR Act The taking of the securities by the Bank was unjust within the meaning of subs 7 (1) of the CR Act. Particulars of the "unjustness, harshness and unconscionability" are (par 18): "(i) There was an inequality of bargaining power between [Judith] and the Bank. (ii) There was no negotiation between [Judith] and the Bank in respect of the security documents. (iii) It was not reasonably practicable for [Judith] to negotiate, alter or reject any of the provisions of the security document. (iv) [Judith] was not advised to, and if [sic - in] fact did not, obtain independent legal or financial advice in respect of the security documents. (v) [Judith] by reason of her training, experience and the absence of independent advice, had no adequate appreciation of the contents and consequences of executing the security documents. (vi) The security documents contained conditions and provisions which were not reasonably necessary for the protection of the legitimate interests of the Bank. (vii) [Judith] derived no benefit, or no benefit reasonably proportionate to the burden imposed by the security documents. (viii) [Judith] was, to the actual or constructive knowledge of the Bank, not reasonably able to protect her interests. (ix) The security documents operated for the benefit of [Michael], a third party to the documents. (x) The Bank secured the execution of the documents by [Judith] per medium of her husband, [Michael], who acted as the Bank's agent for this purpose. (xi) [Judith] was not afforded any or any adequate explanation of the nature and effect of the documents she was executing. (xii) Unfair pressure and tactics were applied to [Judith] for the purposes of obtaining her signature by [Michael] and/or [the Bank]. (xiii) [Judith] was not told that she was, nor warned of the improvidence of, providing all moneys guarantees in respect of [Michael's] debts whenever incurred. (xiv) [Judith] was not kept informed by the Bank of the situation in respect of [Michael's] indebtedness, nor told of any changes in the circumstances of the relationship between [Michael] and the Bank which might reasonably be relevant to the decision to grant security. (xv) [Judith] was not kept informed by [the Bank] to ensure that the lending policies of the Bank, as pertaining to [Michael] were communicated to [Judith], and as a result of such failure [the Bank] has suffered damage." [It is noteworthy that no case of undue influence or duress is pleaded against Michael or the Bank (but cf particular (xii) above)].

Unconscionable conduct By reason of the same matters (that is, the particulars in par 18 set out above) Judith was placed in a position of special disability when dealing with the Bank and the Bank took unconscionable advantage of that position.

Misleading or deceptive conduct By reason of the matters which the Bank failed to disclose to Judith (that is, those particularised in par 9, set out above), the Bank engaged in conduct that was misleading or deceptive in contravention of s 52 of the TP Act and s 42 of the Fair Trading Act 1987 (NSW) ("the FT Act"). Further particulars of the misleading or deceptive conduct are that: the Bank failed to inform Judith of the continuing deterioration of the relationship between it and Michael as banker and customer from 1990 to the end of 1992; the Bank failed to inform Judith that in early 1991 it decided to take recovery steps against Michael unless he paid it out; and the Bank failed to inform Judith of this and of the fact that if steps were taken towards recovery, she would suffer loss.

Fraud, negligence and misleading or deceptive conduct in relation to the Bank's reply to Parker's letter of 17 July 1991 Finally, Judith pleads a case arising out of inquiries made of the Bank by her or on her behalf and the Bank's responses in the period May 1991 to March 1992. The only particular given concerns the letter of 17 July 1991 from Parker to the Bank. The pleading is in the same terms, with necessary adjustments, as Michael's discussed earlier. If Judith had been told the truth, she "may have cooperated" with Michael to refinance, and, in any event, by its conduct the Bank eliminated the chance of a refinancing. The Bank, through its Regional Manager, James, engaged in fraudulent concealment and withholding of information. During the period May 1991 to September 1992, the Bank deliberately withheld from Judith and Vladimirka knowledge of its requirement that Michael pay it out under threat of enforcement of its securities. The Bank did not inform Judith because of its concern that she might seek to have the securities set aside, as a result of which the Bank's security position would be weakened. I dealt with these allegations previously in the context of Michael's claim. I have given my reasons for rejecting these claims above, under the heading "Michael's Post-1991 Causes of Action."

Negligent Advice The Bank took it upon itself to offer advice to Judith in relation to her obligations under the mortgages, referring to par 37 of the affidavit of a Bank employee, Leone Maree Boulous ("Boulous"), sworn 18 November 1996. She pleads that the Bank thereby came under a duty of care to ensure that advice was given to Judith on all matters which would affect her obligation under the mortgages. In breach of this duty, in respect to the mortgage dated 14 October 1985 (there are in fact two mortgages of this date, one over 87 Foreshore Drive and one over William Street), the Bank failed to advise Judith of matters particularised in par 9 (i) - (xviii) set out above. If Judith had been so advised, she would not have executed the mortgage. In relation to the mortgage of 2 January 1988 over Appian Way, the Bank failed to advise Judith of the matters contained in par 9 (i) - (xviii). If it had done so, she would not have executed the mortgage. In relation to the mortgage dated 7 July 1989 (there are in fact two mortgages dated 7 July 1989, one over 92 Foreshore Drive and one over Wanda Beach, the Bank failed to advise Judith of the matters particularised in par 9 (i) - (xxvii). If she had been so advised, she would not have executed these mortgages.

Relief Judith seeks an order under s 7 (1) (a) of the CR Actthat none of the provisions of the third party securities executed by her are enforceable against her, an order under s 7 (1) (b) of that Act declaring them void, in whole or in part, ab initio or from such other time as the Court might think fit, and damages pursuant to the TP Act and FT Act and interest.

GENERAL FINDINGS OF FACT The Bank has made extensive and detailed submissions as to the findings of fact in relation to Judith for which it contends, and submits that if they are made all legal issues disappear.

Judith's general understanding and ability to understand My overall impression of Judith was one of an intelligent and capable person. She had no difficulty comprehending the questions put to her in the witness box. She was active in the preparation and conduct of her case. She was careful in giving evidence. Far from being spontaneous in answering questions, she took time for reflection. However, in my opinion, this was done not so much with a view to ensuring that the question was fully and adequately answered, but in order to ensure that the answer would assist, or at least not harm, her case. I accept that Judith's state of awareness of legal and commercial matters today exceeds the understanding that she had contemporaneously with the events with which I am concerned. But in my view, the difference is not so substantial as to render irrelevant the impression which she gave in the witness box. Judith's diary-keeping practice, her active role in the selection, acquisition and management of investment properties, her challenging of items in her solicitor's bill of costs, and the general course of her negotiations with Michael in the Family Law proceeding, all discussed in more detail below, suggest that she has long since been conscious of the need to assert and protect her rights. Part of Judith's case was that her "educational background ... would have placed certain limitations upon her as to her ability to understand the mortgage guarantee, cross-guarantees, and documents of the like". I do not accept this submission in so far as it is intended to suggest that she was unable to understand the substance of the documents mentioned (I have previously outlined her educational background under the heading "Introduction to Facts"). It is the Bank's submission that at the relevant times Judith had a "reasonable level of commercial sophistication", shown by and gained from her handling of the day-to-day administration of Michael's and her joint (that is, non-practice) assets and interests. On the other hand, counsel for Judith submits that these activities, described in more detail below, were undertaken at Michael's direction and "subject to the influence of his violence". This sweeping submission is not supported by the evidence. There is no pleading of duress or undue influence exercised by Michael. Michael was not cross examined on this particular issue by Judith's counsel. I do not accept the submission. From an early time in her relationship with Michael, Judith assumed responsibility for organising and paying for various insurance policies. Her diary notes reminding her to attend to various business matters from as early as February 1979 are in evidence. She dealt with real estate agents in relation to some of the properties, for example, Canley Heights, Bullaburra and Appian Way. She carried out investigations in relation to the purchase of Theresa Park and paid accounts in relation to it. She supervised renovations of the family homes at Myall Street and Appian Way, taking out an owner-builder's licence for the purpose. She also worked in conjunction with an architect in relation to the demolition of existing improvements and the building of a holiday home at Salamander Bay. She assumed responsibility for attending to payment of various accounts relating to properties jointly acquired by her and Michael. These included loan accounts with various financiers. She attended to those accounts which were sent to the family home. It was Judith who attended to mail and paper work relating to various property transactions, record-keeping, and payment of insurance premiums, rates and other accounts. Michael's evidence on the issue, although at first evasive, was that whatever their residential address at any particular time, as mail arrived addressed to Judith or to them both jointly, Judith would open it, tell Michael what it was when he arrived home from work in the evening, discuss with him the payment of accounts, and attend to payment and to the filing away of the mail. His evidence was that Judith was not under any direction from him not to open mail which came to the house, regardless of to whom it was addressed. He said that if he had given her such a direction it would "make her open it up". In his words, "Sure, you could never stop Judy opening up mail". He said that while living together, they shared information concerning the domestic accounts and the bank statements on their joint account, and that: "…she was as it were, in control of the paper for example, that was emanated or it was emanated as a result of, for example, property transactions?---She was in control of the paper that - that was vested in at the matrimonial home, yes." Judith had an organised system of filing the documents relating to various property transactions, bank accounts and insurance policies, as was demonstrated by her production of documents in Court during the hearing by way of late discovery. Her filing system even enabled her to produce some documents of which copies were no longer kept by the Bank. These included approvals of early personal loans and of the overdraft on the joint account. She also maintained files for home loans in relation to the successive family homes at Myall Street and Appian Way. When renovations were being carried out at Appian Way, and she and Michael were residing elsewhere, Judith continued to look after the mail delivered to Appian Way. Michael was too busy and could not be bothered to do so. The probability is that Judith also had in place a system to collect any mail addressed to Myall Street after the couple moved to Appian Way. It reflects poorly on Judith's credit that she was reluctant to acknowledge her considerable clerical and administrative activity touching the couple's finances, and that she suggested that she may not have seen certain documents unfavourable to her case because Michael might have taken and secreted them. In relation to each property that Judith bought with Michael, she applied her mind to determining whether or not the price to be paid was fair and was consistent with values in the area. In 1983-1984 Judith handled the sale of Canley Heights, although she had no interest in that property, which was owned by Michael and Vladimirka. She dealt with real estate agents and entered into agency agreements with them. She also responded to the Bank's inquiries in relation to the sale in August and September 1984. It is clear from notes she made on letters from the Bank dated 21 August 1984and 26 September 1984 that she telephoned Boulos at the Bank and advised her accordingly. There is no suggestion that she had any difficulty doing so. Judith was a joint debtor on the joint personal overdraft account (No 147-056), which was used for day-to-day expenses and for making payments relating to the properties and assets other than Michael's practice. She was effectively the person who operated this account. From time to time she checked through each item on the account statements received from the Bank. Her handwriting on a bank statement demonstrates that she understood some of the abbreviations for automatic debits. This, together with the fact that she operated the joint account and paid domestic bills, signifies that she knew that cheques had been returned by the Bank on the joint account. This was something she conceded. The communications from the Bank made her aware of the precise state of the accounts other than Michael's practice accounts. From time to time, Judith dealt directly with the Bank (as noted above) and with other financiers. I have no doubt that Judith always had the capacity to understand, and did understand, the key aspects of the nature and effect of a mortgage, including a third party mortgage. I will address this issue in more detail below. It seems appropriate to note at this stage, however, that during the period 1980 to 1989, Judith executed no less than 16 mortgages of land held by her and Michael jointly or by her alone. Four of these pre-dated her marriage to Michael on 22 November 1981. She had also entered into a bill of sale to fund the purchase of a car in 1979. The following account of the facts is lengthy and somewhat detailed. This is partly attributable to the number and variety of the transactions involved. But as well, it is due to the need to appreciate the respective roles and experiences of Michael and Judith, in particular, that of Judith, and my reasons for not accepting the case that she has sought to make.

The five mortgage transactions in respect of which Judith seeks relief No attempt was made in Judith's submissions to examine the circumstances surrounding each mortgage transaction or her signing of the various acknowledgments, in support of her fundamental submissions, that: a) there was no explanation of the documents given to her at the time of their execution; and b) she did not understand their effect. The Bank has made detailed submissions analysing the circumstances surrounding each mortgage transaction in turn. I set out my view of the factual background to the individual transactions below. It is of some importance to note that in Judith's evidence in chief, there were no allegations of violence or threats by Michael in relation to the execution of any particular mortgage which she now challenges. For the first time in cross examination, she volunteered evidence that Michael threatened her if she were ever to contact the Bank to seek information. Further, at the end of her lengthy cross examination, she said that Michael "made threats in relation to just about every document that [she] had to sign". This sweeping allegation volunteered in cross examination is not supported by other evidence. The Bank submits that these two allegations of threats in relation to the seeking of information and the signing of documents are recent inventions. I discuss these matters further below, but indicate now that I accept the Bank's submission.

From January 1980, Judith made "a lot of enquiries about uses for ... Theresa Park" relating to an interest that Michael and Judith had in starting a farm there, possibly establishing stone fruit orchards, and building a house. However, Theresa Park remains essentially vacant land to this day. On 25 August 1980, Michael and Judith bought Theresa Park for $37,500. Judith made no financial contribution to the purchase. Her evidence was that at the time she did not know where the money was coming from. However, in a statement prepared for the Family Law proceeding, she said: "[a]t the time of purchase I believe that the purchase was financed by vendor finance". In fact Vladimirka contributed $17,500 towards the purchase, and the remaining $20,000 was provided by the vendor, Miss McKee. On 25 August 1980, Michael and Judith executed a first mortgage to Miss McKee as security for the vendor finance. At the time, Judith and Michael were not married. The mortgage was discharged out of funds provided by the Bank six years later on 24 October 1986. In her amended application filed in the Family Law proceeding on 11 September 1992 and affirmed by Judith on the previous day, Judith said in relation to the purchase of Theresa Park that she "made all enquiries regarding purchase", "negotiated price with vendor" and attended to many other things in relation to the property, including payment of all accounts, discussions with Water Resources, the Council and the Department of Agriculture, and the obtaining of various quotations in relation to the farm that she and Michael contemplated starting. Before me, however, Judith maintained that if she were to rewrite her Family Law application now, she would not use the concept of "negotiation". She said that it was her solicitor, not herself, who actually chose the words. Her cross examination before me included the following passage: "You never said, relayed amounts told to me by Mr Radin, do [sic - did] you?---Well, that's what I told my solicitor that I did. Mrs Radin, you signed this document which is in the form I have read to you: 'Negotiated price with vendor.' did you not?---They weren't the words I used when I was ... Now, listen, Mrs Radin, it may not be the words you used, they were words you were quite happy to adopt in your commercial interest, were they not?---When my solicitor put my words into that document, I assumed that was the correct way to write what I had told her." It subsequently emerged that this evidence was false, in that the very word "negotiations" was used by Judith in her handwritten instructions to her solicitor for the purpose of preparation of documents in the Family Law proceeding. Confronted with her own handwriting, Judith conceded that her suggestion that the word "negotiated" had been selected by her solicitor, was wrong. This is one of many examples of Judith's propensity to disclaim responsibility for aspects of her past conduct which she perceived to be damaging to her present case. Judith said that at the time of the purchase of Theresa Park, she did not know what a mortgage was. She said that at that time, 1980, she "had never heard of one" or been "associated with obtaining a loan for anything". But this was inconsistent with her involvement in the purchase of a motor vehicle and giving of a bill of sale for the purpose only the preceding year, 1979. Her evidence before me was that she had not known the difference between a loan and a mortgage at the time of the purchase of Theresa Park. In cross examination, she said that she could not remember what she thought she was signing when she signed the mortgage securing the vendor finance, and did not know whether she would have been inquisitive as to what she was signing. She agreed that she would have known that she and Michael were jointly involved in the purchase and needed to borrow money for that purpose, but said that she could not say whether she had known that the mortgage was signed to formalise the vendor finance from Miss McKee. There is no other evidence as to what was said at the time of the execution of this mortgage. On 26 July 1983, Michael and Judith executed a second mortgage over Theresa Park to the CTB (subject to the first mortgage to Miss McKee), expressed to be given as security for advances and accommodation to be provided to Michael. It was an "all monies" mortgage. This was the sixth mortgage Judith had signed since August 1980. The signatures of Michael and Judith were witnessed by a Bank employee, Kerry Ann McIlvenny (née Cruse) ("McIlvenny"), who gave evidence. McIlvenny said she did not remember meeting Michael or Judith, but would have followed her "normal practice" in relation to execution of mortgage documents. Her evidence as to her "normal practice", which she says she "always" followed, was as follows: "(3) I explained to the people executing the mortgage that the document was a mortgage and said something like: 'This is the mortgage document which is security for the loan.' (4) I would then point out the title details and say: 'This is the volume and folio for the land that is being mortgaged.' ... (6) I would then say: 'It is important for you to check the details of the spelling of your name and that the details there are correct.' (7) ... The Bank always had printed copies of [the] memorandum at the branch. When the mortgage was prepared, it was always accompanied by a printed copy and I would provide a copy to the people executing the mortgage. At the time of providing the copy, I would say something like: 'This is a copy of the memorandum and the terms of the mortgage are contained in this.' (8) On the second page, there are three parts which have been completed by me. The first is the date "26/7/83" which is in my writing [when shown the original document in examination in chief, McIlvenny said that '26/7/83' was not her writing]. Second, underneath where [Michael] signed, I have inserted '/DEBTOR'. The third is that I have signed and placed my name indicating I witnessed both the signature of [Michael] and [Judith]. (9) In relation to the date, it was my practice to place the date on the document on the day that I witnessed somebody signing the document. (10) In relation to adding the word 'Debtor', this was because [Michael] was the borrower of the money and was described as the Debtor on the front page. (11) In relation to witnessing the signatures, I signed the mortgage and placed my name on the mortgage after each of [Michael and Judith] had executed the mortgage. Under no circumstances would I have signed as a witness if I had not in fact witnessed both [Michael and Judith] sign ..." (emphasis in original) Judith did not recall what was said at the meeting, but did not deny McIlvenny's account. Her evidence in chief was that although she could not remember signing the mortgage, she knew that she "was not aware and was not made aware, by any actions or words of the bank representative that day" that she "could lose [her] property if payments fell behind". She stated in her affidavit sworn 13 February 1997: "At the time I understood that by signing I was agreeing to [Michael] borrowing money. At no time did it occur to me that the [Bank] would expect me to pay back the money as I was a full time housewife and mother." In cross examination, Judith claimed that she could not be sure what she understood about this mortgage, and could not be sure that she understood at the time (July 1983) that a mortgage was security for a loan. She also claimed that she could not be sure that she knew that a mortgage was in connection with "financial facilities ... of one sort or another". However, she did agree that if she had been at all troubled about the nature of a mortgage at any time when she signed one, she would have asked about it. She also agreed that she knew well before 1983 that a mortgage was a document executed in connection with a loan of money, and that if she had looked briefly at the face of this mortgage, she would have known that it was a mortgage document relating to Theresa Park. By the time she executed the mortgage dated 26 July 1983 over Theresa Park, Judith had already entered into: (1) a bill of sale to secure a loan to purchase a motor vehicle in 1979; (2) a first mortgage (with Michael) to Miss McKee over Theresa Park in 1980; (3) a mortgage (by herself) to the United Permanent Building Society ("United Permanent") to secure a loan in relation to her purchase of Bullaburra in 1980; (4) a first mortgage (with Michael) to the CSB over Myall Street to secure a loan in relation to its purchase in 1981; (5) a second mortgage (with Michael) to the CTB over Myall Street; and (6) a mortgage (as debtor with Michael, the mortgagors being Michael and Vladimirka) to the CTB over Canley Heights to secure a personal loan to herself and Michael for the purchase by Michael of Menart's legal practice.

2. 87 Foreshore Drive On 14 June 1985, Michael and Judith bought this waterfront property for $115,000 (Judith gave wrong amounts in her affidavits). Judith's handwritten instructions to her solicitor and her amended application in the Family Law proceeding stated that she "participated in negotiations and purchase" in respect of this property. Before me, she said that this was not true, and that she was "just there" when the purchase took place. Either her amended application in the Family Law proceeding or her evidence before me was incorrect. Such inconsistencies and their implications (other instances will be mentioned) have undermined any confidence which I might otherwise have had in Judith's testimony. Judith's interests in the two proceedings were inconsistent, and Judith was disposed to say whatever seemed to her to serve her interest at the time. The documentary evidence of Judith's role as "administrator of family finances" strongly suggests that she gave the more realistic self-portrait in the Family Law proceeding. Michael and Judith used 87 Foreshore Drive as a holiday home. When they bought it in 1985, it had on it a fibro cottage and shed. From that time to late 1988 or early 1989, they redeveloped it substantially, building a new two storey brick residence. Michael's evidence is that this was paid for, at least in part, from the earnings of his practice. The Bank submits that a lot of the funds provided by it (the Bank) went into this redevelopment. It is unnecessary for me to determine precisely how the new residence was paid for. The funds must have come from either or both of the Bank and Michael's practice. Judith was involved in supervising the building of the new house. In fact, in a statement prepared by her solicitor in the Family Law proceeding, Judith's account was that the property was demolished in July 1988, and that a new house which she (Judith) had "designed with an architect" was erected at a cost of some $130,000.00 and completed in December 1988. In cross examination, she said that this was only a half-truth, in that she only "drew a design" and told the architect what was required, looked at the drawings prepared by him and told him what she thought needed to be changed. This was yet a further attempt by Judith to disavow an account of herself which she had previously given but which she found inconvenient in the present proceeding. On 14 June 1985, Michael and Judith granted a first mortgage over 87 Foreshore Drive to AGC as security for a loan of $60,000 to finance the purchase. It was the seventh mortgage signed by Judith. Judith's evidence in chief was: "The house was about $110,000. I had no idea where the money was going to come from to buy this house and [Michael] did not discuss that with me. I now know that [Michael] borrowed some money from AGC to pay for it". In cross examination, Judith said that she could not say what she understood at the time of this mortgage, but thought she understood that it related to a loan for the acquisition of 87 Foreshore Drive. It is highly improbable indeed that she would not have understood the essential nature of a mortgage by mid-1985: she had signed six mortgages and a bill of sale by that time. On 13 September 1985, the Bank (Boulous) wrote to Michael and Judith at Myall Street in relation to a second mortgage over 87 Foreshore Drive, requesting them to arrange a time to execute the security documents which had been prepared. Michael's evidence was that he had little doubt that he would have discussed this letter with Judith. Judith's evidence was that they definitely did not discuss the matter. I accept the Bank's submission that, having no definite recollection one way or the other in relation to several other matters around this time (including whether she had in fact seen the letter), Judith probably does not have a definite recollection that she and Michael did not discuss this topic. On 14 October 1985, Michael and Judith executed a second mortgage over 87 Foreshore Drive to the Bank. It was expressed to be "in consideration of certain advances and accommodation granted or to be granted at the request of" Michael and Judith. They were both named as mortgagors and debtors. It was an "all monies" mortgage. It was additional security for a Fixed Rate Bills Endorsement Facility of $210,000 for Radin & Associates which was used to fund the purchase of William Street (dealt with next below). The mortgage was executed before Boulous who cannot remember whether Michael and Judith attended together to sign. Michael conceded that it was possible they attended separately. He recalls only one occasion when they attended together (with Vladimirka also) to execute a mortgage, and that was in the presence of Zsilinsky rather than Boulous. Judith did not assert otherwise. Her evidence in her first affidavit sworn 11 July 1996 was as follows: "On each occasion a property was purchased with funds being provided by the [Bank], or that the property was being re-financed by the [Bank], it was the usual practice of [Michael] to bring home the relevant documents. I was then shown where to sign and did so as requested, with the exception of one occasion whereupon I was requested by [Michael] to attend the [Bank] at its Fairfield branch and did so for the purpose of signing mortgage documents." Later evidence in chief of Judith's was that she could not remember attending the Bank, meeting Boulous or signing the mortgages of 14 October. Her affidavit sworn 13 February 1997 included the following passages: "[I am] certain that no one explained them [the mortgages of 14 October] to me at the time. … No one asked me questions and I did not ask any questions because I didn't know what to ask"; "At the time I knew that I was signing papers relating to the purchase of the William St and Salamander Bay properties, but I know now that I still did not have a correct understanding of what a mortgage was. Up until this date no one had ever told me that I was responsible for paying back the debt, or that the Bank could take my property if the money was not paid. No one had ever said that to me before and they did not say it to me then. I did not think that the Bank would expect me to pay back the money because at the time I was a full time housewife, except for doing some photography for [Michael], and our daughter was only 3. It was not possible for me to pay back the money" ; and "I do not recall signing any Letters of Acknowledgment or Consent at the Bank. These kinds of papers were usually signed at home." Contrary to this account, in cross examination Judith said she recollected signing the documents at the Bank, stating that the cross examination over some days concerning events of long ago had jogged her memory. She did not say that she attended with Michael. Judith said that she understood in 1985 that the mortgage was somehow connected with the loan and with the purchase of real estate, but said she could not recall whether she had understood at the time anything further about the nature of a mortgage. Boulous's evidence in chief as to her practice was: "(1) The mortgage documents were always prepared with a copy of the Bank's usual registered memorandum with them. There was at least one copy per mortgage and usually one for each mortgagor. ... (2) I always said to people signing as mortgagor: 'This is the Bank's standard mortgage document and you are the mortgagor. The mortgage has to be executed in duplicate.' (3) I would then hand one of the copies of the mortgage to the mortgagors. (4) I would then say, referring to the top left-hand box: 'The property is described as Volume ... Folio ... which is your property at ... . The Bank is taking a mortgage over your property.' (5) I would then refer to the section where the mortgagor and the debtor is set out. In relation to this mortgage, my practice would have been as follows: 'You are both the mortgagor and also both the debtor. You are responsible for repayment of the loans and that is why you are mortgaging the property.' (6) I would then comment in relation to the section which referred to prior encumbrances. If there were any prior encumbrances, I would invariably say words to the effect: 'This is a prior mortgage.' In this case I would have said: 'This is the prior mortgage to AGC.' (7) I would also hand to the mortgagor a copy of the memorandum ... and say words to the following effect: 'These are the terms of the mortgage. You don't have to sign the mortgage today if you don't wish to. You can take the mortgage home and read it first.' (8) If the person signing indicated that they did not wish to sign the mortgage without first reading the terms, then I would agree, although that was something which almost never happened. Also, if at any point the person signing had any questions, I would answer those. I also asked the person signing: 'If you have any questions before you sign the mortgage, you should ask me.' (9) At that point, if the person was willing to sign and had no unanswered questions, I would indicate where the person should sign on the document. Once all the persons to sign had signed, I would witness their signature and print my name and work address which I have done in the case of the Salamander Bay mortgage." (emphasis supplied) As set out earlier, Judith has pleaded that by virtue of Boulous's practice implemented on this occasion, the Bank took it upon itself to offer advice to Judith in relation to her obligations under the mortgages of 14 October 1985, and the Bank thereby became subject to a duty of care to ensure that Judith was given advice on all matters which would affect her obgliations under them. It is convenient to note here rather than later, that in my opinion there is no substance to this claim. In my view, Judith and Michael probably went to the Bank separately to execute both mortgages of 14 October (W254833 over William Street and W254834 over 87 Foreshore Drive) and an acknowledgment of an increase in facilities to $412,311. In those circumstances, Judith could have asked anything she wished without any influence from Michael. Set out on the acknowledgment as part of the total debts acknowledged is a sum of $220,000 "B/E/F" (Bills Endorsement Facility) to enable settlement of William Street to be effected. Judith signed twice, once as a "third party mortgagor". Judith said she could not remember what was said to her at the meeting and could not deny that Boulous said the things set out above. She agreed that if she had wished to ask Boulous any questions she could have done so. Judith had spoken to Boulous at least twice over the phone in 1984 in relation to the sale of Canley Heights. The Bank submits that I should find that Boulous told Judith the matters set out above, in accordance with her usual practice. Boulous impressed me favourably as a witness. She answered questions in a straightforward and thorough manner. I have no reason to doubt that she was giving truthful evidence to the best of her ability. I accept her evidence. The two mortgages of 14 October 1985were the eighth and ninth mortgages signed by Judith. Counsel for Judith submits that the signing of these two mortgages was very urgent; that there is no evidence that Judith knew of this urgency or of any of the other background circumstances; that this was not a "position ... that the surety would naturally expect"; and that the undisclosed urgency affected the nature and degree of Judith's responsibility. I do not accept the submission. For a start, it is inconsistent with other evidence. Judith and Michael purchased William Street in May 1985. Michael gave evidence that he took the mortgages home to Judith and discussed the provision of the securities to the Bank. The letter from the Bank to Michael and Judith at Myall Street dated 13 September 1985 indicates that they had had a previous discussion with the Bank Manager in relation to the Bank's taking an additional mortgage over 87 Foreshore Drive, and states: "The documents are now prepared and we would appreciate you contacting this office to arrange a mutually convenient time to sign them." There was default under the first mortgage to AGC. Section 57 (2) (b) notices dated 14 August 1987 and 15 September 1987 were issued to Judith. They referred to the proposed exercise of the mortgagee's power of sale of 87 Foreshore Drive if the amount specified was not paid. The notices were addressed to Judith at Appian Way. When taken to them in cross examination, Judith said she was not sure whether she had seen them because she may not have been living at Appian Way while the house there was being renovated. In her evidence in chief, Judith did not mention any absence from Appian Way for the purpose of renovations in 1987, although she did in relation to 1988 in the paragraph below (and on the same page as) the one in which she described the events of 1987. In any event, in cross examination she conceded that when she was absent from Appian Way during the renovations there, she had the picked up the mail and would have opened mail addressed to her. She later changed this evidence, claiming that she may not have seen mail addressed to her if Michael had collected and opened it, and that he sometimes "second guessed" what was in letters addressed to her and opened them if he thought they related to things that he dealt with. On this basis, she suggested that he may have kept the s 57 (2) (b) notices from her. In my opinion, Judith was attempting to accommodate her evidence to her interest as she perceived it, which was to keep open the possibility that she did not see the s 57 notices from AGC. Judith was not a witness who would ever make concessions against her interest unless confronted with evidence that seemed to her to be irrefutable. She would frequently, as in this instance, suggest what might have happened in order to explain away an inconvenient fact. She seemed unable to bring herself to say simply that she had no actual present recollection of receiving the notices but that if they were addressed to her, she "probably did" or "would have done so" in the ordinary course. Judith was never willing to make frank concessions of that kind. In any event, in the present instance, Judith's ultimate explanation ("blame Michael") is inconsistent with Michael's evidence that Judith took care of the mail while renovations were being carried out at Appian Way; that he would drop in early in the morning to check on the renovations but would be gone by 7.00 am; and that he was too busy to bother with collecting the mail. This evidence of Michael's is consistent with Judith's own evidence about the hours for which he was absent from the home for work (from very early in the morning to very late at night) during the course of their marriage. I find that the probability is that Judith received and read the s 57 notices from AGC and understood from doing so that AGC, as mortgagee, was threatening to exercise its power of sale. Regardless of whether she received them, Judith said she did not know whether or not she would have appreciated that a mortgagee could exercise a power of sale. However, she agreed that if she had read the notices, she would have understood that AGC was threatening to exercise a power of sale which she would have considered a serious matter, and that if she had not understood what this meant she would have asked about it. By memorandum dated 17 September 1987 from Branch to Region, Branch sought consideration of Michael's application for an advance of up to $30,000 to help pay out AGC and discharge its first mortgage over 87 Foreshore Drive. In fact, the Bank did pay out that mortgage. The amount paid was some $71,000 to $73,000. Discharge of AGC's mortgage was effected on 30 October 1987. On 17 September 1987, Judith had signed an authority to complete and pay at settlement in connection with the discharge of the mortgage. She must have known then that the Bank was providing the money to pay out AGC. In her first affidavit sworn 11 July 1996 she stated: "This mortgage [the mortgage to AGC] was subsequently discharged and the property re-financed by a loan from the [Bank]." In cross examination she said that she derived this information from documents and had not known it at the time. This assertion is implausible on the basis of the "authority to complete and pay that she signed at the time and I reject it. I find that she did know at the time that the Bank was refinancing Michael and her, that the funds provided by the Bank enabled discharge of the first mortgage to AGC, and that the Bank was to become first mortgagee of 87 Foreshore Drive in place of AGC.

3. William Street William Street was a commercial property which Michael saw as capable of redevelopment into new offices for his practice. Plans were drawn up but the offices were never built. The property comprised a shop, dwelling, shed and store. It was tenanted when the property was bought. Michael and Judith contracted to purchase William Street for $300,000 on 24 May 1985. (Judith erroneously stated in her first affidavit that they bought it in 1986/7.) A deposit of $30,000 and possibly $7,500 for stamp duty had been paid out of the Radin & Associates overdraft account. Michael applied to the Bank for finance of $200,000. A Bank memorandum of 4 October 1985 indicates that Vladimirka was to contribute $40,000 and that the remaining $30,000 was to come from Michael's practice earnings. It identifies the purpose of the acquisition to be to "[a]ssist with purchase of commercial premises for own use". On 14 October 1985 the Bank approved a "Fixed Rate Fixed Term Bills Endorsement Facility" of $210,000 for Radin & Associates. The transfer to Michael and Judith as joint tenants was also executed on 14 October 1985, as was the mortgage from them to the Bank. The mortgage was expressed to be "in consideration of certain advances and accommodation granted or to be granted" to Michael and Judith. It was an "all monies" mortgage and appears to have been executed at the Bank by Judith at the same time as the mortgage dated 14 October 1985 over 87 Foreshore Drive and an acknowledgment. Boulous witnessed Michael's and Judith's signatures. Her evidence is that she would have followed her practice which I set out above in my discussion of the mortgage over 87 Foreshore Drive. Boulous's evidence is that she "would have referred to the total amount [set out in the acknowledgment] as being the amount currently secured by the mortgages". Judith did not remember what was said to her at the meeting but could not deny that Boulous's evidence was correct. In her affidavit sworn 13 February 1997 she had said of the purchase of William Street, only: "I cannot recall the purchase price of the property. I was not involved in any arrangements or discussions to borrow money to buy this property." The purchase was initially funded from the overdraft account before the Bills Endorsement Facility was drawn down. On 22 October 1985, Radin & Associates made a formal application setting out terms and conditions for a "Bills Endorsement Facility" of $210,000. On 24 October 1985 Williams advised Michael that this Facility had been funded, and indicated that there was a "shortfall in the equity you were to provide" and that "[w]e allowed the settlement to proceed to extricate you from a difficult position but for your part it is now expected that you will make a concerted effort to reduce the debt". The Bank submits that this shows that it fully funded the purchase. William Street has not been sold. The mortgage remains current and is the subject of challenge by Judith.

4. Appian Way Appian Way was Michael's and Judith's primary matrimonial home until their separation on 24 November 1988. After the separation Judith continued to reside there with the two children of the marriage. Michael and Judith purchased Appian Way as joint tenants for $420,000 on 30 April 1986. (In her first affidavit Judith wrongly stated that they bought it in 1985.) They executed a first mortgage to Suncorp dated 23 April 1986 for a loan of $320,000 to assist in the purchase. This was the tenth mortgage signed by Judith. Judith's evidence in chief was that she could not recall the signing of the documents to purchase Appian Way. She did not state in respect of this mortgage, as she did in respect of others, that she did not know what a mortgage was at the time of signing. In cross examination she said that she did not think that she recognised "very clearly", when executing the mortgage to Suncorp, that she was jointly responsible with Michael for payment, although she agreed she knew that there was an obligation to repay. She said that she did not ask anyone at Suncorp, her husband, or anyone at Radin & Associates, about the ramifications of signing the mortgage. She said "I didn't know I needed to know". She said her understanding of what a mortgage was,was "exactly the same as all the other ones that I had signed", and that she "thought" she knew that the mortgage was being required by Suncorp in relation to the loan to herself and Michael to purchase Appian Way. In my view, Judith prevaricated. She would not make the obvious and sensible concession that at this point in time she understood the basic nature and effect of a mortgage as security, and further that she and Michael were personally liable to repay the amount borrowed to enable them to purchase. In my opinion she did know these matters. Judith said in her amended application filed in the Family Law proceeding on 11 September 1992 that, in relation to the purchase of Appian Way, she attended on estate agents in Burwood and Strathfield, viewed properties, and "negotiated" with the vendor. She also said that she engaged in many other activities in relation to Appian Way, including correspondence and the paying of accounts; engaging of an architect and builder in relation to renovations; negotiating, consulting, and assisting supervision of the renovations in liaison with the architect and builder; and attending Burwood Council to make submissions in response to opposition to the renovations and extensions. In fact, she took out an owner-builder's licence. However, in her evidence before me, Judith again attempted to minimise her role. In relation to the negotiation of the purchase, she said that all she did was to speak to the vendor on the telephone and tell him what Michael had told her to say. Again, the substance of her amended application in the Family Law proceeding or of her evidence before me was incorrect. A statement of account from Suncorp dated 4 November 1987 shows that $320,000 was advanced on 30 April 1986. Interest paid to 4 November 1987 totalled $116,274. These payments, I infer, came out of the Radin & Associates practice account and were at the expense of a non-reduction in the amount of Michael's practice or other debt to the Bank. On 13 November 1987 Michael and Judith applied to the CSB for a home loan of $280,000 to pay out the mortgage over Appian Way to Suncorp. They stated that Appian Way would also be mortgaged to the Bank to support the debts of Radin & Associates. Pursuant to the request, the Suncorp mortgage was discharged by the Bank, and Michael and Judith granted a new first mortgage bearing date 5 January 1988 over Appian Wayto the CSB in consideration of a loan of $280,000 expressed to be to Michael and Judith. This was the twelfth mortgage signed by Judith. It is the subject of my Reasons for Judgment of 8 May 1997. Michael and Judith granted a second mortgage bearing date 2 January 1986 [sic-1988] over Appian Way to the Bank for "certain advances and accommodation granted or to be granted" to Michael, to support the debts of Radin & Associates. This was an "all monies" mortgage. It may be that it was executed at the same time as the CSB mortgage, as both were witnessed by the same solicitor, Warwick Ward ("Ward"). It was the thirteenth mortgage signed by Judith. According to Judith's affidavit evidence in chief, she had not seen a copy of this second mortgage to the Bank and could not recall anything about the circumstances of the signing of documents in relation to the purchase of Appian Way. In fact, on 4 January 1988 the Bank wrote to Judith at her home address, Appian Way, enclosing the second mortgage over that property and advising: "Your present maximum liability to the Bank under the document(s) [mortgage enclosed] is $950,332 - plus interest, costs, charges and expenses as provided in the document(s). Prior to signing the document(s) you should satisfy yourself that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position. Your signature to the document(s) should be witnessed by an adult person who is not the borrower/debtor or a co-guarantor/mortgagor (if any) under the document(s). DOCUMENT(S) Mortgage by you and [Michael] over property at [Appian Way] in respect of the indebtedness to the Bank of [Michael] & T/as Radin & Associates." The mortgage came back executed by Judith. As mentioned above, her signature was witnessed by a solicitor. Judith said that she did not see the Bank's letter of 4 January addressed to her. She said that in fact she was not living at Appian Way at the time. Even if this be accepted, as noted earlier, she looked after the mail arriving there while renovations were taking place. I am satisfied that probably she did see the letter and would have understood what it meant if she read it, which she probably did. In my opinion this is a further attempt by Judith to distance herself from a document she perceived to be damaging to her case. The witness to Judith's signature, Ward, did not give evidence. It would appear from his address and his employment as a solicitor, noted under his signature, that he was an employee of Michael's. On this basis the Bank submits that Judith would have had the opportunity to ask questions of him. Judith submits that given that the Bank knew who Ward was (this has not been the subject of direct evidence) it should not be accepted that his witnessing of her signature gave her an opportunity to have independent advice, since he was an employee of Michael's. The submission compounds and confuses two ideas: the Bank's state of knowledge and Ward's employment by Michael. But in my view neither separately nor in combination do they tell against the following conclusion which I reach: Judith received and read the letter of 4 January 1988 and had the opportunity to seek legal and financial advice in relation to the mortgage enclosed it but chose not to do so. On 29 August 1988 the Bank wrote to Michael at his office, advising, inter alia, that it had approved a home improvement loan to him and Judith of $100,000 "to reimburse the working account for the costs associated with the recent additions to [Appian Way]". On 14 October 1988 the CSB funded a $100,000 "home improvement loan" to Michael and Judith in respect of the renovations at Appian Way. They both signed the application and the "authority to complete and pay" in relation to this further loan on or about this date. Judith submits that this loan was "absolute nonsense" because monies for the renovations had already been expended long before. She submits that the "loan" was an attempt by the Bank to improve the appearance of the account and to find an excuse for an additional $100,000 in debt run up by Michael, which she describes as another "unusual circumstance" not disclosed by the Bank. As an undisclosed "unusual circumstance" it could be relevant only to the fifth and final mortgage subject to challenge (that over 92 Foreshore Drive) and the three acknowledgments signed by Judith after this date. Yet the pleading does not raise this matter. The matter was also not taken up with any witness. Moreover, Judith admitted liability in respect of the home improvement loan: it was the subject of my Reasons for Judgment of 8 May 1997. She also well knew that substantial amounts had been previously spent on the building and renovation work at Appian Way supervised by her. Judith points to no evidence in support of the present submission other than a letter dated 14 October 1988from the Bank to Michael and her at Appian Way. That letter referred to the fact that "home improvement loan number: 270396607" had been funded that day by payment to account 214-984 of $100,000. A Bank memorandum from Branch to Region dated 26 July 1988 suggested provision of this facility: "To reimburse the Office No 2 Account for expenditure relating to renovations and additions to [Appian Way]. (Building contract by Darryen [sic - Darren] Jay P/L for $84,226 plus receipts in excess of $15,000 sighted)." There is no substance in Judith's present submission. Judith must have known at the time all the circumstances of which she now complains. She must have known that the renovations were being, and later had been, funded by Michael out of his practice account. The expenditure was to her benefit as much as to his. I see no basis for attacking the mortgage in the fact, assuming it was the fact, that the advance to both co-owners from the CSB was used to replenish Michael's practice account at the CTB which had, after all, been depleted by expenditures on renovations for the benefit of them both.

5. 92 Foreshore Drive On 8 May 1987, Michael and Judith acquired, as joint tenants, as an investment, 92 Foreshore Drive, which was situated on the side of the road opposite the waterfront. The transfer records the consideration as $73,000. The vendors were Judith's parents, John and Daisy White. Judith's signature on the transfer was witnessed by Peter Gallagher, a personal friend of hers who was also a solicitor, and to whom she talked a lot after her separation from Michael. He was visiting at Salamander Bay at the time. Judith said that the purchase from her parents was Michael's idea. But in her amended application filed in the Family Law proceeding on 11 September 1992 she stated that she "[a]ssisted in original purchase by parents" and "[n]egotiated purchase from parents". Also on 8 May 1987, Michael and Judith mortgaged the property to Suncorp as security for a loan of $38,000 to enable them to purchase it. This was the eleventh mortgage signed by Judith. She signed or initialled against various paragraphs of the covenants in the schedule to the mortgage. Judith claimed that her understanding of this "all monies" mortgage was no different from her understanding of any of the others. Her evidence is that she appreciated only that it was a document that she needed to sign in relation to the purchase of real estate. In cross examination she said she did not know whether she had understood that some money had been borrowed from Suncorp for the purchase. However, she conceded that if she had looked at the mortgage, however briefly, when signing it, she would have seen that it referred to Suncorp and that she would have known that Suncorp was providing money towards the purchase. She acknowledged that she had had previous dealings with Suncorp. Her original account in her first affidavit sworn 11 July 1996 was: "This property was purchased with the assistance of a mortgage once again in the first instance from [Suncorp] which was subsequently discharged and re-financed by way of a loan advance from the [Bank] for approximately Thirty-five Thousand Dollars ($35,000.00)." However, Judith submits that this affidavit was effectively an account of dealings lodged at the Land Titles Office, and was not a statement of her contemporaneous understanding of the nature of the transaction. I note, however, that Judith makes no reference to dealing numbers and does not annex copies of documents. I have previously observed that in her early affidavit evidence she frequently made errors in her account of transactions (for example, as to dates (years) and amounts of purchase price), notwithstanding the availability of registered dealings and material that had been prepared for the Family Law proceeding. I do not know how the passage set out above came to be prepared, but in my opinion it may well be not an account prepared directly from the registered dealings, and may represent Judith's recollection in mid-1996. In her long affidavit sworn 13 February 1997, Judith gave evidence inconsistent with her first affidavit as follows: "In 1987 my parents sold us the house on Foreshore Drive for approximately $73,000 and purchased and moved to a house in Wanda Avenue, Salamander Bay on 10th March, 1987. I do not know where the money came from for [Michael] to buy this property." The Bank submits that Judith well understood the nature and effect of the transaction and desired it to take place as part of the expansion of the jointly owned real estate portfolio, and that it is unrealistic to think that her parents' property, the purchase of which she negotiated, was forced on her by Michael. I accept the Bank's submission. The Bank wrote to Michael by letter dated 10 April 1989 approving an increase of all facilities up to $1,376,950. One of the conditions was that additional security be provided in the form of second mortgages over 92 Foreshore Drive and Wanda Beach. These second mortgages were ultimately to be security for a further increase in borrowing by Radin & Associates up to $1,297,570, as Judith was informed by letter from the Bank dated 7 June 1989 enclosing a letter of acknowledgment for her to sign. Judith conceded that she received this letter and signed the acknowledgment (see later). On the same day, 7 June 1989, the Bank wrote a second letter to Judith at Appian Way, enclosing mortgages over 92 Foreshore Drive and Wanda Beach for signing. Omitting formal parts, the letter stated: "Your present maximum liability to the Bank under the document/s is $1,297,570 plus interest, costs, charges and expenses as provided in the document/s. Prior to signing the document/s you should satisfy yourself that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position. Your signature to the document/s should be witnessed by an adult person (specially qualified where so called for in the document/s) who is not the borrower/debtor or a co-guarantor/mortgagor (if any) under the document/s.

DOCUMENT/S Mortgage by [Michael] and [Judith] over [92 Foreshore Drive] in respect of the indebtedness to the Bank of [Michael]. Mortgage by [Michael] and [Judith] over [Wanda Beach] in respect of the indebtedness to the Bank of [Michael]." Judith probably signed the two second mortgages on the same date, 7 July 1989,as she signed the acknowledgment. She did not allege in any of her numerous affidavits that she did not understand the nature of a mortgage at the time or that Michael forced her to sign. But at the end of her cross examination, she generalised: "Mr Radin made threats in relation to just about every document that I had to sign". By the time of the giving of this second mortgage over 92 Foreshore Drive on 7 July 1989, Michael and Judith had been separated for some eight months (since 24 November 1988) and Judith had retained a solicitor, Michael Miceli ("Miceli"), for more than six months. She had had ample opportunity to obtain advice from him. In my view, in fact she did so. In a statement prepared by Miceli in relation to her Family Law proceeding some time prior to February 1991, Judith referred to the purchase of 92 Foreshore Drive and copies of the certificate of title, transfer and mortgage, but made no allegation touching the circumstances in which she had executed the mortgage, and, in particular, did not allege undue pressure by Michael. Judith did, however, allege that she had been threatened by Michael in relation to the signing of a lease in October 1989. Her statement also included the following paragraph relating to the events of 1989: "3.9 At the beginning of 1989 [Michael] agreed to pay me $1,500.00 per week until the 26th of September, 1989 whereupon the weekly payment would be increased to $2,000.00 per week. The money would be deposited to my St George Building Society Account and drawn on his office account." In her lengthy affidavit sworn 13 February 1997, under the heading "1989", Judith said nothing about the mortgage over 92 Foreshore Drive. I am satisfied that before she signed the mortgage over 92 Foreshore Drive, Judith received some independent advice from Miceli. On 8 May 1989, she had two conversations with Miceli in relation to the question whether or not she should sign a "guarantee". They were itemised in his bill of costs. In my view, Judith was deliberately evasive in her evidence touching these conversations. Probably the reference to "guarantee" was a reference to the mortgages which the Bank had requested of Michael in April 1989 as a condition of an increase in his practice overdraft. Judith conceded that the advice might have related to the two mortgages, but said that it was in relation to one of the Bank's acknowledgments. On Judith's own evidence, this cannot be correct. The only acknowledgment outstanding in 1989 was the one sent to her on 7 June 1989, which she had signed and the Bank had received back on 10 July 1989. Judith emphatically denied showing this letter to Miceli or seeking his advice on it. In my view, it is probable that the advice given by Miceli not to sign any documents until there was "final resolution of the current financial matters between [Judith and Michael]" related to the very two mortgages that Judith in fact signed on 7 July 1989 over 92 Foreshore Drive and Wanda Beach. Miceli wrote a letter to Michael concerning the matter a copy of which Judith retained, but did not initially discover in this proceeding. Despite Miceli's advice, Judith signed the mortgages dated 7 July 1989 over 92 Foreshore Drive and Wanda Beach and the acknowledgment. The acknowledgment, and probably the two mortgages, were received back at the Bank on 10 July 1989. The mortgage over 92 Foreshore Drive was a second mortgage expressed to be "in consideration of certain advances and accommodation granted or to be granted" to Michael. It was witnessed by Konda. These two second mortgages, over 92 Foreshore Drive and Wanda Beach, were the fifteenth and sixteenth mortgages signed by Judith. Judith's counsel submits that the fact that she did sign against Miceli's advice raises the inference that her will was overborne by Michael. Judith did not make any allegation in all of her affidavit evidence, or, in fact, prior to the conclusion of her cross examination, that she was pressured into signing these mortgages or the acknowledgment. In her affidavit sworn 13 February 1997 she made allegations of force and violence in relation to the execution of other documents, but under the heading "1989", she referred to four things only, none of which was the execution of the mortgages or the acknowledgment of July 1989. Nor did she refer to them in her statement prepared by Miceli, in the Family Law proceeding. There was default under the first mortgage to Suncorp. On 26 November 1991, Suncorp issued notices under s 57 (2) (b) of the Real Property Act 1900 (NSW) to Michael at his office, and to Judith at Appian Way. Judith thought she recalled being served with such a notice prior to 27 November 1991 and reading it at the time. The notices clearly referred to the proposed exercise of the mortgagee's power of sale if the outstanding payments were not made. Judith accepted that she would have appreciated this. She said that she did not know whether she had seen such a notice previously, or whether she had understood prior to November 1991 that upon default a mortgagee could sell the mortgaged land. On 27 November 1991, Suncorp wrote to the Bank enclosing copies of the notices. Suncorp issued a summons for possession returnable on 12 December 1991 which Judith discussed with her then solicitor, McGuire, on a number of occasions in December 1991. Suncorp's mortgage was discharged on 4 February 1992 out of finance of some $35,000 provided by the Bank. The Bank submits that there is no evidence that Judith attempted to have the mortgage to Suncorp set aside on the basis that it was unfair or that she did not understand it and received no explanation of it. Judith submits in reply: "What right could [she] possibly have to have an acquisition loan set aside? It is not submitted that she can even against this [Bank]." But Judith does seek to have the securities provided for an "acquisition loan" set aside. As noted earlier, she seeks such relief in relation to the funding of the purchase of William Street, by seeking to have set aside the mortgages of 14 October 1985which were granted to secure the advance of funds for its purchase. The property, 92 Foreshore Drive, remains unsold and the Bank's mortgage over it subsists.

Joint purchases of further properties in late 1988 The following account is included in relation to two additional properties, to which reference is made elsewhere in these Reasons.

These premises consisted of two home units and three "shops", one of which was used as the Port Kembla office of Radin & Associates. Michael and Judith acquired the property as joint tenants by way of transfer dated 21 October 1988 for $107,000 (just prior to their separation), mortgaging the property to Mercantile Mutual for a loan of $66,000 to fund the purchase. Judith had also signed the relevant loan approval letter dated 10 October 1988. In her handwritten instructions to her solicitor in her Family Law proceeding, Judith stated that she viewed this property prior to its purchase and discussed its suitability as an office site with Michael. These matters were also set out by Judith in her amended application filed in that proceeding on 11 September 1992.

This property was acquired by Michael and Judith as joint tenants for $355,00. The transfer was dated 21 December 1998 for that is, after they had separated. The waterfront property comprised land on which there was a shack, and it was acquired as an investment. Michael and Judith mortgaged the property to Mercantile Mutual for a loan of $185,000 to fund the purchase. As noted earlier, they gave a second mortgage over the property to the Bank on 7 July 1989 (the day on which the second mortgage over 92 Foreshore Drive was also granted) for "certain advances and accommodation granted or to be granted" to Michael. In her handwritten instructions to her solicitor in her Family Law proceeding, Judith stated that she attended the auction of this property, assisted in its purchase, and prepared it for leasing. Judith also set out these matters in her amended application filed in her Family Law proceeding on 11 September 1992. As noted previously, it had been one of the conditions in the Bank's letter of 10 April 1989 to Michael approving an increase in his facilities, that additional security be provided in the form of second mortgages over 92 Foreshore Drive and Wanda Beach.

Joint Cheque Account Number 147-056 Michael and Judith opened this joint cheque account in December 1981. It was principally operated by Judith, in the sense that she wrote most cheques drawn on it. The account was used for the payment of bills and living expenses. Michael gave evidence that he also lent money to clients out of the account, and that funds (in his words, "a substantial amount" and possibly somewhere in the vicinity of $25,000 to $40,000), may also have been drawn from it for extensions to the matrimonial home at Myall Street. A $5,000 overdraft on the account was granted by the Bank in January 1983 on the application of Michael and Judith. The contract for this overdraft was on the Bank's usual terms and conditions and contained: an agreement to lodge such securities as might from time to time be required by the Bank (clause 2); an agreement to execute such form or forms of security as the Bank might require (clause 5(b)); and an agreement that the Bank might cancel or vary the limit from time to time at its pleasure (clause 5(c)). Judith said that the signature on the contract did not look like hers. The Bank permitted various temporary excesses on the account above the overdraft limit. Judith was at all relevant times aware that Michael funded this joint account by making deposits into it. She had access to the Bank statements for the account and in fact filed them away regularly. She and Michael discussed cheques they were proposing to draw on the account to pay bills. Judith was careful to try to ensure that there were funds in the account to meet the cheques she drew. She understood from the acknowledgments she signed, that the account was in excess of its overdraft limit. She occasionally checked against the Bank statements the amounts of cheques written during the period covered by them. From about September 1985, Michael deposited $1,500 per week into the joint account from his practice account. From October 1986, the amount increased to $2,500 per week. Judith assumed, correctly, that the source of these payments was Michael's practice. Although I may use the expression "maintenance" to refer to the purpose of these payments, it should be understood that they were to cover certain loan repayments and property outgoings as well as family and household expenses. Apart from monitoring the cheques drawn on the account, Judith's handwriting demonstrates an understanding of some of the abbreviations used by the Bank for automatic debits. In particular, her writing on the statement for January-February 1986 indicates that she appreciated as at February 1986 that she had a home loan. She gave evidence that she was not sure that as at 22 February 1991 she knew that she had a home loan. But she kept a file for the home loan in relation to Myall Street, and also retained the Bank statements in relation to the home loan and correspondence for Appian Way. On 29 June 1984, the Bank wrote to Michael and Judith at Myall Street expressing disappointment in relation to the issuing of cheques "with complete disregard for arrangements …" and stating "we cannot continue to provide this unlimited credit". Judith said she had no recollection of seeing the letter. The Bank submits it is likely she did see and read it, referring to two letters dated 21 August 1984 and 26 September 1984 which she did receive and read, and which were also addressed to the couple at Myall Street. I agree: I think she probably saw the letter dated 29 June 1984. In early 1987, Michael began to deposit the weekly amounts of $1,500 into a St George account in Judith's name rather than into their joint account at the Bank. Judith knew that these amounts came from Michael's legal practice. This step was taken as a result of discussion between Michael and Judith about the fact that cheques drawn on their joint account at the Bank were being returned. Judith had felt angry and frustrated because the Bank had dishonoured several cheques drawn by her. She said that she was aware of about five occasions prior to 1987 that this had happened. The opening of the St George account in Judith's name only was clearly an arrangement made between Judith and Michael to avoid the risk of further return of cheques drawn on their joint account. Contrary to her evidence, Judith must have known that the Bank was concerned as to Michael's finances. Perusal of the cheques drawn by Judith on the joint account supports the Bank's submission that Judith handled the administration of the co-owned properties. Michael and Judith maintain that Judith made payments at Michael's direction, albeit after discussion with him. Michael said that this was because he was trying to keep an eye on the level of the various accounts and keep them within their limits. However, a Bank memorandum dated 13 February 1986 records that when spoken to by the Bank about the level of Judith's drawings on this account, Michael claimed "not to be able to stem her personal spending". It also records, and Michael recalled, that Williams told him that Branch could not continue to meet cheques, and that he should "take the pen away from Judith". Judith's independence in operating on the joint account was understated by her and Michael, in my view. Payments made by Judith included payment of insurance premiums, rates, and payments off loans from financial institutions. Judith drew cheques in favour of AGC with respect to several accounts, including those for a loan to purchase a boat, the loan to purchase 87 Foreshore Drive and a loan in relation to a motor vehicle. Judith also corresponded with AGC. By letter dated 27 June 1986 addressed to Michael and Judith, AGC referred to the arrears on the loan for the purchase of 87 Foreshore Drive and indicated that it was going to extend the term of the loan at a specified rate of interest. It advised that its intention was "not to demand repayment of the principal sum for 12 months", reserving its "legal right to make such demand at anytime during this period". By letter received on 17 July 1986, Judith responded, enclosing payment of the first instalment on the account pursuant to AGC's letter. Of greater importance is the letter she wrote from Appian Way on 23 September 1986 requesting a refund of monies paid in error. Judith said in evidence that she could not recollect the letter. She initially denied composing it, although I think it clear that she did. She agreed she could have typed it. On the basis of typing errors and typeface, again I think it clear that she did. In any event, Judith agreed that it was likely that as a result of a discussion with Michael about AGC's letter, she went through the AGC accounts and documents and came to the view expressed in her letter to AGC of 23 September 1986. In my view, Judith prevaricated in her evidence in relation to this letter because the level of familiarity with financial matters that it demonstrates is vastly beyond that which she would have me accept she possessed. On 26 November 1986, the Bank wrote to Michael and Judith at Myall Street advising that the balance on the joint account was "far in excess of arrangements", and threatening to return cheques other than those for normal living expenses and to cease paying monthly amounts to various finance institutions (AGC and Suncorp, at least). The payments off the first mortgages over some of the properties together with their private expenses were being paid for out of this account. The deposits into this account came from the Radin & Associates account. The letter clearly demanded reduction of the debt on the joint account. Judith said she did not think she saw this letter. She agreed that if she had seen it, she would have thought it was serious. However, her evidence in chief was that she did not see the letter because it was addressed to Myall Street at a time when she and Michael were living at Appian Way. In my view, this was another attempt by Judith to distance herself from a document which she perceived to be damaging to her case. Michael had no difficulty in acknowledging that he and Judith probably received this letter. On 30 October 1987, $73,348.20 was paid from the joint account to discharge the first mortgage to AGC over 87 Foreshore Drive. The Bank's second mortgage over that property then became a first mortgage. On 27 August 1992 the Bank wrote to Judith a letter demanding payment of the amount of the debit balance on the account of $16,525.26. As at 20 January 1993, the amount was $17,402.63.

On 22 February 1991, Judith met with Bank officers Coiera, Barry Rowley (Acting Senior Manager) and Ruth Chan (Senior Loans Officer) ("Chan"). Judith was accompanied by a solicitor. Coiera, who had not previously met Judith, gave this affidavit evidence: ".. initially I was confused as to who was [Judith]and who was her solicitor. [Judith] was dressed more professionally, spoke better and generally appeared more knowledgeable than the other lady who was present who was, in fact, her solicitor." The purpose of the visit was to obtain information relevant to the property settlement claim in the Family Law proceeding. The Bank diary note of the meeting, prepared by Coiera, records that Judith's last visit had been on 10 October 1990, and includes the following: "[Judith] refuses to sign the Third Party consents to $2,618,400 sent to her in August [1990], as she feels the one's [sic] previously signed to $2,321,400 are sufficient to cover her liability." The earlier consent referred to was that dated 22 August 1990. Coiera recalled that during the meeting Judith had said words to the effect that she was not prepared to sign a further acknowledgment, and that the one she had previously signed was sufficient. His evidence was not diminished in cross examination. Chan signified her agreement with the contents of the diary note in writing at its foot. Her evidence was that at the meeting questions were put to the Bank by Judith and her solicitor, to which the Bank responded. Judith denied saying that previous acknowledgments were sufficient to cover her liability. In my opinion, her general recollection of the meeting is poor. Her evidence in chief was that she met with Kennedy, but this was clearly incorrect. Contrary to the conversation Judith alleges that she had with Kennedy, the notes of McGuire and Coiera indicate that the current details (including the balance) of every account were provided to Judith, together with a list of the security properties. The Bank did not supply valuations of the security properties, but Judith's evidence was that prior to the meeting she had a good idea of their values. McGuire's note indicates a value for each security property. Judith accepted that she (Judith) probably gave this information to McGuire. The Bank submits that this meeting is important both for what was, and for what was not, said by Judith in relation to her allegations of threats by Michael in respect of the signing of the mortgages and acknowledgments, her allegations of unfairness or impropriety on the part of the Bank as to the level of indebtedness, and her allegation of her lack of understanding as to how the indebtedness arose. Judith submits that these matters were not put to her in cross examination. But there was extensive evidence in relation to this meeting: there were witness statements and cross examination of Bank officers; file notes of the Bank and of Judith's solicitor; affidavit evidence of Judith as to what occurred at the meeting; and an extensive cross examination of her on it. Yet, and this is the point: there is no suggestion of Judith's having made any allegations of the kind referred to above. The Bank was not obliged to put to her matters that did not take place, given her evidence of what did take place. The Bank's submission is simply that at a meeting with her solicitor and Bank officers in relation to her liabilities, it would be expected, if they were true or she believed them to be true, that she would have made the allegations she has made in these proceedings, such as the allegation that her execution of the mortgages was the result of pressure from Michael. The omission is significant, as is the fact that she made no such complaints to the Bank prior to initiating the present proceeding.

Settlement agreement between Michael and Judith in September 1991 In September 1991, a property settlement agreement between Michael and Judith was drawn up. Judith was to receive a house, car and regular maintenance for the children, in return for assigning to Michael her interest in the other properties. Judith found a house for herself and the children (Haberfield), and her solicitor began drawing up documents. On or about 28 September 1991, Michael and Judith contracted to purchase Haberfield. Michael handled matters in relation to the progress of the transaction. The Bank submits that this is further evidence of their cooperative and business-like relationship. Michael lodged a caveat dated 16 December 1991 to protect his interest under the contract. Michael and Judith also lodged a caveat dated 3 February 1992 to protect their interest as purchasers under the same contract. The Bank did not become aware of the existence of Haberfield until 24 March 1992. The purchase was never completed.

Letters of demand of 27 August 1992 and subsequent meetings with the Bank The Bank issued letters of demand dated 27 August 1992 to Judith in relation to all the accounts. Judith received them shortly afterwards. There followed discussions and meetings between the Bank, Judith and her solicitor. Bank diary notes record these as having taken place on 16 September 1992, 22 September 1992, and 14 October 1992. On none of these occasions did Judith or McGuire question the enforceability of the Bank's mortgages. Judith and Michael met with Kilburn and Doyle on 14 October 1992. Doyle prepared the Bank's diary note of the meeting. He agreed that it was accurate, as did Michael. It stated that the Radins had called "to advise they were considering not proceeding with present Family Law negotiations as solicitors for each party were dogmatic in their approach and not able to achieve anything worthwhile except to cost them a lot of money". The note recorded that Judith made several admissions, on which the Bank relies. According to the diary note, Judith conceded: (1) that on the occasions when she had contacted the Bank, she had been given the information she sought (Judith agreed that she may have said this); (2) that she had consented to the level of facilities provided; and (3) that opinions expressed by her solicitor to the effect that she could challenge her liability, had no foundation (Judith could not recall whether she said this). A Bank diary note dated 16 October 1992 also records that Michael rang the Bank and advised Doyle that he and Judith had reached an agreement to settle their Family Law proceeding on the terms that refinancing arrangements were to proceed, properties in his name were to be transferred to a joint tenancy to "ensure wife has a say in their fate", and an active programme of property sales was to commence. The Bank submits that Judith's conduct after the meeting is consistent with the admissions that she made. On 20 October 1992, Michael and Judith wrote to the Bank (Kennedy) a letter, which, omitting formal parts, was as follows: "We, the undersigned hereby confirm in writing our offer to payout in part the various amounts current and outstanding to the Bank by the following procedure. 1. Draw on finance in place to the amount of $2.19 million, using security of all the Real property we hold jointly, or is held soley [sic- solely] by [Michael]. 2. Balance outstanding to be taken up by the Bank as secondary security over part or all of the Real property held by the undersigned." The Bank submits that this letter demonstrates that Judith had re-formed a commercial alliance with Michael, and was prepared to mortgage all of the properties again, despite the fact that she had received advice in June 1991(from McGuire and Mr Lethbridge (of counsel)) and in April 1992 (from McGuire and Mr Mater (of counsel)) in relation to the possibility of challenging the Bank's securities under the CR Act. The Bank submits that it is reasonable to infer that Judith had no faith in the prospects of a claim by her under the CR Act. On 21 October 1992, Judith instructed McGuire "that everything be put on hold". Judith refused to follow McGuire's advice in relation to the proposed property settlement which McGuire did not consider to be fair and reasonable (see, for example, letters from McGuire to Judith dated 6 November 1992,19 November 1992(enclosing a notice of ceasing to act) and 9 December 1992(enclosing Michael's proposed Terms of Settlement)). Judith conceded in cross examination that in the period November/December 1992 she was still cooperating with Michael to resolve matters.

Auction of Port Kembla on 12 December 1992 Mercantile Mutual as mortgagee caused Port Kembla to be auctioned on Saturday 12 December 1992. Judith attended the auction alone. She made a bid for the property, negotiated on price with the selling agent, and signed a contract to purchase. Radin & Associates were recorded as the purchaser's solicitor. Judith wrote a cheque on her St George account for the deposit of $8,000, although she agreed she had no reason to believe she had sufficient funds in the account to meet the cheque. She said that Michael was to give her the money and that he had asked her to attend the auction. In my opinion, Judith knew that if she failed to complete the purchase, this would obstruct Mercantile Mutual's attempt to sell, although, against her credit, she was reluctant to concede even this in her evidence. Judith did not assert an arrangement under which Michael was to give her the funds for the deposit on Port Kembla until her cross examination. Judith's assertion that she attended the auction because she "was in great danger if [she] did not do what [Michael] said", was first made in her sixth affidavit sworn 2 April 1997, in response to the affidavit of Stephen Campbell of Mercantile Mutual. Michael denied threatening her with physical violence. The assertion that Judith went to the auction under threat and in fear of her life sits uncomfortably with her earlier evidence in cross examination that in the period November/December 1992 she had been cooperating with Michael to get matters resolved. It also sits ill with Michael's evidence that he persuaded Judith that it was in their financial interests as well as the Bank's that their property portfolio should not be sold off but should remain intact and available to support a refinancing. In my opinion, Judith attended the auction on 12 December to thwart it. She probably had the unrealistic hope that a refinancing would eventuate so that Mercantile Mutual would be paid out and so not suffer in the long run. Three days earlier, on 9 December,McGuire had written to her enclosing Michael's proposed Terms of Settlement. McGuire's bill of costs shows that Judith received this letter on or before 11 December, when she discussed amendments to it with McGuire by telephone. At this stage, Judith had concluded that the best way to serve her own commercial interest was to ignore McGuire's advice and cooperate with Michael, consistently with the settlement reached between them and the offer of refinance made to the Bank on 20 October 1992. She understood that this required her to try to ensure that Port Kembla remained part of the property portfolio.

Appointment of receiver (Brown) by the Bank on 8 January 1993 On 8 January 1993, the Bank appointed Brown as receiver of Michael's practice pursuant to its registered bill of sale and equitable mortgage

Meeting at the Bank on 22 January 1993 On 21 January 1993, Michael and Judith wrote to Brown agreeing to sell Appian Way, 87 Foreshore Drive and William Street, to reduce their indebtedness. Michael signed the letter on Judith's behalf (as is clear on the face of the document), as she had authorised him to do. Michael's evidence was that this was the only occasion on which he did so. They discussed their proposal at a meeting at the Bank with Brown and Bank officers the next day, 22 January. Judith did not refer to this meeting in her affidavits. At the meeting, Judith put to the Bank a proposal for development of Wanda Beach by the use of the proceeds of the sale of Theresa Park. Wanda Beach was in fact to be auctioned eight days later, on 30 January, as Judith surely knew at the time. Michael and Judith also sought from the Bank finance for a "modest dwelling" for Judith and the children. Judith handled the proposed sale of Appian Way with real estate agents, Vandyke and Vandyke. The Bank submits that Judith's participation in the proposal for reduction in their indebtedness by the sale of various properties gives rise to one or both of two inferences: (1) that she realised that her prospects of successfully opposing enforcement action by the Bank, notwithstanding legal advice of her rights under the CR Act, were weak; or (2) that she had no real intention of selling the properties, and was in fact misleading the Bank and thwarting its attempts at recovery. I draw the second inference. It is supported by the evidence of Judith's conduct in relation to the auction of Wanda Beach discussed below.

Auction of Wanda Beach on 30 January 1993 Mercantile Mutual, as first mortgagee, put up Wanda Beach at auction on Saturday 30 January 1993. Judith attended the auction alone, made the successful bid, and signed a contract. She drew and handed over a cheque on her St George account for the deposit of $50,500, but the cheque was dishonoured and the contract for sale was terminated. Michael's evidence was that he and Judith had an arrangement under which he was to reimburse Judith. In fact he did write out a cheque dated 1 February 1993 for the amount of the deposit. Judith's assertion that she attended the auction by reason of a threat by, and her fear of, Michael, was first made in her sixth affidavit sworn 2 April 1997, in response to the affidavit of Mark Mullington ("Mullington") of Mercantile Mutual. The assertion that she had an arrangement with Michael for reimbursement was also first made in this affidavit. Michael denied that he threatened her with physical violence. The assertion that she attended the auction because of a threat and in fear of her life is inconsistent with this. She accepted in cross examination that she understood that a refinancing was to occur soon after the auction which would resolve the two auction matters, Port Kembla and Wanda Beach, and that both properties were to be retained to contribute to the refinancing. It conflicts with Michael's evidence that Judith's bidding at the auctions was part of a strategy between them to allow them to retain the properties with a view to ensuring that the refinancing could be achieved, and that she attended because he persuaded her that it was in their commercial interests, as well as the Bank's, that the properties be retained rather than be sold by Mercantile Mutlal. Despite signing the contract, Judith told Mullington that she intended not to complete, but to refinance and pay out Mercantile Mutual. She also told him that she had reached agreement with Michael concerning their financial affairs and was cooperating with him to refinance. Mullington adhered to this account in cross examination. It is supported by a detailed file note he made on Monday 1 February 1993 in relation to the auction the preceding Saturday. Moreover, he said that he had a clear recollection of the conversation and that during it he went over the issues several times so that Judith would understand the position. I accept Mullington's account of the conversation. Judith could not recall much of it. In my view, the two auction episodes show that Michael and Judith were cooperating and were prepared to conspire to frustrate a mortgagee when they thought this would serve their financial interests.

Withdrawal of McGuire's retainer on 3 February 1993 On 3 February 1993Judith withdrew McGuire's retainer. Judith's solicitor friend, Peter Gallagher, helped her compose the letter to McGuire.

Meeting at the Bank on 16 February 1993 On 16 February 1993, a further meeting took place at the Bank between Michael, Judith, Ken Tilbrook (Regional Manager), James (then Acting Deputy Regional Manager), Brown (receiver) and Greg Artrup (solicitor and debt recovery agent engaged by Michael), at the request of Michael and Judith. When Michael and Judith were questioned concerning the progress of the sale of Appian Way, 87 Foreshore Drive and William Street properties, they replied that although the properties had been listed for sale, they did not have the money required to put them to auction. They sought the Bank's further financial assistance to do so. In particular, Judith pointed out that the various selling agents were requesting payment "up front".

Judith's facsimile to Brown in late February 1993 By a handwritten facsimile to Brown, Judith requested $5,100 to cover the advertising and marketing of 87 Foreshore Drive, William Street and Appian Way. Her facsimile argued the case for the necessity of a special advance of a further $3,000 to prepare Appian Way for sale.

Letter from McGuire to Judith dated 2 March 1993 On 2 March 1993 McGuire wrote to Judith "as a friend rather than as your former solicitor". The letter included the following: "…I urge you to obtain strong, independent legal representation if you have not already done so. I know that you have formed the view that you and [Michael] are now "business partners" and that you can trust him to look after your interests. With respect, history has shown your trust and judgement in this respect to be misguided. To ensure that your interests are protected please seek legal representation prior to either discontinuing proceedings or signing Terms of Settlement." (underlining in original)

The acknowledgments Between 1984 and 1990 Judith executed the "acknowledgments" of increases in facilities described below upon which the Bank relies. The Bank submits that Judith understood their nature and importance. They usually listed, by reference to identified accounts at the Bank, the debts of Michael and the joint debts of Michael and Judith, and informed the reader that the accounts were almost always in excess of limits. The documents constituted acknowledgments by Judith that the amounts specified in them were secured by the mortgages also identified in them, given by her. Judith understood that the level of debt was continually increasing, and that the debts were secured by the mortgages she had signed. The documents were not always in the same form, but it is convenient to use the word "acknowledgment" to refer to them all.

First acknowledgment - 12 November 1984 By letter dated 31 October 1984 to Michael and Judith, the Bank (Boulous) enclosed an acknowledgment and requested that it be returned. It was received back by the Bank on 12 November 1984. Judith signed it twice, once as co-debtor with Michael and once as a "third party" mortgagor. It acknowledged the amount of $214,608 as the total amount of the debts of the practice and on the joint accounts as at 31 October 1984, secured by the second mortgage over Myall Street dated 24 March 1981 and the second mortgage over Theresa Park dated 26 July 1983. Judith's evidence was that she could not say what she understood about the document when she signed it. She was evasive in her cross examination on it. However, when she was taken to the respective elements of the document more closely, she agreed that it is likely that she would have understood: (1) that she was being asked to acknowledge that the amounts shown were the total debts in the various accounts identified; (2) that those debts were connected with the mortgages referred to in the document; and (3) that there was an overdraft limit of $10,000 on the Radin & Associates account which had been exceeded and that the debit balance on that account was in fact over $41,000. In my view, Judith understood these matters and the nature and importance of this first acknowledgment when she signed it in 1984. In cross examination, Judith asserted for the first time that the reason she did not seek an explanation from the Bank in relation to this acknowledgment was that Michael had threatened her when she had said she would contact the Bank for information. She gave no evidence of such a threat in any of her numerous lengthy affidavits, although she had had ample opportunity to do so. The allegation of such threats does not sit well with other evidence. Judith felt free to make telephone calls to the Bank (Boulous) in relation to the sale of Canley Heights in August and September 1984. Michael said that he had no recollection of ever having made such threats to Judith and said that Judith did in fact ask questions of people at the Bank in accordance with what he perceived to be her "inquisitive" nature and her "need to know" things in relation to his business. She opened mail and read it. He agreed that she was not the type of person who could easily be fobbed off if she wanted to know something, and described her as "pugnacious". In my view, Judith's allegation is a recent invention, and I reject it.

Second acknowledgment - 9 September 1985 By letter dated 29 July 1985 to Michael and Judith, the Bank (Boulous) enclosed a further acknowledgment in relation to the Radin & Associates and joint accounts. It was signed twice by Judith (as co-debtor with Michael and as third party mortgagor) and received back by the Bank on 9 September 1985. It showed a total indebtedness of $182,219, as against the second mortgage over Myall Street dated 24 March 1981, and the second mortgage over Theresa Park dated 26 July 1983. In cross examination, Judith accepted that she had understood that she was acknowledging: (1) her total indebtedness to the Bank; (2) that this debt was secured against the mortgages she had signed; and (3) that the overdraft limit on the joint account was $5,000 but that the debit balance on that account was in the vicinity of $60,000. She said that she thought that the document spoke for itself to the above effect in 1985. I take this to mean that if she had read the document in 1985, it would have been obvious to her that it was to the effect described. During cross examination, Judith again claimed that she had not felt that she could seek an explanation from the Bank in relation to the acknowledgment because Michael's threat which she had referred to in relation to the first acknowledgment "was ongoing and increased". I have referred to this allegation earlier. For the reasons previously given I do not believe it.

Third acknowledgment - 14 October 1985 Judith signed a "request and authority" dated 14 October 1985, while she was at the Bank to execute the two mortgages of that date. She signed as co-debtor with Michael and she and Vladimirka signed "third party consents". Their signatures purport to have been "verified" by Boulos. In her evidence in chief Judith said that she could not recall signing this document and that if she had known that cheques were being dishonoured in relation to Michael's practice, she would not have signed any documents on 14 October 1985. She also said that in 1985 she did not know what an overdraft account was and did not know that Michael had one or that its limit had been exceeded. She deposed: "Had I been aware of excess on any accounts, I would not have signed any mortgage on 14 October, 1985." However, Judith said in cross examination that she remembered signing this document at the Bank and having her signature verified by Boulous on the occasion when she attended to execute the two mortgages dated 14 October 1985. The document shows a total indebtedness of $412,311 ($230,092 more than the previous $189,219) in relation to the practice and joint accounts and is signed by Judith twice, once as co-debtor with Michael, and once as a "third party" with Vladimirka. The excess on the accounts and the existence of overdrafts (on the joint cheque account as well as on Michael's practice account) were clear on the face of this document (as on the others previously mentioned). Contrary to her evidence in chief, it emerged in Judith's cross examination that when she signed the acknowledgment, she understood that: (1) it was an acknowledgment by her of an increase in overall indebtedness of about $230,000; (2) there were debit balances in relation to the respective accounts; (3) the account of Radin & Associates had an overdraft limit of $10,000 but a debit balance of about $68,000; and (4) her joint cheque account with Michael had an overdraft limit of $5,000 but a debit balance of about $68,000. She agreed that if she had wished to ask any questions of Boulous she could have done so.

Fourth acknowledgment - 1 October 1986 On 1 October 1986, the Bank received a fourth acknowledgment signed by the Radins. Michael had signed it, and, separately from his signature, Judith and Vladimirka had signed it as "third party mortgagors". The acknowledgment was that the Radin & Associates overdraft account had peaked at $272,868 on 19 August 1986. Judith agreed that if she had looked at the document for only a few seconds she would have understood that it related only to the Radin & Associates general account.

Fifth and sixth acknowledgments - 8 December 1986 On 24 November 1986 the Bank sent to Michael and Judith two further acknowledgments in relation to the Radin & Associates account and their joint cheque account respectively. The Bank received the acknowledgment in relation to the Radin & Associates account on 8 December 1986. Michael, as customer, and Judith and Vladimirka separately as "third party mortgagors", acknowledged that the Radin & Associates overdraft account had "peaked" at $332,888 on 23 September 1986. Judith agreed that if she had read the documents she signed, she would have understood that the indebtedness of the Radin & Associates account had increased from the amount of $272,868 mentioned in the acknowledgment that she had signed in October. She also agreed that she would have recognised that the acknowledgment was a document that was important to the Bank and which required three signatures. The acknowledgment relating to the joint cheque account is not in evidence. It would appear from the Bank's covering letter dated 24 November 1986 that Michael and Judith were to acknowledge on a separate request and authority that the debt on the joint cheque account peaked at $100,992 on 23 July 1986.

Seventh acknowledgment - 6 January 1988 By letter dated 22 September 1987 addressed to Judith at Myall Street, the Bank enclosed for her signature only, as "Mortgagor/Guarantor", an acknowledgment of a secured total debt of $752,807. The letter distinguished between facilities in the name of Radin & Associates (including the cheque account which it stated had peaked at $416,284 on 10 July 1987 although the overdraft limit was only $10,000) and facilities in the joint names of Michael and Judith (including their cheque account which it stated had been in debit in an amount of $118,871, although the overdraft limit was only $5,000). The aggregate amount of the indebtedness on all accounts was shown as $752,807 as at 10 July 1987. The letter included the following: "As you have provided security to support the abovementioned debts we require the attached Letter of Acknowledgment executed by you where indicated and returned to our office. You signature to this document should be witnessed by an adult person who is not the borrower/debtor or a co-guarantor/mortgagor under the document." The letter of acknowledgment referred to the maximum aggregate amount of liabilities which it authorised as being $752,807 and to the fact that the debts to that level plus permitted interest, costs, charges and expenses were the subject of the following "mortgage(s)/guarantee(s)": (1) mortgage dated 24 March 1981 over Myall Street; (2) mortgage dated 26 July 1983 over Theresa Park; (3) mortgage dated 14 October 1985 over 87 Foreshore Drive; and (4) mortgage dated 14 October 1985 over William Street. Judith said that she did not see the Bank's letter dated 22 September because it went to Myall Street. But the sale of Myall Street was not settled until 30 October 1987. In any event, even if Judith was living at Appian Way as at 22 September, in my opinion she would have looked after the mail delivered to Myall Street and this letter was addressed to her personally. Judith said several times that she opened mail addressed to her. However, in her cross examination on documents dated at around this time, the following passage occurs: "Now, Mrs Radin, I thought you told us on a number of occasions that when letters were addressed to you solely you opened them?---But that didn't stop Mr Radin from opening things that were addressed to me if he knew that it was something he dealt with. Oh, I see, and so he would sort of second guess what might be in the envelope, open it and secrete it from you, is that the idea?---Yes." Judith also denied seeing a letter dated 4 January 1988 addressed to her at Appian Way, on the basis that she was then living at "Concord" (that is, with Vladimirka). I refer to my earlier observations about Michael's and Judith's practices in relation to the collection, opening and perusal of mail. Judith's evidence in relation to these letters from the Bank dated 22 September 1987 and 4 January 1988 illustrate what I regard as the unsatisfactory nature of her evidence. In my opinion, Judith's habit of mind was one of "disclaiming responsibility", whether by denials, blaming others, suggesting possible reasons why she may not have seen documents, or professing an inability to remember. In my opinion, she gave evidence in this way in preference to making a genuine attempt to recall what the facts were or probably were, because she thought that the latter course would not be in her interests. The Bank wrote again to Judith on 22 October 1987, referring to its letter of 22 September and seeking return of the letter of acknowledgment. Again, Judith said that she may not have seen the letter. The acknowledgment was eventually received by the Bank on 6 January 1988, but Judith's evidence in cross examination was that she did not think the signature on it was hers. The signature is not closely similar to many of Judith's that are in evidence, but the form of her signature varied considerably as between the many documents in the case that she did sign. She said that the document looked like one that she saw, but that she did not think that she saw the particular one in question. In the absence of anything more than an expression of doubt by Judith, I proceed on the basis that the signature was hers. But this will not be decisive in her case.

Eighth acknowledgment - 6 November 1988 On 13 October 1988, the Bank wrote to Judith at Appian Way advising that it had approved an increase in facilities for Radin & Associates to $1,029,804. It itemised the facilities and their amounts, and enclosed a further acknowledgment for her signature which was to be witnessed by an "adult person ... not the borrower/debtor or a co-guarantor/mortgagor". The enclosed letter of acknowledgment referred to indebtedness of $1,029,804 against the following "mortgage(s)/guarantee(s)": (1) mortgage dated 26 July 1983 over Theresa Park; (2) mortgage dated 14 October 1985 over 87 Foreshore Drive; (3) mortgage dated 14 October 1985 over William Street; and (4) mortgage dated 2 January 1986 [sic - 1988] over Appian Way. Judith said that she may not have seen this letter because she was depressed and had ceased attending to mail. When pressed, however, she conceded that she could not be sure that she had given up attending to the mail at this time (October 1988). In fact, Judith kept the original of the relevant letter sent to Michael at Appian Way in the file she maintained in relation to the Family Law proceeding, in which she first gave instructions to Miceli in December 1988. In any event, the signed acknowledgment was received by the Bank on 6 November 1988. Judith said that the signature on it did not look like hers but she did not deny signing it. There is a signature of an attesting witness, Konda. The Bank submits that the Court should find that Judith signed the acknowledgment. Judith put forward no suggestion as to who might have forged her signature. Michael said that he signed on behalf of Judith only once, and then with her authority. That was on 21 January 1993 when, expressly on her behalf, he signed a letter from him and Judith to Brown agreeing to sell certain properties to reduce their indebtedness (discussed above). Judith identified her signature on numerous documents. It is clear from these documents that Judith's signature is not always uniform. Judith said that the signature on the present acknowledgment was a "version" of her signature. She also said that she did not think it was her signature. A stamp on the acknowledgment indicates that her signature was verified at the Bank. For the following reasons, I think that the signature is probably Judith's. First, it is generally similar to some others of hers. Second, I see no reason to reject Michael's evidence. Third, Judith's evidence was not that she did not sign, but was merely that she did not think the signature hers. Fourth, forgery is a finding not lightly to be made. Fifth, Judith does not submit that I should find that someone forged her signature.

Ninth acknowledgment - 10 July 1989 The Bank wrote to Judith at Appian Way a letter dated 7 June 1989 (some months after Michael had ceased to reside there) enclosing a further acknowledgment in relation to a request by Radin & Associates for an increase in total borrowings to $1,297,570 to be secured against certain "mortgage(s)/guarantee(s)". Judith conceded that she received this letter and signed the acknowledgment. Judith's signature on the acknowledgment was witnessed by Konda. The signed acknowledgment was received back at the Bank on 10 July 1989. It acknowledges a total indebtedness not exceeding $1,297,570 plus permitted interest, costs, charges and expenses, as against the following mortgages to the Bank in respect of which Judith was a co-mortgagor with Michael: (1) mortgage dated 26 July 1983 over Theresa Park; (2) mortgage dated 14 October 1985 over 87 Foreshore Drive; (3) mortgage dated 14 October 1985 over William Street; and (4) mortgage dated 2 January 1986 [sic - 1988] over 11 Appian Way. Judith agreed that she had ample opportunity to read and reflect upon the acknowledgment before signing it. She understood that the mortgages described secured Michael's indebtedness to the Bank. At the time, Judith had retained her own solicitor, Miceli, for more than six months. However, she did not show the document to him. She did not allege that she was forced to sign this document until the end of her cross examination, when she volunteered the following statement, noted earlier: "Mr Radin made threats in relation to just about every document that I had to sign". I am totally unpersuaded by this sweeping allegation which was not made in any of Judith's seven affidavits, was made for the first time in passing at the end of her cross examination and which is, as noted elsewhere, inconsistent with other evidence.

Tenth acknowledgment - 8 February 1990 By letter dated 30 January 1990 the Bank advised Judith that her "present maximum liability to the Bank" was $2,321,400. Enclosed was a letter of acknowledgment in relation to accommodation provided or to be provided to Michael, to be signed and returned. The letter advised that prior to signing, Judith should satisfy herself of the full nature and effect of her liabilities to the Bank and obtain appropriate advice, legal or otherwise, if she was uncertain of her position. The acknowledgment was returned to the Bank on 8 February 1990, signed by Judith. There is no dispute that it she signed it. Her signature was witnessed by Konda. Judith's initial evidence in cross examination was that she recalled receiving this document at or around the date it bore. A short time later, she said that she had had the letter of acknowledgment at home for over six months by the time she signed it. This cannot be correct: according to the Bank's date stamp, it was received back at the Bank after only nine days, on 8 February. By February 1990, Judith had retained Miceli for over twelve months, but she did not seek his advice on the letter. The document acknowledges an aggregate indebtedness not exceeding $2,321,400 plus permitted interest, costs, charges and expenses secured by the following mortgages: (1) mortgage dated 26 July 1983 over Theresa Park; (2) mortgage dated 14 October 1985 over 87 Foreshore Drive; (3) mortgage dated 14 October 1985 over William Street; (4) mortgage dated 2 January 1986 [sic-1988] over Appian Way; (5) mortgage dated 7 July 1989 over 92 Foreshore Drive; and (6) mortgage dated 7 July 1989 over Wanda Beach. Judith alleged in her evidence in chief that she was forced into signing this document by Michael, who had sent three tattooed men to her house and poisoned the family dog after Judith had said to him that she did not want to "sign any more documents for the Bank". She deposed: "I eventually signed the paper because I was afraid of what [Michael] might do if I didn't. … One night when [Michael] came to collect the children for the weekend I finally signed the paper after weeks of verbal abuse and threats. I did not want to sign the paper, but I was too afraid not to." These allegations were denied outright by Michael in cross examination. Importantly, the account of this episode is inconsistent with a statement given earlier by Judith to Miceli in the Family Law proceeding. That statement must have been prepared prior to February 1991, that is, less than twelve months after Judith signed the ninth acknowledgment in early February 1990. In that statement, Judith did not mention the signing of this acknowledgment, but said: "On or about Monday the 16th of October, 1989, [Michael] did deliver to me a lease, a copy of which is annexed hereto and marked with the letter 'I', whereupon he requested me to sign and said, 'If you don't sign I won't be able to open my city office and therefore my practice won't progress and I won't be able to make payments to you anymore of $1,500.00 per week maintenance'. I replied that I was not going to sign anything without first getting independent advice in respect of it. … When I informed my husband on the 20th of October, 1989 that I would not be entering the lease in respect of his city office, he threatened me by saying the following, or words to the effect thereof: You know those three chaps who came around last night looking for me, well they're the ones that I would get to do it." Judith agreed that these paragraphs reflected what she had told Miceli. This account also accords with items 35 and 39 of Miceli's bill of costs: "35 19.10.89 Attending you for instructions re: husband's request for signature to lease for city office premises, timing of same, his concern re: refusal will effect his practice and thus may effect his willingness to negotiate, your requirements for maintenance for self and children, current position in respect of same, proposals for division of matrimonial property, intentions re: application for property settlement …" ... "39 20.10.89 Attending you on the telephone re: being advised husband has threatened you this morning discussing and advising courses open and discussions with husband re: cessation of payments"

Miceli's bill contains no references to threats by Michael to Judith in the period 30 January 1990 to 8 February 1990, or, in fact, to any contact at all between Judith and Miceli in that period. This is a striking omission because, according to his bill, Miceli received numerous other telephone calls from Judith alleging pressure from Michael. When the inconsistency was put to her, Judith said: "Obviously I confused the two times but [Michael] made threats in relation to just about every document that I had to sign" These matters reflect poorly on the reliability of Judith's evidence in relation to the signing of this acknowledgment. I do not accept her allegation that she was forced under threat to sign it. The allegation is not supported by her prior statement to Miceli at a time much closer to the events than the swearing of the affidavit in question on 13 February 1997. In fact, at one point in her cross examination, Judith disavowed the conversation to which she deposed in her affidavit. All these matters make her affidavit account set out earlier inherently unreliable. I do not accept it.

Eleventh acknowledgment - 22 August 1990 By letter dated 22 August 1990, the Bank sought to obtain Judith's acknowledgment that the debt secured by her mortgages was as much as $2,618,400. She refused to sign.

Conclusions relating to the acknowledgments In my view, when Judith received and signed the acknowledgments, she understood their nature and importance. She understood that they usually listed the debts of Michael trading as Radin & Associates, and their joint debts; that his and their respective cheque accounts were in excess of limits as indicated on the acknowledgments; that the level of debt was increasing; and that the debts were secured by the mortgages listed, being mortgages in respect of which she was a co-mortgagor. Michael's evidence was that from time to time when she signed an acknowledgment, Judith told him that she was concerned about the increasing indebtedness and that he reassured her that all would be fine because the firm had a lot of work and fees outstanding. He said he could not recall her ever saying to him throughout the period of their marriage that she wanted to go to the Bank and find out what was going on.

Allegations of threats and of violence In her later affidavits and in the course of her oral evidence, Judith made allegations of threats and of violence by Michael. They do not appear in her account of the circumstances touching the signing of the mortgages given in her first affidavit sworn 11 July 1996, in which she stated: "On each occasion a property was purchased with funds being provided by the [Bank], or that the property was being re-financed by the [Bank], it was the usual practise [sic] of [Michael] to bring home the relevant documents. I was then shown where to sign and did so as requested, with the exception of one occasion whereupon I was requested by [Michael] to attend the [Bank] at its Fairfield branch and did so for the purpose of signing mortgage documents." Allegations of violence first appeared in her affidavits sworn in February 1997. However, even then, the allegation was not made in relation to the mortgages over Theresa Park, Bullaburra, Myall Street, 87 Foreshore Drive, William Street, Appian Way, 92 Foreshore Drive, or Wanda Beach. Judith did not make any allegation against Michael in respect of the signing of these mortgages until she made the statement previously noted at the end of her cross examination, "Mr Radin made threats in relation to just about every document that I had to sign". I have rejected this evidence. Michael's own perception was that Judith appeared to be cooperating in relation to signing the various mortgages. Of course, there may exist a situation in which physical violence and threats continue to have effect even though they are not repeated each time the question of the signing of a document arises. But in my view, that is not this case. In my opinion, whenever Judith signed she did so because she calculated it to be in her interests to do so. In her statement prepared by Miceli some time prior to February 1991, Judith referred to the purchase of the various properties set out above and to some of the mortgages. However, she made no allegation in relation to the manner in which she was led to enter into the purchases and mortgages. In particular, she made no allegation of undue pressure by Michael, although she did allege that she had been threatened by Michael in relation to the signing of a lease in October 1989. In her amended application in the Family Law proceeding seeking property orders, affirmed on 10 September 1992 and filed on 11 September, Judith relied on her mortgages as evidence of a direct financial contribution by her to the acquisition, conservation and improvement of their properties. That is, she relied on her having validly co-mortgaged them. The amended application also reveals a further purchase of a property at Carrington in January 1986 for $18,000, the particulars of which Judith did not know. The Bank was not aware of this purchase. Judith stated in her amended application, in relation to the acknowledgment sent to her on 30 January 1990 and received back at the Bank on 8 February 1990: "On 30 January, 1990 [Judith] at the direction and request of [Michael] attended at the [CTB] and signed an authorisation for [Michael] to increase their indebtedness to the [CTB] for $2,321,400 plus interest and charges. This was subsequently increased $2.5 million by [Michael] without [Judith's] consent. Particulars: (i) $1,300,000 Litigation lending facility by the practice Radin & Associates being loans by clients secured by mortgage over [Judith's] and [Michael's] assets. (ii) $150,000 Overdraft facility by practice Radin & Associates. (iii) $1,050,000 Loan over investment properties being a bulk amount net." She made no allegation of violence, duress or undue influence by Michael in relation to these transactions. As discussed above, the affidavit account Judith gave in this proceeding as to her signing of this acknowledgment is not supported by her previous statement to Miceli. A further problem for Judith's case is that she did not claim at any of the meetings she attended at the Bank from October 1990, when Michael was absent and when she was often accompanied by her solicitor, that she had been pressured by the use or threat of violence to sign any of the Bank's security documents. The Bank submits that the allegations made by Judith in her affidavits sworn 12 and 13 February 1997 and in the course of her oral evidence were greatly exaggerated, and that to the extent that there was "discord" between Michael and Judith it was unrelated to borrowings from the Bank. It submits that I should prefer the evidence of Michael on these matters. Michael made some concessions of episodes of violence, but of a kind less severe than those alleged by Judith and not linked to transactions with the Bank. He admitted dragging Judith out of a room on a few occasions so that he could go to sleep and pulling out some of her hair. He also admitted that he may have threatened to "kill her" but without actually having any intention to do so. For Michael's part, he said "I think she ripped my clothes", although it is not clear whether his allegation was that this was the initial act in an episode of violence or a response to his own violence to Judith. That Judith was alleging violence by Michael is corroborated by some items in the Miceli and McGuire bills of costs and by Judith's statement prepared by Miceli in relation to the Family Law proceeding. Michael maintained, however, that he was in a "state of disbelief" when he heard some of the allegations made by Judith against him in the present proceeding. He said that he was not the "monster" she depicted. This was despite the fact that Judith's credibility was important in his own and his mother's cases against the Bank in relation to the alleged misrepresentations by the Bank to Judith concerning time constraints. In particular, Michael denied the allegations made by Judith in relation to the signing of documents. He denied holding a knife to Judith's throat or otherwise threatening her with physical violence to force her to sign. He denied slapping her across the face or head to force her to sign documents. He denied slamming her up against a wall. He denied threatening her with violence or death if she did not attend the auctions of Port Kembla and Wanda Beach. Judith's allegations of threats in relation to these auctions were first made in her sixth affidavit sworn 2 April 1997. They are not reflected in McGuire's itemised bill of costs. Michael said that he did not recall ever threatening Judith with violence if she were to go to the Bank and ask for information. He said that, on the contrary, Judith did ask questions of people at the Bank. The evidence is that she usually attended the Bank in his absence. He further denied sending three tattooed men to the house to intimidate her, and he also denied poisoning the family dog. Judith's claim that she did not ask questions of the Bank because of Michael's threats sits ill with another theme of her case, that is, that she did not ask questions about them because she had no understanding of the documents and was totally ignorant of what she might need to know. It is also inconsistent with evidence of the contacts she did make with the Bank, for example, in relation to the sale of Canley Heights. Moreover, the allegation, in so far as it is related to the signing of documents or seeking of information, is not supported by the bills of costs or files of her solicitors. A further difficulty is that Judith has never pleaded duress or undue influence, even after the Court drew her legal representatives' attention to the fact and they had time to consider the matter. Nor did her counsel cross examine Michael in relation to these allegations. Nor did she file any cross claim or bring any other claim against Michael based on the allegations in question. In my view, whether consciously or not, Judith has given an account of Michael's conduct towards her which is exaggerated and distorted by reference to her purpose in the present proceeding. Michael was undoubtedly violent towards Judith and this is to be deplored. But I do not accept Judith's evidence that violence and threats of violence by Michael affected her signing of the Bank's security documents or her inquiries of the Bank. In these respects she was free to act, and did act, according to her assessment of her own interests, in my opinion. Nor is there any evidence that any Bank officer knew of, or had any reason to suspect the existence of, the violence or threats. Nor can awareness of them be attributed to the Bank on the basis that Michael was its agent.

Michael and Judith as "business partners" Counsel for the Bank submits that, with the exception of a period from about April 1992 to October 1992 when Judith was acting upon the advice of McGuire, Michael and she were effectively "business partners". This was a term Judith appears to have used herself in describing their relationship to her then solicitor, McGuire. From the beginning of their relationship to well after their separation, Judith saw her financial interests as being at one with those of Michael, and for this reason was prepared to sign documents in connection with financial accommodation provided by the Bank, not only in connection with their joint acquisition of property, but also in connection with that provided to his practice. For example: (1) she was a joint borrower of the personal loan advanced by the Bank for Michael's purchase of Menart's practice; (2) during their marriage, she assisted in the practice by undertaking photographic work, trading for the purpose under the business name "Kaleidoscope"; (3) she received direct pecuniary benefits from the practice, and from about 1985 she received $6,000 per month from it; and (4) until April 1992 she cooperated with Michael in attempting to refinance, even after letters of demand had been issued by the Bank, and later, from October 1992, she participated, against legal advice, in an offer to pay out the Bank and joined in thwarting mortgagee sales in order to preserve the jointly owned property portfolio intact, in aid of refinancing.

FURTHER REASONING The findings that I have made above either suffice to resolve, or go far towards resolving. Judith's case adversely to her. But I proceed now to address particular issues that were debated.

Credit Because of the instances of falsity, inconsistency, half truth, exaggeration and recent invention in Judith's evidence, on the whole, I have no confidence in her testimony and would not accept it on controversial issues, unless it is against her interest or is corroborated by other satisfactory evidence. In my opinion, her demeanour, consistently over a lengthy cross examination, was that of a witness who was alert to the terms and nuances of the questions asked and whose governing state of mind was one of consistent bias directed towards supporting her case, rather than one of frankness and openness. In particular, I do not accept Judith's evidence as to her lack of understanding of the general nature and effect of the mortgages, the violence and threats by Michael connected with the signing of documents and seeking of information, or the courses she would have followed if she had known certain matters disclosed in the Bank's documents. She was evasive and calculating when confronted by matters which she thought to be detrimental or potentially detrimental to her case. She was very reluctant to make concessions against interest, even ones that were almost inevitable. I have already referred to instances of Judith's uncreditworthiness. The following are some other ones, or encompass further aspects of those previously mentioned.

Inconsistency between present evidence and documents in Family Law proceeding In her amended application in the Family Law proceeding, Judith stated that she was involved in negotiations for the purchase of Theresa Park, Myall Street, Appian Way, 87 Foreshore Drive and 92 Foreshore Drive. It was in her interest in the Family Law proceeding to portray herself as having made a substantial contribution to the acquisition and management of the jointly owned properties. In cross examination before me, she sought to portray the very opposite picture. She said that the words "negotiated price" in her amended application had not been her own but had been chosen by McGuire. But this was demonstrably untrue: the amended application was, in this respect as in many others, a verbatim copy of the lengthy handwritten instructions Judith gave to McGuire. The amended application was signed on each page by Judith. Judith was forced to concede that her evidence that the word "negotiate" had been selected by McGuire was incorrect.

Knowledge of a "home loan" Judith said that she was not sure whether she had a home loan as at 22 February 1991. In my view, this was untrue, that is, she was sure that she had had a home loan at that time. She had kept a file in relation to the housing loan for Myall Street and she kept the Bank statements on the home loan for Appian Way. On a Bank statement for the joint account dated 18 February 1986, she had written what some of the debit entries were for. In particular, she had written "home loan" against some. Judith's evidence was that many documents were left behind by Michael when he ceased living with her and that she did not look at them until asked to produce them in Court or until cross examination. However, she knew that they were there, and had in fact selected some of them in support of her case. She could not have done so without looking at the others.

Awareness of nature of an "overdraft" Judith claimed: "in 1985 I was unaware of what an overdraft account was". It will be recalled that her father was an accountant, her sister was employed at a bank, and she was married to a solicitor. More importantly, she agreed that she operated the joint cheque account with Michael, and discovered a letter dated 18 January 1983 sent to her and Michael at Myall Street approving "an overdraft limit of $5,000" on that account. She had also signed consents on or about 9 September 1985 and 14 October 1985 which refer to the "overdraft" on each of the joint cheque account and the Radin & Associates office account. In any event, she had any number of opportunities to ask officers of the Bank or her own family members what an overdraft was, if in fact she had had any doubt, for example, when she was signing consents. I do not believe that Judith did not, in 1985, know what an overdraft was.

Evidence as to impact of letter of 17 July 1991 from Bank to Parker Judith gave evidence that the letter of 17 July 1991 from the Bank (Doyle) to Parker stopped having an impact on her only when the Bank appointed Brown as receiver of Michael's practice in around September 1992. This was not so, as I have previously concluded. I have found that any impact of the letter must have ceased within a week of 17 July 1991, because of the meeting on 24 July 1991between Michael, Judith and the Bank. Judith swore to the truth of her affidavit, including the statement "[n]o one informed me of any such requirement to refinance elsewhere as a matter of urgency", and reswore to its accuracy when she first entered in the witness box. She later reluctantly conceded that the statement might be incorrect. She was evasive in cross examination on this paragraph, precisely because she knew that there was material which contradicted it, but which she did not know whether the Bank had seen. In my view, she must at least have had doubts that the evidence she was giving was correct before she twice swore to its truth. Nonetheless, she was intent on adhering to it in view of the possibility that the Bank might not find her out. Judith did not refer to the meeting between herself, Michael and the Bank on 24 July 1991 at which she was told that she and Michael had until 18 August to refinance, despite having seen reference to it in McGuire's files. She went to some length not to volunteer the possibility of such a meeting. She inspected the McGuire files, made photocopies of documents which supported her case, and annexed portions to her affidavit selectively so as not to annex a part detrimental to her case. The part of the file note she did not annex recorded that she was prepared to sign any documents in return for a certain property settlement. This was directly inconsistent with her assertion that she did not cooperate with Michael in the attempt to refinance. She was fully aware of the inconsistency between her evidence and the file note, and maintained that she thought the file note "must have been a mistake", but did not disclose or refer to it in any way in her evidence, even to explain it away, until pressed on the point in cross examination.

Occasions on which mortgages signed at the Bank Judith's evidence in chief (in her first affidavit) was that there was only one occasion when she went to the Bank to sign a mortgage. This was false. She went to the Bank to sign mortgages on no less than five occasions. The Bank submits that she lied in her first affidavit, and that no explanation, such as not having read the Bank's documents, can excuse the lie. She has now given evidence of having visited the Bank several times to sign mortgages.

Evidence as to independent advice Judith pleads that she did not receive, and was not advised to obtain, independent legal or financial advice in relation to any security document she signed. She stated in her first affidavit: "[a]t no stage was it ever suggested to me that I should seek independent legal advice prior to signing any document". This is patently incorrect. She received advice from her then solicitor, Miceli, in relation to the mortgages to the Bank over 92 Foreshore Drive and Wanda Beach executed on 7 July 1989. She received from the Bank letters dated 4 January 1988, 7 June 1989 and 30 January 1990, the first in relation to a mortgage over Appian Way, the second in relation to mortgages over 92 Foreshore Drive and Wanda Beach, and the third in relation to a letter of acknowledgment, all advising her to obtain appropriate advice, legal or otherwise, if she was at all uncertain of her position. Judith's sweeping statement in her affidavit is typical of her propensity to make general assertions that even a cursory review of the facts would demonstrate to be insupportable.

Judith's "what if" evidence The Bank submits that Judith sought to mislead the Court in relation to her "what if" evidence, that is, her evidence of what she would have done (that is, not sign mortgages and acknowledgments) if she had known various things that the Bank knew about the state of Michael's indebtedness, accounts and the attitude of Region to these. In reply, Judith submits that she knew that Michael was working hard, that money was coming in, and that it was natural for her to assume that he was duly paying bills and loans. Her own evidence in chief was that the couple never seemed to have sufficient funds to pay bills, and that this was a continual source of conflict between them. The Bank submits that Judith did not give evidence to this effect and could not have truthfully done so, due also to the numerous acknowledgments of increased indebtedness which she successively signed. The Bank also refers to other evidence that Judith knew the debt was escalating. It submits that the evidence is inconsistent with an assumption on Judith's part that Michael was maintaining payments. I accept the Bank's submission.

Understanding of a mortgage The Bank submits that I could not confidently accept Judith's evidence as to her lack of understanding of a mortgage. I agree. Judith's evidence in chief was that at the relevant times she did not understand what a mortgage was. When given an opportunity to clarify or withdraw this evidence during cross examination, she stated that: (1) until she and Michael separated at the end of 1988, she did not know that as a result of a failure to make mortgage repayments, the mortgaged property could be sold; (2) she did not know the difference between a loan and a mortgage; (3) she did not know "which pieces of paper were called mortgages"; (4) she did not understand that she was responsible for making loan repayments; and (5) the extent of her understanding was that a mortgage was a piece of paper signed in connection with the purchase of real estate. The Bank submits that these assertions are all false. Senior counsel for the Bank took Judith to several transactions in which she was involved. On several occasions she said she did not recall or know the state of her knowledge or awareness at the relevant time, for example, when the secured vendor finance was made available on the purchase of Theresa Park in 1980. This makes it difficult to accept, at least in relation to those transactions, her five statements set out above and her assertion that she would have acted in a particular way at that time if she had had greater knowledge than that which she in fact had. In my view, in this proceeding Judith has understated her comprehension of the numerous documents she signed, the numerous transactions she was involved in, and her part in those transactions. By July 1983, when the earliest mortgage the Bank is seeking to enforce was given, Judith must have understood that a property mortgaged to the Bank could be sold by the Bank if there was default in repayment. After all, prior to July 1983 she had been involved in the following transactions: (1) purchase of a motor vehicle by means of a secured personal loan in February 1979; (2) purchase and mortgage of Bullaburra; (3) purchase and execution of two mortgages of Myall Street; (4) purchase and grant of a first mortgage of Theresa Park; and (5) numerous other Bank loans. In my view, probably as early as February 1979, Judith understood that if payments under a mortgage were not kept up, the mortgagee could sell the mortgaged property. I turn to the circumstances surrounding the five transactions referred to above.

(1) Purchase of a motor vehicle by means of a secured personal loan in February 1979

In February 1979 Judith, either alone or with her first husband, Bruce Avnell, purchased a motor vehicle. This involved the taking out of a loan from the Rural Bank and the giving of security over the vehicle. Her diary note for 5 February 1979 included the following: "Bank's name must be noted as mortgagee - Bill of sale - policy to Rural bank". The note clearly refers to the necessity for the name of the Rural Bank as mortgagee under the bill of sale to be noted on an insurance policy in respect of the vehicle. Judith said she thought she had been given the instruction recorded in her diary note by her sister Gail, who worked at the Rural Bank. She ultimately agreed that if her sister had been her source and she had not understood what Gail had told her, she probably would have asked Gail for an explanation. When pressed as to whether she would have asked for some explanation of the term "mortgagee" if she had not understood it, Judith initially said "maybe I did", adding that she did not know. She also said in answer to the question whether she understood that if payments were not maintained the Rural Bank could repossess the car, "I suppose so". However, she said that she did not know whether she understood that the Rural Bank could then sell it. In my view, this last evidence is improbable. Judith conceded that if there was any aspect of the transaction which she did not understand, she had available two domestic sources of potential explanation: her accountant father, and her bank officer sister Gail: "Your father was an accountant, was he not?---Yes. And your sister worked in the Rural Bank?---Yes. And if you had any reason at all to be involved in a transaction which you did not understand, you had two sources at least of potential explanation?---Yes. And if there had been any matter that you had not understood of a financial nature that you were going to engage in, you would either have asked your father or your sister if you wanted an explanation, would you not, at least?---I could have. And if it was anything that involved you by way of personal obligation and you did not understand it, the likelihood is you would either have asked him or asked her?---Well, I could have. I would have had that option." I find that the probability is that from at least the time of the purchase of the motor vehicle in February 1979, Judith knew that a "mortgagee" could sell mortgaged property if payments were not maintained.

The Bank submits that as a result of her dealings with Bullaburra, Judith knew that a mortgage gave the mortgagee the right to sell the mortgaged property if the borrower defaulted. Judith purchased Bullaburra for $35,000 and the date on the transfer was 27 October 1980. In these proceedings, she produced a file in relation to the transaction. She held the property as trustee for Ross Golotta, Vincent Galluzzo and Michael pursuant to a deed bearing date 1 August 1980. On 18 September 1980, United Permanent approved Judith's application for a "first home loan" for the purchase of the property at concessional interest rates. Apparently someone intended to deceive United Permanent into believing that Judith was buying the property as her first home, whereas in truth Michael and the other two men were buying it as an investment. Judith's diary entry for 14 October 1980 was: "4.15 United Perm. Sign Mortgage Documents." There was a further diary entry in relation to the transaction on 20 October 1980. Judith executed a mortgage over Bullaburra to United Permanent bearing date 28 October 1980. Judith maintained before me that she did not know if she understood what the word "mortgage" meant when she wrote the diary entry for 14 October. However, confronted by her contemporaneous notes, she was unable to say that she definitely did not know. Judith's evidence in chief was that Michael arranged the purchase and borrowing, and said to her: " 'I have arranged for you to get a loan so that we can buy Bullaburra. All you have to do is to go to the United Permanent, Fairfield at 4.15 on Tuesday, October 14th and sign the papers.' ... I do not recall the man who had me sign the papers." Judith knew that the document to be signed was a "mortgage" - she had made the notation to that effect in her diary. She had sources from whom she could have asked what a mortgage was if she did not already know. In my opinion, Judith probably knew in 1980 what a "mortgage" was, but rather than be candid about this in her evidence in chief, she merely said she signed some "papers". In my opinion, this is another instance of Judith's choosing words designed to attempt to cast responsibility for what happened onto others, and of her portraying herself as passive, unaware and naďve. Judith said in cross examination that she did not know whether she was aware when she signed the Bullaburra mortgage that she had previously signed a mortgage in respect of another property. In fact, she had signed the mortgage over Theresa Park two months earlier. It was clear on the face of both documents that they were "mortgages". The two occasions were only some weeks apart. At no time did she challenge the validity of either mortgage. In my view, on both occasions Judith knew what a mortgage was. In the time it was owned by Judith, Bullaburra was a rental property. Real estate agents corresponded with Judith for instructions in relation to lettings. Judith would send them written instructions in relation to tenants and repairs, while maintaining in cross examination in one particular case that Michael forced her to reply against her will. On 17 March 1981, United Permanent wrote to Judith asserting that a leasing agreement had been entered into without its prior knowledge or consent, and: "As a result of the continued leasing, the Society could, under its Rules, initiate action to call up the outstanding Loan Balance. However, this action would not be commenced by the Society without giving you a full six months notice of its intentions." Clearly, United Permanent had come to suspect that the concessional rate first home loan had been obtained under false pretences. Due to a falling out among the beneficiaries, there was default on the loan and United Permanent sold Bullaburra in exercise of its power of sale prior to 2 March 1984. There was a preceding course of correspondence from United Permanent to Judith from May 1981 relating to the defaults, and threatening legal proceedings and exercise of its power of sale. Following some letters, further payments were made by Judith or on her behalf, and in the latter case, they must have been made with her knowledge. Yet Judith said she could not recall knowing in early 1982 that the payments were in arrears and that United Permanent had threatened to exercise its power of sale. In my view, she probably had this knowledge by the end of 1981, and, moreover, if she had applied her mind to the matter in the witness box she would have acknowledged as much. On 30 July 1981, Michael signed a document entitled a "deed". His signature purported to have been witnessed by Konda. By this document Michael purported to assign to Judith, for $17,500 the following interests: "1. ... one half share fee simple ... in property situate at 50/88 Hughes St., Cabramatta. 2. ... one half share of the equitable interest I hold in property situate at 43 Bullaburra Rd., Bullaburra. 3. Half share of the legal and equitable interest I hold in Crosby Haulage Pty. Ltd." (emphasis supplied) On 31 July 1981, United Permanent sent Judith a "FINAL NOTICE - ARREARS", giving her seven days within which to pay the outstanding amount, and threatening that in default legal proceedings would be taken without further notice. On 10 August 1981 the outstanding amount was paid. However, there were further defaults. Judith must have known by the end of 1981 that default on a mortgage could result in repossession and sale. Even if she did not know it beforehand, she must have known it as a consequence of the issue of the s 57 (2) (b) notice dated 4 November 1981 in relation to Bullaburra and addressed to her at Canley Heights. That notice was produced by Judith on the hearing as part of her file on Bullaburra. The notice included the following passage: "AND TAKE NOTICE that unless the said sum is paid to the Society within one month after service of this notice upon you it is proposed to exercise a power of sale in respect of the land the subject of the mortgage and/or take such other action under the Mortgage as the Society sees fit to recover all principal interest and other moneys secured thereby ..." (underlining in original - emphasis supplied) Payment was later made on 3 December 1981 by Judith or on her behalf, and in the latter case, it must have been made with her knowledge. By a letter dated 4 January 1982, United Permanent notified Judith of yet further arrears. On 24 March 1982, United Permanent's solicitors wrote to Judith informing her that they had instructions to proceed with legal action, noting the amount of arrears as $1,369.77 as at 25 February 1982. On or about 16 June 1982, United Permanent served Judith with a statement of claim, No. S12167 in the Common Law Division of the Supreme Court of New South Wales for possession of Bullaburra. Judith says that she cannot recall United Permanent's statement of claim being served on her. In her extensive affidavit sworn on 13 February 1997, she states that she first saw this document in 1997 amongst Michael's papers. If she had read the statement of claim, it would have informed her that a mortgagee could seek possession of the mortgaged property following default under the mortgage. On 31 August 1982, United Permanent wrote to Judith at Canley Heights notifying her that, following the recent legal action, it had debited certain legal fees, particularised in the letter, to her account. Judith conceded that she knew Bullaburra was eventually sold by United Permanent due to default on the loan, but stated that she could not remember when she became aware that United Permanent had exercised its power of sale. In my opinion she could have done better than this if she had tried to give evidence frankly, rather than with an eye to her interest. Although she might have not have remembered the date, she would have conceded that it was about the time when letters of demand from United Permanent ceased to arrive and instalments ceased to be payable off the mortgage. She agreed that whenever she became aware that the property had been sold, she would have assumed that it had been sold by United Permanent because of default on the loan. She also agreed that at that time she understood that United Permanent was able to sell Bullaburra because it had a right to do so in the context of a default, and that a lender had a right to sell property in respect of which it had lent money and taken a mortgage in the event of default under the mortgage. I infer that Judith became aware of the sale of Bullaburra by United Permanent in exercise of its power of sale in early 1984. Numerous aspects of the evidence support this inference. Judith dealt with real estate agents Gilbey, Wentworth Falls, in relation to leasing Bullaburra. Real difficulties arose between Judith and Michael in relation to Bullaburra, as a result of which she contemplated leaving him. Michael then executed the deed poll dated 30 July 1981 referred to earlier by which he purported to assign to Judith, inter alia, a half share of his interest in Bullaburra. It is clear on Judith's own evidence that she regarded Bullaburra as "really a sore point" and as a "thorn in her side". It had been the source of considerable friction between her and Michael. Judith agreed that she would have felt relief when she found out that it had been sold. On 2 March 1984 United Permanent sold Bullaburra for $43,500. Although he said that he could not recall specifically discussing the sale with Judith, Michael did not deny that he did so, saying "Well, I guess it's a major thing, you'd think you'd touch base on it". This is obviously correct, particularly given the trouble it had caused between them, the involvement Judith had had in relation to the letting of the property, and the fact that the title, loan and mortgage were in her name. In her affidavit sworn 13 February 1997, Judith gave a detailed account of the circumstances leading up to the purchase and mortgage of Bullaburra. She also clearly recollected the "sore point" that the property had become. Yet she stated that she did not remember anything about when she learnt of its sale. It is highly improbable that she did not become aware of the sale in early 1984, even if Michael was handling matters relating to the property at that time.

(3) Purchase and execution of two mortgages of Myall Street

Prior to 17 February 1981 Michael and Judith purchased Myall Street for $78,000 as joint tenants. On 17 February 1981 Judith, as co-mortgagor and co-debtor, executed a first mortgage over the property to the CSB. Her evidence is that at the time she knew that the mortgage was necessary in order for the Bank to lend money (that is, $30,000) to assist her and Michael to purchase the property. This was the third mortgage Judith had signed. The loan was a "home loan". Judith stated, however, that she did not know that she was responsible for the payments or that the Bank could take the property if payments fell behind. The Bank submits that this evidence should be rejected as no more than an attempt by Judith to distance herself from any knowledge of the basic nature and effect of a mortgage. The mortgage was witnessed by a Bank officer, Christopher John Lloyd ("Lloyd"). He gave evidence of his "usual practice" when customers came to the Branch to execute loan and mortgage documents. This included the giving of an explanation that security for the loan was a mortgage over the property and that if there was default, the Bank could exercise its rights under the mortgage and sell the property. Judith agreed that Lloyd might have given her the explanation set out in his affidavit. The Bank submits that although Lloyd did not recall meeting Michael and Judith, I should accept that he followed his usual practice, which he set out as follows: "(5) ... I would say something like: 'You are here today to sign the documents relating to your home loan (or other loan). The security for the loan will be a mortgage over your home (at a particular address).' (6) I would then go through the terms of the conditions of the housing loan, if that was the type of loan being entered into, including the repayments, the time for repayments, current interest rate, how that rate was calculated, establishment fees and bank fees. I would then say something like: 'In the event that you default on your loan, the Bank will exercise its rights under the mortgage and will realise upon the property.' 'You must also understand that the property must be insured while the loan is current.' (7) When the mortgage was prepared, it would be accompanied by printed copies of the memorandum of mortgage. ... I would refer to the memorandum as 'covenants'. I would provide a copy of this document to the customers prior to them executing the mortgage and ask them to read it. After I had read the memorandum I would say words to the effect: 'This is a copy of the covenants which set out the terms and conditions of the mortgage and will be filed with the Registrar-General.' (8) The customers would then sign the mortgage and I would witness it by signing the mortgage and printing my name beneath my signature. I would then date the document. My usual practice was to print the date on the document at the time of execution." On 24 March 1981,Michael and Judith gave a second mortgage over Myall Street to the CTB. This was the fourth mortgage Judith had signed. It secured a personal loan to them both, for the purchase of a Renault motor vehicle. It was again witnessed by Lloyd. He maintained in cross examination that he would have followed his usual practice, even when witnessing the execution of a mortgage by a person who had given mortgages before, and even if the person concerned was an experienced solicitor or businessman or both, particularly where, as here, the second mortgage was a CTB mortgage and its terms and conditions differed from those of a prior CSB mortgage. Lloyd's evidence was not significantly challenged in cross examination. I accept that Lloyd said words substantially to the above effect to Michael and Judith, on both 17 February 1981 and24 March 1981. Judith submits that I should accept that she thought that Michael was borrowing the money and that she was not responsible to repay it. This is not, however, quite in accord with her evidence. Michael and Judith purchased Myall Street as joint tenants and the property was to be their matrimonial home. Judith signed both mortgages as co-mortgagor and co-debtor. Although she may have had insufficient income to repay the loans and reasonably expected the source of the payments to be Michael's practice, this does not mean that she had any basis for believing that she was not "responsible" for repayment. Moreover, responsibility would come home to her if resort was had to the sale of property in which she had an interest. She clearly understood that if one borrowed money, it had to be repaid and that a person who was a borrower was one of the persons "responsible". Judith's intelligence was such that she could appreciate the difference between the legal "responsibility" for making payments and the actual making of them. Indeed, she was familiar with this difference from the circumstances surrounding the purchase and mortgage of Bullaburra, where, although the property, loan and mortgage were in her name, the three beneficiaries under the deed of 1 August 1980 in fact funded the payments to United Permanent.

(4) Purchase and grant of first mortgage of Theresa Park

I refer to my earlier discussion of the circumstances attending the purchase of Theresa Park, and the grant of a first mortgage by Michael and Judith to Miss McKee.

During the hearing, Judith produced several letters from the Bank relating to early loans made to her and Michael, copies of which are no longer retained by the Bank, and details of which appear below.

(i) Secured personal loan to assist Michael to purchase the practice from Menart By letter dated 7 April 1982, the Bank communicated to Michael and Judith its approval of a secured personal loan to them, as joint borrowers, to assist Michael to purchase the legal practice of Menart. Michael and Vladimirka gave a mortgage dated 13 April 1982 over Canley Heights as security. Judith signed as co-debtor with Michael on the mortgage. It was the fifth mortgage Judith had signed. Zsilinsky witnessed Judith's signature. She was an impressive witness and clearly recalled meeting Judith. From the four or so occasions she met Judith, she formed the impression that Judith was a "very intelligent, bright, classy woman". Her evidence was that the application for the personal loan for the purchase of the practice approved by the letter of 7 April 1982had probably been signed by Judith. She said that part of the documentation at the "sign up" on 13 April 1982 would have been a personal loan contract which Zsilinsky would have encouraged Judith to read and understand before signing. She also said that she explained the obligations under the mortgage to Judith as co-debtor because the mortgage was actually mentioned in the personal loan contract. She said that she made no assumption that Michael would explain Bank documents to Judith and that her attitude was that if they had any questions about the financial side of the transaction, then she was there "at the sign on" to answer them. Judith conceded that if she had had a concern about signing the mortgage as debtor or was otherwise concerned about the transaction, she would have asked about it.

(ii) Personal loan to assist purchase of Renault motor car Judith produced a letter dated 12 July 1982 from the Bank to Michael and herself approving a personal loan of $33,240 to assist in the purchase of a 1980 Renault motor car, and to pay out an earlier personal loan, apparently not exceeding $20,000, on which $12,790.74 was outstanding. It was to be secured by the second mortgage of Myall Street.

(iii) Overdraft on account number 147-056 Judith produced a letter dated 18 January 1983 from the Bank to her and Michael approving an overdraft of $5,000 on their joint cheque account 147-056. Judith must have known they had an overdraft limit on this account in 1983. She said that she did not recall seeing the letter at the time. She held the only copy of the letter. She said that in 1985 she was not even aware of what an overdraft account was. I do not believe her. Her receipt and filing of this letter, her operation on the cheque account and receipt and filing of Bank statements in relation to it, and her signing of acknowledgments as early as 1984, tell strongly against acceptance of her evidence in this respect, in my view.

The duty of a creditor to an intending guarantor The Bank submits that there was no duty of disclosure incumbent on it which required it to bring to Judith's attention the matters particularised in par 9 of her further amended statement of claim, or matters of that kind affecting Michael. It is well established that the creditor/guarantor relationship is not one uberrimae fidei and that the creditor has only a very limited duty of disclosure. A creditor is not generally obliged to inquire into the manner in which the guarantor's consent to giving the guarantee was obtained: Owen v Homan (1853) 4 HL Cas 997 at 1035; 10 ER 752 at 767; Union Bank of Australia Ltd v Puddy [1949] VLR 242 at 247 (Fullagar J); Bank of New South Wales v Rogers (1941) 65 CLR 42 at 60 (McTiernan J); Amadio at 458 (Gibbs CJ). An exercise of undue influence by the principal debtor over the guarantor may invalidate the guarantee if the creditor has entrusted the principal debtor with obtaining the guarantor's signature: see Halsbury's Laws of Australia, Vol 14, par [220-140] and cases there cited,for example, Bank of Credit and Commerce International SA v Aboody [1989] 2 WLR 759. Judith did not plead undue influence. As a matter of general principle, a creditor is not obliged to ensure that an intending guarantor receives independent advice. The creditor must disclose to an intending guarantor any unusual matter or arrangement between the creditor and the debtor which the intending guarantor would not naturally expect to find, particularly where the nature or degree of the guarantor's responsibility is affected. However, Gibbs CJ noted in Amadio that: "To require a bank to make disclosure to a surety of the details of all unusual transactions which, to the knowledge of the bank, had taken place between the customer and third parties might prove to be both vexatious and misleading, as well as a breach of confidence." (at 457) As discussed in the context of Vladimirka's claim, a creditor need not disclose to an intending guarantor matters affecting the principal debtor's credit, even though the facts might be material to the risk that the guarantor will undertake. Judith submits that in accordance with the judgment of Gibbs CJ in Amadio, each time the Bank sought her acknowledgment of an increase in the amount secured by mortgages given by her, it effectively sought a new guarantee and came under an obligation to explain the reason for and circumstances of the increase. In my view it did not: each time the Bank sought an acknowledgment from Judith, it sought her approval of an increase in the indebtedness covered by securities she had previously granted, not a new guarantee or security. Judith submits that her case is on all fours with Amadio, in that Gibbs CJ there said (at 457-8) that the bank should have disclosed to the guarantors at the time it increased their son's overdraft limit, that it had been selectively dishonouring his cheques. But Judith's case is distinguishable from Amadio in several respects. There was not between the customer and the Bank here, an arrangement comparable to the extraordinary one in Amadio, under which the customer was to be given an immediate overdraft limit of $270,000 as a condition of which the actual overdraft was to be reduced to $220,000 within a week and to $180,000 within a fortnight, so that within three weeks the debit balance was to be reduced to less than that which already existed, and then the overdraft was to be entirely cleared within a short time. In Gibbs CJ's words, the guarantee was given in circumstances where "the company was given merely a temporary respite, whereas the bank improved its existing and inadequate security". Further, it is not alleged, nor could it be supported on the evidence, that the Bank was a party to selective dishonouring of cheques on Michael's practice account "in an endeavour to maintain the façade of prosperity that the [customer], although insolvent, had erected", as was the case in Amadio (where cheques to about $44,000 were held pursuant to those arrangements at the time when the guarantee was given). Nor did the Bank have reason to believe that it may have caused Judith to labour under a misapprehension in this respect. She was not deceived by the continued payment of her maintenance cheques. In fact, in her affidavit sworn 12 February 1997 in response to the Bank's evidence, Judith deposed: "A couple of times my maintenance cheques from [Michael] were dishonoured, however this was not unusual as it had happened throughout our marriage that there was not enough money in our account to cover cheques. Sometimes I would pay a bill by cheque and [Michael] would tell me to cancel it because there were not enough funds to cover it. When my maintenance cheques were dishonoured I would tell him and he said words to the effect of: 'Don't worry about it. I'll fix it up.'" A major distinction between the facts of the present case and those of Amadio is that in Amadio the parents were purely third party mortgagors having no commercial interest in the provision by the bank of financial accommodation to their son's company, whereas in the present case Judith was a co-venturer("business partner") with Michael. Even as to his practice debt she benefited financially, inter alia, because the practice income was the source of all payments off the mortgages and therefore of an improvement in her net asset position.

What did Judith know of the matters allegedly not disclosed? Judith pleads, in essence, that she was unaware of the following matters: that from time to time the Bank considered returning cheques on the practice account and the joint account, and Region instructed Branch to this effect (no cheques appear to have been dishonoured on the office account until March 1987); that the debit balances on the practice and joint accounts had exceeded their respective overdraft limits; that from time to time the Bank was concerned as to the level of debt relative to the value of the security held by it; and that additional securities were to be sought. Perhaps additionally, there are the allegations that Branch (Williams) ignored Region's instructions and paid cheques drawn by Michael, and at other times selectively decided which cheques Michael would be permitted to draw. In her submissions, Judith refers, as a further unusual circumstance, to the Bank's "continued payments of maintenance" to her. She submits that the Bank "was actively concealing from her the fact that it was allowing the maintenance cheques to be met as part of its selective honouring of cheques". In her evidence in chief, she refers to the fact that her maintenance cheques were in fact dishonoured "a couple of times". Elsewhere she gives evidence that she did not, in the light of their banking history, consider this to be "unusual", and that she informed Michael of this, and he said he would make arrangements with the Bank (as noted earlier). Judith did not know, and did not ask, what these arrangements were and it "did not worry" her when these cheques "bounced" because her own evidence in chief was, "this type of thing had happened quite a few times throughout [our] marriage". The continuing payment of maintenance cheques, during a period in which the Bank was dishonouring other cheques on the practice account, is not one of the undisclosed circumstances referred to in the pleading. In my view, in the light of her evidence previously discussed, she would not have considered such a circumstance "unusual", nor would knowledge of it (assuming against the Bank that she lacked such knowledge) have had any real effect on her actions. There was no evidence from Judith as to what she would have done if she had known, assuming that she did not, that her maintenance cheques were being honoured while other cheques drawn on Michael's practice account were not. Moreover, cheques on the practice account were not dishonoured until 1987, and so this submission would not relate to security documents signed prior to that time in any event. Assuming that the circumstances pleaded and the additional one just mentioned were all made out on the evidence, they are nonetheless not matters of a kind which, on the authorities referred to earlier, the Bank was obliged to disclose to Judith. In any event, the Bank did make disclosure to Judith of the substance of many of them and, further, she was aware of the substance of them from at least 1984 in some instances, as I will now attempt briefly to explain.

Judith gave evidence that she knew in 1985 that if a bank returned cheques, that was a very serious matter which indicated that the drawer was spending money it did not have. Further, she said that if she had known that any of Michael's business cheques were being dishonoured, she would not have signed any documents on 14 October 1985. In fact, there is no evidence that as at 1985 cheques had been returned on Michael's practice account. However, as early as 1983, cheques were returned on the joint account. Judith conceded that she had had contemporaneous knowledge of the return of cheques on the joint account on about five occasions prior to 1987. She signed the mortgages of 14 October 1985with knowledge of this fact.

Judith also knew from correspondence from the Bank and from the numerous acknowledgments that she signed from as early as November 1984, that the drawings on both the Radin & Associates overdraft account and the joint account were in excess of their limits and that the Bank required additional security for the excesses. If she had thought about it, it would have been obvious to her that from time to time the Bank was concerned as to the level of debt in relation to the value of the security it held.

Judith was aware from the various acknowledgments she signed, beginning in November 1984, that the general level of Michael's indebtedness to the Bank (as well as her own) was increasing. For example, she signed the acknowledgments dated 9 September 1985 and 14 October 1985 which showed an increase in indebtedness of $230,092, from $182,219 to $412,311 within the space of a month. She understood that the second of the documents was an acknowledgment of an increase of about $230,000, an amount which she agreed she would have considered to be a "huge increase in indebtedness". She clearly knewfrom an early time of the increasing indebtedness, although she did not acknowledge this in her affidavit evidence.

Judith understood from Michael that his practice was successful and that by virtue of its nature there were always a lot of fees outstanding. She also knew that Michael ran a practice in which he funded his clients' litigation. In fact, on Judith's own evidence this was a source of continual conflict between them, due to its effect on the cash flow of the practice and the result that "often [she] did not have enough money to pay domestic bills". She knew that it often took a long time for Michael to recover fees owed to him and that it took time for cases to be heard and completed. I infer that she knew that her mortgages secured financial accommodation provided by the Bank to Michael which, directly or indirectly, he used to fund clients' litigation.

Judith was aware, from correspondence received from the Bank, that it was concerned as to the level of indebtedness and as to Michael's and Judith's disregard for the arrangements in place for the accounts, that it would not tolerate the situation indefinitely, and that it was, from time to time, considering returning cheques on their accounts. In addition to the acknowledgments, the Bank sent, and Judith received, the following letters: (a) letter dated 29 June 1984 sent to Michael and Judith at Myall Street, advising of the Bank's disappointment in relation to the drawing of cheques outside of arrangements on both the practice account and the joint account, and of the Bank's unwillingness to continue to provide "this unlimited credit"; (b) letter dated 26 November 1986 sent to Michael and Judith at Myall Street, advising that the balance of the joint account was "far in excess of arrangements ... [being] the $100,000 absolute temporary limit that we imposed", and threatening to return cheques drawn in favour of various finance institutions and cheques drawn for other than normal living expenses; (c) letter dated 22 September 1987 to Judith at Myall Street, advising of the balance of indebtedness of the practice and joint accounts, and enclosing a letter of acknowledgment, and requesting her to execute and return the letter; (d) letter dated 4 January 1988 to Judith at Appian Way, advising of her current maximum liability of $950,332 under the second mortgage over Appian Way (which was enclosed for signing), and also advising her to obtain independent advice if she was uncertain of the nature and effect of her liability to the Bank; (d) letter dated 13 October 1988to Judith at Appian Way, advising her of the total amount of facilities of $1,029,804, and enclosing a letter of acknowledgment to be signed and returned. I find that Judith would, in the ordinary course, have seen, read and understood these letters.

Would Judith have acted differently if she had known of the matters particularised? The Bank submits that there is no "what if" evidence of Judith in relation to the following particulars which were set out earlier in my account of Judith's pleading: (1) particulars (i) to (xvi); (2) particulars (xxi) to (xxv); and (3) particulars (xxviii) to (xxix). For several reasons, I reject Judith's "what if" evidence, and, in particular, her claim that if she had known certain things, she would have directed the Bank to cease making advances to Michael secured against any property in which she had an interest and would not have entered into any of the mortgages after July 1983. First, I simply have no confidence in any evidence given by Judith for reasons I have previously discussed. Second, in fact she knew many of the matters particularised. Third, the evidence as a whole suggests that she would have assisted Michael, because she believed, and it was a matter of fact, that her own financial interests were inextricably linked with his. I will deal with this last point first. Judith was prepared from the outset of her relationship with Michael to support his practice. She specifically claimed this in her amended application in the Family Law proceeding. She was a joint borrower of the loan by the Bank which enabled Michael to purchase Menart's practice. She was also engaged by Michael's practice to do photographic work, trading under the business name "Kaleidoscope". She knew that the weekly deposits of $1,500, at first into the joint account and later into her own St George account, which continued after their separation, were generated by the practice. Her evidence was that she was dependent upon this money after separation, particularly due to the young age of her children. She also understood that Michael would be unlikely to continue these payments if she refused to cooperate in executing mortgages and acknowledgments. She continued to do so against the legal advice of Miceli in 1989 and 1990, and later against the advice of McGuire. Importantly, after the Bank issued letters of demand, Judith was prepared to cooperate with Michael at a time well after they had separated, again against the advice of her solicitor. She cooperated in attempting to refinance in 1991 and 1992, by, for example, signing an offer to the Bank dated 20 October 1992to pay out the indebtedness to it, using jointly owned property as security for the refinancing, and obstructing the mortgagee sales of two of the properties in the portfolio to be used for the refinancing. That she was prepared to mortgage the properties all over again after the Bank had issued letters of demand is inconsistent with her assertion that if she had been aware of the matters particularised in her pleading, she would not have executed any of the mortgages and would have directed the Bank not to make any further advances. In fact, in January and February 1993, some months after the issue of letters of demand from the Bank, Judith and Michael were still seeking further advances from it for the purchase of a new home for Judith and the children. In my view, Judith assessed that her financial best interests lay in cooperating with Michael, both during their relationship and after their separation, and she executed documents to that end. She did so against legal advice on several occasions, and, in my view, she would have done so if she had possessed knowledge of all the matters particularised, which, in numerous instances, she did possess. I turn now to discuss Judith's mortgages, in sequence, in relation to the main aspects of her "what if" case.

The matters which Judith alleges the Bank failed to disclose to her post-date the mortgage of 26 July 1983 over Theresa Park. Therefore this particular mortgage is not touched by the complaint of non-disclosure in any event.

(2) Two mortgages signed on 14 October 1985 over William Street and 87 Foreshore Drive

Judith said she would not have signed either mortgage on 14 October 1985, that is, either the mortgage over William Street or that over 87 Foreshore Drive, had she known of "excess on any accounts". She also said that she would not have signed any documents on 14 October 1985 if she had known that Michael's business cheques were being dishonoured. She also said that she did not think that she would have signed the mortgage over 87 Foreshore Drive had she been aware "that Michael had owed the Bank more than the value of the mortgages he had given to [it]". I reject this last evidence for reasons generally discussed earlier. In fact, as discussed above, Judith well knew of the excess on the joint and practice accounts, at least from the letter of acknowledgment she signed on 14 October1985 at the same time as these two mortgages. Nor had any cheques been dishonoured on the practice account as at this date and she knew that cheques had been dishonoured on the joint account. She also knew that the Bank was disappointed in relation to the issue of cheques outside of arrangements on both the practice account and the joint account, and took the stance that it could not continue to provide "unlimited credit", yet she still signed the two mortgages on 14 October.

Judith said she would not have signed a mortgage on 2 January 1986 [sic] had she known the matters already referred to and that it was to be given to secure money already lent to Michael "and spent by him without my knowledge". For reasons generally discussed earlier, I reject this evidence. In my opinion, she would have signed this mortgage because she believed it to be in her financial interests to do so.

(4) Two mortgages signed on 7 July 1989 over 92 Foreshore Drive and Wanda Beach

Judith gave evidence that she would not have signed the mortgage on 7 July 1989over 92 Foreshore Drive, if she had known that "any of Michael's cheques had bounced prior to July 1989 because he had exceeded the limits set on him by the Bank", and if she had known that the mortgage "was just going to secure moneys that the Bank had already lent to Michael and had been spent by him". But in my view, again, Judith would have done so because she believed her financial interests were tied up with his, and more specifically for the reasons set out below. Judith said that as at 17 March 1987 she was not aware that the Bank had dishonoured cheques on Michael's practice and private accounts. This was untrue. In cross examination she said that she was frustrated several times that cheques she had drawn were dishonoured, that this was a source of conflict between herself and Michael, and that she had opened an account in her own name in early 1987 with St George, specifically in order to overcome the problem of the return of cheques drawn on their joint account. Judith also signed these mortgages dated 7 July 1989 over 92 Foreshore Drive and Wanda Beach (Wanda Beach was sold and so the mortgage over it is not in issue in this proceeding) and a letter of acknowledgment, against the advice of her then solicitor, Miceli. She had been separated from Michael for some eight or nine months at the time, the documents were sent directly to her, she had plenty of opportunity to read and reflect on them prior to signing, she had by then retained a solicitor for more than six months and had received independent advice by him (Miceli) not to execute such documents until there was "final resolution of the current financial matters between [herself and Michael]". However, she executed these documents against that advice. In my view, her preparedness to reject legal advice is an indication of her independence of mind and strength of will. In my opinion, far from being a passive dependent wife, Judith was always disposed to act, and did act, upon her own assessment of where her best interests lay. Judith now submits that the fact that she acted inconsistently with Miceli's advice raises an inference that her will was overborne by Michael. Such undue influence by Michael was not pleaded. Nor did she allege that she was forced to sign the mortgage over 92 Foreshore Drive by Michael, in this or the Family Law proceeding, until the end of her present cross examination before me when she volunteered the comment that Michael "made threats in relation to just about every document that I had to sign". Her assertion that she would not have signed the mortgage if she had known it was going to secure money already lent to Michael and spent by him is contradicted by her signing of the letter of acknowledgment, received under cover of the Bank's letter dated 7 June 1989. If she was prepared to sign against the legal advice of Miceli, in my view, knowledge of the matter mentioned would not have affected her actions. She accepted that she had plenty of time to read and reflect upon the acknowledgment before signing. The form of acknowledgment specifically states "I hereby acknowledge that the Bank has granted or may be granting" accommodation and liabilities to the Bank not exceeding $1,297,570. She understood that the mortgages appearing in the schedule immediately above her signature secured the indebtedness to the Bank. She does not allege in her evidence that she was forced to sign this acknowledgment. She also had ample opportunity to ask Miceli for legal advice in relation to it if there was anything in it which she did not understand. In my opinion, in order to save her position, Judith gave the following evidence on crucial aspects of her "what if" case that I have no hesitation in rejecting: (1) her assertion that in 1985 she was unaware of what an overdraft was, and was unaware that Michael had an overdraft account and that its limit had been exceeded; and (2) her assertion that she would not have signed certain mortgages if she had known that they were being taken as additional security for moneys already spent by Michael. Judith has also given evidence, as part of her "what if" case, that had she known the matters already discussed in relation to her mortgages, she would "certainly not have signed" the acknowledgments. I reject this evidence for the same general reasons as those set out in relation to the mortgages themselves.

Discharge of the third party mortgages as a result of implementation of the litigation loan facility Judith submits that the Bank's letter dated 15 January 1990 approving a litigation loan facility discharged her third party mortgages to the extent that they were then enforceable. She refers to Ankar Pty Ltd v National Westminster Finance (Aust) Ltd (1987) 162 CLR 549 ("Ankar") and Amadio. She submits that to the extent that the acknowledgment of 8 February 1990 (the last one she signed) was capable of creating a new third party security or revitalising any earlier one, she is entitled to be relieved of its effect because the litigation loan facility which had been approved a little earlier, on 15 January 1990, had not been explained to her. Under that facility, Michael guaranteed payment to the Bank of moneys lent by the Bank to his clients. The facility was of $1,300,000. It incorporated both a refinancing of the indebtedness of Radin & Associates to the extent of $820,000 "incurred [by Michael's] paying disbursements on behalf of existing litigants", and $480,000 to cover Michael's liability in respect of the Bank's paying disbursements on behalf of "new litigants" (I will refer to the latter as the "new litigation loan facility"). Judith's submissions betray confusion of thought. Ankar was concerned with a breach by the creditor of a contractual promise which discharged the guarantee containing it. Amadio was, relevantly, concerned with non-disclosure by the creditor of a matter which existed when the third party security was given and which therefore had the potential to vitiate it ab initio. Neither case has any application to the present contract of guarantee between Michael and the Bank which was part of the new litigation loan facility. So far as Ankar is concerned, there was no contractual promise by the Bank to Judith not to enter into a facility of the kind in question with Michael. In relation to Amadio, the acknowledgment of 8 February 1990 did not create a new third party security or "revitalise" an earlier one so as to attract the duty of disclosure of unusual matters sometimes imposed on a creditor taking a guarantee. By the acknowledgment of 8 February 1990, Judith acknowledged that the Bank had granted or might be granting from time to time to Michael and otherwise permitting Michael to incur liabilities to the Bank up to $2,321,400 plus permitted interest, costs, charges and expenses, against the security of the five mortgages and the mortgage over Wanda Beach, all executed by Judith. Upon its proper construction, the acknowledgment was wide enough to refer to the refinancing of the indebtedness of Radin & Associates to the extent of $820,000 and Michael's liability as guarantor under the new litigation loan facility. That is the end of the matter so far as the acknowledgment is concerned. The issue here is whether the five mortgages, all given by Judith prior to 15 January 1990, extended on their proper construction to encompass Michael's liability under the litigation loan facility. Judith submits that the "all monies" clauses in the five mortgages attacked by her are not capable of saving the transaction, because the litigation loan facility approved on 15 January: (a) was completely different from any facility previously established; (b) operated in a completely different way; (c) gave rise to a potential liability of Judith to guarantee the obligations of third party borrowers by guaranteeing Michael's own guarantee of their obligations; and (d) was not a fresh advance at all, but merely a "subterfuge" by which the Bank could shift the past indebtedness of Michael to a new account. She submits that "all monies" clauses extend only to debts of a kind contemplated when the security was granted. In support, she refers to ANZ Banking Group Ltd v Comer (1993) 5 BPR [97404] ("Comer") at 11,748; Estoril Investments Pty Ltd v Westpac Banking Corp (1993) 6 BPR [97441] ("Estoril") at 13,146; and State Bank of New South Wales v Burke (1997) NSW ConvR 55-814 ("Burke"). Burke contains no final opinion on the point. In Comer, after referring to the absence of authority on the issue, Young J said: "It seems to me that the way courts approach these very wide all obligations mortgages is to read them down so that the wide words have some operation but do not include situations that would never have been contemplated by the ordinary mortgagor by the use of the words." (at 11,758) The issue was again considered by his Honour in Estoril. After reviewing many authorities, he expressed the view that in New South Wales, where "wide words and legal jargon" in a printed form of mortgage would give rise to an absurdity, one should "pause to see whether the parties intended when they entered into the mortgage that it should cover the circumstance which has now arisen" (at 13,154). But it is not absurd that the mortgages signed by Judith should extend to secure performance by Michael of his obligation under the litigation loan facility. At all material times, Judith knew that in one way or another the Bank was funding Michael's practice which was funding his clients' litigation. The change made by the introduction of the litigation loan facility was only that for the future, instead of the Bank's being the indirect funder of the clients through Michael, it became a direct funder of them while Michael undertook a secondary liability as guarantor. Throughout their marriage, Judith knew that Michael had a practice of lending money to his clients. He lent from his practice account, and, on occasions, even from the couple's joint account. This practice was a bone of contention between them, and Judith said, "quite often I didn't have enough money to pay domestic bills". Her mortgages had always been security, in part, for funds lent to clients. She must have known this. Why, it can be asked rhetorically, should she be discharged from liability merely because, as from 15 January 1990, instead of Michael's liability to the Bank being increased as a result of direct advances by him on account of his clients, it was increased by reason of a guarantee by him of payment by his clients to the Bank? The Bank submits, first, that Judith did consent to the increase in facilities by signing the acknowledgment and returning it on 8 February 1990. By the Bank's covering letter dated 30 January 1990, the Bank advised Judith to ensure that she understood the full nature and effect of her liabilities to the Bank and to seek appropriate advice, legal or otherwise, if she was at all uncertain of her position. The letter mentioned an increase in her maximum liability to $2,321,400, but did not separately identify, or explain, the litigation loan facility. Her consent was in fact a pre-condition of the rearrangement of the accounts, and the rearrangement of facilities was not implemented until it was received. It was only on 5 March 1990 that the Bank advised Michael of the implementation of the new facilities. I infer that the Bank "suffered detriment" in reliance on Judith's signature on this acknowledgment. Second, the Bank submits that the standard terms of the mortgages specifically provided for future variation in the obligations of Michael to the Bank, and that such terms have been held to be enforceable. By clauses 1, 3 and 4 respectively, of the memorandum of mortgage, Judith covenanted to pay to the Bank on demand: "[a]ll moneys (including moneys advanced by way of loan for fixed term or provided by way of overdraft) now or hereafter to become owing or payable to the Bank by the Debtor and the Mortgagor or either of them either alone or on joint or partnership account or on any other account whether as principal or surety" (emphasis supplied). "[a]ll moneys which the Bank shall lend or pay or become liable to lend or pay or may have advanced or may advance the payment or repayment of which the Debtor and the Mortgagor or either of them has guaranteed or may hereafter guarantee to the Bank" (emphasis supplied); and "[a]ll moneys which the Bank shall lend pay or advance or become in any way liable to lend pay or advance to for or on the credit or for the accommodation or otherwise on the account of the Debtor or to for or on account of the Mortgagor or to for or on account of any other person upon the order or request or under the authority of the Debtor and the Mortgagor or either of them" (emphasis supplied). In my view, in the light of these terms of the mortgage and in accordance with Goodwin v National Bank of Australasia Ltd (1968) 117 CLR 173, Michael's liability as guarantor under the new litigation loan facility was not an unusual circumstance or arrangement to which the Bank was required to draw Judith's attention, and she remains liable under relevant mortgages and the acknowledgments, including the acknowledgment of 8 February 1990. In summary, (1) both as a result of clauses 1, 3 and 4 and of the factual background, Michael's liability (including his liability as guarantor) under the litigation loan facility was within the contemplation of the parties to the mortgages; (2) the mortgages are not liable to be set aside as a result of the Bank's post-mortgage conduct in approving of the litigation loan facility on 15 January 1990; (3) the acknowledgment of 8 February 1990 was effective as an acknowledgment that Michael's indebtedness to the Bank on any account (this was capable of including the litigation loan facility) was secured by the couple's mortgages up to the total amount specified; and (4) Judith knew at all relevant times that Michael had a practice of lending to clients, which was supported by his indebtedness to the Bank. In any event, the Bank points out that it has not proceeded against Judith (or Michael or Vladimirka) in respect of the loans made by the Bank to Michael's clients which were the subject of the guarantee by Michael, and does not seek to enforce the mortgages given by Judith in so far as they secure Michael's guarantee of those litigation loans.

Misleading or deceptive conduct As it is pleaded, this claim does not attack the circumstances of the execution of the original security documents. In my opinion, the matters particularised in pars 9 and 20 set out earlier (assuming, against the Bank, that they are all made out) would not establish that the Bank engaged in misleading or deceptive conduct in contravention of s 52 of the TP Act or s 42 of the FT Act. In any event, Judith was aware of the continuing deterioration of the relationship between Michael and the Bank from 1990 to the end of 1992, by reason of (a) what Michael told her, (b) the meetings she attended at the Bank during this period, and (c) the fact that she was aware that the Bank was pressing for a refinancing. She was not misled or deceived in this regard. My earlier discussion under the heading "Michael's Post-May 1991 Causes of Action" is also relevant to Judith's additional particulars of misleading and deceptive conduct.

Michael as agent of the Bank Judith submits that the Bank made Michael its agent to procure her signatures, and that it did so by sending the documents from time to time to Michael for him to arrange execution and by not ensuring that Judith had advice independent of Michael. Judith's case of agency is not borne out by the evidence. In relation to her execution of all but one of the mortgages, Judith's initial affidavit evidence was that Michael brought the mortgage home, where she signed it. But, as noted earlier, this evidence was quite incorrect, as Judith was later forced to concede. In relation to the five mortgages challenged in this proceeding, Judith attended the Bank to execute the mortgage of 26 July 1983 over Theresa Park, and the two mortgages executed on 14 October 1985. The mortgage over Appian Way was executed before a solicitor, following its being sent addressed to Judith alone at Appian Way under cover of a letter which advised her to satisfy herself of the full nature and effect of her liabilities to the Bank and to obtain appropriate advice, legal or otherwise, should she be at all uncertain of her position. Finally, the mortgage over 92 Foreshore Drive of 7 July 1989was executed after she had obtained advice from her solicitor (whom she had then retained for more than six months), and eight months after she had separated from Michael. It was also sent to her under cover of a letter which advised her to satisfy herself of the full nature and effect of her liabilities to the Bank and to obtain appropriate advice, legal or otherwise, should she be at all uncertain of her position. The last four acknowledgments which the Bank received signed by Judith (6 January 1988, 6 November 1988, 10 July 1989 and 8 February 1990) were sent to Judith alone, two being subsequent to the separation from Michael (on 24 November 1988) when Michael was no longer living at Appian Way. The letter of 22 August 1990 enclosing the consent which Judith ultimately did not sign, was similarly sent to her at Appian Way. From December 1988, Judith was retaining her own solicitor. The acknowledgment of 14 October 1985 was signed at the Bank by Judith when she attended without Michael. She agreed that if she had wished to ask Boulous any questions on that occasion, she could have done so. She received the last acknowledgment she signed (8 February 1990) like the later one she refused to sign (22 August 1990), under cover of a letter which advised her to satisfy herself of the full nature and effect of her liabilities to the Bank and to obtain appropriate advice, legal or otherwise, should she be at all uncertain of her position. I do not accept the submission that the Bank made Michael its agent to procure Judith's signatures.

Undue influence or duress In her submissions, Judith sought a finding of undue influence or duress in relation to her signing of "documents". The Bank objects to the raising of these issues at this stage. Neither was pleaded. The particulars of the CR Act and Amadio claims referred to "unfair pressure and tactics". Attention was drawn early in the trial to the way in which this was pleaded. It was made clear to the Court by Judith's solicitor and counsel that undue influence or duress would not be pleaded. There was ample opportunity for Judith to apply for leave to amend her statement of claim, and it was amended subsequently in other respects. That she did not seek leave to amend in this respect was a calculated decision, taken after advice. It would prejudice the Bank to be required to meet a case which was previously and specifically disavowed. If Judith had put such a case, my factual In any event, for reasons generally discussed earlier, any such claim would not succeed on the evidence before me. I am not satisfied that in relation to the signing of mortgages or acknowledgments, Judith was subject to the undue influence or duress of Michael. If Judith had put such a case, my factual findings would have prevented it from succeeding. I noted that if Vladimirka had put a case based on the Yerkey/Garcia line of authority, my findings that she was not a volunteer, understood the effect of the Norman Street Mortgage and entered into it of her own free will would have sufficed to prevent such a claim from succeeding.

Judith's claim based on Yerkey v Jones (1939) 63 CLR 649 ("Yerkey") and Garcia v National Australia Bank Ltd (1998) 155 ALR 614 ("Garcia") The Bank complains that Judith's case at trial was not run as a Yerkey case. I have earlier set out the basis upon which her claim was pleaded. The Bank submits that although factual matters relevant to a Yerkey casewere the subject of evidence, they were not examined against the background of such a claim. It refers, by way of example, to the fact that in accordance with Yerkey,Judith would have had to establish that she was a volunteer and received no benefit from executing the mortgages, and points to the fact that this was not specifically pleaded by Judith. However, the question did arise whether she was a true "third party" for the purposes of her case under the CR Act. It was also a particular of her CR Act and Amadio claims that she "derived no benefit, or no benefit reasonably proportionate to the burden imposed by the security documents". The Bank raises the issue of the benefit Judith received, inter alia, to demonstrate that pursuant to subs 6 (2) of the CR Act, relief under that Act could not be granted to her. It also raises the issue in relation to its argument that Judith failed to offer to do equity, and generally to demonstrate that the relief claimed by Judith is too wide, as the Bank funded the purchase or refinancing of the mortgaged properties. The Bank submits that reliance on Yerkey by "picking through" evidence led by reference to other grounds is an exercise which should be undertaken with great caution and with due regard to the fact that the evidence was not led against the background of a Yerkey claim squarely raised. Although the Bank's submission has some attraction, I do not think the Bank is prejudiced by the late raising of the Yerkey claim and I will deal with it. In her additional submissions, Judith relies on the following specific matters which she suggests are common to herself and Mrs Garcia: "(a) the bank knew of the separation between the parties …; (b) the proceedings were instituted against the bank not vice versa …; (c) the business was in the 'complete control' of the husband …; (d) the documents were signed at the request of the husband …; (e) there was no explanation of the documents at the time of signing (this is particularly so of the posted acknowledgments in the instant case) …; (f) the wife did not understand the effect of the documents (in the instant case this is particularly so of the complex and unusual litigation lending facility the bank finally approved) …; (g) the bank had no actual notice of the quality of the relationship between the parties …; (h) neither Mrs Garcia nor [Judith] adopted the sole role of passive housewife; and (i) both Mrs Garcia and [Judith] took active steps to co-operate with their husbands in the belief that they were trying to save their marriages." The Bank takes issue with some of these matters. I do not understand why Judith relies on (a), except, perhaps, to show that a separation does not necessarily defeat a Yerkey claimant. The following factual matters may be noted in relation to the separation of Michael and Judith on 24 November 1988. The Bank did not become aware of the separation until much later, possibly as late as October 1990, after the execution of all the mortgages and acknowledgments in issue. One of the five mortgages and two of the ten acknowledgments signed by Judith were executed after the separation. Judith was independently advised in relation to that mortgage, and she was advised by the Bank to obtain independent advice in relation to the last of the acknowledgments that she signed. In relation to (b), the Bank filed its first cross claim in the Supreme Court of New South Wales in November 1993 joining Judith as second cross defendant. Judith did not commence her proceeding against the Bank until she filed her present application and statement of claim in NG 985 of 1995 in December 1995. Allegations of violence in that proceeding did not emerge until 1997. In relation to (c), the Bank submits that there were two businesses, Michael's legal practice and "the joint business of acquiring properties", and that Michael was not in "complete control" of the latter. I agree. Judith's role as an active self-serving "business partner" of Michael's provides a sufficient basis on which to distinguish the Yerkey/Garcia line of authority, not only in relation to the borrowings in support of their real estate investments, but also in relation to his practice indebtedness because of the way in which the latter supported the former. In relation to (d), it is not clear what documents are referred to. In any event, the Bank submits that Judith's assertion is factually inaccurate in respect of both the mortgages and the acknowledgments, as Michael was not the agent of the Bank for the purpose of having Judith execute those documents. I agree, for reasons given earler. In relation to (e) and (f), it is not clear what "documents" are referred to. No attempt has been made by Judith to support the submission by reference to the circumstances which attended particular mortgage transactions or acknowledgments. For example, the particulars do not reflect the circumstances in which the mortgages and acknowledgment dated 14 October 1985 were signed, when Boulous gave Judith the explanation of the documents which was set out earlier, and Judith admitted that she could have asked Boulous any questions. In relation to (f), Judith's understanding of the security documents has been discussed earlier. The Bank has not sought to recover from Judith the amounts of the litigation loans to his clients guaranteed by Michael under the new litigation loan facility approved on 15 January 1990, and has stated that it will not do so. In relation to (i), the evidence as a whole does not support the proposition. Judith cooperated with Michael, both after as well as before their separation, but her cooperation was not motivated by a desire to "save her marriage" (it was motivated by her financial self-interest). Even if it had been, I do not understand the fact's relevance to any issue before me. I proceed on the basis that Yerkey, as explained by the High Court in Garcia, establishes that it will be unconscionable for the Bank to enforce the mortgages against Judith if: "(a) in fact the surety did not understand the purport and effect of the transaction; (b) the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed); (c) the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet (d) the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her." (at 623) The Bank submits that Judith has failed to establish these elements. I will deal with them in turn. (a) The present case is distinguishable from Garcia in relation to the issue of the wife's understanding. In Garcia, the trial Judge found that Mrs Garcia understood that she was signing a guarantee, but that she thought it was a guarantee of limited overdraft accommodation and did not understand that it was secured by a mortgage over her home. In contrast, for the reasons given earlier, I do not accept Judith's evidence as to her lack of understanding of the security documents she signed. It is also to be recalled that subsequent to her separation from Michael, Judith signed the mortgage of 7 July 1989over 92 Foreshore Drive (and the mortgage of the same date over Wanda Beach) after receiving, but contrary to, independent legal advice from Miceli. Judith does not allege that she did not understand that mortgage when she signed it. Nor does she allege that Michael forced her to sign it. Judith also agreed later (at two meetings at the Bank on 22 February 1991and 14 October 1992, the first of which was also attended by her solicitor) that she was bound by the mortgages, when she did understand their nature and effect. Her conduct in late 1992 and 1993, as it appears from correspondence with the Bank and its receiver Brown and from various Bank diary notes, particularly her conduct in attempting to refinance and in putting proposals to the Bank to sell various security properties to pay it out, further demonstrates that Judith considered herself to be bound by the mortgages even after having had the benefit of extensive legal advice. The evidence also demonstrates: that Judith appreciated that the acknowledgments identified separately the debts of Michael and the joint debts; that she understood that the amount of the debts was increasing each time she signed an acknowledgment; and that she understood that the debts were secured by mortgages she had signed from time to time. Judith's submissions in relation to the application of the Yerkey/Garcia line of authority must fail for this reason. (b) Judith was not a volunteer. The mortgages secured, not only financial accommodation provided to Michael to support his practice; they also supported the provision of such accommodation to Michael and Judith to support the building up of their real estate portfolio. In any event, Judith also obtained substantial benefits from the loans that were made to Michael in connection with his practice. In sum, the following considerations show that benefits also flowed to Judith: (i) Judith was the joint owner with Michael of numerous properties which were purchased until the separation, and was a joint purchaser, after the separation, of Wanda Beach; (ii) Judith contributed no equity towards the purchase of any of the properties: (iii) the Bank either provided finance for their purchase directly, or did so indirectly by paying out earlier mortgages over them to financiers that had done so; (iv) In particular, Bank loans were used to pay out first mortgages over Theresa Park, 87 Foreshore Drive, Appian Way and 92 Foreshore Drive; (v) Judith's mortgages dated 14 October 1985 over William Street and 87 Foreshore Drive supported the loan for the purchase of William Street; William Street was bought substantially, if not totally, with finance from the Bank; even the deposit was paid from the Radin & Associates overdraft account, that is, out of a loan by the Bank to Michael; Judith contributed no funds towards the purchase; Michael and Judith were mortgagors and debtors; Judith derived a substantial benefit in that she became co-owner of William Street and the fact that the contract of loan was ultimately only with Michael does not detract from this; Judith also derived a further benefit in that she received rental from William Street for a time; (vi) Judith benefited from the legal practice of Radin & Associates which was funded by the Bank on the security of the mortgages by receiving money generated by the practice; from 1982 Michael deposited funds from the practice into the couple's joint cheque account; from about September 1985, he deposited $1,500 into the joint account weekly; from October 1986, the amount was increased to $2,500 per week; in early 1987, Michael began depositing $1,500 per week into a St George account in Judith's name; (vii) Judith also benefited from the legal practice in that it was the source of payments made off the mortgages; (viii) The practice also provided Judith with some employment; in particular, she was engaged during the period 1982-1988 as a photographer, trading as "Kaleidoscope", in relation to third party and worker's compensation matters conducted by the practice. I accept the Bank's submissions that: during the period over which the properties were acquired, Michael's and Judith's money was derived from borrowings from the Bank and from Michael's practice, and that the equity in all the properties in respect of the mortgages over which relief is sought by Judith can be traced to the Bank in one of three ways: there were loans from the Bank at the time of the purchase; there were loans from other financiers at the time of the purchase which were later refinanced by the Bank; and funds came from Michael's practice, the sole or main financier of which was the Bank. In my view, these facts distinguish Judith's case from Mrs Garcia's, where it was found only that "from time to time some benefit flowed to the family from the companies" (at 625-6). On this ground alone, Judith's submissions in relation to the application of Yerkey and Garcia must also fail. (c) It is not necessary for me to consider the third and fourth elements mentioned above, but I make the following brief observations on them. While the Bank is to be taken to have understood that Michael had greater legal knowledge than Judith, this alone does not suggest a reposing of trust and confidence in Michael in matters of business. No doubt the matter was not fully explored in evidence because a Yerkey claim was not pleaded, but there is some evidence worth noting. Judith impressed officers of the Bank. Zsilinsky described her impression of Judith as one of a "very intelligent, bright, classy woman", and Coiera described her as professionally presented and knowledgeable. I do not think the Bank should be taken, on the evidence, to have understood that Judith reposed trust and confidence in Michael in relation to the building up of their portfolio of properties. Of course, even if she did so, the fact would be rendered inconsequential by my findings that she understood the effect of the mortgages and acknowledgments that she signed. (d) The Bank did take steps directed to ensuring that the effect of the documents which Judith signed were explained to her. Those steps have been described in some detail earlier and fall into three classes: the explanations in fact given to Judith by Bank officers, the contents of the acknowledgments, and letters from the Bank suggesting that she obtain independent advice if she was at all uncertain as to her position.

Unconscionable dealing I set out earlier, in the context of Vladimirka's claim, the general law principles according to which the courts relieve against the result of unconscionable dealing as established by the High Court in Amadio. Judith submits that she was in a position of special disability in relation to the Bank and that the Bank appreciated that this was the case. She gives as particulars those she gave in relation to her CR Actclaim and some additional ones referred to in her submissions. These appear to be as follows: (a) that Judith stood in the relationship of client and solicitor with Michael and the Bank should have ensured that she was independently advised (this was raised for the first time in Judith's submissions in reply); (b) that the Bank was actively concealing from Judith the fact that it was allowing the maintenance cheques to be met as part of its selective honouring of cheques in collusion with Michael; and (c) that Judith was subject to the influence of Michael's violence. Particulars (i) to (iii) set out earlier in my account of Judith's pleading do not advance Judith's claim. Any mortgage to a lending institution by an individual could be challenged as unconscionable on the basis of the matters referred to in those particulars. Particular (iv) is incorrect: Judith obtained independent advice, at least in relation to the mortgage over 92 Foreshore Drive of 7 July 1989,and possibly in relation to the letter of acknowledgment received by the Bank on 10 July 1989. She was advised by the Bank to seek independent advice in relation to several security documents as discussed earlier. Despite having independent legal advice available from December 1988, she did not avail herself of it in relation to subsequent acknowledgments. In my view, that was because she understood the basic nature of those documents. Particular (v) is not substantiated by the evidence. Judith's evidence as to her appreciation of the contents of the security documents and of the consequences of executing them is unreliable, as discussed earlier. I do not accept that she could have executed so many mortgages and acknowledgments in favour of other financial institutions as well as in favour of the Bank in the particular circumstances in which she did so, yet been ignorant of their basic nature and effect. In relation to particular (vi), there has been no evidence or submission directed to a case that the security documents contained conditions and provisions which were not reasonably necessary for the protection of the legitimate interests of the Bank (except those submissions directed to the "all monies" clauses). In relation to particulars (vii) and (ix), I refer to my earlier discussion of the benefit derived by Judith from the security documents. In relation to particular (x), for the reasons given previously, I reject the assertion that Michael acted as the Bank's agent for the purpose of obtaining Judith's execution of the documents. Particular (xi) is not true of all the security transactions. The number of the transactions in which Judith had been involved, the opportunities afforded her to ask questions and obtain independent advice, and her own state of knowledge of the nature and effect of the transactions, all militate against it. In relation to particular (viii), the evidence does not establish that Judith was not reasonably able to protect her own interests, to the knowledge of the Bank. The allegation that the Bank applied "unfair pressure or tactics" to obtain Judith's signature to the security documents (particular (xii)), is not supported by the evidence. As mentioned previously, no claim of undue influence or duress was pleaded. To the extent that Judith gave evidence of violence and threats of violence by Michael relevant to her various signings, it is unreliable, and, in any event, there is no evidence that the Bank ever knew of, or had any reason to suspect, their existence. Judith's submissions on Garcia expressly concede that the Bank had no actual notice of the quality of the relationship between her and Michael. In relation to particular (xiii), the Bank had no duty to "warn [Judith] of the improvidence of providing all moneys guarantees in respect of [Michael's] debts whenever incurred". That Judith was providing security in the nature of "all monies" mortgages was clear at least from the face of the documents she signed. Moreover, it is not clear that at the times Judith signed the respective mortgages, they were improvident from her viewpoint. Nor was the Bank bound to keep Judith informed in the manner asserted by particulars (xiv) and (xv). Its duty of disclosure has been discussed above. In her submissions, Judith has referred to other matters (in particular, the matters referred to in pars (a)-(c) set out above) in support of her claim that the security transactions were unconscionable and should be set aside. Judith submits: (a) that the Bank knew, or ought to have known, that Michael was in the position of her solicitor and acted for them both on conveyances, and that this alone was sufficient to fix the Bank with notice of a special disability on her part. In my view, it is not. Moreover, even if it were, the evidence does not support a finding that the Bank took unconscientious advantage of the position. Judith submits: (b) that the Bank's honouring of the maintenance cheques was a deliberate ploy to prevent her from challenging the securities, as were an alleged decision by the Bank not to disclose to her the "true position" as it related to Michael and its decisions to rearrange Michael's accounts. Judith submits that there was collusion between Michael and the Bank in relation to the selective dishonouring of cheques. In my opinion, the evidence does not support any of these allegations. Judith submits: (c) that she was subject to the influence of Michael's violence. I refer to my previous discussion of this allegation, of particular (xii) and of her Yerkey/Garcia claims. Judith submits that she is in the same position of disability as Mr and Mrs Burke in Burke. In my opinion, Burke is distinguishable on the facts. That case involved a guarantee by Mr and Mrs Burke. The Bank's customer and debtor was their son. In sum, the trial Judge found that: (1) the Bank relied on the son to arrange the execution of the documents and their explanation; (2) the Bank entrusted the explanation of the purpose of the documents and of any matter material to them as guarantors to their son, who had a keen interest in continuing the guarantee for his own benefit as the Bank must have realised (the material matters included the deteriorating financial position of the son); (3) the parents were ignorant of their son's deteriorating financial position; (4) the parents were not given the opportunity to read the documents and had no contact with the Bank; (5) the only explanation they received was from their son who assured them, "It's not a mortgage, it's just a loan for two years"; (6) in order to induce his parents to sign, the son falsely told them he needed the loan to purchase the other half of a real estate business in which he was interested; (7) the parents were unaware that the purpose of the loan was to consolidate business debts; and (8) neither parent would have signed with knowledge of the true situation. Judith's position was far removed from that of Mr and Mrs Burke. I do not think it necessary to discuss all the distinctions. One feature of the present case not mentioned previously, however, is that Judith does not suggest, and there is no evidence, that Michael (or the Bank) misrepresented the nature or effect of the documents Judith was executing. For example, it is not alleged that it was represented to Judith that the mortgages were given for a limited period or subject to a fixed monetary ceiling or that she bore no personal liability under them. Judith submits that Michael's affairs at the Bank were in a "dreadful state" during the period the Bank sought acknowledgments. She submits that the inference is inescapable that the Bank was gaining an advantage at a time when it should have known that she was in a position of special disadvantage. Judith submits that the fact that the acknowledgments could not possibly be to her advantage, at least after separation, must have been obvious to the Bank. It is put for Judith that she had no opportunity to exercise informed consent until the time (August 1990) when she refused to sign any further acknowledgments. She submits that when advised independently of her husband not to sign, she did not do so, and that this shows that if given an opportunity to exercise a free and independent will earlier, she would have refused to sign, particularly if the state of affairs at the time had been properly explained to her. I reject these various submissions for reasons previously given and by reference to the findings which I have previously made. Judith also submits that there is no evidence that no explanation of the nature of a guarantee, or of the position of a guarantor, was ever given to her in circumstances where the Bank ought to have known (and, she submits, did actually know) that she was not obtaining independent advice. I have previously discussed the opportunities Judith had to ask questions and peruse documents, and her state of knowledge and understanding at the relevant times. Judith agreed that when she attended the Bank on 14 October 1985she could have asked Boulous any questions. As early as April 1982, Zsilinsky encouraged her to read and fully understand the loan documentation at the appointment for execution of the mortgage relating to the loan for the purchase by Michael of Menart's legal practice. Judith received several letters from the Bank advising her to obtain legal advice in relation to various documents (for example, the Bank's letters of 4 January 1988, 7 June 1989, and 30 January 1990). The submission that she was able to make an independent decision only in and after August 1990 does not reflect the evidence. On several occasions, Judith did not follow her solicitor's advice. She acted against Miceli's advice when she signed the mortgage in July 1989 over 92 Foreshore Drive. She ignored McGuire's advice in relation to refinancing and settlement of her Family Law proceeding. She terminated McGuire's retainer. I do not accept that Judith followed this course of conduct becaue her will was dominated by that of Michael. Contrary to her submission, in my view Judith was strong willed and was prepared to sign, and did sign, documents against legal advice, because of her own independent calculation of where her best interests lay. Judith was and is an intelligent, educated and capable person. In my view, at all relevant times she had the capacity to understand, and did understand, the significant aspects and effect of the documents she executed in favour of the Bank. For reasons given earlier, her evidence to the contrary is unreliable and I do not accept it. In my opinion, she did not suffer from a "special disability". The evidence does not support her claim that the Bank was on notice that she was at any time in such a position, or that it took any unconscientious advantage of her in the manner required by the principle on which a court of equity acts, as discussed in Amadio. The Bank was not aware of facts that would raise that possibility in the mind of any reasonable person in relation to the mortgages and acknowledgments challenged.

The "business exception" The Bank submits that a preliminary question arises under subs 6 (2) of the CR Act with respect to the two mortgages granted by Michael and Judith on 14 October 1985 in connection with their purchase of William Street. Sub-section 6 (2) provides: "(2) A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by him or proposed to be carried on by him, other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by him or proposed to be carried on by him wholly or principally in New South Wales." (emphasis supplied) The Bank submits that Judith and Michael were involved in a business of building up a real estate portfolio which began prior to their marriage, involved the purchase of Bullaburra and Theresa Park, and continued with, inter alia, the purchase of William Street, three properties at Salamander Bay and the property at Port Kembla. Judith submits that as the Bank did not plead that she was in the "business" of giving guarantees, it must be taken to have acknowledged that the CR Actapplied. In view of the conclusion that I reach below that Judith's contracts were not unjust in the circumstances relating to them at the times when they were respectively made, I do not find it necessary to decide the present interesting issue.

Application of the CR Act The Act does not impose on a lending institution a duty to ensure that a decision to guarantee is a wise one, or that the borrower is able to repay: West at 629C, per McHugh JA. Nor does it impose a duty to provide a borrower or a guarantor with commercial advice, although if such advice is in fact proffered, the financier may come under a duty of care: Beneficial Finance Corp Ltd v Karavas (1991) 23 NSWLR 256 (CA) per Meagher JA at 276-7. Judith made a general submission in reply that the registered memoranda are, in their terms and in the circumstances, unjust. But she had not raised this matter in her pleading. The Bank submits that it is inappropriate for such a case to be made in reply and that the Court should not entertain the submission at this late stage. I agree. In any event, the submission did not attack any particular provision in any registered memorandum. In Bradbury v AGC Ltd (unreported, NSW CA, 1 July 1997), Meagher JA, with whom Beazley and Stein JJA agreed, said (at 5): "Whilst there is jurisdiction under the Act to make orders in favour of a party merely upon proof of a relevant disability, irrespective of the knowledge of that disability on the part of the other contracting party, the circumstances must be extraordinary for that jurisdiction to be exercised: Beneficial Finance Corp v Karavas (1991) 23 NSWLR 256. In any event, his Honour found that no relevant disability existed; and even if it did there were no extraordinary circumstances which would justify any order against AGC." I find here no relevant disability or extraordinary circumstance which would justify the granting of relief against the Bank under the CR Act. Otherwise, Judith's claim under the CR Act fails for the general reasons set out earlier under the heading "Unconscionable dealing".

Falinski Detailed submissions have been made in relation to the decision of the New South Wales Court of Appeal in Falinski. That Court there dealt with a claim by Mrs Falinski against the Bank based upon the CR Act and the general law principles of unconscionable dealing, as well as with questions of estoppel. The substance of Mrs Falinski's claim of special disability were the following features: her financial position vis-a-vis the Bank's; her need to maintain her relationship with and assist the debtor, her husband; her belief that his business was profitable; and her lack of knowledge of the financial circumstances of his business. Mrs Falinski also relied on the risk involved in guaranteeing the debt because her husband's solvency was suspect. She also submitted that her execution of the guarantee was not to her advantage and that the Bank had constructive notice of the circumstances constituting her special disability. The Court accepted that the guarantee was, ex facie, improvident. The Court of Appeal held that, despite all this, Mrs Falinski's CR Act and unconscionable dealing claims failed on the following ground (at 29, per Sheller JA with whom Mason P and Cole JA agreed): "Mrs Falinski's claim is met by the findings, which, in my opinion, are beyond challenge, that she understood the document was a guarantee, that [the Bank] never telephoned her nor put any pressure on her to sign the document, that she full well understood the nature and effect of the guarantee and did not need any explanation as to its effect, that she did not suggest in her evidence that she was pressured by Mr Falinski to sign the document, that she understood the guarantee was for the indebtedness of Osborne, which then stood at $5 million, and that if she signed the guarantee, as she did, and returned it to [the Bank] the Belrose property would be put in jeopardy." In the present case, I have made findings which are in substance, and with necessary adjustments, the same. The Bank had sent Mrs Falinski a letter in identical terms to the letters dated 4 January 1988, 7 June 1989 and 30 January 1990 discussed above, which said: "Prior to signing the document/s you should satisfy yourself that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position". Sheller JA said: "... in the circumstances of the case, [the Bank] was not in conscience required to do more". Their Honours also held that the consent gave rise to an estoppel which precluded Mrs Falinski from disputing her liability under the guarantee for the amount recorded in the consent. She was estopped from denying the relationship between herself and the Bank based upon the continuance of the guarantee, and could not deny her liability in accordance with its terms. In addition to such acknowledgments in Judith's case, there are the admissions she made at the meetings at the Bank on 22 February 1991 and 14 October 1992 and her subsequent conduct consistent with a belief that she was bound by the security documents she had executed. Judith submits that her case is distinguishable from Falinski and that she is not estopped from denying the continuance of the guarantee. I do not agree.

Breach of contract Judith's further amended statement of claim adopts Michael's pleading of breach of contract. However, Michael did not press this claim in submissions. Judith's submission is misconceived. The agreement pleaded was one between Michael and Williams in late 1989. Williams retired from the Bank prior to the amalgamation of the Crescent Branch and Spencer Streets Branch in about mid-1989. Michael conceded in cross examination that the allegation in par 82 of his pleading, which Judith adopted, could not be correct if Williams left the Bank by July 1989. I agree.

FURTHER ISSUES The Bank's defence raises the following additional issues.

Time bar The Bank submits that Judith's claim for loss of opportunity, by virtue of the Bank's misleading and deceptive conduct, is time-barred. Since her claim fails for the other reasons given, I need not deal with this defence.

Estoppel The Bank pleads that Judith is estopped from denying that she is not liable to the Bank for the amounts recorded in the acknowledgments signed by her. Throughout the period in which the Bank granted further financial accommodation to Michael, it obtained acknowledgments signed by Judith. At no time during that period did Judith do anything to indicate to the Bank that she did not consider herself bound by the mortgages. In any event, no ground has been established for relieving her from the effect of them. Her consent to the properties being security for the indebtedness of Michael (and of Michael and herself jointly) up to the amounts specified in the respective acknowledgments was a fact the Bank submits that it took into account at the time of making further advances. I find that it did so. In the case of the last one signed by Judith (8 February 1990), for example, it was only after the acknowledgment signed by Judith was received by the Bank that it implemented the approval which it had conveyed by its letter dated 15 January 1990. I infer that if Judith had, at any time, refused to sign an acknowledgment, as she ultimately did in August 1990, the Bank would have ceased making advances to Michael or otherwise indulging him. In Falinski the Court of Appeal upheld the proposition argued by the Bank that a letter of acknowledgment gave rise to an estoppel precluding Mrs Falinski from disputing her liability for the amount recorded in it. In my opinion, Judith signed and returned the acknowledgments, understanding their basic nature and effect and intending that the Bank would deal with Michael in reliance on them, which I find it did. I uphold the estoppel defence.

Admission The Bank pleads that at the meeting at the Bank on 14 October 1992, Judith admitted that she consented to the level of facilities provided to Michael, and that she had concluded that the opinions expressed by her solicitor to the effect that she could challenge her liability had no foundation. While I do not accept that this admission affords an independent defence, I accept it as evidence against Judith on the question of the extent of her understanding at the earlier times when she signed documents.

No offer to do equity The Bank submits that at no time has Judith offered to do equity, which is a requirement for equitable relief of the type that she seeks. Judith seeks to have all of the mortgages set aside. Yet to her knowledge it was in consideration of them that the Bank advanced funds to enable her and Michael to acquire property and to discharge earlier mortgages given by them. I agree that Judith has not offered to do equity, but since I think, for the reasons given, that her claim fails in its entirety, I need say no more on this issue.

Relief Judith submits that in the alternative to a setting aside of the mortgages, there should be a setting aside of her personal liability for the practice indebtedness. I do not agree. I think that Judith knew that she was secondarily liable for the indebtedness of Michael trading as "Radin & Associates" as well as for the joint borrowings more directly connected with the couple's investment in real estate. However, as noted earlier, the Bank does not seek to recover from Judith the amount of the litigation loans guaranteed by Michael pursuant to the new litigation loan facility approved on 15 January 1990 or seek to enforce the mortgages in that respect. The orders to be made should reflect this exclusion in the money judgment which the Bank is to have against Judith.

CONCLUSION IN JUDITH'S PROCEEDING Judith's application is dismissed with costs. It was not submitted that if I should reach this conclusion the Bank is not entitled to relief on its cross claim. There will be a direction that the Bank bring in short minutes of the orders to be made in NG 985 of 1995.

GENERAL CONCLUSION IN RELATION TO ALL THREE PROCEEDINGS All three applications are dismissed with costs. There will be a direction that the Bank bring in short minutes of orders consistent with the foregoing Reasons for Judgment, apt to dispose of all three proceedings. I certify that this and the preceding two hundred and twenty five (225) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren

Associate: Dated: 23 October 1998 Counsel for the Applicants in NG 984 of 1995 and NG 437 of 1996: Mr G J McVay

Solicitor for the Applicant in NG 984 of 1995: Spencer Whitby & Co

Solicitor for the Applicant in NG 437 of 1996: Milicevic Solicitors

Counsel for the Applicant in NG 985 of 1995: Mr C J Leggatt and Mr D J Thorley (on the hearing of the evidence), Mr M B Duncan (on submissions).

Solicitor for the Applicant in NG 985 of 1995: Richard A Licardy & Co

Counsel for the Respondent: Mr J R Sackar QC with Mr J E Marshall and Mr R S Hollo

Solicitor for the Respondent: Abbott Tout

Dates of hearing: 17-21, 24-27 March; 2-4, 7-9, 14-18 April; 18-20, 22, 25-29 August; 1-5, 29, 30 September; 1,2 October 1997; 16-20 February; 1 April 1998.

Last written submission received: 28 August 1998

Date of Judgment: 23October 1998