DEWAR -v- OLLIER [2018] WASC 212 | Case summary

DEWAR -v- OLLIER [2018] WASC 212 | Case summary | Zoe

[43]

Perhaps understandably given the elapse of time and what was at stake for each of them, in my assessment Ms Dewar, Mr Ollier and Mr Walker were all prone to reconstruct the relevant events in a way that accorded with their perception of their self-interest in this litigation. These considerations, together with the matters to which I refer when considering the evidence of each of them separately, mean that I have reservations about the reliability of the evidence of each of Ms Dewar, Mr Ollier and Mr Walker. For that reason, in making factual findings I have had regard wherever possible to the objective factual circumstances, the inherent probabilities as to what occurred and the inferences that may be drawn from contemporaneous documents.
I find that when Ms Dewar gave oral evidence, both in evidence-in-chief and in cross-examination, she did her best to give truthful and accurate evidence. My impression of Ms Dewar was that she was an intelligent person, albeit that in the context of the events with which this case is concerned she made decisions which were unwise.
In her witness statement, which formed the substance of Ms Dewar's evidence-in-chief, Ms Dewar included a number of statements that she accepted were incorrect. I am not persuaded that Ms Dewar set out to mislead the court. As indicated, my impression is that she had supplemented her poor recollection of events with a reconstruction which exaggerated what she perceived as her vulnerability to exploitation. In my assessment, Ms Dewar's tendency to exaggerate reflected her conviction that she had been wronged by Mr Ollier.
My reservations about the reliability of Ms Dewar's evidence are such that I am not prepared to rely on it unless it is corroborated by other reliable evidence. My reasons are as follows. First, as I have said, Ms Dewar admitted that her account of some of the relevant events given in her witness statement was inaccurate. Secondly, much of her evidence is reconstruction to which, in some respects, Mr Pavy contributed. Thirdly, her recollection of events is not supported by the contemporaneous documents. Fourthly, again as I have already said, her recollection of events has been coloured by her conviction that she was wronged by Mr Ollier. A striking example of how Ms Dewar has looked at events through the prism of her conviction that she was wronged was her evidence, contained in her witness statement, to the effect that most of the $68,338 that was deposited into her bank account following receipt of the loan from GEL was used to meet mortgage repayments. In fact, the bank statements show that only three mortgage repayments amounting to a total of approximately $6,000 were made out of the $68,338. Ms Dewar accepted that her evidence about the use of the $68,338 was 'incorrect and untrue'.[27] Fifthly, Ms Dewar gave inconsistent accounts of the extent to which injuries prevented her from working, thus contributing to her inability to meet her mortgage repayments.
Mr Pavy and Ms Dewar have known each other as friends for 28 years. They had lived in the same house. My impression was that Mr Pavy was concerned to assist Ms Dewar and this influenced his evidence. Additionally, and understandably given the passage of time, his recollection of events was poor. His evidence-in-chief consisted of a short statutory declaration in which he stated, in effect, that Ms Dewar met Mr Ollier for the first time in September 2007. The account of events given by Mr Pavy in the statutory declaration implied that shortly after the first meeting Ms Dewar was required to sign mortgage documents without the benefit of legal advice.[28] Mr Pavy did not mention the meeting that he and Ms Dewar said took place on 8 January 2008 and about which he gave oral evidence in his statutory declaration. This was the meeting at which they said Ms Dewar signed the mortgage document and at which Mr Ollier had told them there was no time for Ms Dewar to obtain legal advice. When Mr Pavy gave oral evidence he had difficulty recalling what had occurred at the meetings at which he was present.[29] For those reasons I find Mr Pavy's evidence to be unreliable.
Mr Gavin Libotte, Ms Dewar's son, gave evidence about a conversation he says he overheard between Ms Dewar and Mr Ollier. He was about 19 years of age in 2007. Mr Libotte's evidence is difficult to reconcile with the chronology established by other evidence. Mr Libotte was giving evidence of events that had taken place over 10 years ago and he was only asked to make a statement a few months before the hearing.[30] My impression is that Mr Libotte's evidence was a reconstruction based on fragmented recollection of different conversations or events. I do not find Mr Libotte's evidence reliable.
Ms Dewar's other three children, Ms Natalie Dewar, Mr Michael Dewar and Ms Emma Dewar, gave evidence on Ms Dewar's behalf in relation to the difficulties she had experienced as a result of GEL taking possession of and selling 17 Mint Circuit. I have no reason to doubt they gave their evidence truthfully.
Mr Ollier responded to questions put to him in a calm and measured way. My impression is that he set out to assist Ms Dewar by obtaining a loan for her and that he did his best to achieve that. I do not accept that he took advantage of Ms Dewar or that his sole interest lay in obtaining commissions. As stated earlier, my assessment is that Mr Ollier had a hazy recollection of some of his meetings and communications with Ms Dewar but that, in the main, his evidence was a reconstruction based on a combination of some recollection, contemporaneous notes and his usual practice. I consider that Mr Ollier's evidence about the order of events and his evidence about the topics covered in his discussions with Ms Dewar was generally reliable as it was based on contemporaneous notes made by him and accorded with the contemporaneous documents. As explained later Mr Ollier was, however, unable to provide a satisfactory explanation for some of the statements made by him in a document entitled Mortgage Loan Summary which accompanied the loan application to Wholesale Funds. I am not prepared to rely on his evidence on the subject of those statements.
Mr Walker answered questions put to him in cross-examination in a straight forward manner. His evidence concerning his contact with Ms Dewar was limited and I accept his account in preference to that of Ms Dewar, largely because his account was consistent with the documents. Mr Walker gave more extensive evidence about his working relationship with Mr Ollier. I regard this evidence with some caution because the impression I gained, especially from the statements that constituted his evidence-in-chief, was that Mr Walker was anxious to establish the legal conclusion that Mr Ollier was not Andtrac's agent rather than to confine himself to a statement of the facts as he could recall them.
A number of other witnesses were called on behalf of Mr Ollier. These were Mr Brian McClure, a collections officer of Keystart; Mr Robert Layh, the credit consultant who considered Ms Dewar's mortgage loan application on behalf of Wholesale Funds; Mr James Murphy, who gave evidence of the policies and procedures in place for the approval of loans by GE Money in the period between November 2007 and February 2008; and Dr Pasquale Franzese, who gave opinion evidence in relation to the suitability of the loan made to Ms Dewar for her purposes and related issues. The credit of these witnesses and the reliability of their evidence was not in issue. Witness statements from two other witnesses, Mr Andrew Pepper and Ms Felicity Cornforth, were tendered by consent. Their evidence dealt with the availability of records following the acquisition of the GE Money business by the Pepper Group Ltd and was also not in dispute.

[44]

In 2007 Ms Dewar was a single woman with four children aged between 11 and 19. She was 47 years old.
Ms Dewar completed her secondary education in year 10. She went to work as a 'dictaphone' typist for RAC Insurance. In addition to typing, Ms Dewar said that her duties included attending a service counter and assisting customers with completing claim forms.
After working for RAC Insurance for a number of years, Ms Dewar studied graphic design at the Commission of Technical and Further Education (TAFE) and thereafter worked as a graphic designer.
In 1991 Ms Dewar studied on a part-time basis for a Certificate of Business Studies. This was a TAFE course which involved studying Accounting, Economics and other business related subjects. In 1992 she undertook further part time studies at TAFE for the purposes of gaining an Associate Diploma in Business Office and Secretarial Studies. As part of this course she again studied accounting. It was not clear from the evidence whether Ms Dewar completed the course successfully but, in any event, her attendance on these courses did not lead to any employment in accounting or any similar occupation.
When her children were young Ms Dewar had a number of casual jobs, but the details are of no present relevance.
At various times Ms Dewar gave consideration to starting her own business. In October 2002 Ms Dewar obtained an Australian Business Registration Number (ABN) for a business called Colt 45 Design that she hoped to establish but nothing came of this. In March 2003 a friend encouraged her to start a different business under the name KISS 23 and, as a consequence, the ABN registration was changed to KISS 23.
At some stage Ms Dewar undertook TAFE courses in land law and criminal law. Again it was not clear from the evidence exactly when Ms Dewar undertook these courses but it was before she applied for a loan in November 2007.[31]
As a result of tiling work completed by Ms Dewar at her own home, she acquired some skill as a tiler. Building on those skills, Ms Dewar attended further TAFE courses to obtain the skills and qualifications required to trade as a tiler.
In late 2005 or early 2006 Ms Dewar completed some tiling on a property in Walcott Street, Coolbinia. Her brother also lived at an address in Walcott Street. Not long after completing the tiling work in the Walcott Street property, Ms Dewar decided that she would start a tiling business. In 2006 she changed her ABN to the name ITILE, the name was subsequently changed to ITILE4U.
A profit and loss account for the tiling business for the financial year ending 30 June 2007 recorded that Ms Dewar derived a net profit of $5,728 from revenue of $42,393.
Ms Dewar's income was supplemented by a family payment allowance paid by Centrelink and some child support from her former husband.
In about 2010 Ms Dewar undertook a full-time 'Diploma in Legal Studies' at TAFE. She studied criminal law, contract law, tort law and other legal subjects. In 2010 or 2011 Ms Dewar worked as a telephone operator at Legal Aid in Perth.
As part of her unconscionable conduct case, Ms Dewar pleaded that she suffered from dyslexia. In her witness statement she said that she told Mr Ollier that she had dyslexia at their first meeting. In crossexamination Ms Dewar said that she thought whether she told Mr Ollier that she had dyslexia was quite trivial and she did not think that dyslexia would affect her.[32] Ms Dewar said that she had not been diagnosed with dyslexia. I infer Ms Dewar referred to herself as being dyslexic because, as she put it, '[her] maths isn't good'.[33] Although in crossexamination Ms Dewar was dismissive of the significance of the suggestion that she suffered from dyslexia, the fact that it featured in her pleaded case reflected her tendency to exaggerate matters to support her claims.

[46]

Ms Dewar pleads that Mr Ollier acted as agent for Mr Walker, Andtrac and Atnam.[35]
Between October 2004 and October 2006 Mr Ollier was employed by the home mortgage lender known as RAMS Home Loans (RAMS) as a mortgage broker. Whilst so employed, Mr Ollier completed various training courses in mortgage broking. He became an accredited mortgage consultant with the Mortgage and Finance Association of Australia in March 2005. In early 2007 Mr Ollier took steps to establish his own mortgage broking business.
On 22 October 2007 Mr Ollier was granted a licence to conduct business as a finance broker under the Finance Brokers Control Act 1975 (WA).
Mr Walker has been a mortgage broker for over 15 years. He is a director of Atnam Pty Ltd, the second defendant, and Andtrac Pty Ltd, the fourth defendant.
Mr Walker carried on his mortgage broking business through Andtrac. Andtrac subleased an office in Osborne Park.
Andtrac submitted loan applications on behalf of its clients to an 'aggregator', Xinc Financial Services Pty Ltd. To facilitate this, on 1 May 2006 Andtrac had entered into a SubIntroducer Agreement with Willard King Organisation (1978) Pty Ltd under which Andtrac was the subintroducer and Willard King the introducer. In support of her argument that Mr Ollier was Andtrac's agent, Ms Dewar drew attention to the fact that the SubIntroducer Agreement contained a term to the effect that any person who provided services 'for or in relation to' the Sub-Introducer Agreement was defined for the purpose of the agreement as a 'Sub-Introducer's Agent' under cl 10.1.[36] Willard King was replaced as the introducer by a company with the name ACN 117688356 Pty Ltd. This was achieved by a deed of novation.
Mr Walker's evidence was to the effect that he (by which I understood him to mean Andtrac) and Mr Ollier each had individual subintroducer agreements with ACN 117688356 Pty Ltd. He described Mr Ollier and Andtrac as separate and independent sub-introducers.[37]
Mr Walker and Mr Ollier were 'Self Generating Leads Brokers'. This meant that they solicited potential clients for their mortgage broking businesses as opposed to clients being referred to them by an aggregator. On occasions, Mr Walker and Mr Ollier purchased 'leads' from advertising agencies that had been generated by enquiries from members of the public.
Mr Ollier conducted his mortgage broking business from Andtrac's office. In his witness statement at pars 29 and 30 he described the arrangement with Mr Walker and Andtrac in the following terms:[38]

[51]

Mr Walker corroborated Mr Ollier's evidence about the payment of commissions. His evidence in this respect was to the effect that commissions from any loan Mr Ollier wrote flowed from the Aggregator to the Introducer to Andtrac's bank account. Andtrac deducted a percentage out of the trail commissions and paid the remainder into Mr Ollier's bank account.[39]
The business card to which Mr Ollier referred had the logo Ⓧinc and Mr Ollier's name on it and described him as a 'Senior Finance Broker' and set out his contact details. Andtrac's name appeared under Mr Ollier's contact details with the words 'Andtrac Pty Ltd trading as Xinc Perth, an independently owned and operated business' and the address of the Osborne Park office was given.[40] It is not disputed that Mr Ollier gave this business card to Ms Dewar at their first meeting.
Mr Ollier and Mr Walker had different recollections about whether the business arrangement between them had been reduced to writing. Mr Ollier recalled that an agreement between them had been prepared and signed by them both. He was unable to find a copy of the agreement. Mr Walker said Mr Ollier was mistaken in his recollection that there was a written agreement and said that Mr Ollier was referring to a subintroducer agreement that he recalls that Mr Ollier had signed with ACN 117688356 Pty Ltd as opposed to an agreement between them.
Mr Ollier maintained his own professional indemnity insurance.[41] When crossexamined by Andtrac's counsel he said, in effect, that Ms Dewar was his client and he was operating as an independent mortgage broker.[42]
Mr Walker's evidence was that he had not granted Mr Ollier any authority to act as agent for him personally or for Andtrac. In crossexamination Andtrac's counsel put to Mr Ollier that neither Mr Walker nor Andtrac had granted Mr Ollier authority to provide financial services on their behalf. Mr Ollier's response was that he did not know the answer to that question.[43]
Mr Ollier's evidence about his usual practice in relation to the preparation of finance broking agreements with clients cast his relationship with Mr Walker and Andtrac in a different light.
Mr Ollier said that at all relevant times he used a template Finance Broking Agreement and that the first six fields of Part 1 of the document were pre-completed. I describe the Finance Broking Agreement and its component parts in more detail later in these reasons. The first six fields of Part 1 recorded the identity of the broker as Andtrac, and its address and licence number was given. Mr Walker was identified as the principal.
It is common ground that Mr Walker was a more experienced finance broker than Mr Ollier and that he assisted Mr Ollier and acted as a mentor to him. It is also common ground that the application made on Ms Dewar's behalf that led to the loan being made to her was made by Mr Walker using Andtrac's accreditation as an Xinc sub-introducer.
I find that in November 2007 Mr Ollier was authorised to enter into finance broking agreements with members of the public on behalf of Andtrac. I make this finding for the following reasons taken in combination.

[94]

Ms Dewar also alleges that Mr Ollier told her that: she was entitled to an 'equity release' on the new loan; she would be able to be provided with $10,000 in order to undertake renovations on 17 Mint Circuit; and Keystart may not be able to accept the loan application because she needed an investment loan as she was not living at 17 Mint Circuit and that Citibank would be approached if Keystart rejected her application.
In cross-examination Ms Dewar accepted that although she had said in her witness statement that Mr Ollier said that he would help her refinance through GE Money, he did not, in fact, mention GE Money to her at that meeting.[52]
Whilst I accept Ms Dewar had a recollection of her first meeting with Mr Ollier, I do not accept her recollection of what was said at the meeting on 2 April 2007 for a number of reasons. The first reason is the elapse of time between the meeting and when she came to recall the meeting for the purposes of this action. Given that elapse of time, the recollection professed by Ms Dewar would be exceptional. Secondly, Ms Dewar's ability to recollect what was said at the meeting is inconsistent with her inability to recall that the meeting had been arranged by telephone and did not come about because Mr Ollier had been 'door-knocking' in the area. Thirdly, her recollection has been influenced by discussions with Mr Pavy, who suggested that Mr Ollier was door-knocking. Fourthly, when she gave her oral evidence she admitted that the evidence contained in her witness statement was incorrect in the respects to which I have referred. Fifthly, as noted earlier, Ms Dewar's account of her interactions with Mr Ollier was influenced by her perception of the importance of factors she considers will assist her case. This provides an explanation as to why Ms Dewar stated in her witness statement that she had her tax return for the 2007 year available but Mr Ollier chose not to take it when it should have been obvious to Ms Dewar when she prepared her statement that she could not have had her 2007 tax return available to give to Mr Ollier in April 2007.

[105]

The most reliable guidance of what was discussed at the 2 April 2007 meeting is the note made by Mr Ollier in his CRM notes read in the context of subsequent notes made by him. I find that Ms Dewar told Mr Ollier that she held a 70% interest in a house and that Keystart owned the remaining interest which she would like to acquire. It is likely that in their discussions Ms Dewar and Mr Ollier referred to Keystart as the entity owning the 30% interest rather than to the Commission. Ms Dewar told Mr Ollier that she was a self-employed tiler. Mr Ollier told Ms Dewar to obtain a quote from Keystart to establish a value for the property and thus Keystart's 30% interest. I infer there was a discussion about obtaining a valuation of the property through Keystart because in a note made on 27 April 2007 Mr Ollier recorded, 'she wants to go ahead and is ordering val with keystart for te 30% she doesn't own ...'.[57] Mr Ollier told Ms Dewar that he could arrange a 'no doc' loan with Macquarie Bank. Some discussion took place between Mr Ollier and Ms Dewar to the effect that Ms Dewar could borrow more than was required to buy out Keystart's interest and Ms Dewar said to Mr Ollier that she would like to borrow an extra $15,000. Further, as Mr Ollier accepts, he said to Ms Dewar that he would find a suitable loan for her.
There was no discussion of Ms Dewar's income or expenses or her assets and liabilities. Mr Ollier had formed the view that a 'no docs' application was the way to proceed and no further information was required from Ms Dewar at that stage.
Ms Dewar did not ask Mr Ollier to approach Keystart. I am satisfied that had she done so he would have explained that it was not possible for him to deal with Keystart. Moreover, as I record later, it was Ms Dewar who contacted Keystart, from which I infer it was unlikely that she had asked Mr Ollier to do so.
It is possible that there was some discussion about the amount of the repayments Ms Dewar might be required to make in the event that an application to refinance was successful. The objective circumstances suggest that it is a topic likely to have been discussed, but I cannot be satisfied that a detailed discussion of the nature described by Ms Dewar took place.
There was no discussion about Ms Dewar investing in a share portfolio or using funds obtained by way of 'equity release' to buy another investment property.

[106]

In opening her case Ms Dewar said that after meeting Mr Ollier in April 2007 she made some enquiries of her own and did not hear from Mr Ollier for several months, until the end of September or October 2007.[58] In her witness statement Ms Dewar said 'I hadn't heard from the broker until 02/11/2007'.[59]
Based on entries in his CRM notes, Mr Ollier gave evidence of intermittent contact with Ms Dewar between 2 April 2007 and 13 August 2007. I am satisfied that the CRM notes summarise both Mr Ollier's attempts to make contact with Ms Dewar and the communications that took place between them in that period and, on that basis, make the following findings.
On 20 April 2007, Mr Ollier had a telephone conversation with Ms Dewar and during that conversation she said words to the effect that she was 'too busy' and that she had not contacted Keystart but would do so 'soon'.
On 27 April 2007, Mr Ollier telephoned Ms Dewar again and during the conversation she told him she wanted to 'go ahead' with arranging the refinancing which had been discussed and she was ordering a valuation with Keystart for the 30% of 17 Mint Circuit that she did not own. She told Mr Ollier that she owed $70,000 and she wanted to buy out the 30% of 17 Mint Circuit she did not own. She told Mr Ollier 17 Mint Circuit was worth $400,000. She also told him that she would like to borrow an extra $10,000.
In response, Mr Ollier told Ms Dewar that the loan to value ratio (LVR) would be around 50%, and he could arrange a 'no doc' loan.
Mr Ollier tried to contact Ms Dewar again by telephone on 16, 22, 25 and 29 May and on 1 June, 2007, and on each of those occasions he was unable to speak to her. On the last occasion he 'left a message with someone' for Ms Dewar to contact him.
On 8 June 2007, he called Ms Dewar again and spoke to her and during the conversation she said to him words to the effect that Keystart was asking for a profit and loss statement. Mr Ollier made the following note in the CRM notes: 'we must [get] a no-doc. Place was valued at 300k they own 30% or 90k'.[60]
On 14 and 19 June 2007, Mr Ollier tried to contact Ms Dewar by telephone. He was unable to speak to her and left messages for her on both occasions.
On or about 26 June 2007, Mr Ollier arranged a meeting with Ms Dewar to take place on 28 June 2007.
On 28 June 2007, Mr Ollier spoke to Ms Dewar by telephone and she said she was going to call him the following day to reschedule the meeting. Mr Ollier spoke to Ms Dewar by telephone a number of times between late June 2007 and 7 August 2007. On 7 August 2007 Mr Ollier spoke to Ms Dewar by telephone and they arranged to meet.

[131]

• Before you accept your loan offer, make sure you read the credit contract/loan agreement carefully to find full details of the loan. Warning: You should check the loan agreement/credit contract to ensure that the terms of the loan do not vary from what you require. If they do, inform us immediately so that we can assist you.

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[137]

On the basis of those entries, I find Mr Ollier submitted Ms Dewar's application to RAMS and on about 7 November 2007 he received notice that the application had been declined. Mr Ollier established that the reason why the application had been declined was because a rates notice for 17 Mint Circuit that had accompanied the application disclosed that Ms Dewar was in receipt of a 'single parenting pension'. Mr Ollier was told that if he obtained a copy of the pension documents he could renew the application. Mr Ollier obtained the pension documents and the loan application was resubmitted. The application was declined again on 19 November 2007.
On 19 November 2007 Mr Ollier spoke to Ms Dewar and told her that the application to RAMS had been unsuccessful but that an application could be made to another lender, whom he described as Wholesale Funds, if Ms Dewar could obtain a copy of the certificate of title for 17 Mint Circuit.
On 19 November 2007 Ms Dewar faxed a copy of the certificate of title to Mr Ollier. On 20 November 2007 Ms Dewar faxed him a letter she had received from the Department of Housing and Works dated 7 November 2007. The letter referred to an attached transfer of land document and an 'offer and acceptance' that provided for the sale and transfer of the Commission's interest in 17 Mint Circuit to Ms Dewar. The author of the letter requested that Ms Dewar sign the transfer and the offer and acceptance. The letter recorded that the valuation that had been undertaken for the purpose of the transaction was valid for three months from 12 September 2007. The transfer and the offer and acceptance were not in evidence, but I infer from the fact that Ms Dewar did acquire the Commission's interest in 17 Mint Circuit that Ms Dewar signed the offer and acceptance and the transfer. The letter of 7 November 2007 also enclosed a GST invoice addressed to Ms Dewar for the settlement fees and expenses incurred by reason of the refinancing and an interim settlement statement.
In subsequent telephone conversations Mr Ollier told Ms Dewar that the account keeping fee for a loan arranged through Wholesale Funds would be $300 and not $98 and he arranged for Ms Dewar to meet Mr Walker on 20 November 2007 for him to interview Ms Dewar and submit the loan application to Wholesale Funds. Mr Ollier says that this arrangement was made because he was not available to meet Ms Dewar himself.

[139]

The first issues raised by Ms Dewar are: was the loan application form completed before Ms Dewar signed it, and did Ms Dewar meet Mr Ollier or Mr Walker on 20 November 2007?
Ms Dewar denies that Mr Ollier arranged for her to meet Mr Walker and denies that she attended a meeting with Mr Walker. Her evidence is that she met Mr Ollier at her home and she signed a printed Mortgage Loan Application form. She said that on 20 November 2007 she did not have a car because the car that she had been driving had broken down and had to be towed away. She gave this as the reason why she could not have travelled to Andtrac's office in Osborne Park.[73] She accepted, however, that Mr Pavy could have taken her to Andtrac's office.[74]
It is common ground that a Mortgage Loan Application form was completed. The application form was a pre-printed 11page form. It comprised a number of different sections which had to be completed and signed by Ms Dewar. These included: a Personal Financial Statement, a Loan Purpose Checklist, and a Declaration as to Loan Purpose. To complete the application paperwork Ms Dewar was required to sign a 'Fastdoc Declaration of Financial Position' and the broker was required to sign a 'Record of Interview'.
Ms Dewar alleges that she signed the Mortgage Loan Application but when she did so parts of it were not completed and Mr Ollier completed them later. Consequently, she says she did not know what was contained in them. Mr Ollier says that he completed the loan application after he had spoken to Ms Dewar on 19 November 2007 and that he used information she had provided to him for the purposes of the RAMS application and additional information she provided to him in the telephone conversation on 19 November.[75]
Mr Walker's evidence was to the effect that he met Ms Dewar at his Osborne Park office on 20 November 2007. He said that he had offered to submit the loan application on Mr Ollier's behalf because Mr Ollier was away from the office and there was some urgency as the customer wanted the loan before Christmas. Mr Walker's evidence was that he was provided with loan application forms that had already been completed and filled in.[76] Mr Walker's explanation for some of the documents being dated 22 November 2007 was that he was dealing with other applications at the time and the documents relating to Ms Dewar's application may have remained on his desk for a day or so. Mr Walker's evidence, which I accept, was that he had no further involvement with the Wholesale Funds loan application or with Ms Dewar after the meeting on 20 November 2007.
I accept Mr Walker's evidence that he met with Ms Dewar on 20 November 2007 and that she signed the Wholesale Funds mortgage loan application documents in his presence. Mr Walker's evidence to the effect that he understood that there was some urgency with the application, because the loan was required before Christmas, is consistent with the fact that the valuation on which the price at which Ms Dewar was acquiring the Commission's 30% interest was only valid until 12 December 2007.
I think that Ms Dewar is mistaken in her recollection about the meeting on 20 November 2007. Further, I find that when Ms Dewar signed the Mortgage Loan Application Mr Ollier had inserted the relevant information in each section of the application. My reasons for making these findings are: my reservations about Ms Dewar's evidence to which I have referred earlier; Mr Ollier's 19 November 2007 note that he had booked a meeting between Ms Dewar and Mr Walker for the following day corroborates the account given by him and Mr Walker; and Mr Walker's evidence that the application form was completed when he saw it was consistent with Mr Ollier's evidence.

[143]

The next issues raised by Ms Dewar concern the Fastdoc Declaration of Financial Position. Ms Dewar contends she did not understand the document. She raises a separate issue about who amended the ABN details where they appeared in that document.
The 'Fastdoc Declaration of Financial Position' section of the application specified the loan details as follows: 'Proposed Loan Amount $292,000; Loan Term 30 years; Repayment $2,306 per month'.[82] Ms Dewar accepted that this part of the document was completed by her in her own handwriting but in her witness statement stated 'I was told to place specific amounts for the loan and repayments but did not understand the figures, neither was it explained and I could not tell the repayments would be above $326 per week'.[83] I do not accept that Ms Dewar did not understand the figures she inserted in this section of the application. There was nothing complicated about these figures. For the reasons which I explain shortly Ms Dewar knew that the repayments she would have to make would be more than $326 per week. Although the Proposed Loan Amount was stated to be $292,000, the amount was reduced to $245,000 because a loan of $292,000 exceeded the permissible loan to valuation ratio.
In the 'Fastdoc Declaration of Financial Position' under a heading of 'Borrower Details', Ms Dewar was recorded as the borrower, the name ITILE was inserted in a space provided for 'Company, Trust Name (if a Trust or Trustee Company, specify name of trust)' and the number 34769872486 was inserted in a space provided for 'ABN'. It is evident that a correction has been made to the third digit in the number inserted in the 'ABN' space. There are initials placed opposite the name ITILE and the ABN. Ms Dewar said that she did not insert the name ITILE or the ABN and that the initials are not hers. She pointed out that her business name was iTile4u. Both Mr Ollier and Mr Walker denied that the initials inserted in these places were their initials. It was a special condition of the loan that Ms Dewar initial the changes to the Fastdoc70 Declaration of Financial Position.[84] Although there is no clear evidence, I think it is likely that the changes I have described were initialled by Ms Dewar but ultimately the issue is not a material one.
The Fastdoc Declaration of Financial Position contains the following declaratory statements under which Ms Dewar's signature appears: [85]
1. Declaration of Financial Position

[150]

The Mortgage Loan Summary also included a number of statements under the heading 'BACKGROUND & COMMENTS'. These statements formed an important part of Ms Dewar's case. She said that the statements misrepresented her circumstances and her objectives. The statements were as follows:[88]
- Corrinna is a qualified Tyler with many years of experience (ABN registered in 2002) working as a sole trader.
- Corrinna did originally purchase her investment property as a shared ownership set up with Key start where she owns 70% and key start owns 30% of the property.
- She has the opportunity to purchase the property at her will and Key start have recently organised a valuation and came out with the pay out figure of $177 350 inclusive of all the discharge cost (see the statements provided).
- Corinna wishes to use this opportunity to borrow additional funds as an equity release for investment purpose (purchase of shares and or purchase of a new investment property).
- Since the citizenship certificate provided for 100 point check purpose was in Corinna's maiden name I did provide a copy of her marriage certificate although she has since separated and is single.
- I did include a copy of the title which shoes that the registered proprieter is the state housing commission and did include their letter confirming the 70% ownership for Corrinna and the pay out figure required for the purchase of the remaining 30%.
- Corrinna did submit an application for the refinance with RAMS but due to her concern with their unstable state (bad publicity in the media), the application was withdrawn and she wishes to go ahead with Wholesale Funds Australia.
- Considering the fact that Corinna has been self-employed for many years, the very high demand for qualified construction personal in WA, the fact that she has a clear credit history and she has demonstrated perfect conduct on her existing loan (see the statement provided), I am convinced that she will remain an excellent long term customer for Wholesale funds Australia.
Mr Ollier accepted that the statement in the Mortgage Loan Summary as to the withdrawal of the RAMS application was not correct.[89] Mr Ollier agreed with the proposition that it was important to provide an explanation to a lender as to why an earlier application for finance had not proceeded. His evidence was to the effect that a failure to disclose an earlier application for finance that had not proceeded would delay the process because a lender would conduct a credit check and see that there had been a prior credit check enquiry by another lender which would then generate a 'request for clarification'. I asked Mr Ollier whether it was possible that he included the statement about Ms Dewar's concerns about the unstable state of RAMS to provide an explanation to Wholesale Funds for why the application had not proceeded. Mr Ollier said he could not recall or explain how the statement came to be included in the Mortgage Loan Summary.[90] In answer to a question from Ms Dewar about whether he should have included in the Mortgage Loan Summary a statement to the effect that the RAMS application had been declined, Mr Ollier said that he did not think that such a statement would have 'impacted the application' but he accepted that leaving such a statement out would have helped the application.[91]
In his witness statement Mr Ollier did not say anything to the effect that Ms Dewar had told him that she was going to use the equity release portion of the loan to purchase an investment property or to invest in a share portfolio. In cross-examination Mr Ollier said that Ms Dewar had said that she wanted an investment property and that she was interested in a share portfolio at the 2 April 2007 meeting.[92] I am not satisfied that Ms Dewar ever said to Mr Ollier that she wished to use the 'equity release' funds either to purchase another investment property or to invest in shares. Not only are these possibilities not mentioned in Mr Ollier's statement but they are not mentioned in his CRM notes. I accept it is possible that Mr Ollier may have based the statement he made about the purchase of an investment property on what was contained in the Eleven Marketing lead but, as I have said, I am not satisfied that Ms Dewar ever said anything to that effect to him.

[152]

An issue was whether Ms Dewar knew that the repayments on the proposed loan which was the subject of the Wholesale Funds application were likely to be $500 per week.
In her witness statement Ms Dewar's evidence was to the effect that it was not explained to her and she could not tell that the repayments would be more than $326 per week.[93] In cross-examination, Ms Dewar initially said that Mr Ollier had come over to her house one evening before she had signed any loan application and had told her repayments would go up to $500 per week. When reminded of that evidence Ms Dewar said 'I guess that's right'.[94]
In a later passage of evidence, Ms Dewar said that she did not know that the repayments would be $500 per week when she signed the RAMS application and that she learned that would be the case about a week later.[95] My impression is that Ms Dewar had no recollection of when she was told that her likely mortgage repayments would be $500 per week and her evidence on the issue was little more than guess work. I am satisfied, however, that by the time Ms Dewar signed the Wholesale Funds loan application she knew that if the application was successful the amount she would be required to pay on a weekly basis would be about $500.
I am satisfied that Ms Dewar thought that she could afford payments of that amount. In the course of her evidence Ms Dewar confirmed the impression that I had formed, that in November 2007 she thought her business was going well and was confident about where it was going.[96] She said that she got a very good tiling job at the end of 2007 from which she received $36,000 for six weeks work from which she made what she described as a 'fair price'.[97] She said that she did have concerns but was 'reassured' by Mr Ollier 'that because I was doing really well, there's nothing to worry about, and I agreed with him because I wanted to see myself becoming at least independent. I've been on Centrelink for years; since 1995 so I wanted to be successful. I wanted to do this on my own. So I did trust his - his advice.'[98] Although Ms Dewar gave evidence to the effect that she trusted Mr Ollier's advice that there was nothing to worry about, I am not persuaded that he gave advice of that nature.
Ms Dewar's confidence in her financial position in late 2007 was apparent from two further matters. First, on 19 November 2007 Ms Dewar agreed to buy a second hand car for $15,443. The purchase price was advanced by Esanda Finance Corporation Ltd which took a chattel mortgage over the car. The monthly repayments were $471. Second, as noted above, she was prepared to make a loan of $8,000 to her friend Jang.
As with the RAMS application, I am not persuaded that when Ms Dewar made the application to Wholesale Funds she was relying on a representation or assurance from Mr Ollier that a loan in the amount of $292,000 was suitable for her circumstances or that she could afford the repayments for a loan in that amount.
Ms Dewar's optimism about her business was not based on a solid foundation. As she accepted in cross-examination her business had made a loss in the quarter ending 30 September 2007.[99] My impression is that Ms Dewar's optimism about her business was attributable to the increase in turnover at the end of 2007 but she did not appreciate that this increase was not necessarily indicative of a sustained increase in profitability.
Ms Dewar alleges that she did not understand that the 'equity release' portion of the loan funds was a loan. In Ms Dewar's witness statement referring to the 'equity release' she said, 'I was of the opinion it was not a loan but an eligible amount of money in cash', she continued, 'Stating them both in different terms, ie "loan and equity release" when both were loans'.[100] I infer from the last statement that Ms Dewar says she was misled into thinking that the 'equity release' was not a loan by the use of different terms.
In her oral evidence she said:[101]

[155]

Mr Murphy is the Head of Enterprise Risk Management and Policy at GE Capital Australia and New Zealand. He identified a number of documents used in GE Money's home lending business in 2007. Relevantly, one was entitled 'GE Money Operations Manual: Credit Origination Standard' and the other 'GE Money Operations Manual: Product and Policy'.[103] The Credit Origination Standard manual was a modified version of an earlier manual. The modifications were made on 1 November 2007. There were four versions of the Product and Policy manual, one modified on 2 August 2007, one modified on 13 December 2007, one modified on 30 January 2008 and one modified on 4 December 2008. The contents of the Credit Origination Standard were directed primarily to setting out the criteria to be satisfied by applicants for different types of loans. The criteria varied depending upon a number of factors including: the employment status of the applicant; the nature of the application, for example, whether capacity to repay the loan was to be verified by requiring the applicant to provide documentary evidence of income; and the nature of the loan. There was an overlap between the contents of the Credit Origination Standard and Product and Policy manual. The contents of the Product and Policy Manual did not deal with loan criteria in the same level of detail as the Credit Origination Standard. In addition, the Product and Policy manual contained commentary on the regulatory regime applicable to finance brokers in various states. There was no evidence to suggest that the contents of the Credit Origination Standard or the Product and Policy Manual were known to Mr Ollier or Mr Walker in 2007 or that they were of any contractual relevance as between one or both of Mr Ollier and Andtrac on the one hand and GE Money on the other. The Credit Origination Standard or the Product and Policy Manual regulated the relationship between GE Money and its 'correspondents'. In this case, the correspondent was Wholesale Funds.
GE Money had two 'no doc' loan 'products' - the Fastdoc80 and the Fastdoc70. The suffixes '80' and '70' signified the loan to valuation ratios for each type of loan. The Product and Policy Manual contains the following description of Fastdoc80 and Fastdoc70 loans:[104]

[168]

In the course of setting out my findings as to how Ms Dewar's application was progressed, I will deal with Ms Dewar's allegation that Mr Ollier included further information in the application which he knew or ought to have known was false.[105] Ms Dewar alleged that Mr Ollier had included the following information in the application: first, that Ms Dewar had a gross annual income of $75,000; secondly, that Ms Dewar had gross rental income of $5,200; and, thirdly, Ms Dewar was paying income tax of $12,751.[106]
Xinc in its role as a mortgage aggregator retained a business known as Starworks to administer and process loan applications submitted to lenders.
In late 2007 Mr Robert Layh was employed as a leader of a team that undertook the administration work on loan applications submitted through Xinc. Mr Layh gave evidence on Mr Ollier's behalf. He explained that Starworks' role was to ensure that a loan application satisfied all of the lender's pre-requisites before the application was processed by the lender. This included ensuring that there were no discrepancies in the loan application documents, obtaining valuations and ensuring that lender's mortgage insurance would be available. The tasks undertaken by Mr Layh and Starworks were part of the broking function. As Mr Layh made clear in his evidence, he did not decide whether a loan should be made.
By reference to documents made available to him prior to his giving evidence, Mr Layh was able to say that he was responsible for processing Ms Dewar's application. Mr Layh communicated with Mr Ollier about Ms Dewar's application by email and fax. He also communicated with a Mr Niall McLynskey of a business known as Genworth Financial about the availability of lender mortgage insurance and Mr Peter Davis of GE Money about the loan application.
Mr Layh raised queries with Mr Ollier and relayed queries raised by Mr McLynskey and Mr Davis to Mr Ollier for answers and he explained to Mr Ollier how the queries needed to be addressed. On the basis of the contents of the communications between these parties, coupled with Mr Ollier's CRM notes, I find that over the period in which Ms Dewar's loan application was being processed the following occurred:

[187]

On 2 January 2008, GE Money's lawyers, Gallilee Solicitors prepared a letter dated 2 January 2008 addressed to Ms Dewar at her Walcott Street home. The letter stated that it enclosed a number of documents, including a loan agreement and a mortgage. A copy of this letter which had been stamped, 'RECEIVED 09 JAN 2008 BY: ..............' was included in the documents tendered at trial.[118]
Ms Dewar's evidence was that the 2 January 2008 letter was not received by her at her home address. She said that she met Mr Ollier at his office in Osborne Park to sign the loan agreement and mortgage and related documents on 8 January 2008. She said that Mr Ollier had called her on the morning of 8 January 2008 and told her that she had to come into the office that day to sign the documents for her loan. She said that at the time she was working in a tiling job in Nedlands and that in the late afternoon she left work and drove home, changed out of her work clothes, met Mr Pavy and they drove to the office in Osborne Park together.[119]
Mr Pavy's evidence was that he recalled Ms Dewar coming home from work and he thinks he drove Ms Dewar to Mr Ollier's office in Osborne Park because she had to 'hand in' the documents that day.[120]
Ms Dewar said that when she and Mr Pavy arrived at the office and met Mr Ollier he gave her documents to sign. She said she signed the document in the reception area of the office. She said that Mr Ollier told her the documents had to be signed that day. Ms Dewar said she asked Mr Ollier whether she could take the documents away and obtain legal advice, to which he replied that she could not. Ms Dewar said that Mr Walker was present in the office at the time she signed the documents and Mr Ollier introduced him to her and Mr Pavy. She said that Mr Walker was not present all the time but came in and out. She said that Mr Walker agreed with Mr Ollier that there was no time for Ms Dewar to obtain legal advice about the documents.[121]
Mr Pavy witnessed Ms Dewar's signature on the documents and signed them to record that he had done so. Ms Dewar said that at the time of signing the documents she had noted that only an 'approved witness' could witness her signature on the documents. She said she had asked Mr Ollier whether Mr Pavy could witness her signature. She said Mr Ollier replied that Mr Pavy could witness the signature so long as he had a university degree.
On 4 January 2008 Mr Ollier made the following entry in the CRM notes:[122]

[193]

I am not satisfied that Ms Dewar received and signed the loan documents in the circumstances she and Mr Pavy described in their evidence.
First, there is no contemporaneous documentary evidence which supports Ms Dewar's account.
Secondly, the fact that the letter of 2 January 2008 from Gallilee Solicitors was addressed to Ms Dewar at her home address gives rise to an inference that it was sent to her by mail at that address.
Thirdly, Mr Ollier's entry of 4 January 2008 in the CRM notes is a contemporaneous record that Ms Dewar told him that she had received the loan documents that day.
Fourthly, I think it is inherently improbable that Mr Ollier and Mr Walker would have said to Ms Dewar that she did not have time to obtain legal advice in relation to the loan documents.
Fifthly, settlement of the loan transaction did not take place until 14 February 2008. In the period between 8 January 2008 and 14 February 2008 Mr Ollier made a number of the entries in the CRM notes about administrative details that needed to be resolved before settlement could take place. There is no indication of urgency in any of these entries.
Sixthly, the date stamp upon which Ms Dewar places reliance does not support an inference that the documents were received by Mr Ollier at his office rather than by her at her home. If the documents had been received at Mr Ollier's Osborne Park office it is likely that the letter would have borne a date stamp with a date of 8 January 2008 or an earlier date. The fact that the letter has a date stamp with the date 9 January 2008 on it is consistent with that being the date upon which the documents were returned to Gallilee Solicitors, that is, the date stamp was applied in the solicitors' office. Ms Dewar contended that it was unlikely or improbable that she would have returned the letter itself to the solicitors as opposed to the loan agreement, the mortgage and the other documents. I do not think that this is so unlikely as to justify the conclusion that she did not receive the letter at her home on or before 4 January 2008.

[197]

By 18 June 2008 Ms Dewar was in arrears with her mortgage repayments. By 24 February 2009 the arrears stood at $6,661.11 and GEL served a notice of default.[126] In cross-examination Ms Dewar accepted that in February 2009 she should have thought about whether she could keep 17 Mint Circuit.[127]
Mr Ollier learned that Ms Dewar was in arrears with her mortgage payments in February 2009. Mr Ollier's evidence was to the effect that GEL was waiving 'early exit penalties' and Ms Dewar might be able to refinance at a more competitive interest rate. Mr Ollier spoke to Ms Dewar on the telephone and she said that she had been late in making her mortgage repayments over the last couple of months. Ms Dewar said that she had picked up a big contract and that she would be 'flat out' for the next few months. I find that in February 2009 Ms Dewar was confident that she would be able meet her commitments to GEL and pay off the arrears that had accumulated. She did not suggest to Mr Ollier that she could not afford the mortgage repayments or that he should not have arranged the loan for her. Mr Ollier said that he would contact her in about six months to refinance at a more competitive rate.
In April 2009 Ms Dewar was in arrears in her repayments in the amount of $3,213. On 14 April 2009 GE Money wrote to her advising her that a default notice might be served upon her. On 5 May 2009 a notice of default was served on Ms Dewar. The arrears specified in the notice were $5,763. Ms Dewar did not have the funds to pay the arrears but she did not think about selling the property.[128]
By April 2010 the arrears amounted to $8,896 and on 13 April 2010 GE Money sent a 'pre-possession' letter to Ms Dewar warning her that unless she paid the arrears or provided evidence that 17 Mint Circuit was for sale or she surrendered possession of the property to enable a mortgagee sale, possession proceedings would be commenced. In crossexamination Ms Dewar accepted that she should have done something to avoid the extra costs associated with continuing to hold 17 Mint Circuit, although she did manage to pay $6,000 in reduction of the arrears.[129]
On 15 June 2010 GEL commenced proceedings for possession and for payment of the balance owing under the mortgage, being $250,337.
Ms Dewar defended the possession proceedings and counterclaimed. In affidavits sworn by her in those proceedings Ms Dewar gave accounts of how she had fallen into arrears.[130]
In an affidavit sworn on 25 August 2011 Ms Dewar deposed:

[210]

Dear Sebastien,

'WITHOUT PREJUDICE'

Would you please send details of the retaining agreement of remuneration for the past, present and future payments from either Wholesale, Gel Custodians, GE Money or Pepper whoever it may be from since the date of approval. Could you advise whether you were at that time just an employee or a seperate [sic] entity from X Inc., as from information you only registered yourself after a couple of years after my refinance. Would you also advise at what level of license you worked at the time ie: C of my loan application.

In the beginning it was definitely clear all I requested was a further apportionment or full 100% of the mortgage only. I never requested further funds for future investment purposes, you offered that amount extra which of course was like a beautiful fish dangled before me. I never advised you I needed further investment funds, only that it would take at least $10,000.00 to complete minor renovations and [I] did not know anything about refinancing and complexities of investments.

As far as I am aware you advised me you were just new to your line of career and you did not receive any commission from helping me, however, it seems that its [sic] not the case, in fact you receive continual commissions on my mortgage. I was not aware or understood that the mortgage was secured by the equity of my home. If I had total refinance then why was I not paid out for the $350,000.00 refinance where did my equity share go because it would have been over $170,000.00. It seems at that time Keystart and the Housing Commission benefitted of the value of $350,000.00 yet I did not receive any benefit but being placed into more debt by your refinancing for $245,000.00 how is this so, I cannot understand any benefit to me. The figure of $65,000.00 did not come into my head because I did not understand what I was able to receive from my equity share, only you would have been able to figure what your lender would provide.

It is the lenders and your duty to make sure the loan is appropriate to my circumstances and benefits me in favour. However, the only thing a refinancing did was put me in a position of more debt and you did not approach Keystart regarding apportionment. None of the forms were filled in by myself only the signature and I can verify they are not in my writing at all. I walked away from this with $65,000.00 but that is a loan which I have to repay. Why on earth would you percieve [sic] this to be any benefit to me.

Since further investigations and contact with Denise Brailey that the low doc and no doc loans were made especially to take advantage of people like myself being self employed ie:- income poor, assett [sic] rich. I am now only just understanding the ramifications of refinancing. How can you honestly think a mortgage where I paid $100 per week to $500 per week is to my advantage. How can you percieve [sic] a debt of $245,000.00 you placed me in better than a mortgage debt of $75,000.00. It is plain to me now that it was such a risk and it was known by yourself and the lender that the risk was high but the equity of 16 years could easily be in the Lenders favour within a short time in default. I realised only now that my home was the target for the lenders imprudent lending practices, but only after reading many other cases similar to mine.

As mentioned there are emails that have been sent as evidence in an investigation that state these facts to brokers. The government is now investigating into all financial lending practices and an investigation is already underway. I was and still am illiterate to financial matters, at that time I was totally unaware of consequences from trusting the refinance you suggested. I still dont [sic] understand many things including the fact your first advice was to get a mortgage not more than $325.00 a week, however it became $500.00 a week, a written statement drawn by yourself which I have, also stating equity release. I was given one day to sign the paperwork which did not allow consultation of any legal entity, in fact you advised it was all so simple it did not require consultation with any solicitor and anyhow, if it wasn't signed by the end of the day I would lose the offer of the loan, which placed me in strained and flustered state.

In reference to 17 Mint Circuit, Banksia Grove it was not an investment property at all, you advised me that you required the finance as an investment property because my son was living there. I know nothing about investing in property, never arranged that from the beginning with Keystart or yourself, and refuse to acknowledge it was my own idea for investment purposes, all I did was follow every advice you gave. You did not require my taxation details which I was offering for you to refer to however, you did not require them. I do not agree to the fact that the home was my investment property, only that I was living away from home as I had gone through trauma from violence in the neighborhood [sic].

I have now engaged advice from a solicitor and will require the requested documents as soon as possible. As mentioned I feel the onus is on the lender more, to ensure that the borrower suits the finance product and able to meet the loan, if you are an agent for the lender then the onus does fall on Wholesale Funds. Please give me a copy of the lenders assessment to state the loan was not unsuitable for the mortgagor and their calculator details. When I signed the paperwork apparently the lenders representative interviewed me, however, it was at X Inc's office, therefore, I consider you to have been their agent as the interview was not at GE Money or Wholesale Funds office.

Please advise what status Andrew Walker has as employee or agent of X Inc or Wholesale Funds at time of acceptance of the loan and interview. I have also copies of my Personal Financial Statements sent by Pepper which have two documents for the Personal Financial Statement, with altered figures but signed by me exactly the same and on the same date, can you explain. One statement says the property is worth $350,000 and the other $380,000.00. At no time did I sign or initial alterations to the Personal Financial Statement of which I never filled in.

Attached is a copy of a media release by BFCSA, I will now go ahead with legal advice and proceedings.

Regards

Corinna Dewar

cc: Legal Aid

cc: ASIC

cc: COSL

[212]

Dear Sebastien,

I wrote to Pepper regarding this whole fiasco, they said as you are not their agent they do not take responsibility for your advice on refinancing and therefore, it is obvious that my conflict should be with you.

As I expected your most experienced advice in my benefit, it seems that you had refinanced in the full benefit of yourself and the mortgagor Wholesale Funds.

I requested from you a service that "I required a further apportionment in my loan where I had only 70% and Keystart held 30%. The whole debt or mortgage was for a mere $108,000. If at that time I sold the property for the valued sum of $350,000.00 I would have been able to payout the

Housing Commission of $108,686.38

Keystart Loans Ltd $ 64,976.15

Landgate $ 265.00

TOTAL $173,927.53

SALE OF PROPERTY AT MARKET PRICE $350,000.00

$173,927.53

cash profit of equity to me $176,072.47

I would have paid all my debt and walked away with $176,072.47, with my 16 years worth of hard yards.

Instead you refinanced this without even requesting my prior lender Keystart for information of taking further apportionment, went ahead with refinancing without looking into the benefits for me through my prior lender who advises were not contacted regarding further apportionment. My deed with Keystart allows me to request further apportionment.

I hold you accountable for my economic loss, which the refinancing has placed me in. GE Money holds you responsible as well. Your advice has been detrimental to my security as the loan was clearly going to place me hardship in the future whether or not injuries or loss of work occurred.

It is my intention to now take legal action and I am now considering placing a complaint to ASIC. I have been in contact with COSL as well who have helped try to delay court proceedings against me on many occasions.

I require an answer to my accusations against you, if you have any information that I can refer this wholly on the Lenders responsibility for imprudent lending practices instead please let me know. I would rather take GE Money to court because upon great investigation I have found that Subprime Lending has caused many people to lose their homes.

As a member of BFCSA (Inc) I have found out that Banks since 2001 had urged brokers to seek out potential clients from those who have equity in their homes.

From the year 2000 lenders were and non banks alike were promoting no doc and Low Doc loans to brokers Clients affected were mainly low income earners and centrelink recipients, who did not receive a copy of the Loan Application Form( like myself).

These financial products used as a major vehicle were designed especially for self employed persons, and lending guidelines were breached as a matter of routine.

All lenders used business development managers ("BDM's") as bank officers to teach brokers certain strategies to lead to successful volume of loans and thereby maintain quotas for sales.

If you consider yourself as a vehicle used to pass these financial products please let me know, because then the onus I consider does not wholly stay on you, I can then shift my claim to the lender Wholesale Funds acting as GE Money.

I will await your reply before making a complaint to ASIC, if I do then if necessary make the claim against the mortgage lender GE Money. I need proof however, to make the claim against the Lender and if you have any information please let me know.

regards

corinna dewar.

[223]

The commission sharing arrangement between Andtrac and Mr Ollier described earlier in this judgment was mutually beneficial. It was an important aspect of the working relationship between Mr Ollier and Andtrac because it enabled Andtrac to collect its share of commissions generated by Mr Ollier's work. The commission arrangement was facilitated by Mr Ollier entering into finance broking agreements with his clients on Andtrac's behalf. In this respect it is significant that Mr Ollier's evidence was to the effect that he used the Andtrac finance broking agreement document whenever he prepared a loan application.[151] He did this with Mr Walker's consent, and thus with Andtrac's knowledge and authority. These facts and the control over Mr Ollier's activities exercised by Mr Walker conferred by his review of drafts of all loan applications prepared by Mr Ollier lead me to conclude that Mr Ollier was acting as Andtrac's agent when he presented the Finance Broking Agreement to Ms Dewar for her to sign. Mr Walker intended that Mr Ollier should act on Andtrac's behalf when Mr Ollier arranged for his clients to sign finance broking agreements with Andtrac. This authority was not negated by the fact that Mr Walker was not specifically aware of the Finance Broking Agreement with Ms Dewar in November 2007. As a consequence, the Finance Broking Agreement was an agreement made between Ms Dewar and Andtrac.
The obligations expressly assumed by Andtrac in the Finance Broking Agreement may properly be construed as constituting an obligation to render its services as a finance broker with reasonable skill, care and diligence. If not, then such a duty would be implied.[152] Concurrently with the contractual duty, Andtrac owed Ms Dewar an identical duty at common law.[153]
Andtrac's contractual obligations under the Finance Broking Agreement were expressed to include an obligation to act in Ms Dewar's best interests and to give her undivided loyalty unaffected by Andtrac's interests. By necessary implication this express obligation required Andtrac to act in good faith towards Ms Dewar, to be honest and truthful in its dealings with her and to represent her circumstances, as known by it, accurately to any prospective lender.
In the context of considering the duties owed by Mr Ollier and Andtrac to Ms Dewar, it is important to record that they were not obliged to provide Ms Dewar with financial advice. As was submitted on Mr Ollier's behalf, the role of finance broker is obtain or negotiate credit for the client. This role is to be contrasted with that of financial advisor. A financial advisor's core obligation is to warn a client of the material risks of a potential investment.[154] More specifically, Mr Ollier and Andtrac were not obliged to determine whether Ms Dewar could afford to make the repayments on the loan for which she applied or to give her advice regarding her ability to make those repayments.

[229]

The statement in the Mortgage Loan Summary to the effect that Ms Dewar's application for refinance with RAMS was withdrawn due to her concern with 'their unstable state (bad publicity in the media)' was incorrect. There was no basis for making the statement. The question of whether an applicant had made a previous application for the same finance was an issue of some significance. A finance broker acting with reasonable skill, care and diligence would not have included in an application for finance a statement about previous applications for finance that was incorrect and for which there was no basis.
The statements included in the Mortgage Loan Application about Ms Dewar's work history were that she was a 'qualified tyler [sic] with many years of experience (ABN registered in 2002) working as a sole trader' and, 'Corinna has been self-employed for many years'. These statements were materially inaccurate in that although Ms Dewar had an ABN as early as 2002 she did not start work as a tiler until 2006. Mr Ollier made an assumption about how long Ms Dewar had been a self-employed tiler based on the start date of 10 October 2002 for Ms Dewar's ABN registration. Whilst there was some basis for the statement made by Mr Ollier, it was inaccurate. It would have been quite a simple matter for Mr Ollier to check with Ms Dewar when she started her tiling business. Failing to do so and including the inaccurate statement in the Mortgage Loan Summary amounted to a failure to exercise reasonable skill, care and diligence.
As noted earlier, Mr Ollier had no basis for making the statement to the effect that Ms Dewar was going to use the equity release funds to purchase shares or to purchase a new investment property.
Before leaving the subject of the statements made by Mr Ollier on Ms Dewar's behalf I must deal with a further allegation that Ms Dewar makes to the effect that Mr Ollier's description of 17 Mint Circuit as an investment property and his description of the loan for which she applied as an investment loan were misrepresentations. I acknowledge that Ms Dewar may not have thought of 17 Mint Circuit as an investment property. Objectively, however, it was appropriate to characterise it as such. Ms Dewar was not an 'owner-occupier' as she lived in her rented house on Walcott Street. Ms Dewar did not receive rent from her son but this on its own did not mean it was not an investment property. Consequently, it was appropriate to describe 17 Mint Circuit as an investment property and the loan for which Ms Dewar applied as an investment loan. The predominant purpose of the loan sought by Ms Dewar was to acquire the Commission's 30% interest in the investment property, 17 Mint Circuit, and to discharge the mortgage debt due to Keystart.
As noted at the start of this judgment an allegation that was central to Ms Dewar's case was that Mr Ollier (and by extension Andtrac) breached the duties owed to her because Mr Ollier arranged a loan for her in an amount she did not need and could not afford. To adopt the language of the Finance Broking Agreement, Ms Dewar's contention was that the loan was not appropriate for her needs, objectives and financial circumstances.
In evaluating Mr Ollier's conduct for this aspect of Ms Dewar's case it is important to eliminate the hindsight bias that comes with the advantage of knowing what happened after the loan funds were advanced. The evaluation must be undertaken on the basis of what was known to Mr Ollier in November 2007 together, of course, with what should have been known to him had he exercised reasonable skill, care and diligence as a finance broker.
In November 2007 Mr Ollier knew that Ms Dewar was self-employed and her objective was to acquire the Commission's interest in 17 Mint Circuit. He knew that no doc or selfcertified loans were available to selfemployed people provided they satisfied the relevant criteria. It was reasonable for Mr Ollier to make the judgment that a 'no doc' application was an appropriate application for Ms Dewar to make and that she did not need to provide documentary verification of her income. I am not persuaded that Mr Ollier knew that if Ms Dewar's financial position was disclosed she would not obtain a loan. That said, he correctly identified that a 'no doc' application was an appropriate one for Ms Dewar to make as she might not have been able to verify her income in the conventional way. The recommendation to make a 'no doc' application does not give rise to the inference that he knew that if her true financial position had been disclosed she would not obtain a loan.
There was no reason for Mr Ollier to doubt that Ms Dewar had a good credit history as the subsequent search disclosed that she did.
Mr Ollier had four face to face meetings with Ms Dewar before he submitted the RAMS application on Ms Dewar's behalf. Whilst Ms Dewar may not have been experienced in financial matters, I do not have reason to conclude either that Ms Dewar presented to Mr Ollier as a person who was particularly naïve or gullible or that she presented as a person who was unable to determine for herself what amount she wished to borrow or whether she could make the repayments required to service the loan for which she applied.
As I have found, in November 2007 Ms Dewar was confident that her business was going well. It is likely that she conveyed that confidence to Mr Ollier. Whilst Mr Ollier was under the mistaken impression that Ms Dewar had traded as a tiler for five years as opposed to just over a year, this was not critical as the criteria to be satisfied by an applicant for a Fastdoc70 application did not include a minimum period of selfemployment.
Mr Ollier knew that Ms Dewar was in receipt of a 'single parent's pension', more accurately a Family Payment Allowance, but once again, this did not prevent Ms Dewar from applying for a Fastdoc70 loan. To the extent to which the receipt of a pension ought to have given rise to a concern about whether Ms Dewar could afford to make the repayments, I think it was reasonable for Mr Ollier to rely upon Ms Dewar to determine whether she could afford the repayments. As I noted earlier, Mr Ollier was not obliged to determine whether Ms Dewar could afford the repayments.
There is no evidence that Mr Ollier put undue pressure on Ms Dewar to apply for a loan or to apply for a loan in the sum of $245,000. It is significant that after a long meeting in September 2007 Ms Dewar decided against proceeding with the refinancing of 17 Mint Circuit. There was no evidence that Mr Ollier tried to talk her out of that decision - it was she who got back in touch with him some weeks later and said she had changed her mind and wished to proceed.
In the course of finding the facts in this case I have considered whether there is evidence to sustain the conclusion that when she made the application to RAMS and the subsequent application to Wholesale Funds Ms Dewar relied on Mr Ollier to advise her to take out a loan in a particular amount or to take out a loan for more than she needed and could afford or that he encouraged her to do so. I have found the evidence does not sustain the conclusion that Mr Ollier provided any such advice or that Ms Dewar relied on Mr Ollier in that way. I would add by way of context that on 27 April 2007 it was Ms Dewar who told Mr Ollier that she wanted to borrow an extra $10,000 over and above the sum required to acquire the Commission's interest in 17 Mint Circuit and discharge the Keystart mortgage and on 13 August 2007 it was Ms Dewar who told Mr Ollier that she wanted to borrow $200,000.
In my judgment, on the basis of what was known to Mr Ollier and what should have been known to him, it was reasonable for Mr Ollier to form the view that an application for a no doc loan was an appropriate loan for Ms Dewar to make and he was entitled to rely on Ms Dewar to determine the amount of the loan she wanted and whether she could afford the repayments for such a loan.
I am not persuaded that Mr Ollier breached his obligation to act with undivided loyalty unaffected by his own or Andtrac's interests. Nor am I persuaded that Mr Ollier acted otherwise than in good faith towards Ms Dewar. The evidence is insufficient to sustain those conclusions.

[253]

Whether Ms Dewar's application for a loan would have been successful had the true position in relation to the RAMS application, the use to which the equity release portion of the loan and her work history as a self-employed tiler been disclosed is a hypothetical question to be determined by reference to the inferences arising from the facts as I have found them. Ms Dewar must show that the facts raise the inference that it is more probable than not that the application would have been declined.[160]
In my view, had the application disclosed that Ms Dewar had been selfemployed as a tiler for just over one year as opposed to for five years this would not have led to a rejection of her application for a loan. The Fastdoc70 loan criteria did not require a minimum period of selfemployment.
The two other matters, the reason why the RAMS application was declined and the purpose for which Ms Dewar wished to borrow the equity release funds, are likely to have been matters to which more significance would have been attached.
The inclusion of a question in the Wholesale Funds application form about previous applications for loans made by an applicant and the fact that Mr Ollier considered it important to address the issue of the application to RAMS in the Mortgage Loan Summary evidence the importance of knowing about previous applications for finance and the reasons why they did not proceed from a prospective lender's perspective. Such information has the potential to provide an insight into the credit risk posed by an applicant.
Likewise it was obviously important for a prospective lender to know to what use funds advanced by way of an equity release were going to be put. That this was an important consideration is to be inferred from: the Loan Purpose Declaration Ms Dewar was required to make; the requirement to state the purposes of the loan on the application for Lender's Mortgage Insurance; and, the specific enquiry made by Mr McLynskey as to how Ms Dewar was going to use the equity release portion of the funds. I infer that the importance from a lender's perspective of knowing the purpose of the loan was, in part, so that the lender could be satisfied that the use was an acceptable use having regard to the type of the loan and, in part, so that the lender could be assured that the loan repayments were not going to be serviced from the loan funds themselves, that is, the loan did not constitute asset based lending.
The inference that the loan application would have been successful even if the reason for the RAMS application being declined and Ms Dewar's work history had been stated accurately, and the statement that the equity release portion of the loan funds was to be used for the acquisition of a share portfolio or an investment property had not been made, is supported by:

[256]

In my view, however, had the reason for the rejection of the RAMS application been disclosed I think it is likely that this would have provoked questions on the part of Gemworth and GE Money about Ms Dewar's ability to service the loan. I infer that this would have been so from the fact that both Gemworth and GE Money scrutinised Ms Dewar's application closely.
The use to which the equity release portion of the funds was to be put was a matter of some significance - Mr McLynskey did not consider the explanation provided in the Loan Purpose Declaration and in the application for lender's mortgage insurance that $57,500 of the amount was to be used for 'personal purchases' was adequate, even though 'personal purposes' was an 'acceptable purpose' as defined in the Credit Origination Policy. I think it likely that had it been disclosed to Mr McLynskey of Gemworth that Ms Dewar had no particular use in mind for the $57,500, he would not have approved lender's mortgage insurance for a loan of $245,000 and that consequently GE Money would not have made an offer of a loan of $245,000 to Ms Dewar.
This case is to be contrasted with the hypothesis adopted by Dr Franzese because there was an inconsistency between the purpose stated in the Mortgage Loan Summary and the actual purpose. In my assessment, Gemworth would not have offered mortgage lending insurance had it made the further enquiry about Ms Dewar's use of the $57,500 and received the correct answer to the effect Ms Dewar had no particular use in mind for the funds. Without mortgage lending insurance of $245,000 GEL would not have made the loan offer of $245,000. A further enquiry about the use of the 'equity release' funds as well as a separate enquiry about Ms Dewar's ability to meet the repayments would have made it even more unlikely that an offer of a loan of $245,000 would have been made.
A second causation question is raised by the defendants, namely: were any losses suffered by Ms Dewar following the advance of the loan funds and the mortgage to GEL caused by any breach of duty that is established?
In support of the contention that Ms Dewar suffered no quantifiable loss following entry into the loan, reliance was placed on Ms Dewar's evidence that her work injuries incapacitated her and this incapacity was the start of her difficulties in servicing the GEL loan which were compounded by a lack of work - she said she did not think of blaming Xinc for her predicament.[161]
In my assessment, neither Ms Dewar's work injuries nor the lack of work are sufficient to break the causal relationship between the breaches of duty on the part of Mr Ollier and Andtrac and the loss claimed by her. I accept that Ms Dewar's injuries and the lack of work were causes of her loss in the form of the interest and other charges she incurred by failing to make the repayments when they fell due but those losses would not have been incurred had she not been offered and accepted the GEL loan.

[259]

Division 2 of Pt 2 of the ASIC Act contains provisions regulating unconscionable conduct and providing protection for consumers in relation to financial services.[163] These provisions include a prohibition against engaging, in trade or commerce, in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.[164]
A person who suffers loss or damage by conduct of another person that contravenes s 12DA may recover the amount of the loss or damage by action against that other person.[165]
Any conduct engaged in on behalf of a body corporate by an agent acting within the scope of the agent's actual or apparent authority is taken for the purposes of Div 2 to have been engaged in by the body corporate.[166]
The term 'financial services' is defined in wide terms in s 12BAB of the ASIC Act. The defendants did not contend that the finance broking services rendered by Mr Ollier and Andtrac did not constitute 'financial services' for the purposes of s 12BAB. The term 'Financial services' is defined to include financial product advice that is, relevantly and subject to presently irrelevant exceptions, a recommendation or statement of opinion that is intended to influence a person in making a decision about a particular financial product.[167] A 'credit facility' is a 'specific thing' that is a 'financial product'.[168] 'Credit facility' is defined to include the provision of credit and the provision of a mortgage that secures an obligation under a credit contract.[169]
Conduct is misleading or deceptive if, viewed as a whole, it has a tendency to lead a person into error.[170]
Whether conduct is misleading or deceptive is a question of fact to be determined objectively in the light of the surrounding facts. A person may contravene an applicable statutory prohibition even though the person acts honestly and reasonably.[171] For loss or damage to be recoverable under s 12GF of the ASIC Act it must be suffered 'by' the contravening conduct; that is, there must be a causal connection between the conduct and the loss or damage.
Ms Dewar's claim rests upon four representations she alleges were made by Mr Ollier. The only representation that Ms Dewar has established is the representation that Mr Ollier admits he made, that is, that he would find her the most suitable loan for her circumstances.
The first question is what was conveyed by the representation that Mr Ollier would find Ms Dewar the most suitable loan for her circumstances. I consider the representation conveyed that Mr Ollier would find Ms Dewar a loan on terms which were most suitable for her circumstances as she had disclosed them to him. The terms are the terms as to fees, interest, the duration of the loan and other standard commercial terms. In the context in which the representation was made, I do not consider that it was intended to convey, did convey or was understood by Ms Dewar as conveying that Mr Ollier would exercise any professional judgment about the amount of the loan.
Understood as conveying no more than that the terms of the loan - other than the amount - would be suitable for Ms Dewar's circumstances, the representation was not misleading on the basis contended for by Ms Dewar as the terms of the GEL loan were suitable for her circumstances.
Moreover, in my assessment, Ms Dewar understood that how much she wished to borrow was a matter for her to work out. As I have stated earlier I am not persuaded that Ms Dewar made the Wholesale Funds application or signed the GEL loan documents and mortgage on the basis that Mr Ollier had represented to her that a loan in the amount of $245,000 was suitable for her circumstances.
Consequently, Ms Dewar's misleading or deceptive conduct claim fails.

[270]

I am satisfied that Ms Dewar suffered damage as a result of the breaches of duty on the part of Mr Ollier and Andtrac. The defendants contend that Ms Dewar's damages should be reduced because she was guilty of contributory negligence. If a court is satisfied that a plaintiff has been guilty of contributory negligence, it shall reduce the damages which would be recoverable by the plaintiff if the happening of the event which caused the damage had been solely due to the negligence of the defendant to such extent as the court thinks just in accordance with the degree of negligence attributable to the plaintiff.[177]
In determining whether a plaintiff has been contributorily negligent the same standard of care as applied to determine the liability of a defendant in negligence is to be applied. For that purpose, the standard of care required is that of a reasonable person in the position of the plaintiff taking into account what they knew or ought to have known at the time.[178]
Mr Ollier's contributory negligence case focusses on Ms Dewar's conduct prior to executing the GEL loan documentation and on her conduct after she went into arrears. As to the former, Mr Ollier alleges that Ms Dewar knew or ought to have known that entering into a loan in the amount sought by her would involve her over-committing herself financially. Notwithstanding that Ms Dewar would be over-committing herself, she signed the Fastdoc Declaration of Financial Position declaring that she could comfortably afford repayments of $2,306 per month having previously signed the Finance Broker Agreement in which she declared that she had ensured that she was not over-committing herself financially and that she was able to meet the repayment requirements on the loan she sought from RAMS. As to Ms Dewar's conduct after she was in arrears with her repayments, Mr Ollier alleges that she failed to take any steps to enter into an alternative arrangement with GEL until 22 July 2010 and when sued by GEL for possession she elected to defend the summary judgment application by raising untenable defences that could not possibly succeed.
Although in November 2010 Ms Dewar thought that her business was doing well, as I have noted earlier, in the course of cross-examination she accepted that in the quarter ending in September 2007 her business had made a loss.[179] Ms Dewar also accepted that when she signed the Fastdoc Declaration of Financial Position declaring that she could afford repayments of $2,306 per month she was taking a risk that she would be over-committing herself financially.[180] Ms Dewar accepted that she should have thought about the loan for which she applied and the repayments she would have to make more carefully.[181]
In my judgment, a reasonable person in Ms Dewar's position in November 2007 would not have signed the Fastdoc Declaration of Financial Position. The Fastdoc Declaration of Financial Position was a cause of GEL making the loan offer to Ms Dewar - but for the declaration that Ms Dewar could afford the repayments the offer would not have been made. Ms Dewar was contributorily negligent. I consider that her degree of negligence was significant and had I found that her claims were not statute barred I would have reduced her damages by 60%.

[273]

The effect of s 13 of the Limitation Act 2005 (WA) is that, subject to certain exceptions, actions cannot be commenced if six years have elapsed since the cause of action accrued. This means Ms Dewar was required to commence her claims for damages for breach of contract and negligence within six years of the date upon which those causes of action accrued.
A cause of action accrues when all the facts have occurred which give rise to a right to sue.[186]
In claims for breach of contract, the cause of action accrues at the time of the breach of contract,[187] because damage is not an element of the cause of action.
As previously stated, Ms Dewar commenced this action on 28 May 2015.
Andtrac's breach of contract occurred in November 2007. That is when Ms Dewar's cause of action accrued and an action in respect of it could not be commenced after the elapse of six years, that is, after November 2013. Ms Dewar's claim based on the breach of contract must fail because it was not commenced within the applicable limitation period.
A cause of action for damages for negligence accrues when the plaintiff suffers actionable damage.[188]
As was submitted on Mr Ollier's behalf the answer to the question of when a cause of action for negligence causing economic loss accrues requires a consideration of the precise interest infringed by the negligent act or omission.[189]
Ms Dewar's primary interest infringed by the breaches of duty found by me was her equity in 17 Mint Circuit. Arguably, Ms Dewar suffered damage when she executed the mortgage in favour of GEL because the execution of the mortgage diminished her equity.[190] The latest date upon which it could be said that Ms Dewar first incurred damage was in June 2008 when she fell into arrears with her loan repayments and incurred interest and other charges. On this basis, Ms Dewar was required to bring her action for damages for negligence within six years of June 2008, that is, by June 2014. Her claim for damages for negligence fails because the action was not commenced within the limitation period.
Ms Dewar sought to overcome the limitation defences by relying on s 38(2) of the Limitation Act. That provision enables a plaintiff to apply to the court to extend the time within which an action can be commenced by up to three years from when the action ought reasonably to have been commenced if the court is satisfied that the failure to commence the action was attributable to fraudulent or other improper conduct of the defendant or a person for whom the defendant is vicariously liable.
Ms Dewar did not make a formal application to extend the time for commencing the action. In my judgment, an application under s 38(2) of the Limitation Act would not have assisted Ms Dewar because, on her own evidence, by March 2012 she had formed the view that she had been 'scammed' by Xinc and that she wanted to sue Mr Ollier.[191] She telephoned Mr Ollier on 26 March 2012 and told him that she wanted to take him to court.[192] Ms Dewar wanted, however, to give Mr Ollier the opportunity to help her sue GEL.[193] In August 2012 Ms Dewar corresponded with Mr Ollier and referred in some detail not only to her intention to sue him but also to the basis of her proposed action. She referred to the fact that she had sought legal advice.
In the light of those facts, it cannot be said that the failure to commence the action was attributable to fraudulent or other improper conduct on the part of Mr Ollier, let alone Andtrac. Not only was there was no such conduct, but Ms Dewar was aware that she had grounds to sue Mr Ollier and Andtrac by early 2012. It is significant that in August 2012 Ms Dewar notified Mr Ollier that she was going to sue him and that she had sought legal advice. Ms Dewar's failure to commence the action within the limitation period was not attributable to either Mr Ollier or Andtrac. Ms Dewar's action was commenced outside the limitation period and the law requires that it must be dismissed.

DEWAR -v- OLLIER [2018] WASC 212 (19 July 2018)

At a glance

Court

Decision date

Before

Source

Judgment (301 paragraphs)

The information included in the Mortgage Loan Application

What duties were owed by the defendants to Ms Dewar?

Did Mr Ollier and Andtrac breach the duties owed to Ms Dewar?

Did the breach of duty cause Ms Dewar to suffer loss?

Legislation Cited (6)

Cases Cited (1)